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 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.
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?
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.
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 
We recently received a couple of recent issues of a monthly news/analysis newsletter from 
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.