Hess Drilling 5 More Utica Wells 1Q16 Then Stopping

stop signHess Corporation released their 2016 capital and exploration budget yesterday. Last October Hess said they would spend $2.9-$3.1 billion during 2016. Throw that out the door. They’ve now dropped the capex budget to $2.4 billion, which is 40% less than they spent in 2015. Hess has maintained an active drilling program in the Ohio Utica Shale. What part of that $2.4 billion do you suppose they plan to spend in the Utica this year? The number is $45 million, which will be spent on drilling five new wells and bringing a total of 14 wells online–all in the first quarter. After that? They’re releasing the single rig they now have under contract. So Hess is spending 1.9% of their budget on the Utica for 2016…
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Canadian Antis Turn Criminal in Quest to Stop Fossil Fuels

When radical environmentalists use lock cutters to break into an oil pipeline pumping station and turn the values–off or on or anything but what they are supposed to be–that’s a serious crime. It’s not cute. It’s not funny. It’s not “a statement”. It’s a hate crime–hatred of fossil fuels, which is driving some enviros criminally insane. And it’s happening in Canada where lunatic anti-fossil fuelers are attempting to disrupt, on a regular basis, the free flow of crude oil by pipeline throughout the country. We hope these criminals are caught and thrown in jail–for a long time…
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Judge Stops WV County from Enforcing Injection Well Ban, For Now

The second step has been taken in overturning an illegal ban on wastewater injection wells in Fayette County, WV. You may recall we told you two weeks ago that three Democrat county commissioners voted to ban injection wells (see WV County Officially Bans Injection Wells; Children Brainwashed). There are two injection well operators in Fayette County: Danny Webb Construction and EQT. The day after the vote EQT sued to overturn the new ban (see EQT Sues WV County that Banned Injection Wells, Seeks Injunction). On Tuesday, Jan. 19, U.S. District Court Judge John T. Copenhaver Jr. granted an injunction preventing the county from enforcing the ban at least until a Feb. 11 hearing. As part of his reasoning, Judge Copenhaver said EQT “is likely to succeed” in their lawsuit to overturn the ban…
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FERC Investigates 3 Northeast Pipelines for Overcharging

The Federal Energy Regulatory Commission (FERC) has launched five investigations into four pipelines, three of which operate in the northeast, to determine whether or not those pipelines have been “substantially” overcharging their customers with the excuse of “we have to recover our costs.” Although you might think the free market would govern what pipelines charge, pipelines, like other utilities, don’t operate in a totally free market. You can’t just up and leave one pipeline and take your gas to another. The government grants permission to operate, and the government keeps an eye on the rates charged–just like they do with your local gas and electric company. In the case of interstate pipelines, the government agency monitoring how much they charge is FERC. Apparently someone complained and FERC is now on the case. The three pipelines in the northeast under investigation are: Empire Pipeline, Iroquois Gas Transmission System and Columbia Gulf Transmission…
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Drilling Slowdown – What to Do With Excess Produced Water?

Ever hear of something called a crossover point in oil and gas drilling? No, we hadn’t either. When shale drilling is going full tilt, it uses, and produces, a lot of water. We’ve talked about this before. When you frack and force water down a hole, you get about 20% of it back (the rest dissipates into the rock layer a mile or more below ground). Millions of gallons. You also get, over time, something called “produced water,” or water that already existed in the depths that over time will come to the surface along with the oil and gas you’re extracting. In Pennsylvania most flowback (from fracking) and produced water (or brine) is recycled and reused to drill more holes. But eventually you drill so many holes and get so much brine or produced water out of the ground, you will begin to exceed the level that drillers can re-use it. That is, you “crossover” the point at which you produce more water from previously drilled holes than you can now use. Just last year predictions for the Marcellus were that it would be 5-9 years before crossover of water production. With the radical reduction in drilling in 2016, it may be this year we hit crossover. What do you do with all of that extra wastewater?…
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New Report Says O&G Industry Repeating Mistakes from Last Downturn

According to a new report published Monday by DNV GL, a Norway-based technical advisory firm for the oil and gas industry, a majority of oil and gas professionals believe the industry is repeating the mistakes they made during the last serious downturn in the industry. Namely, companies are laying off too many workers and cutting budgets too much. The report is titled “A New Reality: the outlook for the oil and gas industry in 2016” (grab a copy below). According to DNV GL Vice President Graham Bennett, “The operators can weather the low oil price storm for some time, but the supply chain will suffer far more, and there is a risk of a permanent loss of capacity in the supply chain if low prices persist.” Rather than being too quick to cut bodies and budgets, survey respondents believe now is the time to cut complexity, increase collaboration and work on standardization…
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ExxonMobil: Fossil Fuels Will Produce 80% of World Energy Thru 2040

Understanding the global energy picture is helpful so we know where the shale energy piece “fits” in that picture. Each year ExxonMobil prepares an annual energy outlook. On Monday they released the 2016 ExxonMobil Outlook for Energy: A View to 2040 report (full copy embedded below). Some interesting tidbits from the report: “In 2040, oil and natural gas are expected to make up nearly 60 percent of global supplies, while nuclear and renewables will be approaching 25 percent. Oil will provide one third of the world’s energy in 2040, remaining the No. 1 source of fuel, and natural gas will move into second place.” Perhaps most astonishing (for wacko environmentalists) is this: Fossil fules–oil, natural gas and coal– will continue to meet almost 80 percent of the world’s energy needs through 2040. It is intellectual suicide to pretend so-called renewables will be able to shoulder the energy burden in our lifetime. Ain’t gonna happen. We live in a world powered by fossil energy–and THERE’S NOTHING WRONG WITH IT…
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API & GPA Say PHMSA Regs for Liquids Pipelines Not Necessary

Last October the Dept. of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice of proposed rulemaking for new regulations governing hazardous liquid pipelines. It appears to be another case of aggressive action by the Obamadroids, bent on hassling the fossil fuel industry by requiring unnecessary regulations that don’t really improve safety. They just cost more money and take more time. The new rules will require safety inspections after “extreme” weather events and natural disasters–just to be sure there aren’t any leaks. Stepped up inspections would be required even if no problems are found–just to be sure no problems are found. The new regs also require all hazardous liquids pipelines to be piggable–something not physically possible with some pipelines. The list goes on. Recently both the American Petroleum Institute (API) and the Gas Processors Association (GPA) weighed in on the proposed new regulations. Needless to say they’re not impressed…
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Cool New Tool for Landowners to Estimate Shale Royalties

MDN noticed a cool new tool recently released by the great folks at GoMarcellusShale.com. The new tool is called ShaleCast (www.shalecast.com) and it provides free estimates of future royalties, production, and much more. There is no cost to use the service but it does require that you register (give your name, etc.). We haven’t used it ourselves because we don’t have any drilled wells or even the prospect of a drilled well–alas we live in the People’s Republic of New York with a malevolent dictator by the name of Andy Cuomo. But many MDN readers live in PA, OH and WV and may be able to benefit from using this cool new tool. Here’s a screen shot to help you understand what it can tell you about a well on or near your property…
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Oilfield Serv. Co. Keane Group Buys Trican Well Service for $247M

Keane Group is a Texas-based oilfield services company that provides fracking, wireline and top-hole air drilling services to oil and gas companies in the Marcellus/Utica as well as several other major basins. Keane announced yesterday they are buying out Canadian-based Trican Well Service for $247 million. The expansion will, according to Keane, triple its fracking capacity and give it access to proprietary technology. Cool, we love shiny new objects! Here’s the Keane announcement they are buying Trican…
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Marcellus & Utica Shale Story Links: Wed, Jan 27, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA pipeline task force still generating heat; teapot refineries going under; time to limit crude imports?; Supreme Court upholds energy conservation program; Halliburton/BH merger 50/50; the five stages of oil price grief; distress in the shale oil patch; and more!
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