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OH Drillers Win Case Against Landowners re Drilling Deeper

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 OH Landowners Sue Rice, Ascent, XTO, Gulfport for Drilling Too Deep). The case took nearly four years and hundreds of filings by both sides, but last week, a jury found in favor of the drillers (the defendants) and against the rights owner (the plaintiffs). This case likely has far-reaching consequences for landowners and drillers in Ohio.
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XTO Begins to Plug 4 Shale Wells in Butler County Starting Today

XTO Energy began to drill four shale wells in Prospect Borough, Butler County, PA, in 2019. At least one of the wells was drilled down to a depth of nearly 2,000 feet. At some point since that time, XTO decided not to finish the wells and filed a request to plug the wells. A Pennsylvania Dept. of Environmental Protection (DEP) inspector visited the well pad, the Coretsky well pad, in September of last year and issued a “failure to plug” notice of violation for the four wells (called the Patton wells). Although it took a few months, XTO said the equipment would be delivered last week and that, as of today (Monday), the process would begin to cap and plug the four abandoned wells.

1/24/24 UPDATE: We have new information and context about these four wells. See below.
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Court Orders Ohio Drillers to Produce Documents in Royalty Dispute

Back in the summer of 2020, MDN told you about a lawsuit brought by an Ohio rights owner called TERA, an organization that appears to own 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 OH Landowners Sue Rice, Ascent, XTO, Gulfport for Drilling Too Deep). That lawsuit continues to grind on. Last week, a judge ruled the drillers being sued must produce certain documents sought by the plaintiff (rights owner).
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Exxon Plans to Double LNG Biz by 2030 to Supply Asia & Europe

An Exxon Mobil executive told the Nikkei news service his company is looking to nearly double the volumes of liquefied natural gas (LNG) it is handling to more than 40 million tons per annum (MTPA) by 2030. Exxon currently handles roughly 22 MTPA now. The company plans to invest in LNG projects, offshore oil in Guyana and South America, and in U.S. shale (the Permian). What about the Marcellus/Utica?
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21 New Shale Well Permits Issued for PA-OH-WV Sep 12-18

Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 21 new drilling permits, down from the 30 permits issued the week before, and down from the 40 permits issued the week before that. The trend is not our friend right now. PA issued 13 permits, and OH and WV issued four permits each.
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30 New Shale Well Permits Issued for PA-OH-WV Sep 5-11

Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 30 new drilling permits, down from the 40 permits issued the week before. PA roared back to life by issuing 21 of the 30 permits, with OH issuing just three and WV issuing six.
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Ascent Closes on 27K Utica Acres for $270M – Finally Names Seller

On July 1, just as everyone was heading out the door for summer vacation, Ascent Resources announced it is buying another 26,800 acres in the Ohio Utica for $270 million (see Ascent Resources Buys Another 27K Utica Acres for $270 Million). The announcement withheld the identity of the seller but did say Ascent was buying *all* of the seller’s Ohio Utica shale assets, which touched off speculation about who is doing the selling. We now know. On Friday, Ascent announced it has closed on the deal. The seller was…
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4 Cos. Shopping M-U Assets – Represents 11.5% of M-U Production

We recently received a couple of recent issues of a monthly news/analysis newsletter from The Capitol Forum (TCF). The author shared with us (and is allowing us to share with you) the March and April monthly editions of TCF Upstream Monthly, a publication that focuses on drilling in the Appalachian Basin. The April issue tackles the rumored Gulfport Energy/Ascent Resources merger we recently reported on (see Rumor: Gulfport Energy in Talks to Merge with Ascent Resources). Analysis of that potential merger is fascinating. However, it was tangential information part of the analysis that caught our eye. If you add up all of the assets currently rumored or known to be in play (for sale or merger), it amounts to 11.5% of all M-U production.
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Exxon/XTO Energy Looking to Sell 27K Utica Shale Acres + 61 Wells

In late 2020, ExxonMobil released the outlines of its development plan for the next five years (see ExxonMobil Announces Plan to Divest “Certain” N.A. Dry Gas Assets). Exxon said it had decided to prioritize investing in “high-value assets” over the next five years–namely in Guyana and in the Permian Basin here in the U.S. The company hinted that asset sales for U.S. onshore shale outside the Permian were on the table. The hinting is done. Reuters is reporting that yesterday Exxon launched the sale of shale gas properties stretching across 27,000 acres in the Utica Shale of Ohio.
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13 New Shale Well Permits Issued for PA-OH-WV Nov 22-28

It seems as if Pennsylvania has been on a yo-yo lately. Three weeks ago PA issued just two permits to drill new shale wells. Two weeks ago PA issued 15 permits! And now, for last week (Nov. 22-28), PA flipped back to just two new permits again. What’s going on? Did the DEP take most of last week off for the Thanksgiving holiday? Perhaps. Ohio pulled our region’s bacon out of the fire by issuing 11 new permits last week for Utica shale wells. West Virginia drillers got skunked with zero new permits last week. All totaled there were just 13 new permits issued last week in the M-U, down from 32 the week before.
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Weekly Shale Drilling Permits for PA, OH, WV: Aug 23-29

Last week both Pennsylvania and West Virginia issued permits to drill new shale wells. Ohio remained skunked for a sixth week in a row. What’s going on in Ohio? Or rather, what isn’t going on there? PA issued 15 new shale permits. Not to be outdone, WV also issued 15 new shale permits.
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Weekly Shale Drilling Permits for PA, OH, WV: Aug 16-22

Last week both Pennsylvania and West Virginia issued permits to drill new shale wells. Ohio remained skunked for a fifth week in a row. PA issued 18 new shale permits, mainly in the western part of the state (a few in the northeast). WV issued 7 new shale permits, all of them for the same pad being drilled by EQT in Wetzel County. This is the second week in a row EQT scored all of WV’s new permits, and the second week in a row they were all in Wetzel County.
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ExxonMobil Announces Plan to Divest “Certain” N.A. Dry Gas Assets

Yesterday ExxonMobil released the outlines of its development plan for the next five years. We previously alerted you that Exxon was looking to write down (impair) up to $30 billion of its assets, including (potentially) its assets in the Marcellus/Utica (see ExxonMobil Deciding Fate of XTO Asset Value in 4Q). Indeed it has happened, albeit not quite as bad as expected. Exxon says the impairments, which include assets in the M-U, will be on the order of $17-$20 billion. Exxon is also considering a sale of those impaired assets.
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ExxonMobil Deciding Fate of XTO Asset Value in 4Q

Last week ExxonMobil issued its third-quarter 2020 update. The company announced it is currently reviewing and making a decision about whether or not to write down (impair) the value of its North American dry gas assets–i.e. XTO Energy. If it writes down the value XTO assets, it will take a huge write-down in value (assets currently on the books at a value of $25-$30 billion).

NOTE: MDN revised this post on 11/9/20 to reflect new information. See an extended explanation below.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 28 – Oct 2

Somebody lit a fire under drillers in Pennsylvania last week! Or maybe we should say a fire was lit under the PA Dept. of Environmental Protection (DEP). PA issued 35 new permits last week spread pretty much across the entire state–in the northeast, central, and southwest portions of the state. Ohio, once again, issued no new Utica permits last week. West Virginia issued a single new permit last week.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 7-11

For the third week in a row, both Pennsylvania and West Virginia issued permits to drill new shale wells last week, and Ohio did not. What’s up with Ohio? PA issued 13 new permits for wells on five well pads. WV issued 2 new permits on two different pads. PA’s new permits skewed toward the southwestern part of the state with 11 of the 13 permits issued (two in Bradford County in the northeast). The WV permits were both issued in Marshall County, located in the northern panhandle of the state.
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