Energy Companies | Exxon Mobil | Ohio | Statewide OH | XTO
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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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.
Do you remember the child’s game called “Simon Says”? That’s what we were thinking when we read about a lawsuit in Ohio by landowners against a group of shale drillers. The lawsuit, initiated by several landowners in Belmont County, OH, claims the drillers drilled too deep–into the Point Pleasant rock layer–when the leases signed only mention the Utica rock layer. The lawsuit, which is seeking class action status, claims “unjust enrichment” by the drillers.
A Pennsylvania landowner thought he could finagle extra payments from XTO Energy after his land was drilled under from a neighboring property. The landowner had signed a lease, and the lease contains language that says if XTO were to drill “on” his property (i.e. install a well pad) the landowner would receive an extra payment. The landowner sued saying “on” also means “under” when XTO drilled under his property. The Superior Court of Pennsylvania disagreed, saying “on” means “on the surface” and “under” does not mean “on”.
The Ohio Dept. of Natural Resources (ODNR) is doing a happy dance that they’ve shaken down XTO Energy $425,000 to settle a violation by XTO for drilling a shale well in Belmont County a year ago that exploded and caught fire.
EPA Chief Andrew Wheeler wasn’t the only speaker at yesterday’s Shale Insight event in Pittsburgh (see EPA Head Andrew Wheeler Addresses Shale Insight re “New EPA”). There were a number of other sessions addressing issues from the technical to the philosophical. A speaker from XTO Energy said the Utica Shale is only just getting started and the potential of the Utica “enormous.” A panel spoke to the critical nature of pipelines and addressed the issue of how we can better “tell our story” to the public with respect to pipelines. And another panel discussed whether and how natural gas development is affecting public health. Here’s a few select reports.
Yesterday the Pennsylvania Department of Environmental Protection (DEP) issued administrative orders requiring three oil and gas companies–Alliance Petroleum Corporation (a subsidiary of Diversified Gas & Oil), XTO Energy, and CNX Resources–to plug 1,058 abandoned oil and gas wells across Pennsylvania. Alliance has 638 wells, CNX has 327, and XTO has 93. In a quick scan of the list of wells to be plugged, we didn’t spot a single shale well. All 1,058 wells are conventional/vertical wells. So why is this news for MDN? Because all three drillers (but in particular CNX and XTO) drill shale wells, and plugging old conventional wells takes time and money–time and money that could be spent on drilling shale wells. It takes anywhere from $10,000 to $100,000 to plug an abandoned conventional oil/gas well. Most of the wells are located in the southwestern part of the state. CNX responded that in reviewing the list, some 190 of the wells in their list (out of 327) were part of a recent asset sale. Here’s the details on where, and how long these companies have, to plug old/abandoned oil and gas wells…
In February MDN told you that XTO Energy, the shale drilling arm of Exxon Mobil, has plans to begin drilling five new shale wells in Armstrong County, PA on a former golf course (see 
XTO Energy, the shale drilling arm of Exxon Mobil, wants to sell ~9,400 Ohio Utica Shale acres in Monroe and Washington counties. Have no fear, XTO isn’t going anywhere. According to XTO’s website, the company currently owns 82,000 acres of Utica Shale leases in Belmont and Monroe counties. The tiny 9,400-acre sale appears to us to be selling off acreage in areas that don’t fit with XTO’s future drilling plans. XTO maintains a regional office in Belmont County. According to the sale announcement appearing on Oil & Gas Asset Clearinghouse, there are potentially 40 drilling locations on the 9,400 acres. The acreage has dry gas potential. The sale is not exactly an auction, but it is timed and uses bids. XTO is accepting sealed bids on the property through May 17. Here’s a copy of the listing, along with a flyer…