AEP Retains Drilling Rights for 31K Acres of Park Land Sold to OH

American Electric Power (AEP) recently sealed a deal to sell more than 31,000 acres of land in eastern Ohio to the state of Ohio for $47 million. The state will use it for a state park. However, subsurface rights are not part of the deal. AEP will wisely hold on those rights. At some point AEP may want to drill and frack the land, and that has antis in a tizzy.
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Pin Oak Buys Protege Energy’s Utica Assets in Ohio, W.V.

Listen up landowners in Washington County, OH: For some of you, your shale lease may now be owned by someone else. Pin Oak Energy Partners, a relatively young Marcellus/Utica driller based in Akron, OH, has purchased all of Protégé Energy’s Utica Shale leases (and other assets) located in Washington and Noble counties in Ohio, and Wood County in West Virginia. The vast majority of the lease transfers are in Washington County.
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Exploded Tetco Pipe in Ohio Back Online – 10 Weeks Later

A 30-inch segment of Enbridge’s Texas Eastern Transmission Company (Tetco) interstate natural gas pipeline exploded in January, sending two people to the hospital and destroying two nearby homes when fires from the blast spread (see Texas Eastern Pipeline Explodes in Noble County, OH – Injuries). The pipeline is now, after 10 weeks, fully back online and flowing at 100% capacity. We have an update on how the outage affected flows in the region, and the likely cause for the explosion.
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Enbridge Trying to Restore 1 Bcf/d on Exploded Tetco in Ohio

A 30-inch segment of Enbridge’s Texas Eastern Transmission Company (Tetco) interstate natural gas pipeline exploded one week ago today, sending two people to the hospital and destroying two nearby homes when fires from the blast spread (see Texas Eastern Pipeline Explodes in Noble County, OH – Injuries). Enbridge is hoping to restore partial service along the line early this week.
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Texas Eastern Pipe in Ohio Down Indefinitely Following Blast

Credit: Columbus Dispatch

Some 2.31 billion cubic feet per day (Bcf/d) of Utica Shale natural gas had been flowing through the Berne Compressor Station in Noble County, OH. Some (most?) of that gas goes to the Gulf Coast. That is, did go to the Gulf Coast–until the Texas Eastern Pipeline (Tetco) exploded earlier this week. That 2.31 Bcf/d coming from Berne has dropped to 0 Bcf/d for the indefinite future.
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Texas Eastern Pipeline Explodes in Noble County, OH – Injuries

Fires from Texas Eastern Pipeline explosion (click for larger version, credit: WTRF Channel 7)

A 30-inch segment of Enbridge’s Texas Eastern interstate natural gas pipeline in Noble County, OH exploded yesterday sending two people to the hospital and destroying two nearby homes. The pipeline was built in the early 1950s and was last inspected in 2012.

NOTE: We’ve added a 1/23/19 update below on how this accident has affected gas flows in Ohio.
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Ascent Resources Spends $1.5 Billion to Buy OH Utica Acreage, Wells

Last Thursday, Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, announced it is buying 113,400 Utica Shale acres along with 93 operating wells located in eastern Ohio for $1.5 billion. The new acreage tips Ascent over the 300,000 Utica acre line and catapults the company into one of the largest privately owned drillers (exploration and production) in the U.S. The companies doing the selling are CNX Resources and Hess (selling a joint venture they co-owned, each selling their share for $400 million each, for a total of $800 million), Utica Minerals Development (a subsidiary of First Reserve, a private equity firm headquartered in Greenwich, CT, and EMG), and a fourth, unnamed mystery seller. The CNX/Hess acreage (78,000 net acres of the 113,400 acres) is located in the wet gas window of Belmont, Guernsey, Harrison and Noble counties. We’re not sure about the location of the other acreage. The CNX/Hess jv sale marks Hess’ total exit from the Utica Shale. So how will Ascent pay for all of their new shiny new assets? After all, they only just emerged from bankruptcy in April (see Ascent Resources Marcellus Exits Chapter 11 Bankruptcy). [Correction: Ascent Resources Marcellus was the part of the Ascent business that filed for bankruptcy and is not related to Ascent Resources Utica and this new transaction.] Ascent will pay for it by issuing $965 million in new shares of equity (private stock), and borrowing $535 million under their existing line of credit…
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Latest OH Wayne Natl Forest Auction a Bust – Leases Go for $3/Acre

The fifth auction by the federal Bureau of Land Management (BLM) of federally-owned acreage in Wayne National Forest (WNF) to allow shale drilling was, in a word, a bust. The first four auctions offered up a total of 2,396 acres in total, and sold for over $8 million (average of $3,354 signing bonus per acre). The fifth auction of two smaller parcels–39.6 acres in Monroe County, and 305.8 acres in Noble County–sold for a piddly $2 and $3 signing bonuses per acre, respectively. What in the world happened? MDN reader and friend Charles Winslow, owner of The Wells Inn in Sistersville, WV, writes the INNformer publication. Charles recently published an excellent article about the recent auction and its lackluster results in the INNformer. He offered MDN the opportunity to reprint it (below). Charles finds there are a number of factors for the low auction price–but primarily the blame can be laid at the foot of regulatory uncertainty…
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Utica Pipeline Explosion in Noble County, OH Affects Natl Output

Seneca Lateral pipeline fire – Noble County, OH

On Wednesday around 2:30 am in the morning, a section of 24-inch pipeline that runs from the MarkWest Energy natural gas processing plant in Noble County, OH and the Rockies Express (REX) pipeline (also in Noble County) exploded and caught fire. The Noble County Emergency Management Office says it happened about three miles north of Summerfield, Ohio, near Ohio State Routes 513 and 379. Fortunately, no one was injured. Neighbors heard the explosion and saw a glowing night sky. The only damage was to some nearby trees. That short segment of pipeline is known as the Seneca Lateral, owned by Tallgrass (owner of REX Pipeline). Tallgrass is investigating the cause of the accident. Believe it or not, that one pipeline and the gas it flows from the MarkWest plant to REX, carrying it to the Midwest, has caused the entire national output of natural gas to decrease by an estimated 2%, according to Reuters. A single small pipeline can actually move the needle on output! Right away the Sierra Club jumped into the story with a wild claim that the pipeline was not properly reviewed before regulators signed off on it. Typical headline-grabbing propaganda from the Clubbers. Here are the details we could find about the explosion/fire…
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More of Rover in Eastern Ohio Coming Online in Time for Star Wars

The mighty Rover Pipeline project marches on toward 100% completion, even though the Ohio EPA is doing its best to stop it (see Rover Ignores Shrill Ohio EPA, Asks FERC to Continue HDD Drilling). Because of previous issues with underground horizontal directional drilling (HDD), the Federal Energy Regulatory Commission (FERC) first put the brakes on Rover, then later eased off the brakes, but still keeps Rover on a tight leash, preventing Rover from moving at the faster pace they’d like move at. Especially with respect to work in eastern Ohio. Rover is a $3.7 billion, 711-mile natural gas pipeline that (will eventually) run from PA, WV and eastern OH through OH into Michigan and on to Canada. A large portion of the pipeline, designated Phase 1A, began flowing natural gas on Sept. 1st (see Big Portion of Rover Pipeline Now Up & Running – Thru Most of Ohio). However, Phase 1B work in eastern OH and WV, which will feed more Marcellus/Utica gas to the main part of the pipeline, has been stymied by slow HDD work. At least some of 1B is now ready to begin. Yesterday Rover asked FERC for permission to begin service on three lateral pipelines totaling nearly 62 miles, and to start up three compressor stations and seven metering stations–in Ohio’s Noble, Monroe and Harrison counties. Rover is asking FERC to hurry it up so they can begin service by next week, in time for the Star Wars: The Last Jedi premier on Dec. 14…
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Marcellus/Utica Gas “Briefly Trapped” by Tetco Pipeline Outage

Canadian company Enbridge owns the mighty Texas Eastern Transmission Company (Tetco) pipeline system in the U.S. Last Wednesday, as workers were installing test equipment along the line in Noble County, OH, the workers noticed soil around the pipeline moving around. Not a good situation. So they shut off the flow of gas through that section of the pipeline, south of the Berne compressor station in Noble County. That portion of the pipeline went from flowing 1.6 to 2.3 billion cubic feet of gas per day (depending on the news source), down to flowing zero. The situation was investigated and the pipeline returned to service on Sunday, Oct 15th. In the meantime, from the 11th to the 15th, Tetco declared the situation “force majeure”–meaning “due to circumstances beyond our control we have to shut it off.” We assume force majeure was declared because shippers who wanted to move gas through the pipeline, and buyers on the other end, were screwed for a few days. Shippers lost money from gas they could have sold and buyers had to scramble to try and find other sources to meet demand. Economic losses for both. We’re guessing declaring force majeure lets Tetco off the hook legally for any potential monetary damages its customers experienced during the outage…
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Carrizo Sells 26K Prime Utica Acres for $62M

This morning Carrizo Oil & Gas announced it has sold “substantially all” of its Utica Shale assets, located primarily in Guernsey County, OH, for a grand total of $62 million. The Carrizo website says the company owns 25,900 acres in the Utica. Do the math, and if they sold all 25,900 acres for $62 million it works out to a relatively low $2,394 per acre–essentially a fire sale compared with lease prices in that area which are double that amount. Once upon a time Carrizo had big plans for the Utica. They (wisely) sold off their northern Utica acreage and retained their southern acreage in 2012 (see Carrizo Exits Northern Utica Shale, Retains Southern Acreage). The company has drilled four Utica wells–all of them in Guernsey County, with three of the four producing gas and oil. But the oily Eagle Ford play caught the company’s eye and in 2015 Carrizo quit drilling in the northeast (see Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015). Since that time, they have not drilled any new wells in the Marcellus/Utica. In May of this year, Carrizo put all of their Marcellus/Utica assets up for sale (see Carrizo O&G Puts Up ‘For Sale’ Sign on Marcellus/Utica Assets). So it should be no surprise they’ve found a buyer (unnamed) to pick up prime acreage in the Utica…
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Artex Energy Selling 14,885 Utica Acres in Eastern Ohio

Artex Energy Group, a subsidiary (on paper) of Marietta, OH-based Artex Oil Company, is selling 14,885 Utica Shale acres located in Noble, Guernsey, Washington and Tuscarawas Counties (southeastern OH). On its website, Artex claims it is “one of the largest oil and gas producers in Ohio” pumping out “millions of dollars per year in royalties to landowners.” The company says it has drilled and operates “more than 600 operated wells in Ohio.” Some of those wells are Utica Shale wells. However, many of their wells are conventional (vertical only) non-shale wells. The auction notice says 87% of the leases being offered are held by production. Over 2,000 acres is part of a joint venture Artex has with Antero Resources on land in Noble and Washington Counties. Artex is accepting bids now and will accept bids through March 2nd, with a target closing date of March 31st. Here are the particulars of what is being offered for sale…
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Rex Energy Sells 4,100 Acres, 14 Utica Wells in OH to Antero Resources

Rex Energy announced yesterday the company has cut a deal with Antero Resources to sell all of Rex’s “Warrior South Area” assets to Antero. Which may should like a big deal, but really isn’t. The assets sold include 4,100 net acres in perhaps the hottest part of the Ohio Utica Shale: Guernsey, Noble and Belmont counties. It also includes 14 Utica Shale wells. However, the wells are only producing 9 million cubic feet per day (MMcf/d) collectively. The sale price is $30 million–or $7,317 per acre. Rex says the acreage and wells are in a “non-core” area for the company. Rex, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), has had its share of financial challenges. In December the company was warned by the New York Stock Exchange that the per share price is too low and the stock is in danger of being delisted (see Rex Energy Stock Threatened with De-Listing by Nasdaq). This sale is the latest in a string of sales meant to improve the company’s financial health…
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Eclipse Sells 9,900 “Non-Core” Acres in OH for $6,444/Acre

Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, announced yesterday they sold 9,900 net acres in eastern Noble County and western Monroe County, OH for $63.8 million to an undisclosed buyer. That works out to be $6,444 per acre. The assets are in areas that are (currently) undeveloped, according to the company, and not in the “core” of where Eclipse wants to drill. Here’s the company announcement…
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FERC Tells Rover, Leach XPress Pipes to Redesign Routes in SE OH

FERC logoTwo major pipeline projects have just received a big red light from the Federal Energy Regulatory Commission (FERC), pending changes to their plans. Energy Transfer’s Rover pipeline, a $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada, along with Columbia Pipeline’s Leach XPress, running from Marshall County, WV through Ohio to Leach, KY, got word from FERC that a small section where the pipelines cross must be reworked or it’s a “no go” for both projects…
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