Hess Likes Early OH Utica Results, Drilling 35 Utica Wells in ’14

smiley faceWith all of the lip-dragging this week over Williams canceling work on the Bluegrass ethane pipeline and BP quitting the Utica in Trumbull County, here’s a little happy news to brighten your Friday. Hess has 43,000 “core” net acres in a joint venture to drill in the Ohio Utica Shale. On an analyst call earlier this week, Hess’ top brass said they will continue to drill test wells this year and up to 35 full production wells, and then really ramp up the drilling program in the Ohio Utica in 2015. According to Hess, early results in the Ohio Utica are very good.

MDN has extracted out of the (long) analyst call those spots where the Utica was discussed, so you can read for yourself exactly what Hess’ top brass had to say…
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Feds Clear Chesapeake & Encana in Collusion Case, Michigan Next?

An update on the Chesapeake/Encana “collusion” story in Michigan. Two years ago Reuters accused Chessy and Encana of colluding to keep prices low for Michigan state oil and gas leases coming up for auction (see Did Reuters Break the Law with Latest Chesapeake Story?). Either a low-life snitch gave Reuters private emails from the companies or Reuters engaged in breaking and entering, a la Watergate style, to get access to those emails. Either way, the emails didn’t really show anything damning. However, both the feds and the state of Michigan launched years-long, anal exam-type investigations. In March of this year the Michigan Attorney General decided to press charges (see Reuters Smiles: MI Criminal Court to Charge Chesapeake & Encana).

However, the feds have just sent a letter to Chessy and Encana exonerating them from any wrongdoing. Since “more often than not” the feds and the state attorneys reach the same conclusion, it’s quite possible that Michigan will drop its criminal case as early as next week…
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Ohio Quarterly Shale Jobs Report – Shale Jobs Up 79% in 2 Years

Each quarter the Ohio Dept. of Jobs and Family Services issues a report on how the Ohio shale industry is faring with respect economic impacts and the number of jobs. The April 2014 edition of that report was just released (see a full copy embedded below). What does the state’s own research show? In the two years from Q3 2011 to Q3 2013 core shale-related industry employment (like pipeline construction and well drilling) was up 5,763 (79.0 percent). Employees in core jobs had an average wage of $71,661. To which we say, that ought to make OH Gov. John “foreigner hunter” Kasich happy! He doesn’t like foreigners (people from Texas and Oklahoma) takin’ good Ohio jobs–so every now and again he prowls around on patrol (see OH Gov. Kasich Goes After Out-of-State Engineers/Surveyors).

The report contains a lot of great charts and maps and helpful information to understand the economics of shale in Ohio–we encourage you to take some time with it. Here’s a good overview of the report from Columbus Business First:
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Southwestern Energy 1Q14: Marcellus Production Hits Avg 800 MMcf/d

Southwestern Energy, a very large Marcellus driller, released their first quarter operating and financial update yesterday. Although Southwestern has operations in other resource plays, the Marcellus is one of their most important. They reported yesterday their gross operated production reached 800 MMcf per day in the Marcellus (closing in on the 1 Bcf/Day Club!), and net production was up 147% compared to year-ago levels in the Marcellus.

Immediately below we’ve extracted out those sections of the update that talk about the Marcellus, and below that we’ve embedded a full copy of the mammoth 14-page update…
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Rex Energy 1Q14: Record High Production, Stacked Plays & Long Laterals

Rex Energy, our “little energy company that could (and is)” continues to chug along. And because of the Marcellus, Rex isn’t so little anymore. They release their first quarter operations and financial update earlier this week. The Rex update shows quarterly production has hit 122.2 MMcfe/d, a new record for the company. Rex is drilling stacked plays, targeting not only the Marcellus and Utica but the Upper Devonian layer too–and experimenting with different lateral lengths. Doing all the right things, and it’s paying off for Rex.

A a comprehensive update from the little energy company that’s doing it right…
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20 Youngstown U Profs Attempt PR Stunt on Frack Ban – Goes Limp

On Wednesday, 20 Democrat faculty members who teach at Youngstown University, most of whom (perhaps all) are *not* professors in the geosciences area (i.e. they’re clueless about fracking) attempted a PR stunt that well, went limp. They all endorsed a frack ban that’s coming around for the THIRD time on the ballot in Youngstown (voting happens May 8). Even the Democrat mayor of Youngstown knows that such a ban would be a “jobs killer” for the city and recommends a “no” vote next week (see Anti-Drillers Force 3rd Vote on Frack Ban in Youngstown).

Here’s the limp effort from 20 professors at a university you probably should not send your children to because people like those listed below mis-teach there:
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Dominion Announces 2 New Pipeline Projects from Marcellus/Utica

Dominion is a huge power and gas utility with customers spread across Virginia, North Carolina, West Virginia and Ohio. They also have a number of subsidiaries, including their proposed LNG export facility in Cove Point, Maryland (see Celebrate! Dominion Wins DOE Approval for MD LNG Export Facility), and midstream operations (see Dominion Announces Marcellus/Utica Shale Expansion).

We have a pair of new Marcellus/Utica-related projects coming from Dominion to share. On an analyst call yesterday, Dominion CEO Thomas Farrell II announced the Lebanon West II project that will provide 130,000 dekatherms per day of firm transportation service for 20 years to move Marcellus Shale production from Butler County, PA, to Lebanon, OH. In addition, two weeks ago Dominion Energy (subsidiary) announced an open season for the Dominion Southeast Reliability Project–a new pipeline that will extend from the Marcellus/Utica to markets in Virginia and North Carolina. An update from SNL Financial:
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Guess Why GDF Suez Doesn’t Want Marcellus Pipeline to New England

As MDN reported back in January, the governors of six New England States want ISO New England (the regional cooperative transmission organization) to assess a tax on electric customers throughout New England so they can build a new natural gas pipeline to the region (see Blue State Blues: 6 New England States Want New Natgas Pipeline). The problem is not so much residential customers running low on natgas but electric generating plants. Obama’s war on coal is rapidly shuttering coal-powered electric generating plants in New England and so to keep up the electric demand, they’re turning to natural gas to fire the plants. And because natgas is in short supply in New England, particularly in the winter months, it makes the price of electricity skyrocket. Hence–tax electric rate customers to build a natgas pipeline.

However, Frank Katulak, the CEO of GDF Suez which operates a big LNG (liquefied natural gas) import terminal in Everett, MA, is trash-talking a tax on New England electric rate payers to build a natgas pipeline. If the pipeline gets built, that means less import business for GDF Suez. But Katulak says oh no, that’s not why he thinks a healthy tax hike is a bad idea (of course not!)…
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Access Midstream 1Q14: Throughput Up in Marcellus/Utica

Access Midstream, formerly known as Chesapeake Midstream, released their first quarter 2014 update earlier this week. Access has operations around the country, not just the northeast. However, both the Marcellus and Utica Shale is an important part of the Access picture. Among the interesting things in this update: Throughput (the amount of gas flowing through Access pipelines) was up for both the Marcellus and Utica in 1Q14; and, Chesapeake, via their subsidiary Midcon Compression, sold 103 compressor stations to Access located along gathering systems in the Marcellus and Utica region for $160 million (see Chesapeake Fire Sale Continues: Marcellus/Utica Compressor Plants).

Below is an extract from the Access Midstream update–the part most relevant for the Marcellus and Utica:
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Boone Pickens Says Fracking Doesn’t Hurt Anybody–He Should Know

You’ve gotta love the plain spoken, Texan, oil billionaire T. Boone Pickens. At a conference in California, Boone said fracking won’t hurt anybody.He also said environmentalists “moan and groan about it,” but at the end of the day fracking happens two miles below the surface. Boone says he’s fracked 2,000 wells during his life and none of them caused environmental damage.

Boone also talked about renewable energy and the one “insignificant” adverse effect that comes from fracking…
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MDN Quoted on WKSU Radio News Re BP Leaving the Utica

Every now and again when MDN editor Jim Willis answers the phone, it’s a reporter on the other end of the line. Earlier this week he spoke to a reporter from Kent State University’s PBS affiliate WKSU. The topic was BP pulling out of the Utica Shale in Trumbull County (see BP Calls it Quits in the Utica Shale – Total Write-off). Jim told the nice reporter essentially what he said in that article: All is not lost for future drilling in Trumbull County–but it may take a few more years for things to pick up there. In the meantime, there’s plenty of ways for people in Trumbull to benefit from the shale drilling that’s happening south of them.

Here’s a transcript of the interview:
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