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EnLink OH Condensate Pipe in Trouble? Open Season Extended Again

EnLink Midstream is clearly having trouble getting enough business to justify building a new condensate pipeline in Ohio. In August 2014, EnLink announced a new 45-mile condensate pipeline that will stretch across Guernsey, Noble and Washington counties in Ohio (see EnLink Midstream Announces New Condensate Pipeline in ORV). The project, which connects to another EnLink pipeline in Washington County, is called the Ohio River Valley Pipeline, or ORV. In mid-December, EnLink launched a 30-day binding open season for shippers to sign up for capacity on the new pipeline (see EnLink Launches 1 Month Open Season for ORV Condensate Pipeline). An open season is the time when shippers sign on the dotted line and commit to paying for and using the pipeline when it’s built. If EnLink doesn’t get enough customers, they won’t build it. In January EnLink announced there were extending the open season another six weeks (see EnLink Extends Open Season for OH Condensate Pipeline by 6 Weeks). Those six weeks have come and gone, and guess what? EnLink has just announced they’re extending the open season again, another six weeks…
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EnLink Extends Open Season for OH Condensate Pipeline by 6 Weeks

In August 2014, EnLink Midstream announced a new 45-mile condensate pipeline that will stretch across Guernsey, Noble and Washington counties in Ohio (see EnLink Midstream Announces New Condensate Pipeline in ORV). EnLink calls the project, which connects to another EnLink pipeline in Washington County, the Ohio River Valley Pipeline. In mid-December EnLink launched a 30-day binding open season for shippers to sign up for capacity on the new pipeline (see EnLink Launches 1 Month Open Season for ORV Condensate Pipeline). Midstream companies won’t build expensive pipelines (this one will cost $250 million) unless they have 15-20 contracts in place to guarantee they’ll make their money back. Today EnLink announced they’re extending the open season another six weeks–to the end of February. Oh oh, must mean they don’t yet have enough interested customers to build it…
Read More “EnLink Extends Open Season for OH Condensate Pipeline by 6 Weeks”

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Was the Blue Racer Accident in Noble County, OH Preventable?

preventionNearly two weeks ago there was a fatal accident at a Blue Racer Midstream condensate pumping skid in Noble County, OH in which an electrical contract worker was killed (see Blue Racer Midstream Explosion Kills One Worker in OH). There was precious little information about the accident–what caused it–at the time. And since then, we’ve spotted nothing. We know it takes time to investigate such things, but usually there is at least an update or two during that period. We did, however, spot a letter to the editor from a veteran oilfield petroleum engineer who claims the accident was preventable. Since this engineer doesn’t work in the northeast and has no personal knowledge of the accident, we thought it was a pretty brash statement to make. Or was it?…
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Blue Racer Midstream Explosion Kills One Worker in OH

There was an explosion and fire at a Blue Racer Midstream condensate pumping skid (equipment that moves natural gas liquids through the stabilizer process) in Noble County, OH. An electrical contract worker from Virginia, Norman Butler (48 years old), sadly, was killed. The pump station is located next to a CONSOL Energy drill pad in northwest Marion Township, about 50 miles west of Wheeling, WV, between Interstates 70 and 77. A CONSOL spokesperson said none of the equipment at their site was affected and everything has been shut-in for now…
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3 Big Compressors Coming with Columbia’s OH Pipeline Project

Representatives for Columbia Gas Pipeline are making the rounds and talking with officials in various communities where the planned expansion of their pipeline will happen. Columbia, as MDN previously reported, is spending $1.75 billion on two pipeline projects that will help move Marcellus Shale gas to the Gulf Coast (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). One of those projects is called the Leach Express–starting in Marshall County, WV and ending up in Leach, KY (hence the name). Along the way three new compressor stations will need to be built, which is the focus of this story…
Read More “3 Big Compressors Coming with Columbia’s OH Pipeline Project”

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EnLink Midstream Announces New Condensate Pipeline in ORV

Earlier this year, midstream company Crosstex Energy merged with the midstream division of shale driller Devon Energy and gave birth to a new company–EnLink Midstream (see Time to Congratulate Devon & Crosstex on the Birth of EnLink). EnLink has a small but growing presence in the northeast, including the Utica Shale. EnLink’s commitment to the Ohio River Valley (Utica Shale) has just doubled by adding another $250 million committed to a project that will build a new 45-mile condensate pipeline and add compressor stations in Noble, Belmont, and Guernsey counties…
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MarkWest Re-Opens Chartiers, PA Plant, New Plant in OH

MarkWest Energy Partners provided an update yesterday for two of its processing plants–one in the Marcellus and one in the Utica. MarkWest said Plant III at its Houston complex (Chartiers, Washington County, PA) is back up and running after being damaged by a lightening strike back in May (see Lightening Strike at MarkWest Chartiers Plant Causes Evacuation). They also said a brand new processing plant at their Seneca complex in Noble County, OH is now online and running, adding an additional 200 million cubic feet per day of processing capacity (now totals 600 Mmcf/d). Next up? Yet another 200 Mmcf/d plant at the Seneca complex, due to open in 2015…
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Rex Energy Begins Selling Ethane; New Wells Go Online in June

Rex Energy, the “little driller that could” and indeed “is” doing a marvelous job in the Marcellus Shale, issued an important update yesterday. Rex reports they began ethane sales on June 11–which was a little bit delayed from what they had expected. But better late than never. Rex projects selling 2,000-3,000 barrels per day of ethane until mid-July at which point more sources will come online. Once all cylinders are firing, the company expects to sell 5,000 barrels of ethane per day. In addition to the good ethane news, Rex recently brought a number of new Marcellus Shale wells online and expects to keep up a brisk pace this year…
Read More “Rex Energy Begins Selling Ethane; New Wells Go Online in June”

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OH Newspaper’s Sloppy Reporting on Drilling Workers/Problems

Local newspapers in drilling towns should know better, but sometimes reporters are either snookered, or they have an anti-drilling bent. We’re not sure which it is for The Marietta Times (Washington County, OH), but a recent article uses a so-called research report from the anti-drilling FracTracker that says when drilling comes to town so too does an increase in crime. And on that particular false premise the reporter hangs an entire article full of anecdotes and innuendo. Shame on The Marietta Times…
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Marcellus/Utica Driller Eclipse Resources IPO Seeks $864M+

Just over a month ago MDN brought you the news that PA-based Marcellus/Utica driller Eclipse Resources would soon float an initial public offering (IPO) hoping to raise $100 million (see Utica Driller Eclipse Resources Files IPO – Wants to Raise $100M). It now appears the information in that story was off–way off. Earlier this month Eclipse launched their IPO by announcing they want to sell 30.3 million shares of common stock for $27-$30 per share. If you calculate they get $28.50, that would raise $864 million!…
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Summit Midstream Cuts $377M Check for 40% of Ohio Gathering

Ohio Gathering is a midstream (pipelines and processing plants) company operating in the southeastern Ohio area–Harrison, Guernsey, Belmont, Noble and Monroe counties. It is a joint venture owned by MarkWest, EMG and until recently, Gulfport Energy. In January MDN told you that Summit Midstream would be buying Gulfport’s 40% ownership interest (see Summit Midstream Closes Deal to Buy 40% Stake in Ohio Gathering). These things take time with lots of lawyers and due dillgence and enough paperwork to re-paper the walls in a dozen homes. The paperwork is done and Summit has cut the check–a $377 million check that will go into the bank account of MarkWest and EMG…
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New Research Project Samples Water Wells in E Ohio Near Fracking

Researchers at the University of Cincinnati are looking for homeowners with private wells willing to have their wells sampled as part of ongoing research into the effects (or lack thereof) from nearby fracking. The idea is to do some real science for a change–that is, to take samples before drilling begins and then again during and after–to see if shale drilling has an effect on ground water supplies. What a brilliant concept! Real, in the field research and done before, during and after. Sharp folks at UC.

Here’s the details from the UC on what they play to do, and how to contact them if you live in Carroll, Columbiana, Harrison, Belmont, Noble, or Guernsey counties in Ohio…
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The Curious Case of First Penn Oil & Gas in Noble County, OH

Curious Case of Benjamin ButtonMDN spotted a very brief mention that Noble County, OH signed a lease in February with First Penn Oil & Gas for 6.71 acres of county-owned land for $36,657, or $5,463 per acre. Which on the surface seems like a pretty good deal. We dug some more, having not heard of Penn Oil & Gas, and found that the Caldwell (Noble County), OH School Board also signed a lease with Penn, just a few weeks ago. The school is raking in the dough: terms were $5,400 for 38.6846 acres, or roughly $209,000.

Who is Penn Oil & Gas? They’re not a driller as far as we can tell. Likely a land company, or more pejoratively, a “lease flipper” that will lease the land then turn around and sell the lease to a driller. Who might the driller be that will ultimately inherit those leases? We have a guess or two…
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Company Targets OH Landowners – Buy Future Royalties for Cash Now

Gateway Royalty is back and has $58.5 million on the bank they can’t wait to give landowners in the Ohio Utica Shale in return for future royalty payments. MDN told you about Gateway last summer. They were the company that the town of Carrollton, OH sold 1/4 of their royalty rights to (see OH Town Votes to Give Up 1/4 Royalties for Cash Payment Now). The way it works, in brief: Gateway pays landowners a lump sum now in return for the right to receive that landowner’s future royalty payments for years to come. You (the landowner) get your money now, they (Gateway) get the money you would have gotten dribbled out over time. Of course the money you receive now is discounted and in all likelihood far less than you would have gotten if you had waited just a few years (the bulk of royalty payments come in the first four years). It’s a bit of a gamble by both parties because no one really knows how much a well will produce.

Still, there are reasons why someone may want to get cash up front–pay off debt, ill health, etc. So in that vein, we bring you the latest press release from Gateway announcing they are ready, willing and waiting to give Ohio Utica Shale landowners money now. Specifically they are targeting landowners in Washington, Noble, Guernsey, Monroe, Belmont, Harrison, Carroll and Columbiana counties…
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ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan

memoIn August of 2012 staffers at the Ohio Dept. of Natural Resources (ODNR) made a boo-boo. They put into writing (in the form of a 13-page memo, embedded below) a draft plan to promote Utica Shale drilling under (not on) Sunfish Creek State Forest (in Monroe County), under (not on) Barkcamp State Park (in Belmont County), and under (not on) Wolf Run State Park (Noble County). The memo begins by saying there will be a communications problem to solve: “An initiative to proactively open state park and forest land to horizontal drilling/hydraulic fracturing will be met with zealous resistance by environmental activist opponents, who are skilled propagandists. Neutral parties in particular — such as ordinary citizens concerned about their families’ health — will be vulnerable to messaging by opponents that the initiative represents dangerous and radical state policy by Gov. Kasich.” (emphasis original) The memo states later on that, “Anti-fracking activists will attempt to legally and physically disrupt or halt the drilling projects, including staging dangerous protests on state lands. (This will require sustained legal countermeasures and crisis readiness by ODNR.)”

May we translate? Groups like the Sierra Club lie to people about the drilling issue–and they sometimes engage in bullying (and violent) behavior. Of course the Sierra Club liars are just a bit miffed at being called out as liars and bullies–by no less than a state agency charged with regulating oil and gas. So they are on the offensive. The first thing the Sierra Club and similar groups will do (are doing) is to get their buddies in the slavishly devoted mainstream media to pick up their “ODNR are scumbags” meme and run with it. The second thing is they will use the ODNR memo in fundraising letters, which is really what the shale drilling issue is for them–a big, fat fundraiser…
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Another Antero Utica Well Top of the Heap: IP Rate of 40.2 Mmcf/d!

super achieverCaution: MDN’s comments below are not completely accurate. It seems that Antero pulled a fast one on us, and unlike their previous updates, they have (starting with this update) used gas equivalents in their production reporting. The Antero Yontz well is still the highest initial production methane (natural gas only) well in the OH Utica. That’s not to take away from the incredibly productive Milligan well mentioned below–but much of Milligan’s production is NGLs and not methane. The Milligan is still a great (and profitable) well! It’s just not the top dog natgas producing well we thought it was.

Wow, we’re speechless! (And that’s saying something.) Last August MDN told you that Antero Resources had de-throned Gulfport Energy for having the highest yielding 24-hour rate Utica Shale well (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d). Antero’s amazing Yontz well is located in Monroe County, OH, south of Gulfport’s super achieving wells in Belmont and Harrison counties. South continues to be better. Yesterday Antero released an operational update, and tucked away in that update is a new reigning Utica champ. Antero reports the Milligan 2H well in Noble County produced a 24 hour initial production (IP) rate of 40.2 Mmcf/d gas equivalent (it produces lots of hydrocarbons other than methane, so the number is converted to gas for apples to apples comparisons). That is the single highest producing shale well we’ve ever heard of–anywhere. No wonder Aubrey McClendon once famously said the Utica Shale is the biggest thing to hit Ohio since the plow!

Aside from the Milligan 2H, there’s a lot of other news in the Antero update, including a very active Marcellus Shale drilling program (they currently have 15 rigs in the Marcellus), and the first of three compressor stations to help get their gas to market has come online in the Utica (two others are behind schedule). Here’s the full Antero update for 4Q13, with a bit of forward looking to 2014…
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