Energy Companies

Carrizo Oil & Gas | Energy Companies | Ohio | Statewide OH | Utica Shale

Carrizo’s New Drilling Strategy: Closer Well Spacing
October 7, 2013October 7, 2013

An analysis by brokerage firm Sterne Agee turns up an interesting strategy change by Carrizo Oil & Gas. Carrizo is a driller in the Utica Shale. They also have active drilling in the Eagle Ford “oily” play (in Texas).

The interesting change-up in their strategy? In the Eagle Ford Carrizo is experimenting with well spacing. Currently the company spaces wells on 105-acre sections. But lately they’re trying it on 80-acre sections, which allows them to place more wells on their leased acreage. Will they use the same strategy in the Utica?…
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American Energy Partners | Carroll County | Columbiana County | Energy Companies | Lease & Royalty Payments | Ohio | Utica Shale

Aubrey Leases More Land for Drilling — in the Northern Utica!
October 7, 2013October 7, 2013

The puzzle pieces continue to fall into place with respect to the deals being done by former Chesapeake Energy CEO Aubrey McClendon in the Utica Shale. Last week MDN told you about a joint venture between McClendon’s new company, American Energy, and Red Hill Development, to lease land for drilling in southeastern Ohio–counties like Guernsey and Harrison (see McClendon’s Utica Company Does JV with OH Driller, Drilling Soon). We now know about a second joint venture–this one with Great River Energy–a new production company formed through a partnership between McClendon’s American Energy and Texas firm Orange Energy Consultants.

The surprise about this new jv? They’re leasing land in Columbiana and Carroll counties, north of what is thought to be the “sweet spot” in the Utica wet gas area. Looks like Aubrey just can’t stay away from the northern Utica!…
Read More “Aubrey Leases More Land for Drilling — in the Northern Utica!”
Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

The Cabot O&G Marcellus Rocketship – To the Moon!
October 4, 2013October 4, 2013

Cabot Oil & Gas, one of our favorite Marcellus drillers, continues to amaze and astound just about everyone. Last Friday (a week ago) the company issued a new “guidance” or “this is our best, educated guess” as to how much natural gas production the company will end up producing for 2013, and how much they believe it will grow in 2014. Given Cabot is already the number one natural gas producer in PA and the first member of what MDN calls the “billion cubic feet per day” club (see Who’s a Member of the Marcellus “1 Bcf/d” Club?), it’s amazing that in 2014 they predict production will be up another 30-50% over this year. Wow!

Something just as startling and no doubt the envy of all their competitors, Cabot CEO Dan Dinges tips their hand as to what the breakeven price is at which the company starts to make money. It’s a LOT lower than even we thought is was…
Read More “The Cabot O&G Marcellus Rocketship – To the Moon!”
Energy Companies | Trans Energy | Tyler County | West Virginia

Trans Energy Sells Off Holdings in Tyler County, WV – Who Bought?
October 3, 2013October 3, 2013

Yesterday Trans Energy, a pure play driller focused on the Marcellus Shale (in West Virginia) announced they’re selling off their holdings in Tyler County, WV so they can concentrate on their holdings and drilling operations in Marshall, Wetzel and Marion counties instead. The deal is for 1,163 acres, two well pad sites and one uncompleted Marcellus Shale well. Trans Energy is getting $11.2 million for the transaction.

The announcement from Trans Energy does not identify who is doing the buying, but MDN has what we consider a pretty solid guess…
Read More “Trans Energy Sells Off Holdings in Tyler County, WV – Who Bought?”
East Resources | Energy Companies | Shell | SWEPI

Russian Spinmeisters Talk Down American Shale, Makes Us Laugh
October 3, 2013October 3, 2013

Russia hates the American shale revolution because it threatens their worldwide dominance in natural gas, and it threatens their ability to threaten others with it. Vlad Putin has long poo-pooed our shale reserves as nothing more than a flash in the pan. So we found it amusing to read the story (below) from the Voice of Russia Radio network that tries to spin Shell’s recent exit from some of its holdings into a story about oil and gas companies are “losing interest” in American shale. Yeah right! We had to pick ourselves up off the floor after laughing so hard.

Uh, VOR, have you ever heard of the wholly-owned Shell subsidiary called SWEPI? It stands for Shell Western Exploration and Production Inc. Oh, and East Resources? Yeah, Shell bought them. Shell now owns 850,000 acres in the Marcellus Shale play–#2 behind Chesapeake’s 1.8 million acres. So please, tell us again how Shell is abandoning American shale plays–we need another good laugh!…
Read More “Russian Spinmeisters Talk Down American Shale, Makes Us Laugh”
Accidents | Blue Racer Midstream | Caiman Energy | Dominion Energy | Energy Companies | Energy Services | Industrywide Issues | Marshall County | Processing Plants | Rex Energy | West Virginia

Natrium, WV Fractionation Plant Still Closed After Explosion/Fire
October 2, 2013October 2, 2013

As MDN previously reported, an explosion and fire was reported at the Blue Racer Midstream’s Natrium, WV natural gas processing plant early Saturday on Sept. 21 (see Explosion/Fire at Blue Racer’s Natrium, WV Processing Plant). It’s a week and a half later and the plant, which both processes or separates wet gas and further fractionates it into its component compounds remains closed while an investigation continues. WV officials and the plant’s owners (Blue Racer is owned by Dominion and Caiman Energy II) still don’t know what caused the explosion and fire.

Meanwhile, at least one Natrium customer has found an alternative source to process their wet gas…
Read More “Natrium, WV Fractionation Plant Still Closed After Explosion/Fire”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | Utica Shale

Rice Pays Belmont County Higher Signing Bonus than Landowners
October 2, 2013October 2, 2013

Rice Drilling is betting big on Belmont County, OH. County commissioners recently signed a sweet deal with Rice Drilling for 406 acres of county-owned land. The lease terms were $7,500 per acre signing bonus and a 20% royalty. That delivers just over $3 million to the county coffers, plus a lot more when the gas begins to flow.

The county deal is, however, sweeter than other recent contracts signed by Rice in the area–contracts between Rice and more than 1,000 landowners in Belmont County. Those leases resulted in payments from Rice for more than $236 million! But area landowners got “just” $5,900 per acre from Rice for a signing bonus…
Read More “Rice Pays Belmont County Higher Signing Bonus than Landowners”
American Energy Utica | Energy Companies | Guernsey County | Harrison County | Ohio | Tuscarawas County | Utica Shale

McClendon’s Utica Company Does JV with OH Driller, Drilling Soon
October 2, 2013October 2, 2013

Yesterday MDN brought you the news that former Chesapeake Energy CEO Aubrey McClendon had started a second company specifically created to target the Utica Shale (see Aubrey McClendon Forms Utica Company, Gets Major Investor). In true Aubrey “wheeling and dealing” fashion, his new company, called American Energy Utica, is already forming joint ventures with other companies in the Utica Shale. One of those companies is Red Hill Development, an independent oil & gas driller located in Dover (Tuscawaras County), OH.

Red Hill Development is tickled pink to be working with McClendon and says the partnership will be an ongoing venture “for many years to come.” According to Red Hill, the new joint venture is already applying for permits and will begin drilling by the end of this year. The focus of their drilling efforts? Guernsey and Harrison counties…
Read More “McClendon’s Utica Company Does JV with OH Driller, Drilling Soon”
Chesapeake Energy | Columbiana County | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Mahoning County | Ohio | Regulation

Salem, OH Votes Down Ordinance to Restrict Drilling in City
October 2, 2013October 2, 2013

In July 2012, the city of Salem, OH signed a lease with Chesapeake Energy to allow drilling on 381 acres of city-owned land (land outside city limits). Terms of the lease: $7,000 signing bonus and 20% royalties (see Salem, OH to Sign Lease Deal with Chesapeake for $7K+20%). It probably wouldn’t send the right signal to turn around and pass a law that would prevent drilling inside city limits after signing a lease and accepting millions of dollars. Yet, such a law was under serious consideration by Salem City Council.

Tuesday night, City Council wisely chose to vote down a proposed zoning amendment that would have prevented drilling inside city limits…
Read More “Salem, OH Votes Down Ordinance to Restrict Drilling in City”
Energy Companies | Hess | Industrywide Issues | Jefferson County (OH) | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Hess Loses OH Court Case, May Owe Big Bucks to 300 Landowners
October 2, 2013October 2, 2013

Hess has just lost a court case in Ohio that may end up costing the company dearly. Hess had purchased leases in eastern Ohio from other companies. The original leases date to 2006-2008 and in many cases the landowners were paid as little as $10 per acre for a signing bonus–absolutely peanuts compared to today’s rates for $5K or more per acre. A Jefferson County landowner sued Hess to get out of his lease agreement because the company had not drilled on his property. Hess argued provisions in the lease let them extend the lease by paying a nominal extra fee.

Hess lost, and now will have to pay that landowner (and by extension around 300 other landowners) big re-signing bonuses or risk losing the land…
Read More “Hess Loses OH Court Case, May Owe Big Bucks to 300 Landowners”
American Energy Partners | American Energy Utica | EMG | Energy Companies | Energy Services | Ohio | Statewide OH | Utica Shale

Aubrey McClendon Forms Utica Company, Gets Major Investor
October 1, 2013October 1, 2013

As MDN has said before and will no doubt say again, we believe Chesapeake Energy will rue the day they fired its founder, Aubrey McClendon. Just a few short months after being tossed out the door by board member and corporate raider Carl Icahn, McClendon founded a new company and was already active in Ohio’s Utica Shale (see He’s Baaaack! Aubrey McClendon is Back in OH Shale Country). His new company, with offices about a mile from Chesapeake’s HQ in Oklahoma City, is called American Energy Partners.

Word has leaked once again from “inside sources” that McClendon has now founded a second company, this one specifically set up to target the Utica Shale. The new company is called American Energy Utica and is being backed with big money by a prominent player in the energy space…
Read More “Aubrey McClendon Forms Utica Company, Gets Major Investor”
Access Midstream Partners | Energy Companies | Energy Services | EV Energy Partners | Hilcorp Energy | Industrywide Issues | M3 Midstream | NGLs | NiSource | Pennant Midstream | Pipelines | Processing Plants | Utica East Ohio Midstream

NiSource & M3 Do a Deal to Process/Sell NGLs in Eastern Ohio
October 1, 2013October 1, 2013

An important announcement yesterday for drillers (and landowners) in the northern portion of the Ohio Utica Shale play: Pennant Midstream announced they are building a 38-mile natural gas liquids (NGL) pipeline from the Pennant-owned Hickory Bend cryogenic processing plant (in Mahoning County, OH) to the Utica East Ohio Midstream-owned Kensington cryogenic processing plant (in Columbiana County, OH). Pennant says initially they will ship 90,000 barrels per day through the new pipeline.

Why is Pennant with its own processing plant sending NGLs to another (competitor’s) processing plant? Good question…
Read More “NiSource & M3 Do a Deal to Process/Sell NGLs in Eastern Ohio”
Energy Companies | EV Energy Partners | Ohio | Statewide OH | Utica Shale

EVEP CEO Mark Houser Discusses Utica Shale Strategy, Future
October 1, 2013October 1, 2013

Mark Houser, president and CEO of EV Energy Partners, presented at the IPAA Oil and Gas Investment Symposium yesterday in San Francisco. Below are portions of his talk dealing with EVEP’s Utica Shale assets and strategy. Also below is the PowerPoint presentation he used, which contains some great maps and charts dealing with the Utica. In particular take a look at slides #8 through #18. Don’t miss the close-up pictures of UEO’s Kensington and Harrison plants.

If we could “net net” summarize what Houser said about the Utica and the role it will play in the company’s future, it’s in line with our previous observations, which is…
Read More “EVEP CEO Mark Houser Discusses Utica Shale Strategy, Future”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Ohio | Pennsylvania | Statewide OH | Statewide PA

Magnum Hunter CEO Gary Evans Charts a Marcellus/Utica Future
October 1, 2013October 1, 2013

Gary Evans, CEO of Magnum Hunter, presented at the IPAA Oil and Gas Investment Symposium yesterday in San Francisco. He did a deep dive into MH’s Marcellus and Utica Shale operations and plans moving forward. Evans said the company now owns 490,000 net acres in the northeast (Appalachia) with 81,000 net acres in the Marcellus Shale and 80,000 net acres in the Utica Shale. They have investments and operations in both drilling and in the midstream (pipelines) segment via subsidiary Eureka Hunter.

Below are Evans’ comments from yesterday along with a PowerPoint presentation which we believe is likely the one he used (or very similar to the one he used). Slides #13-#27 cover the Marcellus and Utica–well worth your time to review, some great maps and charts. Also included, a nifty picture of MH’s new robotic drilling rig (slide #26)…
Read More “Magnum Hunter CEO Gary Evans Charts a Marcellus/Utica Future”
Energy Companies | Gastar Exploration | Marshall County | Utica Shale | West Virginia | Wetzel County

Gastar CEO Porter Outlines Brighter Future in WV Marcellus/Utica
October 1, 2013October 1, 2013

J. Russell Porter, president and CEO of Gastar Exploration, presented at the Johnson Rice 2013 Energy Conference yesterday in New Orleans. Last year at this time Gastar was facing a major lawsuit and a dark future. Porter points out in his opening remarks that the $120 million lawsuit against them was settled this past year–for $1 million–and the future today is much brighter. Gastar concentrates in two shale plays: the Hunton Limestone Oil play (in Oklahoma and Texas), and the Marcellus (in West Virginia). The company has concentrated their efforts on the Marcellus for the past couple of years.

Below are Porter’s comments concerning the Marcellus/Utica, giving us insight into where Gastar is now, and where they hope to go, along with the PowerPoint presentation he used during his talk. Slides #10-#16 are related to the Marcellus/Utica. What caught our eye: During the second half of next year (2H14) Gastar plans to drill its first Utica well–in WV, not Ohio…
Read More “Gastar CEO Porter Outlines Brighter Future in WV Marcellus/Utica”
Doddridge County | Energy Companies | EQT Corp | Industrywide Issues | Lease & Royalty Payments | Litigation | West Virginia

WV Landowner Tries to Stop Shale Drilling with New Water Wells
September 30, 2013September 30, 2013

Here’s a novel approach by a landowner to try and stop drilling on land already leased. A landowner in Doddridge County, WV didn’t like how he was being treated by driller EQT, so he drilled several water wells close to where EQT planned to drill Marcellus Shale gas wells on his property. In WV, you can’t drill within 250 feet of a water well–so the water wells effectively shut down drilling on his property.

Except… EQT is now suing the landowner for bad faith and intentionally trying to obstruct a signed contract. Based on the facts in the case, we expect EQT will prevail. Drilling the water wells was “cheating” to prevent drilling and ultimately to get out of the lease. Creative, perhaps–but misguided…
Read More “WV Landowner Tries to Stop Shale Drilling with New Water Wells”