ODNR Drops “Market Enhancement” Clause in Forced Pooling Orders
Ohio mineral rights owner Gateway Royalty researched unitization (aka force pooling) in the state and discovered a disturbing change introduced in existing unitization beginning three years ago. Since February 13, 2018, a “market enhancement” clause has been included in Ohio Dept. of Natural Resources’ (ODNR) forced pooling unitization orders, which allows the unit operator to deduct post-production costs from the royalties owed to mineral owners. These post-production costs are sometimes as much as 95% of the gross sale price. Gateway called attention to the practice and ODNR has since backed down and no longer includes the market enhancement clause in new unitization orders.
Read More “ODNR Drops “Market Enhancement” Clause in Forced Pooling Orders”
In February of this year, PTT Global Chemical adamantly claimed a final investment decision (FID) to build the $10 billion ethane cracker plant project in Belmont County, OH would happen by “middle of 2021” (see 
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 second quarter 2021 update earlier this week. The company produced 1.95 billion cubic feet equivalent per day (Bcfe/d) during 2Q (91% natural gas). Ascent generated $38 million of free cash flow, but like other M-U drillers, hedging bets on derivatives resulted in a big loss of $617 million for the quarter.
Each quarter the Ohio Dept. of Natural Resources (ODNR) issues an update on Utica (and Marcellus) oil and natural gas production. ODNR no longer issues a summary press release as they once did, which means we don’t automatically notice when quarterly updates appear on their website. ODNR publishes a detailed spreadsheet of all active wells showing oil and gas production by well. We make a copy of that spreadsheet, enhance it to make it more usable, and link to it. We also do our own sorting to show you the top 25 shale gas wells and top 25 shale oil wells. An astute MDN reader inquired about the report for 1Q21, which is now available. We’ve created our own version of their report and have some exciting news to share about 1Q21 results. Oil is back, in a big way, in the northern Utica!
In May MDN brought you the news that Ohio mineral rights owner Gateway Royalty was sounding the alarm over a new bill quickly advancing in the Ohio legislature. House Bill (HB) 152 would use forced pooling if 65% of a proposed unit’s landowners are leased (too low a bar) and also would force the landowner to accept a 12.5% royalty and force them to accept post-production deductions with royalties in some cases potentially going down to nothing (see 
In June the Ohio Oil & Gas Association (OOGA) held its 74th Annual Winter Meeting in Columbus. Yeah, you read that right. The Winter Meeting was moved to June this year due to COVID. As with previous annual OOGA meetings, one of the speakers was Martin Shumway, technical director at Locus Bio-Energy Solutions. Shumway shared details from the latest DeBrosse Memorial Report (full copy below). What does the report show for 2020? Ohio oil and natural gas production both experienced steep declines last year. Oil production was down 16% from 2019, and natural gas production was down 10% from 2019. Even though the production news for 2020 is negative, this report is jam-packed with terrific, very useful information about Ohio’s shale industry.
Ohio’s House Bill (HB) 6 law granted billions (plural) of dollars to FirstEnergy in an attempt to prop up the company’s economically failing nuclear power plants. FirstEnergy bribed state legislators to pass, and keep passed, HB 6 by paying out $61 million to a small group of insiders, including the now-former Speaker of the House (see 
In March 2019 MDN brought you the news that Wood Group had been awarded a $34 million contract to build 28 miles of the 60-mile Risberg Pipeline from Crawford County, PA to Ashtabula County, OH (see 
On June 24, the operator of the SOS D-2 injection well in Cambridge, Ohio (Guernsey County) reported a small release from a pipeline that transfers fluid from a storage tank to the injection well. The well’s owner/operator, Silcor Oilfield Services Inc., immediately contained the leak (see 
New permit activity once again picked up last week after the previous week showed a paltry number of permits. In Pennsylvania 10 new permits were issued, all but one of them in the northeastern dry gas area of the state. In Ohio 4 new permits were issued, all of them for the same driller on the same well pad. And in West Virginia, 7 new permits were issued. One of the permits appears to be issued to a private landowner drilling his own shale well! And in another oddity, four WV permits were issued to a midstream company.
On June 24, the operator of the SOS D-2 injection well in Cambridge, Ohio (Guernsey County) reported a small release from a pipeline that transfers fluid from a storage tank to the injection well. The well’s owner/operator, Silcor Oilfield Services Inc., contained the leak. The Ohio Dept. of Natural Resources (ODNR) was alerted and is overseeing remediation of the affected area and repair of the line. End of story. Except…