Devon Energy Accuses EPA of “Seriously Flawed Misuse” of Data

Devon Energy sent a letter March 5 to the federal Environmental Protection Agency to inform them that Devon is pulling out of the EPA’s Natural Gas STAR Program—a program aimed at reducing methane emissions. Devon says in the letter that EPA is guilty of “seriously flawed misuse” of the data provided to it by drillers to justify costly regulations and to “taint policy research.” The Devon letter minces no words…

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Devon Energy Puts 240K Acres of Utica Shale Leases Up for Sale

for sale sign On Wednesday Devon Energy Corp. confirmed it’s selling off all of its holdings in both the Ohio Utica and Louisiana Tuscaloosa Marine Shale. Between the two shale plays, the company is hoping to raise about $3 billion. Devon’s Utica Shale holdings include 244,000 gross acres (195,000 net) in eastern Ohio in the liquids-rich portion of the play. Devon has hired Scotiabank’s Scotia Waterous (USA) Inc. M&A division to handle the sale. A map of Devon’s eastern Ohio Utica property is embedded below.

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Devon Energy Plugs Third Utica Well, Changes Strategy

Devon Energy, recently named by FORTUNE Magazine as one of the “100 Best Companies to Work For” in the U.S., has just plugged a third Utica Shale well in Ohio and is signaling a major change in strategy. They no longer plan to drill for natural gas in the Utica and will instead concentrate 100% of their time (and money) on drilling for oil.

A few weeks ago MDN told you about two Ohio Utica wells plugged and “abandoned” by Devon, one in Medina County and the other in Ashland County where they found disappointing results (see Flip Side: Some OH Utica Shale Wells Get Plugged/Abandoned). The third Utica well to be plugged and abandoned by Devon is located, ironically, in Utica, Ohio (Knox County):

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Flip Side: Some OH Utica Shale Wells Get Plugged/Abandoned

When it comes to drilling in the Ohio Utica Shale, a lot of attention has been focused on the ramp up in activity—the growing number of drilling rigs, huge land lease deals, and eye-popping initial production results for some of the wells drilled. But there is another side to the story.

Every now and again, a well does not produce. Could be the driller did not properly find the shale layer (extremely rare). Could be they did find it but for whatever reason the layer doesn’t produce in that area. More likely there were problems during the drilling that caused the work to be stopped—like a broken-off drill bit. In Ohio, there have been nine Utica Shale wells that have been plugged and abandoned (so far). Here’s where they are located and who did the drilling:

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Ohio’s Less Than Stellar Results from Oil Drilling

The story line for development of the Marcellus and Utica Shale going back to the beginning of this year was, “Drillers are leaving the dry gas areas and going after wet gas,” meaning natural gas liquids. Why? Because the price for liquids is more favorable. That meant drilling activity was lessening in places like northeast Pennsylvania and (supposedly) moving to southwest PA, northern WV and eastern OH. To some degree that has happened.

However, the price for natural gas liquids has fallen due an abundance created by Marcellus and Utica Shale drilling. So the more recent story has been a move toward drilling for crude oil, especially in Ohio. But drilling for crude in Ohio isn’t working out so well—at least for some drillers.

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Devon Reports Disappointing Results in 2 NW OH Utica Wells

Devon Energy reports “not encouraging” results from two wells in Ohio’s Utica Shale, one in Ashland County, the other in neighboring Medina County—both in the northwestern corner of the Utica Shale in Ohio. Although Devon is not saying whether or not they will drill more wells in that area, they have indicated they will drill more wells to the east.

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EPA Air Pollution Rules Targeted at Senate Hearing Today

Today, Devon Energy Corp.’s environmental manager Darren Smith will testify before the Senate Environment and Public Works Committee in Washington, D.C. about the Environmental Protection Agency’s badly overestimated data on the amount of so-called fugitive emissions that escape from a natural gas well when it’s drilled (a copy of his full testimony is embedded below).

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China Makes $2.2B Investment in U.S. Shale, Including Utica

The Chinese government, through state-controlled Sinopec, yesterday signed a deal with Devon Energy to buy into five prospective new exploration areas in the U.S. One of those areas is the Ohio Utica Shale, where Devon has increased it’s position to 235,000 net acres. With a $2.2 billion cash infusion coming from Sinopec, Devon will have the money to develop all five plays, including the Utica.

From the Devon press release:

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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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