PA NatGas Production 2Q16 – DUCs Shrink, Production Grows

IFO logoIn the past we’ve been pretty critical of the Pennsylvania Independent Fiscal Office (IFO). It claims to provide revenue projections for use in the state budget process along with “impartial and timely analysis of fiscal, economic and budgetary issues to assist Commonwealth residents and the General Assembly in their evaluation of policy decisions.” It’s been our observation the IFO is populated with partisan Democrats. However, we have to acknowledge lately their analysis work, at least with regard to the Marcellus industry, has been pretty accurate (see PA Independent Fiscal Office Predicts Impact Fee Revenue for 2016). The IFO has just released another report–this one analyzing the first six months of monthly Marcellus gas production data issued by the state Dept. of Environmental Protection (DEP), comparing it with previous months and years (full copy of the IFO report embedded below). What’s obvious from the numbers is this: PA’s shale drillers are in the process of completing previously drilled but uncompleted wells (called DUCs), drawing down the number of DUCs available. The conclusion is inescapable: More drilling of new wells is on the way in PA in 2016…
Continue reading

Frackenstein! Researchers Find New Life Form in Fracked Utica Wells

Frankensteins_monster_Boris_KarloffThis story is almost too good to be true. Researchers from Ohio State University have been analyzing the genomes of microorganisms (i.e. bacteria) that live in Utica Shale wells. (Who would think to do something like that?) The researchers “have found evidence of sustainable ecosystems taking hold there–populated in part by a never-before-seen genus of bacteria they have dubbed ‘Frackibacter.'” Translation: There’s little communities of microscopic critters that live in those shale wells, including a brand new critter that lives only in fracked Utica Shale wells. The hypothesis is that fracking itself created this new mutated life form. The researchers are calling it Frackibacter (we think it’s pronounced frack-uh-back-tor). We have a better name: Frackenstein! Yes ladies and gentlemen, step right up to witness this fracking freak of nature–a bacteria created from fracking itself. Who knew fracking didn’t destroy life, but actually creates it?! Below is an article about the discovery, along with a copy of the peer reviewed paper published in the journal Nature Microbiology announcing the discovery of this new fracked life form…
Continue reading

Why Utica Drillers are Moving from Wet Gas to Dry Gas

light bulb going onThis is an update to a story MDN ran last week observing that Utica drillers have slowed (or stopped) their wet gas drilling work and instead have shifted to drilling Utica wells, in Ohio, in the dry gas areas (see Shift in Utica Drilling – from Wet Gas to Dry Gas). That story observed the phenomenon of changing from wet to dry gas drilling in the Buckeye State. This story, today, explores the reason for the shift–answering the “why” question…
Continue reading

Marcellus/Utica Ethane Heads to Norway via Texas

INEOS Intrepid
click for larger version

Very good news for those few Marcellus/Utica drillers who ship their ethane out of the northeast via the ATEX (Appalachia to Texas) Express pipeline. Enterprise Products Partners announced last week that the very first cargo of ethane to be exported from its brand spanking new Morgan’s Point, Texas terminal was loaded onto a ship headed for Norway. Some 265,000 barrels of ethane, some of the ethane (much of it?) came from the Marcellus/Utica via the ATEX Express pipeline. Who are the lucky Marcellus/Utica drillers now selling their ethane via the Gulf Coast?…
Continue reading

Atlas Resources Partners Exits Bankruptcy Renamed as Titan Energy

renameIn July MDN reported that Atlas Resource Partners (ARP), a publicly-traded exploration and production master limited partnership (“MLP”) with operations in basins across the United States including the Marcellus and Utica Shale plays, filed for a bankruptcy (see Atlas Resource Partners Filing for Bankruptcy Tomorrow). The ARP plan follows in the footsteps of other recent such filings, known as a “pre-packaged” bankruptcy. Companies like Atlas cut deals with the people they owe money to, the debtholders, negotiating a plan to convert the debt into equity (ownership) thereby screwing current stockholders by devaluing their stocks to the value of toilet paper. Two weeks ago the ARP plan was approved by the courts, and last week the company exited bankruptcy. But when the exited, they did so sporting a new name: Titan Energy. Perhaps a year from now nobody will remember that Titan is the once-bankrupt ARP…
Continue reading

Baker Hughes Avoids Another Round of Layoffs by Using Furloughs

cutting jobsWe’ve long bemoaned the fact that the first tactic used by oil and gas companies to stay in business during this severe downturn has been to layoff large numbers of employees. We understand all the arguments: better to cut some rather than go bankrupt and out of business, putting everyone at the company in the unemployment line. We also understand many of these same companies added large numbers of people over the past half decade in the rapid scale-up to handle all of the new shale drilling–so this is simply a “correction” or rebalancing. But tell that to someone who has lost his or her job and the families affected by it. “Hey, you’ve been made redundant” (as our British friends call it). Or, “You’re just a correction.” No, our sympathies are with the men and women who have been laid off and suffer. Some of the biggest layoffs have come from oilfield services companies, like Halliburton and Baker Hughes–both with major operations in the Marcellus/Utica. Tens of thousands have been laid off at each company over the past two years or so. In July Baker Hughes laid off another 3,000 in fell swoop (see Baker Hughes Laid Off 3K in 2Q16, No Drilling Recovery in 2016). It’s been an employment apocalypse. We spotted a story that may offer some hope, and an idea, for companies in o&g pondering yet more layoffs. Instead of laying off yet more people at Baker Hughes, the company has just announced they are using furloughs to cut employee payments by 5%…
Continue reading

Why Did Shell Choose PA for its Ethane Cracker Plant?

Shell ChemicalsA great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…
Continue reading

Antero Responds to Critics of New WV Wastewater Facility

antero resourcesTwo weeks ago MDN provided an update on the new Antero state-of-the-art frack wastewater treatment plant and landfill being built in West Virginia (see Update on Antero’s $275M Wastewater Facility in WV). Once built, this new plant will recycle 98% of the water used, for re-use by Antero in its fracking and drilling operations. According to Antero’s regional senior vice president and chief administrative officer, Al Shopp, although it may be cheaper to just inject the wastewater down an injection well somewhere, the more environmentally friendly, long-term solution is to do what they are doing–recycle it all. You might think that would please environmental Nazis–but you would be wrong. They want zero drilling and anything, including a better way to handle wastewater, will lead to more drilling and therefore is opposed by these nutters. Al Shopp responds to some of their nonsensical arguments against the new plant…
Continue reading

Marcellus & Utica Shale Story Links: Tue, Sep 6, 2016

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: GE Oil & Gas lays of workers in Western NY; fire at OH gas processing plant; the Geisinger embarrassment – no study, just junk science; why Rhode Island desperately needs a natgas pipeline; fracking fuels half of U.S. oil output; powergen demand for natgas jumped 9.4% in June; when will oil prices go up?; end in sight for natgas glut; and more!
Continue reading