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20 New Shale Well Permits Issued for PA-OH-WV May 30-Jun 5
Two weeks ago a pathetically low six new permits were issued to drill shale wells across Pennsylvania, Ohio, and West Virginia (see 6 New Shale Well Permits Issued for PA-OH-WV May 23-29). Last week the number improved–with 20 new permits issued. PA had 13 permits with Range Resources, Olympus Energy, and Pennsylvania General Energy all scoring three permits each. OH issued six new permits with the state’s two most active drillers, Ascent Resources and Encino Energy, collectively grabbing five of the six. WV issued just one new permit–to Antero Resources.
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On May 24, Cleveland State University researchers quietly published the “Shale Investment Dashboard in Ohio Q1 and Q2 2021” (full copy below). The new report details shale-related investment in Ohio, looking at upstream, midstream, and downstream activities. The investment estimates are from January through June of 2021–the first half of last year. The report shows investment in the Ohio Utica continued to increase last year, during the height of the pandemic. It also shows just two companies drilled 73% of Ohio’s new shale wells and 69% of the money invested in drilling new shale wells in the Buckeye State in 1H21. Which two companies?
It seems that the higher prices natural gas is fetching are finally translating into higher royalty checks for landowners–at least in the northern part of the Utica Shale in Ohio (likely everywhere). The Youngstown Business Journal spoke to landowners with leased and producing acreage in Columbiana County and found not only have their royalty checks increased, so too has new leasing activity and along with it, new lease bonuses.
The Ohio Oil & Gas Association (OOGA), a trade association with members representing the people and companies directly responsible for the production of crude oil, natural gas, and associated products in Ohio, recently issued its 2022 Community Impact/Sustainability Report. The report (full copy below) is full of interesting facts and figures about the oil and gas industry in Ohio, how that industry benefits every single Ohioan, and how the industry is cleaning up the environment in Ohio. You read that right. O&G is making the environment BETTER in Ohio.
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?
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.