Biden Spending $33M to Plug 277 Wells on Fed Land Incl. PA, OH, WV
The Bidenistas at the Dept. of Interior breathlessly announced the agency is (finally) releasing $33 million to plug 277 orphaned oil and gas wells across the country located on federal lands. The average price per plugging is $119,000. Spending $33 million to plug wells on federal lands is chump change compared to the $4.7 billion allocated for plugging old wells under the so-called Biden infrastructure bill. Why is the government paying $119K to plug wells that normally cost maybe $50,000 to plug? We’ll answer that question with another question. Why does the government pay $400 for a hammer it could buy at Lowes for $18?
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Just last week MDN told you we will, from now on, bring you new permit data for the previous week on Fridays. Yet here it is Thursday and we’re sharing the permit data for last week. What gives? MDN and its author, Jim Willis, are taking a break Friday (tomorrow) and next Monday for the Memorial Day holiday. Well, we’re taking Monday off for the holiday. We’re taking Friday off because there’s a wedding in Jim’s family this weekend. There are preparations to make, and celebrations to partake in. So we’re bringing you the permit data today, on Thursday. Speaking of which, there were 24 new permits issued last week, with 14 of them going to Pennsylvania, seven to Ohio, and three to West Virginia. We break it down below.
For the better part of a decade, MDN has brought you stories about shale development in the Muskingum Watershed Conservancy District (MWCD), an agency formed in 1933 to help control flooding and promote water conservation in the Muskingum River watershed area of Ohio, an area that covers 8,000 square miles. Over the years MWCD has leased thousands of acres for Utica Shale drilling and cut deals to sell water to drillers for fracking. It’s been a while since the last lease announcement. MWCD has just completed negotiations to lease more of its land for drilling. We have all the details.
Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its first quarter update earlier this week. Ascent averaged production of 2.0 Bcfe/d for the quarter, a 9% increase over 1Q21. Nearly all of Ascent’s production (93%) was natural gas, while the rest was oil and NGLs. Ascent generated -$2 million of free cash flow (yes, negative free cash flow) and lost $1.5 billion during 1Q based on bad bets on derivatives/hedging.
Riverbend Energy Group is, according to its website, “a multi-faceted investment firm, utilizing risk-weighted deal evaluation processes to deploy capital into a variety of investment theses in the U.S. energy sector.” Which is gobbledegook for “we invest in oil and gas wells.” The company mainly invests in non-operated oil and gas wells, although it also has some operated wells in its portfolio (and investments in renewables too). Riverbend is, according to sources speaking with Reuters, working with an unnamed investment bank to shop three portfolios of non-operated oil and gas assets–with one of them containing Utica Shale assets.
How much of an effort is “enough” when a surface landowner in Ohio tries to locate the owner(s) of the belowground mineral rights under his or her land using the Dormant Mineral Act (DMA), with an eye toward reclaiming those rights? Is it enough to search the public record archive in only the county where the land is located? The Ohio Supreme Court recently ruled in two cases to say no, it’s not enough to run a quick search in one county when attempting to locate mineral rights owners.
An interesting case recently decided by Ohio’s Fourth District Court of Appeals has a significant impact for both surface landowners and drillers. The case is Zimmerview Dairy Farms, LLC v. Protégé Energy III LLC and establishes, under Ohio law, that a general release of damages contract (typically signed by landowners when they lease land for drilling or pipelines) does not release a driller or pipeline company from its ongoing obligation to remediate (fix) and restore damage to a landowner’s property.
JobsOhio, a private nonprofit largely funded by the profits from state liquor sales, is dedicated to attracting new jobs and investments to the state. JobsOhio has been a big part of the plan to get an ethane cracker built in the state, a project currently on hold. JobsOhio still believes there will be an ethane cracker plant built on a site prepared for that purpose in Belmont County, Ohio. PTT Global Chemical is supposed to be the one building the plant. However, a stray comment by the President and CEO of JobsOhio, JP Nauseef, confirms what we’ve thought for a long time…