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The 10 Largest Natural Gas Drillers in the U.S.

Top 10ProPublica recently compiled a list of the top 10 natural gas drillers in the U.S. based on daily natural gas production volume. The list includes gas drilled by both “traditional” vertical drilling as well as “non-traditional” horizontal hydraulic fracturing. Or think of it as non-shale gas and shale gas—companies who drill for both are in the list. The Marcellus Shale represents a good portion of the gas now being produced in the country, but other shale formations, like the more mature Barnett Shale (in Texas) also contribute a substantial volume of natural gas.

MDN presents this list as a useful resource for landowners. The biggest drillers are not always the best, and not always the right choice for a given landowner and situation. However, knowing who the “bigs” are can be a helpful guide—you know they have the money and the technology to get the gas out of the ground, and they have money to pay for leases and royalties.

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Recent Marcellus Shale Joint Venture Deals

Joint ventures are a common way for oil and gas companies to share risk, expertise and resources. Here is a list of recent deals in the Marcellus shale:

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NY Attorney General Schneiderman Subpoenas Shale Drillers

New York’s anti-drilling Attorney General, Eric T. Schneiderman, continues to target the shale gas industry. On May 31, he filed a lawsuit in federal court seeking to force the federal government to conduct a full environmental review of hydraulic fracturing before the Delaware River Basin Commission be allowed to permit drilling in its jurisdiction (see MDN’s story here). The federal government has since asked the judge in the case to toss out the lawsuit.

Now, based on a questionable article that appeared in the New York Times, written by anti-drilling author Ian Urbina (who used an intern as one of his main sources for the article), Schneiderman is using (misusing?) the considerable power of his office to target energy companies involved with shale gas drilling by sending them subpoenas for documents to “prove” their statements on shale gas reserves are accurate. The Times article claimed energy companies knowingly overstate the production of gas wells, understate how much it costs to get the gas, and intentionally inflate numbers for how much natural gas exists in shale formations.

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Ohio County Receives $8M (So Far) from Marcellus Gas Leases

Ohio County, WV is reaping the rewards of leasing county-owned land for Marcellus gas drilling. The county’s land leases with Chesapeake Energy have already resulted in nearly $8 million in one-time lease payments for the county coffers, and soon will mean royalty payments too. Chesapeake has already completed a well on private land adjacent to (and drilling under) county land in The Highlands area. But gas from that well has not yet started to flow due to a delay in getting a pipeline built to the well. Once the pipeline is in place, the county will start receiving royalty checks from that well.

And within the next 12 months, Chesapeake will drill a new well, this time directly on county-owned land at the airport:

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New Pipeline Permit Rules Delay Landowner Royalties in PA

paperworkA new set of rules governing pipeline construction permits issued by the U.S. Army Corps or Engineers is causing extreme delays in getting gas from wells to market according to Chesapeake Energy. The new rules have turned what was an average 45-day process to file paperwork into a 300-day process.

The bottom line is that wells that are drilled and completed sit idle because gathering pipelines aren’t being built to them, and consequently landowners are not receiving royalty checks.

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Chesapeake Threatens NY with Lawsuit on State Land Leases

force majeureThe New York Department of Environmental Conservation (DEC) leased 19,000 acres of state forestland to Chesapeake Energy and Fortuna Energy (now Talisman Energy) in 2006 to allow gas drilling. The deal provided state coffers with $9 million and the promise of 12.5 percent royalties on any gas produced. Those leases are due to expire Nov. 15 of this year, but Chesapeake has let the DEC know it believes the leases for its share (15,472 acres) should be extended, a legal phrase called force majeure, because of the moratorium that has been in place since 2008 on hydraulically fractured gas drilling. In a letter to the DEC, Chesapeake implied they will sue the state to extend the lease agreements if the state does not willingly agree to an extension.

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Methane Present in 11% of WV Water Wells Before Drilling Begins

In response to a study released in May by Duke University showing elevated levels of methane in water wells near active gas wells being drilled, Chesapeake Energy has released its own water testing data. One of the chief criticisms of the Duke study is that baseline measurements were not taken—that is, Duke did not test water wells before active gas drilling took place to eliminate the possibility that methane in those water wells was naturally occurring. Chesapeake has that data for wells close to its active drilling sites. The results are indeed interesting.

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Columbiana County, OH Renegotiates Lease with Chesapeake Energy After Oil Discovery

sign leaseNews of Chesapeake Energy’s major oil discovery in eastern Ohio’s Utica Shale prompted officials in Columbiana County to renegotiate their about-to-be-signed lease with Chesapeake. It was a smart move for the county—netting them an additional $255K:

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Chesapeake Energy CEO Aubrey McClendon Talks to Jim Cramer About the Utica Shale in Eastern Ohio

Jim Cramer, Mad MoneyChesapeake Energy CEO Aubrey McClendon on Monday appeared on Jim Cramer’s Mad Money show on CNBC to talk about the company’s new, oil-rich discovery in the Utica Shale of eastern Ohio. He had some fascinating things to say, including that he expects there to be some 25,000 wells drilled in the Ohio Utica Shale, and that there will be $10 billion per year for at least 20 years (or $200 billion) of investments in the Ohio Utica Shale alone. Yikes! No wonder Gov. John Kasich is “gushing” about Chesapeake’s discovery. An investment of 1/5 of a trillion dollars is a major big deal for Ohio—not only for landowners but also for businesses and for those who will be employed by drilling and associated industries. You cannot overstate how important this discovery is.

McClendon also says in the segment he believes the Utica Shale will be even bigger (production-wise, economic-wise) than the Eagle Ford Shale, with an estimated 25 billion barrels of oil equivalent in the form of oil, natural gas liquids and natural gas in eastern Ohio. McLendon says the Utica is possibly “one of our biggest discoveries in U.S. history.”

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Chesapeake Energy Slated to Start Drilling in the Utica Shale in Columbiana County, OH this Fall

Last week, Chesapeake Energy announced (via it’s quarterly earnings statement) a major revelation—that it has struck oil as well as natural gas liquids and natural gas, in the Utica Shale of eastern Ohio. Columbiana County, OH is in the hot zone and stands to reap millions in revenue.

In the run-up to the announcement, Chesapeake has been busy signing deals with landowners in Columbiana County, including leases with local municipalities and school districts:

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Ohio Gov. John Kasich Jazzed About Chesapeake Striking Oil in the Utica Shale – Refers to Potential Out-of-State Workers as “Foreigners”

Ohio’s Gov. John Kasich is jazzed about Chesapeake Energy’s announcement of striking oil in the Utica Shale in eastern Ohio. But he also has issued a warning to Chesapeake and other drillers about the makeup of the work crews who will be populating well pads:

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Major Discovery – Chesapeake Energy Strikes Oil (and Gas) in Ohio’s Utica Shale

After two years of research and experimental drilling, Chesapeake Energy announced yesterday they have struck oil, natural gas liquids and natural gas in Ohio’s Utica Shale. This new find will boost Chesapeake’s company value by 15-20 billion dollars and is causing quite a sensation among Ohioans.

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How Much Should Landowners be Paid for Marcellus Pipelines on Their Property?

With an increase in the number of Marcellus gas wells drilled, comes an increase in the need for pipelines to get that gas to market. Local pipelines that gather the gas and take it to a compressor station where it’s then sent to a larger pipeline, and pipelines that bring water to drilling sites, can be from as small as 4 inches in diameter to as large as 36 inches in diameter. In Marcellus Shale states like West Virginia and Ohio, the mineral rights to drill for gas beneath the ground are often owned by someone different than the landowner who owns the surface rights. A pipeline contract is known as a right-of-way easement with the surface owner.

Since surface owners will not see any royalties from the gas, they understandably want to get as high a price as they can for allowing pipelines to traverse their property, pipelines that once installed, will be there for many years—often longer than the producing gas well. But what’s a fair price?

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Chesapeake Energy Will Invest $1 Billion over 10 Years on New Alternatives to OPEC Oil

On Monday, Chesapeake Energy, the second largest producer of natural gas in the United States and a major player in the Marcellus Shale, committed to investing $1 billion over the next 10 years in technologies “that will replace the use of gasoline and diesel derived primarily from OPEC oil with domestic oil, natural gas and natural gas-to-liquids (GTL) fuels.” Chesapeake has created a venture capital fund, called Chesapeake NG Ventures Corporation (CNGV), that will invest in companies offering alternatives to OPEC oil—ie, technologies that use natural gas.

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