Eclipse Resources 2016 & 4Q16 Update – Super Laterals Coming

Two days ago Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released an update for fourth quarter and all of 2016. However, it was an operational and not financial update. Consider this the “good news” from 2016. Among the highlights: Production averaged 229 million cubic feet equivalent (MMcfe) per day, which was above their previous estimates of what it would be. Year-end proved reserves increased by 35% to 469 billion cubic feet equilvanet (Bcfe). Eclipse idled most of its drilling rigs in the first half of 2016 given the low price of gas, but they did drill one notable well early last year–the monster Purple Hayes well in the Ohio Utica–with a lateral (the horizontal part) that reached out 18,500 feet–an astonishing 3.5 miles (see Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes”). Purple Hayes and other “super lateral” wells are the theme for Eclipse in 2017. As part of the update, Eclipse offered a glimpse into what’s coming this year. Their plans involve drilling 11 super lateral Utica wells–all in excess of 15,000 feet long. Those 11 super lateral wells are part of a planned $300 million program to drill a total of 19 Utica wells in 2017…
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CONSOL Ups Proved Reserves to 6.3 Tcfe in Marcellus/Utica

It’s that time of year for energy companies to issue updates on just how much oil and gas they own in the ground, recoverable at current prices. Yesterday CONSOL Energy announced their total proved reserves had hit 6.3 trillion cubic feet equivalent (Tcfe), as of December 31, 2016. That number is an 11% increase compared to the previous year. The vast majority of CONSOL’s reserves (99%) are in the Marcellus and Utica Shale plays. Of the 6.3 Tcfe total proved reserves, some 423 billion cubic feet equivalent (Bcfe), or 6.8%, is in oil, condensate and other liquids. Meaning 93.2% of CONSOL’s reserves are in good ole natural gas (i.e. methane). As part of CONSOL’s update we get some interesting stats about the wells they drilled in 2016. In the Marcellus, CONSOL and its JV partner turned-in-line 47 wells with an average lateral (horizontal) length of 7,300 feet and expected ultimate recoveries (EUR) averaging 2.3 Bcfe per thousand feet. In the Utica Shale, CONSOL and their JV partner turned-in-line 15 wells with an average lateral of 8,000 feet and EURs up to 2.2 Bcfe per thousand feet. Here’s the update from CONSOL…
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Questerre Ups Proved Reserves to 5.8 Tcfe in Quebec Utica

Little known fact: There is a Utica Shale layer in Canada–along the St. Lawrence River Valley–in the Province of Quebec. On and off over the years we’ve mentioned it, largely in connection with an ongoing moratorium on shale drilling in Quebec (see our stories here). Quebec’s moratorium is similar to the moratorium on shale drilling in New York State–that is, a total block, but not a permanent block. After debating an environmental bill in December, the Quebec National Assembly voted to pass Bill 106, ostensibly to support Quebec’s “clean power plan.” The bill includes a section that “lays out a framework for oil and gas development” in Quebec. Fracking will not begin immediately. The bill does, however, mean that new regulations will come along early this year and after that, it’s an almost certainty that fracking will begin, in 2017, in the Canadian Utica. The main beneficiary if Questerre Energy Corporation, which owns ~350,000 acres in the Quebec Utica. Of that, Questerre is considering (for now) drilling on 36,000 acres. Given that drilling is likely to begin soon, Questerre recently commissioned an update of their proven reserves in the Quebec Utica. The last time they did so was in 2010. What did the new study find? Questerre is sitting on 5.8 trillion cubic feet equivalent (Tcfe) of oil and gas, representing some 965 million barrels of oil, a 30% increase over the numbers from 2010…
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Democrat Candidate for VA Gov Targets 2 M-U Pipeline Projects

Elections have consequence–not only on the national level, but also on the state and even local levels. Case in point: Barack H. Obama blocked the Keystone XL Pipeline through most of his presidency, and he blocked the completion of the 97% finished Dakota Access Pipeline. Trump got elected over Obama clone Clinton, and that’s all now changed. The Dakota Access Pipeline has received its final clearance and will be done within a few months. Keystone is refiling their application and will get built within the next year or so. However, there is a flip side too. Even when pipeline projects are federally approved, like the Constitution Pipeline from northeast PA into New York, states can throw a monkey wrench into the works and screw it all up–as NY Gov. Andrew Cuomo has done (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). The Constitution is now in federal court and sometime this spring NY is likely to lose the case and the pipeline will then get built. Nevertheless, the pipeline is delayed a couple of years beyond when it could have/should have been built and operating. Bad news for Williams and drillers like Cabot Oil & Gas, who desperately need it. Also bad news for New York City and New England, who desperately need the gas. So yes, elections have consequences, which is why it’s vitally important that Virginians don’t elect Democrat Tom Perriello as their next governor. Why? Yesterday he went on record to say he will oppose, obfuscate and otherwise do his best to see that two vital Marcellus/Utica pipelines don’t get built: Mountain Valley Pipeline ($3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA), and Atlantic Coast Pipeline ($5 billion, 594-mile Atlantic Coast Pipeline–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina). Virginians need to send Perriello packing…
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County Reaction to PA Gov. Wolf’s 6.5% Severance Tax: “Insane”

Yesterday MDN brought you the disappointing news that Pennsylvania Gov. Tom Wolf, America’s most liberal governor, has once again introduced a 6.5% severance tax plan as part of his 2017 budget (see PA Gov Wolf’s New Budget Calls for 6.5% Severance Tax (Again)). As part of that story we brought you some initial reaction to the proposal. We have some more reaction. Needless to say, PA counties are not impressed with the plan. Although Wolf claims counties will still see their cut of the current impact tax, counties see through the ruse. A county commissioner from Bradford, Doug McLinko, has this blunt assessment of Wolf and his severance tax plan: “I think the governor is insane.” That about sums it up. Hey, we didn’t say it! Doug did. Here’s what else Doug had to say about Wolf’s budget plan, along with some Republican legislators from the Philadelphia area…
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Five Facts About Shale: It’s Coming Back, and Coming Back Strong

Major multinational bank Société Générale, headquartered in Paris but with major operations here in the U.S., has just issued a 37-page report on U.S. commodities. The theme of the report caught our attention: “Five facts about shale: it’s coming back, and coming back strong.” Analysts working for Société Générale asked themselves this question: Will the U.S. recovery in oil and gas production offset OPEC cuts? They review some of the key dynamics of U.S. shale production in their report. Specifically, they highlight five facts about U.S. shale production that all point to the same underlying trend: shale is coming back in a big way…
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RINOsaurs Lobby Trump to Enact Socialist “Carbon Tax”

A group of RINO (Republican in Name Only) dinosaurs (i.e. RINOsaurs) have come out of retirement to lobby President Trump on the insane idea of a so-called “carbon tax.” Two of them were from the Ronald Reagan Administration–George Shultz and James Baker III. (As an aside, when Baker was Chief of Staff for Ronald Reagan, he was an arrogant ass–prancing around the West Wing. We can state this categorically from first-hand experience. MDN editor Jim Willis worked at the White House when Baker was there. Jim can also tell you Baker came from the Bush camp, which today we call the Washington establishment. There was a deep divide in the White House during the Reagan years between the “Bushies” who were establishment types, and true-conservative “Reaganites.” You know which camp Jim belonged to.) A carbon tax is nothing more than a way to slap a regressive tax on every citizen of the country–as if we aren’t already taxed enough. If you live in the great middle class of this country, you already pay close to 50% of your income in various federal, state, local, property, sales and other taxes. Add it up sometime–you’ll see we’re not exaggerating. A group of Republican “elder statesmen” (as fake news source CNN calls them) yesterday met with Team Trump at the White House to push this disastrous plan, calling it (be careful not to vomit), “conservative.” There’s nothing conservative about it…
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Join MDN at O&G Awards Northeast Industry Summit on March 2

Once again MDN editor Jim Willis is participating in this year’s Oil & Gas Awards Northeast Industry Summit, being held on March 2 in Pittsburgh. Jim helped create the program for this year’s Summit, and he will moderate two of the panel discussions at the event. Jim invites Marcellus Drilling News readers in the Pittsburgh orbit to attend the Summit–for FREE. Just sign up here. The Agenda for the Northeast Industry Summit is now complete (see it online). MDN readers are invited to attend as complimentary guests. The Industry Summit takes place at the Westin Convention Centre, Pittsburgh, PA, on Thursday, March 2, 2017, between 8.30 am and 12.30 pm…
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