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The Reason United Canceled Daily Flights Between Cleveland & OKC

A few weeks ago MDN asked the question, Can a Single Canceled Airline Route Affect Utica Shale Development? United Airlines is canceling its daily flights to and from Cleveland’s Hopkins International Airport and Oklahoma City’s Will Rogers World Airport. It’s a big deal because the Utica’s top drillers, including Chesapeake Energy and Gulfport Energy, are headquartered in OKC, and introducing longer delays in getting from here to there may put a damper on Utica development. It’s not so far-fetched that a single canceled route could have a pretty significant impact.

When we brought you that story two weeks ago, we assumed that UA just decided to willy nilly cancel it. But such is not the case. As Midwestern icon Paul Harvey used to say, here’s “The Rest of the Story”…
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Expect “Frackgate” to be an Issue in Ohio for a While

Anti-drillers in Ohio, like the Sierra Club, have dubbed the “revelation” that the Ohio Dept. of Natural Resources (ODNR) once crafted a communications plan to deal with nutjobs (like them) a scandal, so they’ve take to calling it “frackgate” (see ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan). Relatedly, we also told you about Gov. John Kasich already throwing in the towel and admitting defeat on the matter of drilling in a single state forest and two state parks (see The Disgusting PR Mess in Ohio – No One Smells Pretty).

You can expect “frackgate” to continue to be an issue in Ohio for a while because of the upcoming governor’s race. As we previously pointed out, the liberal Dems never let a good manufactured controversy (or crisis) go to waste. They’re now whispering about Kasich’s “enemies list” from the ODNR plan (even though Kasich had nothing to do with authoring the PR plan). By the way–they are enemies–of truth and common sense and reasonableness. Being good libdems, they will continue to harp on the “frackgate” issue, using a sycophantic press. Here’s the latest example of an article with absolutely no new information, the only purpose of which is to keep the story alive and in the minds of voters:
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Confab in Cleveland: Utica’s Best Opportunities & Biggest Fears

Several speakers at last week’s Crain’s Cleveland Business Shale Summit 2014 predicted a major ramp-up in drilling in the Utica Shale during 2014. Of note: one speaker said based on his informal survey he believes the number of drilling rigs in the play will zoom from 40 to 60 or more by early next year. Another speaker said the Utica looks and behaves a lot like the Eagle Ford Shale play in Texas–and that’s a very good thing. The biggest fears by those in the know? Over-taxation and over-regulation–both issues very much alive in the state legislature right now.

Here’s an excellent run-down on what happened at the Summit by intrepid reporter Bob Downing from the Akron Beacon Journal, including which counties are believed to hold the best drilling opportunities:
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The Disgusting PR Mess in Ohio – No One Smells Pretty

You have to hand it to Democrats. As Rahm “the Godfather” Emanuel once stated, they never let a serious crisis to go to waste. And if there isn’t a serious crisis? They manufacture one, of course. And that’s what Dems are doing in Ohio. You know MDN is not a fan of RINO Gov. John Kasich and his penchant to raise severance taxes just to give it away to buy votes, and we’re certainly no fans of his jingoistic “foreigner” hunting. But Kasich is being unfairly targeted by Democrats over the recent “revelation” that the ODNR had a public relations plan cooked up to deal with nutjobs (mostly Dems) who would oppose drilling under (not on) one state forest and two state parks (see ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan). The Dems are now calling for an investigation. (Funny how they never want to investigate our lawless President, isn’t it? But we digress.)

Kasich now says he doesn’t want any drilling under (not on) that one state forest and two state parks, and hasn’t wanted it for a year and a half–although he never publicly announced it. Translation: the Dems have already won the PR war on this issue and have made Kasich back down. Kasich should have, instead, thrown it in their faces by pushing forward with a plan. Here’s the sad story of a complicit media, hypocritical Democrats, and wimpy RINO Republicans (a disgusting mess)…
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McClendon Hauls in Another $1.2B, Utica Shopping Spree Continues

Aubrey McClendon is a high roller kind of guy–I think we can all agree on that one. We respect a guy who can put together deals like Aubrey can. A few weeks ago he announced that he had done deals to lease another 130,000 acres in the Ohio Utica Shale (see McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma). Now he has to come up with the cash to pay for the deals. The company already has some of the cash, but they need more. Yesterday Aubrey announced that his new company, American Energy Partners, has raised an eye-popping additional $1.2 billion in cash, bringing his grand total (so far) to $2.9 billion raised since last October. The man has sure got some moves!

Here’s the latest complicated financing deals Aubrey’s been up to so he can continue snapping up Utica acreage, of which he once famously said “[the Utica] is the best thing to hit the state of Ohio economically since maybe the plow”…
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2 OH Anti-Drilling Dems Miffed at Being Fingered in ODNR Memo

Yesterday MDN told you about the Ohio Dept. of Natural Resources’ innovative strategy to deal with the issue of drilling under (not on) a state forest and two state parks. Frankly, the came up with a brilliant public relations plan (see ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan). But they decided in the end not to pursue the plan, knowing about the loud (and foul) mouthed opposition they would face. Listed by name in the list of dunderheads who oppose shale drilling in the state were none other than OH Rep. Robert Hagan, Democrat from Youngstown, and OH Rep. Nickie Antonio, Democrat from Lakewood (notice a trend here?). The two have called on the Speaker of the Ohio House to launch an investigation into what they creatively call “Frackgate”. It will never happen, but that’s not the point.

We’d say Representatives Hagan and Antonio are up to their necks in…fracking waste. But then that would be unkind, wouldn’t it? So we’ll just say this is “more of the same” and gives the anti-drilling Hagan and Antonio an excuse to (once again) trot out the same old tired lies they’ve told a thousand times before. Here’s 1001…
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Break the Law in OH, Get an Award – Anti-Drilling Nuttery on Display

Here’s a life lesson for the kiddies: Start an “organic” farm, and when you don’t get a lot of business because your prices are twice those of everyone else, become a shrill anti-driller and claim Mother Earth is getting poisoned by evil fracking (gets you noticed). Then, take “direct action” against those nasty drillers, which is a euphemism for break the law. And when you’re done, receive an award for it! That’s the brief story of Gilbert (Kip) Rondy, co-owner of Green Edge Gardens in Amesville, OH.

Rondy is one of the so-called “Athens 8” arrested for illegally blocking access to an injection well site near Athens, OH. To reward his illegal behavior, the Ohio Ecological Food and Farm Association is bestowing on him their Stewardship Award. How nice. We wonder, how would Rondy like it if a group a pro-drillers showed up and blocked access to his organic farm for oh, say a week or so? Would that be worthy of an award too?…
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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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OOGA Actually Surprised at Double-cross in Severance Tax Deal

This one is really kind of funny. The Ohio Oil & Gas Association (OOGA) made nicey nice with Ohio’s Republicans in Name Only (RINOs), and supported a small, modest, ever-so-tiny severance tax increase (that we lambasted here: OOGA Caves, Endorses New Higher Tax on OH Utica Shale).

Even before the ink was dry and before the proposed law is brought up for a vote, those same slimy RINO politicians have done a double-cross and raised the tax rate in the bill. And OOGA is actually surprised! We hate to say we told you so (but we did)…
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Cleveland Suburb’s Socialist Model for Restricting Utica Drilling

Is Utica Shale drilling on the way to the Cleveland, OH area? It is if you listen to the mayor of the Cleveland uppity suburb of Gates Mills. Mayor Shawn Reilly wants landowners in Gates Mills to lock themselves into restrictive land trust deals–you know, to “manage” all that nasty, evil drilling if/when it gets there–in an estimated 10-12 years. This is not your typical landowner coalition being suggested. The good mayor wants landowners to sign over their mineral rights (via deed) to a “trust” managed by people appointed by the village (copy of the proposal embedded below). MDN’s advice to landowners in Gates Mills–run! Absolutely do not assign your mineral rights to a socialist organization that will not have your best interests at heart.

Here’s an article full of errors–like it takes 200 acres for a horizontal drill pad, when it actually takes about 20 acres…
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Magnum Hunter’s Prolific (& Dry) Utica Well in Monroe County, OH

Last week Magnum Hunter released an announcement (below) about their first Utica Shale well, drilled in Monroe County, OH. The company reports it’s an almost totally “dry” shale well–producing 97% methane (almost no natural gas liquids). But oh baby, is it ever productive! MH’s Stalder #3UH, which sits on a well pad that may at some point support up to an eye-popping 18 wells, had an initial production (IP) of 32 million cubic feet of natural gas per day (Mmcf/d). That’s not the highest rate we’ve seen (that honor still goes to Antero Resources’ Yontz well in Belmont County). However, 32 Mmcf/d puts the Stalder #3UH well in an elite group of the top 2-3 best-producing wells in the Ohio Utica–so a big congratulations to Magnum Hunter!

Here’s last week’s announcement from MH:
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Benesch Shale Report: Chesapeake Sale Rumors Swirling

The Ohio law firm of Benesch, Friedlander, Coplan & Aronoff are one of the northeast’s top energy law firms. Each quarter they publish a Shale Industry Report, largely focused on what’s been happening in the Ohio Utica Shale (most recent report covering fourth quarter 2013 is embedded below). It’s a great update–one that we like to read and enjoy being able to bring it to you. The top issue listed in the opening of the report is the rumor that, unsurprisingly, corporate raider Carl Icahn (Chesapeake Energy’s second largest shareholder) is shopping Chesapeake for sale to other companies. We’ve warned you about this from the beginning, when Icahn first started flexing his raider muscles and bullying the company into submission.

Everyone yells at MDN, “Chesapeake needed fiscal discipline…Aubrey McClendon was reckless and almost bankrupted the company…a strict hand was needed at the helm and Icahn came along at the right time…etc.” We say bunk. This has always been about adding more zeros to Icahn’s bank account–from firing more than 1,200 people to selling off assets right and left in the equivalent of fire sales. There’s nothing disciplined or wholesome or good about it. It’s about fat cats getting fatter (i.e. richer). Yes it’s a free country (maybe, we need to check how many more illegal executive orders have been issued in the past 24 hours by Obama)–and in a free country this kind of thing can happen. But we don’t need to like it, and we sure as heck don’t. Icahn and his toady Doug Lawler need to go. End rant. So who’s rumored to be interested in buying Chessy?…
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Marietta Residents Generally in Favor of Leasing City-Owned Land

Seems to us, from an informal survey around town, that most residents of Marietta, OH are in favor of the city leasing 35 acres of municipal property to Protege Energy for the offered $4,750 per acre signing bonus and 17.5% royalty on any gas produced.

A sampling of reaction “around town”…
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Chesapeake, Atlas Try Forced Pooling in Columbiana County, OH

Forced pooling, or as it’s called in Ohio, “unitization”–it’s something we understand, but we don’t like it. Chesapeake Energy and Atlas Noble have filed petitions seeking forced pooling for property owned by a number of landowners in Columbiana County, OH. Some of those petitions have been approved by the Ohio Dept. of Natural Resources (ODNR). Some are still pending.

The industry and landowners who have leased will argue it’s not fair that one or two hold-outs who won’t lease can scuttle a deal to drill and therefore should be forced to lease if they can’t come to reasonable terms. Landowners who don’t want to lease say it’s their land and drillers can figure out how to drill around them–I don’t say you can’t drill, and you don’t say I have to drill under my land. We favor the later position, to the consternation of our friends in the shale drilling industry. We say, make it worth their while–give them an offer they can’t refuse. Here’s some of the details on the forced pooling being sought by Chessy and Atlas in eastern OH:
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RUMA – Columbiana County, OH Enjoys Improved Roadways

Let’s RUMA! No, it’s not the latest dance craze. RUMA stands for Road-Use Maintenance Agreement which are contracts used by counties in Ohio to ensure roads damaged or potentially damaged by heavy equipment being moved for shale drilling and pipeline work is either prevented or repaired.

Thanks to 84 different RUMAs in Columbiana County, OH put in place since 2011, county residents are enjoying miles and miles of revamped roads–all paid for by the drilling industry and not taxpayers. Thank you Utica Shale!…
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Village in Belmont County Signs Lease with Gulfport: $7250/Acre

Bellaire is a small village in Belmont County, OH, near the border with West Virginia. Although Bellaire is small (population 4,300), as the old saying goes, location is everything. It just so happens Bellaire sits atop wet gas Utica Shale deposits and drillers in the area want to lease. So Bellaire officials last week signed a contract with Gulfport Energy for a “piddly” 66 acres of village-owned land scattered throughout the town. Just like another deal recently signed by Gulfport with the Shadyside Local School District, Bellaire is getting $7,250 per acre signing bonus and 20% royalties (see School in Belmont County, OH Gets $7,250/Acre from Gulfport).

The taxpayers of Bellaire will appreciate a $478,500 bonus check coming their way for the village coffers…
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