OH Utica Production 3Q17: Ascent Res. Dominates Top Producers

The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the third quarter of 2017. The good news is that production is up for both natural gas AND oil. Utica natgas production saw a huge percentage increase–up 27.51% over the same period last year. 2Q17 Utica natgas production increased 16% over the previous year, and 1Q17 production increased 13% over the previous year. Although the trend has been up this year, 3Q17’s jump is really big (nearly double) compared to previous quarters. The even better news is that until 3Q17, Ohio oil production was trending down quarter after quarter–but in 3Q17 the trend reversed. Utica oil production was up slightly, close to 3%, over the same period last year. The ODNR report lists 1,796 horizontal wells, of which 1,760 reported production of some amount. The average natgas well produced 261,681 million cubic feet (Mcf) during 3Q17, and the average oil well produced 2,367 barrels of oil. But as we all know, each well is unique. Below we give you an MDN exclusive, showing the top 25 natgas wells and top 25 oil wells. In 3Q17, the top 3 natgas wells were drilled and operated by Ascent Resources. Rounding out the top 5 were two wells drilled by Rice Energy (now owned by EQT). All top 5 producing natgas wells in 3Q17 are located in Belmont County. What about oil wells? The top 2 producing oil wells were drilled by Ascent Resources. Coming in at #3 was a well drilled by Eclipse Resources, followed by #4 drilled by Chesapeake Energy. Rounding out the top 5 producing oil wells was a well drilled by Ascent Resources. Four of the five top producing oil wells are located in Guernsey County, with one in Harrison County. You might say, with some justification, that Ascent Resources (formerly called American Energy Partners, Aubrey McClendon’s startup following Chesapeake Energy), dominated the top producing wells for 3Q17, for both natgas and oil…
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DOE Publishes NGL Primer for Marcellus/Utica, Pushes NGL Storage

The Trump Dept. of Energy is hopping on the natural gas liquids storage bandwagon. Yesterday the DOE published a 45-page report called, “Natural Gas Liquids Primer: With a Focus on the Appalachian Region” (full copy below). The DOE uses its own data along with data from the U.S. Energy Information Administration (our favorite government agency) to create an up-to-date picture of Appalachian NGL supply, demand, and infrastructure. What does that picture show? It shows we are in desperate need of our own regional NGL storage facilities. No doubt one of the reasons for the report is to goose China into investing in a proposed $10 billion NGL storage plan being pushed by many (see Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub). The report gives an important shout-out to the Mountaineer NGL Storage project. The report is a primer–it runs through the basics of NGLs (what they are, why they’re important). The DOE says this report is an important first step in preparing a more comprehensive report requested by Congress about the benefits of Marcellus/Utica NGLs. That comprehensive report will be ready sometime next year. In the meantime, this report will give you an important foundation of knowledge…
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Big Changes Coming in Randolph County, WV with Atlantic Coast Pipe

Randolph County, WV is about to see some big changes in the coming months. Why? In “early spring” somewhere around 400-1,200 workers will descend on Randolph as work begins to build the mighty $5 billion Atlantic Coast Pipeline (ACP) being built by Dominion Energy. Members of the Rotary Club of Elkins heard a presentation earlier this week about what to expect when the pipeliners come a callin’. Some of those impacts include: higher traffic levels, more business for restaurants and convenience stores, an uptick in business at local laundromats, and higher occupancy for hotels and apartment buildings. According to Denise Campbell, community liaison for the ACP, “There’s a lot of opportunity.” Here’s a recap of Campbell’s comments to the Rotarians…
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Cabot O&G Sells Texas Eagle Ford Assets for $765M, Focus on Marc.

Cabot Oil & Gas is a unique company. To date, Cabot produces ~2.5% of the U.S.’ entire natural gas production out of a single northeastern Pennsylvania county: Susquehanna. One company, one county, 2.5% of all our natural gas production. It’s mind-blowing! No wonder they are called Wall Street’s natural gas unicorn (see Marcellus Driller Cabot Oil & Gas: Wall Street’s NatGas “Unicorn”). Although we jealously like to think of Cabot as a Marcellus-only driller, the truth is, they own acreage and wells, and do drilling, in a number of other plays too. Not much drilling, mind you. But some. Cabot mostly sticks to drilling in the Marcellus in northeast PA, although lately they’ve had a wandering eye (see Cabot O&G Considers Drilling in Ashland County, OH). One of the other shale plays where Cabot has been active in the past is the Eagle Ford Shale, in South Texas. The Eagle Ford is largely an oil play. This past year it did not escape our notice that Cabot had de-emphasized their Eagle Ford drilling efforts. Looks like drilling for oil in Texas is not in the cards for Cabot. Yesterday Cabot announced they’ve cut a deal to sell all of their Eagle Ford assets–land and wells–to Venado Oil & Gas for $765 million. They also said they are selling their remaining East Texas assets to an undisclosed buyer. The Houston-based Cabot won’t have any active operations in the Lone Star State. As part of yesterday’s announcement, Cabot released high level budget numbers for 2018. They intend to spend close to $1 billion next year–almost all of it in the Marcellus…
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Preview NGI’s Awesome 2018 Shale Play/Pipeline Map

Just in time for Christmas (or Chanukah, or Kwanzaa)…NGI has just released our favorite map, the 2018 Map of Shale/Resource Plays & North American Natural Gas Pipelines. When MDN editor Jim Willis began working in the natural gas market full-time in 2012, he learned from some of the best in the business–the incredibly talented people at Natural Gas Intelligence (NGI). One the key lessons Jim learned early on in working with NGI is that ours is a market driven by price. And not just one price! Yes, the Henry Hub in South Louisiana is the most quoted price point in the world when it comes to natgas. Indeed, it forms the basis price against which all other trading points are measured. But Jim learned early on there isn’t just one price for natural gas, there are many (hundreds!) of prices for natural gas, because natural gas is traded at hundreds of different locations along pipelines, all around the country. When Jim was being taught about the markets and prices and why and where drillers decide to drill, driven by price, one of the key resources used to teach Jim was the NGI map. It was a revelation that made a lasting impression when Jim’s tutors walked him over to the NGI map hanging on the wall and pointed out all of the different shale plays, pipelines, and trading points along those pipelines. Suddenly, the complex world of natgas with its many moving parts snapped into place. It was now understandable. NGI’s wall map is the tool that did that for Jim. Perhaps it can do the same for you. NGI typically issues the map with updates every year or two. The 2018 edition has just been released, with important updates. If you work in, or have an interest in, the natural gas market, give yourself the one gift that will keep on giving for years–an NGI map…
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Obscure Committee with Power Over PA Gathering Pipes Staffing Up

An obscure committee of individuals will begin to wield big power over Pennsylvania’s natural gas (and oil) gathering pipelines beginning next year. In just about every state in the country, before you start digging a hole in the ground for some reason (water well, septic system, laying an underground electric line, etc.)–the first thing you do is call 811 or some similar phone number. The “one call” or “first call” reaches a state-authorized (not necessarily state-run) office where they have, on file, maps detailing any kind of underground cables, pipelines and other infrastructure. If such underground structures exist, a representative of the owner for the underground line will, if necessary, stop by and mark the areas so when you do begin digging, you don’t hit it. Makes sense. A bill introduced last year (in 2016) in the Pennsylvania legislature “enhances” the existing 811 law in PA. One of the “enhancements” is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system, mainly lines run to low-producing conventional gas wells. The bill was opposed by the Pennsylvania Independent Oil & Gas Association (see PIOGA Opposes Bill to Regulate Unregulated PA Gathering Pipelines). The bill was reintroduced in March of this year (see PA State Senator Introduces Bill to Regulate Gathering Pipelines). Once again PIOGA pushed back, and in June a compromise was reached to exclude pipelines running to “stripper wells”–i.e. low-producing conventional wells. With that compromise in place, both the PA Senate and House have voted to adopt the plan and it was signed into law (see Shale + Large Conventional Gathering Pipes Added to PA One Call). The PA Public Utility Commission is the state agency charged with oversight of the enhanced 811 system. The PUC announced yesterday it is looking for nominations of individuals to sit on the utility and pipeline Damage Prevention Committee (DPC). We spotted this note about the power of this small group of people: “The DPC will meet regularly to review alleged violations of the Act and make determinations as to the appropriate response including, but not limited to, the issuance of warning letters or administrative penalties.” Sounds to us like this obscure committee now holds great power over PA’s gathering pipeline infrastructure…
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SE PA Politicians Introduce Bills to Prevent Future Pipeline Development

Weak-kneed, swamp-dwelling politicians from the Philadelphia area continue to ratchet up the noise on stopping all work for the Mariner East 2 Pipeline. State Sen. Andy Dinniman (Democrat from the 19th District) and State Sen. John Rafferty (RINO from the 44th District) say the impacts of ME2’s construction are “unacceptable.” A few of their loudmouthed constituents (mostly likely members of Big Green groups) are complaining to these weak-kneed politicians and in turn the politicians have introduced four new bills in the PA Senate that will not do a @#$% thing about ME2, but will potentially stop future pipeline projects in the state. The aim of the bills is to tie up pipeline projects with so much red tape in various reviews, and by paying new fees for so-called “safety” measures, as to make the pipelines unbuildable. Here’s the latest effort from the Philly area to derail the Marcellus miracle in PA…
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Marcellus Racial Discrimination Lawsuit Settled Out of Court

Two African-American Marcellus Shale natural gas workers in the Williamsport, PA area claim they were fired, twice, based in part on their race. The two filed a lawsuit against STI Group (a staffing agency) and Chesapeake Energy. The case was thrown out by U.S. Middle District of Pennsylvania Court, but later reinstated on appeal by the 3rd Circuit Court of Appeals. Rather than let the case drag out endlessly, STI and Chesapeake have just settled it. The amount of money they had to pay to make it go away was not disclosed. Workers are hired and fired all the time. Ours is a boom/bust industry. Was this really a case of racism? Or just a case of boom and bust? You read the details and decide for yourself…
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Report: U.S. Natural Gas’ Place in the Global Economy

Every now and again MDN editor Jim Willis attends a conference or seminar that reminds him how parochial we in the natural gas industry sometimes are. We often (understandably) have our heads down, focused on who’s drilling where and fretting over how we’ll get that gas to market. Sometimes it’s good to lift your head up and observe the entire energy landscape. Natural gas is one piece of the puzzle. An important piece, to be sure! But still, just one piece. Trends in coal, nuclear, solar, wind, hydro–they all play a part in the larger picture. The world of energy is dynamic and changing. New solar plants going up in Japan actually DO have an impact on Marcellus gas production–because that means Japan may decrease its LNG imports–which potentially would come from our LNG exports. You get the picture. This past May the Center for Strategic & International Studies (CSIS) held a one-day workshop with government, industry, and policy experts, to explore the outlook for U.S. natural gas markets in the global energy landscape. In November they condensed the material from that workshop into a report. Below is a full copy of that report. This will help you (as it does us) think about the bigger picture and where we here in the Marcellus/Utica fit into that picture…
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Marcellus & Utica Shale Story Links: Thu, Dec 21, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: MSC president has ‘cautious optimism’ for 2018; natgas prices for consumers decline sharply in WV over last 10 years; anniversary of Gov. Cuomo’s Upstate choke hold; NY wants to evict oil tank rail cars; Cheniere’s Corpus Cristi LNG export plant 77% done; surge in US shale hedging will boost drilling in ’18; tax reform benefits energy markets big; Saudi Arabia shopping for US shale assets; and more!
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