Research

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    EIA April DPR: Utica Production Slows, Marcellus Loss Slows

    EIAYesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. First interesting observation about the report just issued: The rate of production decline in the Marcellus has gone down. That is, although the Marcellus is predicted to produce less shale gas in May than it will in April, the amount of less production has decreased–meaning we may be close to equilibrium where the Marcellus produces around the same amount of gas each month, month after month. Second interesting observation: Utica natgas production has continued to grow each month while the other six plays have declined in production each month. The EIA is predicting that in May the Utica will not grow by much–just 1 million cubic feet per day of additional production. Essentially, Utica production of natgas is now flat month over month. Will it also go in the red when the next monthly report comes out?…
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    Syracuse U Study Finds Methane Preexists in Most Water Wells

    Syracuse UniversityNot long ago researchers at the University of Cincinnati that found fracking in Carroll County, OH taking place near water wells did not affect those wells (see Antis Not Happy with Results of OH Fracking Study They Funded). You would think those who claim they care (more than you and me) about the environment would be thrilled to learn that Mom Earth is not being harmed. But no. The anti-fossil fuel nutters funding the study promptly cut off any more funds for the researchers (see Anti Groups Abruptly Cut Funding for OH Fracking Study). A month later and another research study has been released–this one from Syracuse University. The new study, titled “Dissolved methane in Shallow groundwater of the Appalachian Basin: Results from the Chesapeake Energy predrilling geochemical database,” finds by analyzing 19,278 water samples (including samples from wells in Ohio) the same thing the Cinci study found: methane already exists in many water wells, in large quantities, long before any drilling ever happens. That’s bad news for anti-fossil fuelers. Science and facts just keep getting in the way of the fictional fairy tales they tell themselves…
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    HBK 2016 Energy Assessment, Predictions for OH/PA on Pipes, Taxes

    HBK EnergyCPA/consulting firm HBK (Hill, Barth & King) is fresh out with their 2016 Energy Assessment–an analysis of energy trends, opportunities, challenges and risks. In the assessment (full copy below) HBK Energy Advisors (a division of HBK) weighs in on issues like Obama’s odious Clean Power Plan, renewable energy, LNG and more. Of particular interest to MDN is a series of predictions made not in the official assessment, but in an accompanying blog post on the HBK website. The analysts make a series of predictions for Pennsylvania, Ohio, New Jersey and Florida. The first prediction for Ohio is that pipeline work in the Buckeye State will increase, mostly due to the NEXUS pipeline. Which we find interesting. Just last week we told you an analyst from Wood Mackenzie predicted the NEXUS won’t get built (see Utica Event: OH Landowners Will Lose $6.5B in 5 Yrs, NEXUS Nixed). Now we have another analyst/company saying it will get built! Have a look at HBK’s predictions and see if you agree with them…
    Read More “HBK 2016 Energy Assessment, Predictions for OH/PA on Pipes, Taxes”

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    List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016

    Last November MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). The law firm compiling the list, Haynes and Boone, is back with an updated version. Since that time more have fallen to low commodity prices for oil and gas. There are now 59 drillers who have declared bankruptcy–42 last year and (so far) 17 in 2016. Fortunately, the only Marcellus/Utica name we spot on the list is Magnum Hunter Resources, which filed for bankruptcy back in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Here’s the latest edition of Haynes and Boone’s “Oil Patch Bankruptcy Monitor”…
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    Authors of UK Fracking Study Dismayed that Fracking is Safe

    A group of UK researchers/professors have just published a new study on fracking and traffic-related environmental impacts from it. The study is titled “Investigating the traffic-related environmental impacts of hydraulic-fracturing (fracking) operations” (full copy below) and appears in the journal Environment International. The authors conclude that heavy truck traffic from fracking operations has a negligible impact on the environment. Here’s the funny part: the authors aren’t all that happy with their own findings. But to their credit, the researchers don’t screw with the data and attempt to hide or change their findings–as some hucksters do from American universities like Duke and Cornell…
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    Rig Counts for World, US Continue Steep Slide in March; M-U Down 1

    We’ve now gone beyond cutting into the bone and sinew with rig count losses–we’re now severing limbs. February’s Baker Hughes rig counts were awful, with both international and U.S. counts hitting record lows (see Rig Counts for World, US & Marcellus/Utica Crash in February). Somehow, it got worse in March. International rig counts went down 33 from 1,018 counted in February to 985 in March. In the U.S., rig counts went from 532 in February to 478 in March–a loss of 54 (10%). Month after month it just keeps going lower. Will the patient survive the carnage? On a more positive note, the number of rigs in PA, OH and WV cumulatively (the Marcellus-Utica) went down by just 1 rig. PA’s count went up 1 rig, OH’s count went down 2 rigs, and WV’s count stayed the same. Here’s the details…
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    Utica Event: OH Landowners Will Lose $6.5B in 5 Yrs, NEXUS May Get Nixed

    4/17/16 NOTE: Spectra Energy contacted MDN to express concerns that our headline leaves the wrong impression. A Spectra spokesman commented: “The story, particularly the headline, portrays the NEXUS Gas Transmission project as being canceled.  This is untrue; NEXUS filed a Certificate Application with the FERC in November of 2015 and has consistently met its regulatory milestones since that time. The project is on schedule and we anticipate FERC issuing its approval to proceed in the second-half of 2016, thereby allowing us to achieve our in-service date of late 2017.” MDN does not mean to imply the project won’t happen–the speaker at the conference we reported on is the one saying that. We’re simply reporting what she said, which we found newsworthy. Spectra takes issue with the opinion that the project may get canceled–they are committed to building it. We have modified the shorter headline that did say “NEXUS Nixed” to say “NEXUS May Get Nixed” to be more accurate. We regret any wrong impression it may have left. Make no mistake, MDN hopes NEXUS happens! We’re rooting for it!

    On Wednesday, the Canton Regional Chamber of Commerce and ShaleDirectories.com co-hosted the Utica Upstream conference at the Pro Football Hall of Fame in Canton, OH. By all accounts we’ve read, it was an excellent event. (Note: ShaleDirectories is partnering with Sourcewater to present UpStream PA 2016 in State College on April 19). We spotted several articles about Utica Upstream, and all of them focused totally, or in part, on the presentation made by Maria Cortez of energy research firm/consultant Wood Mackenzie. Cortez was clearly the bell of the ball. Among her observations on Wednesday: Ohio landowners will lose $6.5 billion in lost income in the next five years thanks to the drilling slowdown; drillers will buy out other drillers at a rapid pace this year and next; the Utica needs at least 11 rigs to keep production at current levels (right now they’re running 11!); some 150-250 drilled but uncompleted wells (DUCs) will be the focus for drillers for the time being; and the NEXUS pipeline likely will NOT get built. But wait, there’s more!…
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    U.S. Chemical Industry Investment Linked to Shale Gas Tops $164B!

    The American Chemistry Council (ACC) participated in a Hudson Institute event yesterday. During a presentation made by the ACC, they announced that U.S. chemical industry investment linked to plentiful and affordable natural gas and natural gas liquids (NGLs) from shale formations has reached an astonishing $164 billion. Some 40% of that investment is for the 264 projects – new facilities, expansions and factory re-starts – that is either completed or underway. Another 55% are for projects in the planning phase. This is a big deal folks. ACC’s research shows the investments tied to shale will lead to $105 billion per year in new chemical industry output and support 738,000 permanent new jobs across the U.S. economy by 2023–including 69,000 new chemical industry jobs, 357,000 jobs in supplier industries and 312,000 jobs in communities where workers spend their wages. Below we have a variety of resources for you. We have the ACC announcement with many interesting facts and figures. We also have a fact sheet summarizing their research, a copy of the slide deck used for the presentation (with really cool slides), and a copy of a study the ACC published in 2013 with a list of the companies who, at that time, had announced major downstream projects using shale-related natural gas and liquids…
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    Moody’s Oil & Gas Liquidity Stress Index Hits New Worst Level

    In March Moody’s Oil & Gas Liquidity Stress Index, a measure of the liquidity health of oil and gas companies, hit a worst-ever high of 27.2% (see Moody’s Oil & Gas Liquidity Stress Index Hits Worst-ever Level). A month later and the same index has topped the previous bad record–now at 31.6%. Translation: there are a record number of energy companies stretched to the limit, ready to run dry in the cash department. If prices don’t turn around soon, some (many?) of these companies will go under…
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    Top 10 Largest Publicly Traded Oil & Gas Companies in the World

    No doubt about it–oil and gas are joined at the hip. Bosom buddies. Blood brothers. When you talk about the top oil companies in the world, you’re also talking about the top natural gas companies. It’s a rare oil borehole that also doesn’t produce “associated” natgas–either a little or a lot. Earlier this week the Forbes magazine website published a list of the Top 25 publicly traded oil companies in the world. Interesting factoid: 7 of the top 25 publicly traded oil companies are headquartered in the U.S. Another factoid: Even though the price for oil decreased by more than 50% over the past year, production of oil in the U.S. went up nearly 11%–thanks to shale. Below we’ve grabbed some of the commentary from the Forbes article, along with the Top 10 (of the Top 25) list of the largest oil companies in the world…
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    Philly Chamber Publishes Roadmap to Turn Region into “Energy Hub”

    Yesterday a large group of business, labor and political leaders gathered in Philadelphia to hear about plans to turn Philly into an “energy hub” with more pipelines delivering natural gas and natural gas liquids to the region. Chemical plants and manufacturers would spring up to use the gas and gas liquids–creating a huge economic impact for the region. According to press reports there were 200 or more gathered for the unveiling of a new report from the Greater Philadelphia Chamber of Commerce’s Greater Philadelphia Energy Action Team (GPEAT). The report is titled, “A Pipeline for Growth, Fueling Economic Revitalization with Marcellus and Utica Shale Gas” (full copy embedded below). Meanwhile, 20-30 silly anti-drillers (who don’t have lives apart from protesting) stood outside and tried their darnedest to shout and disrupt the meeting. How did they react inside? By making fun and laughing at them! Philip Rinaldi, GPEAT Chair and President/CEO of Philadelphia Energy Solutions said this to the crowd as he took the stage: “I’m inclined to ask for a brief moment of silence to hear the protesters a little better.” Love it! You had to have a ticket into the private event–and the antis couldn’t score any tickets to disrupt the event–something they bitterly complained about. We say it’s about time someone pushed back against these disorderly ne’er do wells. Here’s how it went down inside the event, a place the antis couldn’t go…
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    Marcellus King in PA – Which Other Layers are Actively Drilled?

    Over the past few years MDN has highlighted and brought to your attention an excellent data service called MarcellusGas.org. The service contains data on every Marcellus (and other layer) wells drilled in Pennsylvania. It also covers waste disposal and injection wells. And it posts detailed statistics–down to the individual well level–including production numbers. It’s a really great service that only charges $20 per year for a membership. We highly recommend a membership if you’re into data and numbers. Note: We have no vested interest in the service. We’ve never even received a simple “thank you” for mentioning it and no doubt driving a number of subscriptions their way. No matter. We promote it because it’s a great service. Recently MarcellusGas sent an email to members (yes, we pay our $20/year like everyone else) to highlight how many wells have been permitted, and actually drilled–by rock layer. As you can imagine the Marcellus is king, head and shoulders above all the rest, with 9,359 actively producing wells and another 7,125 wells permitted (for a total of 16,484 Marcellus wells). What caught our eye is the numbers for the other layers. You might guess the second highest number of producing wells would be from the Utica Shale layer–but you would be wrong…
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    DOE Publishes First Annual Energy Employment Report

    Last week the U.S. Dept. of Energy issued its first-ever annual Energy and Employment Report (full copy below). The purpose is to show how many people work in the energy industry, and how the makeup of what they do is changing. It’s an interesting report. For example, the report says some 3.64 million people work in “traditional” energy industries, which includes producing, transmission, transporting and storing energy. Another 1.9 million people work either full or part-time in the energy efficiency industry. Adding the two together we get 5.54 million people working in “energy.” Of that number, roughly two-thirds work in tradition energy production and one-third work in figuring out ways to reduce the amount of energy we use…
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    EIA Report: Trends in U.S. Oil and Natural Gas Upstream Costs

    Our favorite government agency, the U.S. Energy Information Administration, has just published a new report detailing trends and costs in upstream (i.e. drilling) for U.S. oil and natural gas. The report is titled “Trends in U.S. Oil and Natural Gas Upstream Costs” (full copy below). It is a GREAT report. Among some of the highlights: The average well drilling and completion costs in five onshore areas in 2015 were between 25% and 30% below their 2012 level–when costs per well were at their highest point over the past decade. Based on expectations of continuing oversupply of global oil in 2016, the report predicts a continued downward trajectory in costs as drilling activity declines. For example, the report expects rig rates to fall by 5%-10% in 2016 with increases of 5% in 2017 and 2018. The report also expects additional efficiencies in drilling rates, lateral lengths, proppant use, multi-well pads, and number of stages that will further drive down costs measured in terms of dollars per barrel of oil-equivalent ($/boe) by 7%-22% over this period. Below is a summary of the report, followed by a full copy of the report. Take time to read it!…
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    Which Energy Source Added the Most Electric Generation in 2015?

    Question: Which power source added the most megawatts of electric generating capacity in 2015? If you answered, “Natural Gas!”, you would be wrong. The #1 source of new electric generation last year was wind. The #2 source last year was natural gas. And the #3 source of new electric power last year was solar. Important distinction: This is new capacity added. If you look at how much electricity is today produced by each source, natural gas is #1 at around 33%, coal is #2 at around 32%. Down at the bottom are sources like wind, which produces around 5% of our total electricity needs, and solar producing about 1%. So while the headlines may read that wind was #1 in new electric capacity last year, put into context, it’s a thimbleful compared to natural gas and coal–evil fossil fuels. Which is why it’s folly to think that so-called renewables will replace fossil fuels within the next two generations. Ain’t gonna happen. Here’s the EIA’s report on new electric capacity coming online in 2015…
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    US NatGas Production Hits Record High in February – 73.3 Bcf/d

    Something historic has happened. Natural gas production in the lower 48 states hit the highest-ever production levels. Which may seem strange since the U.S. Energy Information Administration has been telling us month after month about decreases in natgas production in the seven major shale plays they track. Bentek Energy, the analytics reporting unit of Platts, closely tracks production and has been since 2005. When you include all sources of natgas production (offshore, conventional onshore, etc.), the U.S. hit a record high in February of 73.3 billion cubic feet per day of production. February usually sees a decrease in production–so why the increase this year? The Marcellus/Utica is the big reason. But the reason behind the reason is that because the winter months were warmer than usual, it led to less “freeze-offs” or wells freezing up and stopping production due to cold temps. With fewer freeze-offs, more gas flowed, and a new record was hit…
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