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27 New Shale Well Permits Issued for PA-OH-WV Jan 6 – 12
For the week of Jan 6 – 12, permits issued in the Marcellus/Utica to drill new shale wells remained healthy. There were 27 new permits issued last week, down three from 30 issued the week before. The Keystone State (PA) issued 13 new permits, with four going to Snyder Brothers in Armstrong County, four going to Coterra Energy in Susquehanna County (must be Coterra has restarted drilling), three for Infinity Natural Resources (INR) in Indiana County, and two for Range Resources in Washington County. Read More “27 New Shale Well Permits Issued for PA-OH-WV Jan 6 – 12”
Yesterday, the Ohio Oil and Gas Land Management Commission (OGLMC) voted to award a contract to Gulfport Energy to drill and frack under (not on) about 30 acres of the Egypt Valley Wildlife Area in Belmont County. Commissioners also voted to open an additional 884 acres of Salt Fork State Park in Guernsey County for oil and gas development. During the meeting, commissioners had to work above the chaotic noise from anti-fossil fuel zealots who dressed up in Christmas attire and sang Christmas “carols” substituting anti-fracking lyrics. Yeah, antis made horses’ rear-ends of themselves, as they typically do. 
According to an extensive report appearing on the World Oil website (and in the November issue of the magazine), multiple possible futures lie ahead for the Marcellus and Utica shales. So, which future will come to pass? Today, both industry and government see the Marcellus and Utica formations as tremendous opportunities for companies and state governments, with domestically produced energy, jobs, and a huge economic impact. 
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its third quarter 2024 numbers yesterday. The company drills Utica and Marcellus wells in Ohio. It also has an active drilling program in the Oklahoma SCOOP shale play. Gulfport’s net daily production for 3Q24 averaged 1,057.2 MMcfe/d (1.06 Bcfe/d), up slightly from 3Q23’s average of 1,056.9 MMcfe/d. Production in 3Q consisted of 861.6 MMcfe/d in the Utica/Marcellus (81%) and 195.6 MMcfe/d in the SCOOP (19%). The production mix comprised approximately 91% natural gas, 6% natural gas liquids (NGLs), and 3% oil and condensate. The company has spent $52 million on maintenance leasehold and land investment so far this year, pointing out that leasing still happens. 
The Ohio Department of Natural Resources (ODNR) released production numbers for the second quarter of 2024 yesterday. The story the numbers tell continues to be about Utica oil, which continues to rise each quarter. Ohio’s total oil production during 2Q24 was 8.01 million barrels, up 23% from 2Q23’s 6.5 million barrels and up 11% from 1Q24’s 7.2 million barrels. The story of oil in the Buckeye State can’t be told apart from Encino Energy (EAP), which produced nearly half of all the state’s oil during 2Q24. As for natural gas production, it’s no surprise it went down slightly in 2Q24, given the current low price for gas. The state produced 526.6 Bcf in 2Q24, down 3.7% from 2Q23’s 547.0 Bcf, and down 1.4% from this year’s first quarter number of 534.0 Bcf. MDN pulled the numbers from the ODNR quarterly report and produced top 25 lists for both gas and oil wells.
There’s just no way to sugarcoat the fact that the low low price for natural gas is having an impact on shale drillers in the Marcellus/Utica. According to an analyst with RBN Energy, a price plunge to near the $2/MMBtu level in early 2023 “crippled” financial results for the companies RBN monitors that are gas-focused (namely M-U companies). However, most producers on the RBN list have remained in the black through spending less and cutting back on production. Down but far from out. How did the major M-U companies that are publicly traded perform in 2Q24? We have the numbers below. 
The Ohio Oil and Gas Land Management Commission (OGLMC) continues to do its job. Yesterday, the group held a meeting and awarded five contracts for drilling and fracking UNDER (not on) several state-owned lands, including a contract with EOG Resources to drill under 85 acres in Keen Wildlife Area in Washington Township, Harrison County, for $211,650 ($2,500/acre). Also of interest at yesterday’s meeting was that 40 parcels of land in Salt Fork State Park and Salt Fork Wildlife Area were removed from the committee’s agenda. Apparently, the nominating company withdrew its application for those tracts.
Here’s a court case that flew under the radar until now. It’s a case that has the potential to affect some drillers and some royalty owners in Ohio. Sabre Energy Corporation (the plaintiff) sued Gulfport Energy Corporation and Antero Resources Corporation (the defendants) for breach of contract. Sabre Energy owns Overriding Royalty Interests (ORRIs), or fractional shares, in defendants’ shares of royalties from their oil and gas leases. Sabre Energy contends that these ORRIs attach to defendants’ recently drilled deep horizontal wells, and so the defendants owe it royalties.
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its second quarter 2024 numbers earlier this week. The company drills Utica and Marcellus wells in Ohio. It also has an active drilling program in the Oklahoma SCOOP shale play. Gulfport’s net daily production for 2Q24 averaged 1,050.1 MMcfe/d, up from 2Q23’s average of 1,039.3 MMcfe/d. Production in 2Q consisted of 836.9 MMcfe/d in the Utica/Marcellus (80%) and 213.2 MMcfe/d in the SCOOP (20%). The production mix was comprised of approximately 92% natural gas, 6% natural gas liquids (NGLs), and 2% oil and condensate. Gulfport brass talked up the Marcellus during a conference call with analysts.
While oil-focused and large diversified drillers in the U.S. made healthy profits during the first quarter of this year (January through March), such was not the case for natural gas-focused drillers. RBN Energy tracks 43 exploration and production (E&P) companies that are publicly traded and reports of those 43 that the 16 oil-focused and 15 diversified E&Ps were solidly profitable in 1Q24, earning $20.65/boe (barrels of oil equivalent) and $18.49/boe, respectively. However, the 12 gas-focused E&Ps were “under siege,” posting a loss of $1.65/boe.
Back in the summer of 2020, MDN told you about a lawsuit brought by an Ohio rights owner called TERA, an organization that owns the royalty rights for a number of leases with wells in Belmont County, OH, drilled by different producers, suing the producers for drilling into the Point Pleasant shale layer when the lease only mentions the Utica layer (see