Frivolous Lawsuit Delays H&H Drilling in Westmoreland County, PA
Huntley & Huntley has plans to drill shale wells in Upper Burrell Township (Westmoreland County), PA. As MDN reported in June, a landowner in Upper Burrell filed an appeal against Upper Burrell’s zoning ordinance that allows drilling in rural, agricultural districts (see Westmoreland Zoning Challenge Heads to Court, Delays H&H Drilling). H&H plans to drill a well near where the woman lives, and she’s arguing such drilling will violate the state’s environmental rights clause and “devalue her property.” The case was supposed to go to township’s Zoning Hearing Board, but all of the (many) lawyers involved agreed to instead move it to county court, making the process faster and less expensive. Last month the judge said he would make a decision in the case “next month” (meaning in August) about whether or not the town can issue conditional use in agricultural-residential zoning district (see Westmoreland Zoning Challenge re H&H Wells Closer to Resolution). But on Monday, the judge put the case on pause again because the landowner has sued the town claiming the town’s very right to issue conditional use permits in agricultural-residential districts is unconstitutional. A hearing on that charge will happen in October. H&H is in a holding pattern, thanks to a frivolous lawsuit…
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In May 2012 a water truck driver delivering water to an Anadarko Marcellus Shale well pad in Clinton County, PA missed a turnoff for the road he was supposed to take, at 2:30 am in the morning. A couple of miles later he crashed and tragically died because the road he was on was not marked well and not conducive to the truck he was driving. There was a sign warning the driver not to go beyond a certain point. The driver had previously–that night–already delivered to the well pad and successfully turned onto the road he was supposed to take. Why did he miss it the second time? His widow maintains that even though he worked for a subcontractor, Anadarko was the company in charge and should have had a light illuminating the “No Anadarko Traffic Beyond This Point” sign. So she sued Anadarko, and the subcontractor, for wrongful death. Lower courts threw out the lawsuit but a federal appeals court reinstated a civil suit against Anadarko (see 
We have to confess, we are not only shocked, but somewhat distressed at news we are reading that Cabot Oil & Gas is considering all options, including a sale of its Marcellus acreage in Susquehanna County, PA. To be fair, and to keep it in balance, it seems that the company would prefer to add to its Marcellus acreage, rather than sell it. However, chief financial officer Scott Schroeder said at a conference in Denver yesterday that all options are on the table, including a Marcellus acreage sale “if the terms are right.” MDN editor Jim Willis lives next door to Susquehanna County (and regularly visits Montrose, PA), and knows landowners in the county signed with Cabot. You have to understand how fundamentally Cabot has changed the county, by investing $1.5 billion into the pockets of landowners over the past 10 years, along with spending another $3.1 billion to do the drilling (see 
Monroeville, PA (suburb of Pittsburgh) is making moves to restrict seismic testing within municipal boundaries–a move meant to restrict future shale well drilling in the area by Huntley & Huntley. In a July story, MDN brought you the news that Cougar Land Services, a subcontractor working with Huntley & Huntley, is planning to conduct seismic testing in two rural areas of the municipality, including “small portions” of Monroeville’s northernmost and southernmost tips (see 
MDN has been tracking the prices paid by Shell to landowners to run an ethane pipeline under their land to feed the might cracker plant the company is just now beginning to build in Beaver County, PA. Why? So landowners in Beaver (and other locations) have a useful metric for judging the offers they receive. To be fair, a company that wants to run a local gathering pipeline across someone’s land will pay a lot less than Shell is willing to pay–given you can’t move the cracker plant. Interstate pipelines will likely pay something less too. But still, we find it interesting and useful to know what Shell is up to in Beaver. We don’t have a lot of data points, yet. In June, we learned that Shell paid roughly $75 per foot for 3,138 linear feet of pipeline space in Greene Township (see 
EXCO Resources was once a sizable player in the Marcellus. They still have 184,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out a year ago, has abandoned the Marcellus at this point (see 
Gulfport Energy, which is the second most active driller in the Ohio Utica, behind Chesapeake Energy, has (so far) drilled 303 Utica wells and owns 211,000 acres of leases in the Buckeye State. Gulfport, which drills mainly in the Utica (but also the SCOOP, in Oklahoma) reported their second quarter 2017 production numbers on July 31 (see 
Earlier this week Rex Energy issued its second quarter 2017 update. During 2Q17 Rex drilled 2, completed 6 and put online into sales 4 wells in their Butler County, PA acreage. They also began drilling a new 4-well pad in Butler. In the company’s Carroll County, OH acreage, Rex drilled a 3 wells on a single pad. The big news from the update was a deal with BP to market Rex’s natural gas liquids (or C3+) production, and the sale of a water pipeline owned by Rex in Salineville, OH for $8 million. Rex’s finances didn’t do so well. In 2Q17 the company lost $10 million versus making a $16 million profit in 2Q16. Production picked up a bit, from 173.4 million cubic feet equivalent per day (MMcfe/d) in 1Q17 to 177.1 MMcfe/d in 2Q17. The official statement said 2Q17 production was “constrained” during the quarter “due to unplanned maintenance downtime in the company’s midstream services.” Which means they had hoped it would have been higher than 177.1 MMcfe/d. Looking forward to 3Q17 Rex says they plan to bring 12 new wells in Butler County online…
Last week one of the Marcellus Shale’s largest drillers, Southwestern Energy, issued its second quarter 2017 update. While production fell slightly from 2Q16 to 2Q17, the fall was due to Southwestern’s Fayetteville Shale production. In both the northeast and southwest Marcellus, Southwestern’s production went up year over year by 12 billion cubic feet equivalent (Bcfe). Southwestern continues to drill and concentrate solely on Marcellus wells–at least in 2Q17. In northeast Marcellus, Southwestern drilled and brought 21 wells online with an average lateral length of 5,530 feet and an average cost of $5.1 million per well. Perhaps we’d characterize them as “short but cheap” wells. Southwestern also drilled an experimental Marcellus well in Bradford County with a lateral of 12,000 feet. That well, the Seymour 1H, is among the top 10% of Southwestern’s wells, with an initial production rate of 37.7 million cubic feet feet (MMcf) per day. Also of note in the northeast–Southwestern added an additional 140 MMcf/d of pipeline capacity, to get their gas to better-paying markets. In southwest Marcellus Southwestern drilled and brought online 15 new wells, with an average lateral length of 7,627 feet and an average cost of $7.1 million per well. The company reported drilling one Utica well in 2Q17–in Washington County, PA. That well will not be completed and online until later this year. The company’s first Utica well, the O.E. Burge 501H in Marshall County, WV, “continues to exhibit strong productivity, with cumulative production of over 2 Bcf in its first six flowing months.” Here’s the lowdown on Southwestern Energy for 2Q17…
Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. During the earnings call for 1Q17, Carrizo CEO S.P. “Chip” Johnson announced Carrizo is putting up their Marcellus/Utica assets for sale–both wells and leases. Yesterday Carrizo issued its second quarter update, holding a conference call to discuss the past three months. What do we learn from it relative to the Marcellus/Utica? Essentially, the company continues on the path of trying to sell their Marcellus/Utica assets. One questioner asked about the company “choking back” production in the Marcellus/Utica–what would it be if they didn’t restrict production? Answer: 180-190 million cubic feet per day…
Antero Resources, one of the biggest and best drillers in the Marcellus/Utica concentrating on just those two plays, turned in their second quarter 2017 numbers last week, and held an earnings call to discuss the results. The company has a lot to crow about. Antero’s gas (and liquids) production hit a new record high of 2.2 billion cubic feet equivalent per day (Bcfe/d) in 2Q17. They continue to be the best hedging company in the Marcellus/Utica, getting an average of $3.15 per thousand cubic feet (Mcf) for the gas they sold BEFORE hedging. After hedging Antero got $3.41/Mcf for gas and equivalents (oil, NGLS). Antero’s hedging program is one of the greatest untold success stories of the Marcellus/Utica. The company lost $5 million in 2Q17, a vast improvement over losing $596 million in 2Q16. Antero completed and placed online 29 horizontal Marcellus wells during 2Q17 with an average lateral length of 9,380 feet. They drilled an average of 5,200 lateral feet per day, a 50% increase compared to 2016. In the Utica, Antero completed and placed online 5 horizontal wells with an average lateral length of 11,222 feet. During 2Q17, Antero set a record for drilling its longest lateral to date at 17,380 feet. The company also announced a big bump up in proved reserves…
Last week National Fuel Gas Company, headquartered in Western New York State with drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its third quarter (everyone else’s second quarter) 2017 update. NFG produced 567 million cubic feet per day (MMcf/d) of natural gas last quarter, a 6% increase over the same quarter a year ago. NFG realized an average price of $2.94 per thousand cubic feet (Mcf), up $0.08 per Mcf from the prior year. Compare that with Antero’s hedged average of $3.41/Mcf (see today’s story about Antero 2Q17). NFG CEO Ronald Tanski had some interesting remarks with respect to the company’s stalled Northern Access Pipeline project. As you may recall, the Andrew Cuomo New York Dept. of Environmental Conservation (DEC) is blocking Northern Access, like they blocked the Constitution Pipeline and a tiny spur project for the Millennium. Because NFG’s Northern Access project is stalled, they are shifting their budget and drilling further west, to do Utica drilling in locations where there is already pipeline infrastructure. So this is yet another case of the NY screwing up Marcellus drilling PA that would otherwise be happening. Landowners in PA can thank NY Gov. Cuomo for screwing them over. Tanski also mentioned the court case for Northern Access, and that FERC (Federal Energy Regulatory Commission) may step in and overrule the NY DEC, as is now being considered in the Constitution Pipeline case (see today’s lead story). Here’s the update from NFG…
Chesapeake Energy reported second quarter 2017 results last week. As is typical, the company hosted a conference call with analysts to discuss those results. However, Chesapeake CEO Doug “the ax” Lawler had some rather exciting news about the Marcellus to report–late breaking news. In recent weeks Chesapeake has brought online an experimental well drilled in Wyoming County, PA (northeastern part of the state) with an initial production of 61 million cubic feet equivalent per day (MMcfe/d). This is a MONSTER Marcellus well! The most productive onshore shale well we know of is EQT’s Utica well in Greene County, PA, with a 72.9 MMcfe/d IP rate, drilled in July 2015 (see 
Of the three Marcellus/Utica producing states–Pennsylvania, Ohio and West Virginia–only WV reports well production on an annual basis. Not frequent enough! In July WV published production numbers for 2016. The exciting news is that on average, initial production (IP) of Marcellus/Utica shale wells surged 20% over 2015. IP is the amount of gas (or oil or NGLs) flowing from a well. However, when you dig into the numbers, you learn that IP rates did not go up universally across the state. Some counties had big increases, other counties went the other way. The same with drillers. Some drillers (like Antero) saw a big bump up in average IP rates. Other’s (like Southwestern Energy) saw a dip in IP rates from 2015 to 2016…