Statoil Cuts Deal to Drill Under 474 Acres of the Ohio River in WV

VikingsThe Vikings are Coming! Er, well, at least the Norwegians are. And they’re not coming to conquer but to drill–underneath the Ohio River in West Virginia on the border of Marshall and Wetzel counties. The West Virginia Department of Commerce has cut a deal with Norway-based Statoil which allows the company to drill and frack for oil and natural gas on 474 acres thousands of feet beneath the Ohio River. What are the lease terms? An average price of $8,732 per acre with 20 percent production royalties. That translates into a signing bonus of $4.14 million. And that’s not all. WV is near to signing a deal with Noble Energy and Gastar Exploration on two other Ohio River tracts that will provide lease bonuses of $4.9 million and $749,000 (respectively) along with 20% royalties…
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Range Resource Secret to Drilling More Productive Wells for Less $

Every year drillers get better at what they do. They experiment, they learn, they grow. Here’s an example from Range Resources. Range went back to a well pad they previously drilled with five wells and drilled two more. The two new wells used a different technique. Comparing the first year of production from the new wells with the first year of the original wells, the two new wells produced 53% more natural gas (per well) than the old wells did. Tell us again, peak oil/gas theorists, how the shale boom is just a flash in the pan and will be all gone by the end of this decade. Here’s more details on how Range increased production by 53%–what their “secret” is to drilling more productive wells using LESS money per well…
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PA Gov Wolf Digs In Like a Chigger with Severance Tax Plan

Newly elected Pennsylvania Gov. Tom Wolf, whose administration is filled with Ed Rendell retreads, remains “dug in” when it comes to a severance tax. One of the Rendell retreads (with ties to the anti-drilling PennFuture) is John Hanger, former Secretary of the Dept. of Environmental Protection under Rendell. Hanger is Wolf’s Secretary of Planning and Policy (see PA Gov-Elect Wolf Appoints John Hanger Secretary of High Taxes). Hanger ran against Wolf and Wolf’s (now) chief of staff, Katie McGinty, who is herself another Rendell retread, before dropping out of the governor race last year (see Pass One Last Joint for John Hanger). True to his far-left lib Dem roots, Hanger (as Wolf’s mouthpiece on this issue) is saying we need those high severance taxes and we need them now. Squishy RINO Republicans, like Senator Joe Scarnati, will consider adopting the severance tax–but only after being bribed enough, er, ah, pension reform is dealt with first…
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PA 2014 Top 5 Lists for: Wells Drilled / Inspections / Violations

Top 5We’ve written about it before, but once again we want to highlight the excellent service provided by Marcellusgas.org. They maintain a data site filled with facts and figures on every shale well in Pennyslvania. Everything from production to how much brine/wastewater is produced to the number (and type) of violations for each well (and for each driller). It’s a true treasure trove. You can access a lot with a free membership, but it only costs $20 a year to access a whole lot more. (No, we don’t even know the guy who runs it and we don’t get paid to sing their praises!) Marcellusgas.org recently sent an email to members with some “top 5” lists for 2014: the top 5 counties with highest number of wells drilled, top 5 drillers by number of wells drilled, top 5 for number of inspections (by county and driller) and top 5 for number of violations (by county and driller). We found the lists interesting and thought you would too…
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The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy

The “get cash through the door” game continues for both drillers (E&P) and midstream companies. We have two more drillers looking to get cash through the door in two different ways. Last week, Carizzo Oil & Gas, an independent oil and gas company with drilling operations in several shale plays including the Marcellus and Utica, floated a plan to use equity financing (selling more of the company via shares of stock) to raise $205 million by floating 4.5 million shares of stock for $45.50 per share. Carrizo, which has no plans to drill new wells in the northeast in 2015 (see Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015), will use the money to pay down debt. Meanwhile, Rice Energy, which is a “pure play” energy company targeting the Marcellus/Utica, announced yesterday they’re going the IOU route–issuing new notes, or promises to repay loans (incurring more debt), hoping to raise $400 million to be used for “for general corporate purposes, including capital expenditures”…
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PA Marcellus Industry Consolation Prize: DEP Conventional Board

Pennsylvania Dept. of Environmental Protection Acting Sec. John Quigley packed the DEP’s Oil & Gas Technical Advisory Board with members who will rubber stamp his onerous new drilling rules (see PA DEP Sec Quigley Pulls a Fast One, Changes Drilling Rules). Quigley used the excuse that the board was splitting in two, one board (the TAB) to cover unconventional/shale drilling, the other–Conventional Oil and Gas Advisory Committee (COGAC)–to cover traditional, vertical-only drilling. TAB is arguably the more important board because conventional drilling, which once was the only kind of drilling in the state, has all but shriveled up. There’s hardly any conventional drilling in PA these days. So with the TAB safely full of Quigley acolytes, it’s time to hand out the consolation prizes to the industry by giving them seats on the COGAC. Which is exactly what happened yesterday…
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Gallup Poll on Fracking Shows it to be a Partisan/Political Issue

Gallup is out with a nationwide poll that asks this question: Do you favor or oppose hydraulic fracturing or “fracking” as a means of increasing the production of natural gas and oil in the U.S.? The headline that news organizations are reporting is that across all age groups and party affiliations, it’s a 40/40 split–40% favor fracking and 40% oppose it. If you dig a little deeper, you find this should be the real headline: Republicans favor fracking, Democrats oppose it. If you dig deeper still, you’ll find those who have grown a brain (50+ years old) are in favor of fracking, while inexperienced (and frankly dumber) young people oppose it. That about sums up the poll numbers (see them below). At least, those are the poll numbers shared by Gallup. They don’t bother to share the cross-tabs–the underlying details of the poll. We’d love to see it broken out by region–or by state. Did Gallup weight the poll with people from New England or California and under-represent places like Texas and North Dakota? We don’t know. Therefore we don’t know how truly reflective this poll is of “average” American opinion…
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Chesapeake Slashes 2015 Budget Again, Another $500M

Just a month ago Chesapeake Energy released their disastrous 2014 numbers and their stock price took a huge hit. Along with the numbers for 2014, Chessy released a projected budget for 2015 of $4-$4.5 billion, down 34% over 2014 (see Chesapeake Energy Earnings Down 60%; Cutting Budget 34% in 2015). It’s a month later and Chesapeake has just slashed the 2015 budget again–another $500 million. They blame it on the low commodity price of natural gas…
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Carl Ichan Ups Ownership of Chesapeake, Continues to Lose $

Corporate Raider Carl Ichan continues his stranglehold on Chesapeake Energy. Ichan, you may recall, holds the second highest number of Chesapeake shares of stock and was largely the person responsible for booting Aubrey McClendon from the company he co-founded in April 2013 (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). In the lead-up to ejecting McClendon, Ichan increased his ownership in the company, starting in November 2012 (see Carl Ichan Ups Stake in Chesapeake Energy). He upped his ownership again after McClendon left, in August 2013 (see Corporate Raider Carl Ichan Ups Stake in Chesapeake – Again). How has that worked out for Carl? He’s losing money hand over fist (see Carl Icahn Has Lost $633 Million on Chesapeake Gamble…So Far). But channeling his inner Britney Spears (“Oops I Did It Again”), Carl just can’t get enough of the money-losing Chessy. He’s just increased his stake again–to 11% of the company. He remains Chessy’s #2 stockholder, behind fellow corporate raider Mason Hawkins…
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Jesse White is Back, Trying to Run as Republican for Judge

This is really rich. Remember Jesse White–a member of the PA House of Representatives (Washington County, PA) who cyber bullied some of his own pro-drilling constituents using fake online IDs? (see How the Mighty Have Fallen: PA Rep White Admits Guilt, Not Sorry) White didn’t, as any normal person would, resign in shame for his disgusting offense. He served the rest of his term and the Democrats in his district were obtuse enough to put him on the ballot again. He lost last November, big time (see End of an Ignominious Era: PA Rep Jesse White Loses). White has now set his sites quite a bit lower–running for PA magisterial district court judge. Around our neck of the woods they call it being a town justice–as low as you can go in the court system (no offense intended to magisterial judges who do an important job!). But get this: White tried to lock up both the Democrat AND Republican lines on the ballot for the upcoming primary in May–by getting 100 or so RINOs to sign his petition for the Republican line on the ballot. Just one problem–not all of the signatures were legit and a judge tossed enough of them that old Jesse can’t run as a Republican. That has him crying the blues yet again…
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