Shale Wastewater Treatment Plant Planned for Potter County, PA
A new shale wastewater treatment facility that works in tandem with a local sewage treatment plant may be on the way in Coudersport (Potter County), PA. Epiphany Water Solutions, via a subsidiary company called Epiphany Allegheny, filed for a permit to build a centralized water treatment facility in Coudersport in July 2017. The initial application with the Dept. of Environmental Protection (DEP) was deemed “incomplete”–so Epiphany filed again and this time the application was complete. The DEP will hold a Jan. 16 public hearing in Coudersport to gain local resident’s input on the facility. This is not the first we’ve heard of Epiphany. They were one of four winners of the Ben Franklin Institute’s Fifth Annual Shale Gas Innovation Contest in 2016 (see 4 Winners Bag $80K at 5th Annual Shale Gas Innovation Contest). Epiphany started life as a company with a mission to pioneer the use of solar technology to desalinate water so people in poor countries have safe drinking water. Laudable goal. However, Epiphany found they actually need to turn a profit and pay bills first–and their technology works equally well for the oil and gas industry. CONSOL Energy (now CNX Resources) was an early backer and user of their technology. JKLM Energy, owned by Buffalo “Marcellus” Bill’s owner Terry Pegula and with active drilling in Potter County, needs a better way to dispose of frack wastewater. So Pegula turned to Epiphany and Epiphany is working with the Coudersport Area Municipal Authority (CAMA) to make it happen…
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Yesterday we brought you the news that CONE Midstream has been renamed to CNX Midstream, and that CNX Resources is now the sole owner of the entire gathering pipeline system (see 
CONE Midstream is, or rather was, a pipeline joint venture between CONSOL Energy and Noble Energy (“CO” from CONSOL and “NE” from Noble Energy), formed in the summer of 2014 to service wells drilled as part of CONSOL & Noble’s drilling joint venture (see 
Chesapeake Energy is holding out an olive branch to Pennsylvania landowners–the offer of settling a years-old class action lawsuit for $30 million–as reparations for shafting PA landowners out of royalties. But–and it’s a big but–Chesapeake is also snatching the olive branch away unless/until the PA Attorney General’s office resolves its separate lawsuit against Chesapeake for the same thing. No deal with the AG? No final settlement. Chesapeake’s lawyer calls it “global peace”–which we find amusing. The lawyer said “we need global peace,” meaning both lawsuits must be settled. His comment reminds us of the recent song blaring on the radio over the holidays called, “My Grown-Up Christmas List.” Yeah, don’t we all want “global peace.” Chesapeake’s proffered deal will give the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. Frankly, it’s chump change. The big concession by Chesapeake in the proposed deal is that it gives landowners the right to clarify the terms of their leases: “Every Chesapeake lessor will get to pick how their royalties are paid going forward.” Landowners can choose to continue letting Chesapeake market the gas outside of the region (theoretically for a higher price) but requiring the landowner to share in post-production expenses with Chessy as has been the case, OR landowners can rework the lease so there are no post-production expenses deducted. In the second case royalties will be based on the local price of gas in that landowner’s area (typically in the basement). It’s a tough decision. So, landowners got shafted in the past, but the past is the past. Going forward, let’s not get shafted any more. That’s what this proposed deal seems to boil down to. Oh, and throw in a few grand as the cherry on top. The billion dollar question is whether or not the AG’s office will go for it. The AG’s office is signaling it may settle, IF Chesapeake picks a number higher than $30 million as a settlement number…
The Pennsylvania Dept. of Environmental Protection (DEP) has fined CNX Resources (formerly CONSOL Energy/CNX Gas) $433,500 for violations at four shale well sites in Greene County, PA. The violations, which happened in 2015/2016, include failure to control and dispose of wastewater properly and failure to prevent erosion. Some of the flowback/wastewater ended up in a small stream called Jacobs Run. We always find the language of these announcements by the DEP somewhat strange: “CNX Gas Company, LLC (CNX) has agreed to two civil penalties totaling $433,500 for violations at well sites in Greene County.” Really? The company getting fined has to “agree” to accept the fine? Apparently we don’t fully understand how regulatory agencies work in PA. What if CNX didn’t agree to the fine? Would the DEP come back with a lower amount, “Will you accept this fine instead?” But we digress. CNX themselves noticed the problems and self-reported the violations. After doing so, they fired two of the service companies they were using. The unnamed service companies were obviously guilty of cutting corners that resulted in improper disposal of wastewater. Interesting factoid: Half of all the wells CNX has drilled in PA are located in Greene County…
Pittsburgh’s oldest still operating steel mill, U.S. Steel Corp.’s Edgar Thomson steel mill, may soon be home to more than just a foundry. A privately owned oil and gas company headquartered in New Mexico–Merrion Oil & Gas Corp.–has signed a lease with U.S. Steel to drill a series of six (possibly more) shale wells on the Edgar Thomson Works property in Allegheny County. The plan is to drill one Marcellus well to begin with, and after testing, expand that with five more Marcellus wells. However, Merrion is not ruling out deeper wells to tap the Utica. Even though the location for the wells is as industrial as industrial gets–with noisy steel making (and the air pollution that goes along with it), antis are complaining that drilling a few shale wells will turn their lives into a dung heap. Nothing new about their reaction. What is new is Merrion. This is their first entry into the Marcellus/Utica region. Until now, Merrion has concentrated on other regions. According to one biased news outlet, Merrion has “no experience drilling into deep, tight, shale formations like the Marcellus.” Whether or not that’s true, we don’t know (we tend to doubt it). What we do know is that Merrion is a privately owned, family company started in 1960 by a former petroleum engineer. Merrion is not some upstart company that doesn’t know anything about the oil and gas business–quite the opposite. Merrion has already had preliminary meetings with the PA Dept. of Environmental Protection about their plans. An official permit request should be coming any time over the next three months…
Huntley & Huntley (H&H), a shale driller headquartered in Monroeville (Allegheny County), PA plans to drill Marcellus Shale wells in neighboring Murrysville (Westmoreland County), PA. H&H has filed for state permits for the Titan Well Pad project. This is will be the first Marcellus wells to be drilled in Murrysville. On May 3, 2017, Murrysville Town Council passed a new drilling ordinance that requires a 750 foot setback from the edge of the well pad–not from the bore hole (see 
Yesterday a Pennsylvania federal judge denied a group of 600+ Marcellus Shale landowners’ request to form a class action in arbitrating a royalty case against Chesapeake Energy. Although the judge’s decision is a disappointment for landowners, his decision should come as a surprise. In April, the same judge, U.S. District Judge Matthew Brann for the Middle District of PA, telegraphed that the landowners, under the law (and under the leases they signed) did not have a right to form a class action (see 
Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. As recently as May of this year Ultra CEO Michael Watford signaled that the Marcellus acreage is not a drain on their budget, so they would just hold on to it and see what happens (see 
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…
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 
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…
Deals to lease land for Marcellus and Utica Shale drilling happen on a regular basis–even today. Perhaps not as much as several years ago when large deals cut by landowner groups were headline news. But lease deals still happen–you just don’t hear about them because they are private deals (deal terms are not recorded at the county clerk’s office). However, every now and again a public entity–a town or school–will lease land for shale drilling. And that IS a matter of public record. When we spot such deals, we like to bring you the details. Such a deal was cut on Monday, by the Ohio County Board of Education. The Board of Ed signed a deal with American Petroleum Partners (from Pittsburgh) to lease the 66 acre Wheeling Park High School campus for shale drilling–under (not on) the campus. Which is so cool for a number of reasons. First of all, the deal includes a $6,000 per acre signing bonus, and if/when the gas begins to flow, an 18% royalty. Second of all, it’s a school! How many times have we read about nutjob anti parents with their knickers in a twist over putting a shale well more than a half mile away from a school, like we heard about endlessly from those in the Mars School District (Butler County). It was a long, hard fight, but we eventually won (see 
A Bradford County, PA judge has turned down Chesapeake Energy’s attempt to wiggle out of a royalty lawsuit on a technicality. However, the judge also punted the case to a higher court to settle what he calls “novel questions of law”–rather than spending more time and money on such issues at the county court level. This is good news for landowners in Bradford County who have been shafted by Chesapeake’s royalty scheme to shift the cost of piping and processing to landowners by using inflated values for those services. In December 2015, Pennsylvania’s felony-indicted Attorney General, Kathleen Kane (now gone), brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
While Buffalo “Marcellus” Bills owner Terry Pegula’s JKLM Energy has been “steadily increasing activity” in Potter County, PA (northcentral PA) grabbing headlines, another company, National Fuel Gas (NFG) subsidiary Seneca Resources, is also active in Potter and several neighboring northcentral PA counties (Cameron, McKean, Elk, and Lycoming). We spotted a pair of stories in a local newspaper recounting Seneca’s activity to date, and outlining plans for the future. One statement in particular stood out for us: Seneca will be “shifting to 100-percent Utica development by the end of this fiscal year.” At first blush, you might think “end of fiscal year” means by Dec. 31, 2017. However, NFG and subsidiary Seneca operate on a strange fiscal year. Fourth quarter 2017 (Oct-Dec) is NFG/Seneca’s first quarter 2018 fiscal period. Since the quote about focusing 100% on PA Utica drilling came at the end of November, we interpret the quote to mean “Seneca will be 100% focused on the PA Utica by September 2018.” At any rate, let’s not get caught up in semantics and timing. The takeaways from the pair of articles below, which appeared about a week apart at end of November/beginning of December, are: (1) Seneca is shifting to 100% Utica drilling; (2) Seneca spent 60% more on drilling in 2017 than 2016; (3) Seneca is currently running either 1 or 2 rigs, depending on which quote from which story you read; and (4) between royalty payments, impact tax payments and money spent with local PA businesses, Seneca has now spent nearly $1 billion on shale drilling–all of it in northcentral PA…