Ohio

Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

PTT Postpones Ohio Cracker Final Investment Decision Indefinitely
April 27, 2020April 27, 2020

Last Friday PTT Global Chemical, the huge Thailand-based petrochemical company looking to build a world-class ethane cracker plant in Belmont County, OH, issued an update for the project. In February PTT’s CEO signaled that a final investment decision (FID) on whether (or not) to build the project would happen by “mid-year 2020” (see PTT CEO Sends Loud & Clear Signal of Positive FID on OH Cracker). That is no longer the case, according to the latest company update.
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Industrywide Issues | Litigation | Ohio | Statewide OH

Case Affecting Surface & Mineral Owners Goes to OH Supreme Court
April 21, 2020April 21, 2020

There is an ongoing question of whether or not the Ohio Marketable Titles Act (MTA), which impacts Utica shale rights, can be used to return previously severed mineral rights back to a surface landowner, or whether the MTA is superseded by Ohio Dormant Minerals Act (DMA). In February 2019, Ohio’s Seventh District Court of Appeals said the MTA *does* still apply to mineral rights (see OH Court Says Marketable Title Act Applies to O&G Rights). The Seventh Circuit then ruled in a second case in April 2019, reaffirming yet again that yes, MTA applies to mineral rights (see Ohio Court Rules Marketable Title Act Applies re Mineral Rights). The Seventh Circuit ruled in a third case in October 2019 to say YES, the MTA still applies (see Court: OH Marketable Title Act & Dormant Mineral Act Don’t Conflict). Now the Ohio Supreme Court will rule on the matter.
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Energy Companies | EV Energy Partners | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Former EV Energy Partners Looks to Sell or Merge Remaining Assets
April 15, 2020April 15, 2020

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In June 2018, EV Energy Partners (EVEP), the drilling subsidiary of EnerVest, emerged from bankruptcy court a mere two months after entering with $355 million of debt erased and sporting a new name: Harvest Oil & Gas Corp. (see EV Energy Partners Emerges from Bankruptcy with New Name). Harvest’s drilling and assets are focused in Ohio, Pennsylvania, West Virginia, where they own/operate 9,787 conventional wells. (The company cut a deal in March to sell off all of its Michigan assets.) In a fourth-quarter (everyone else’s first quarter) and full-year update released yesterday, Harvest announced it is “actively considering the potential divestiture of all of its remaining assets as well as a potential sale or merger of the Company.”
Read More “Former EV Energy Partners Looks to Sell or Merge Remaining Assets”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Chesapeake Beats Another OH Royalty Lawsuit in Federal Court
April 14, 2020April 14, 2020

A few weeks back MDN told you Chesapeake Energy had beaten a lawsuit by a group of Ohio landowners who claimed Chessy had cheated them out of a collective $30 million in royalties (see Chesapeake Energy & Total Beat Class Action Royalty Lawsuit in OH). A second lawsuit by a different set of Ohio landowners in the same court was recently decided. This second lawsuit has gone in Chesapeake’s favor as well. The second lawsuit claimed Chesapeake had fraudulently concealed information on royalty statements dating back to 1993 (for conventional wells). The court found otherwise. Strike two for Ohio landowners.
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Commodity Price | Industrywide Issues | NGLs | Ohio | Statewide OH

With Condensate Near $0, Utica Drillers Shift Permits to Dry Gas
April 13, 2020April 13, 2020

Last week MDN highlighted an article from the Pittsburgh Post-Gazette about the low low prices Marcellus/Utica condensate has fetched since the beginning of the year (see M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1). S&P Global is currently reporting prices for Utica condensate have not yet recovered, sometimes still dipping into negative territory. As a result, drillers are reducing their new permits and drilling in “wet gas” areas of the Utica and instead shifting gears to “dry gas” regions.
Read More “With Condensate Near $0, Utica Drillers Shift Permits to Dry Gas”
Belmont County | Industrywide Issues | Litigation | Ohio | Regulation | Wastewater

Hearing Delayed for 2 New Injection Wells in Belmont County, OH
April 13, 2020April 13, 2020

Last year MDN told you about New Jersey-based Omni Energy Group and their application to build two new injection wells in Belmont County, OH near St. Clairsville (see Belmont County Injection Well Plan Stirs Opposition from Coal Co.). The proposal set off a firestorm of opposition, including opposition from Robert Murray and the Murray Energy Corporation–a coal miner who doesn’t like fair competition from natural gas. The Ohio Dept. of Natural Resources (ODNR) was going to hold a virtual public meeting last Friday on Omni’s proposal–virtual because of the coronavirus. But at the last minute enemies of the injection well project, including Murray, convinced a Belmont County judge to put a temporary restraining order on the virtual meeting.
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Energy Services | Industrywide Issues | Jobs | Mahoning County | Ohio | Pipelines | Supply Chain | Vallourec

Vallourec Announces Layoffs for One-Third of its U.S. Workers
April 7, 2020April 7, 2020

Vallourec, headquartered in Boulogne-Billancourt, France, manufactures steel pipes used in the oil and gas industry. The company employs some 19,000 people in 20 countries, including the U.S. In fact, Vallourec employs more than 750 at three Youngstown, Ohio units: Vallourec Star, VAM USA and Vallourec USA Corp. Yesterday Vallourec corporate headquarters announced it will reduce (layoff/eliminate) some 900 positions “across all plants as well as support functions.” That number, 900, represents over one-third of Vallourec’s total workforce and contractor positions in North America. The announcement implies all 900 of the positions being eliminated will happen in North America.
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Industrywide Issues | NGLs | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1
April 6, 2020April 6, 2020

The Pittsburgh Post-Gazette is reporting Marcellus/Utica condensate, produced in places like southwestern Pennsylvania and eastern Ohio, briefly touched and went below $0/barrel last week, before recovering slightly. The article says the price M-U drillers are getting for condensate is down 91% from January of this year. What’s lacking in the Post-Gazette story is context for how important (or not) condensate is as a revenue stream for M-U drillers.
Read More “M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1”
Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Conventional Drillers Face Tough Decisions re Stripper Wells
April 2, 2020April 2, 2020

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Although some Marcellus/Utica drillers also own conventional (vertical-only) oil and gas wells as part of their portfolio, most conventional drillers are smaller “mom and pop” types of companies. Conventional oil well owners in the M-U, as well as across the country, face some of the same problems as shale drillers with a crash in oil prices: What to do with older wells? Thousands of older conventional oil wells produce as little as 10 barrels of oil per day. These low-producing wells are called stripper wells. With oil selling at $20/barrel, some stripper wells can still break even, but many cannot. It costs an average of $20,000-$40,000 to plug an old stripper well. Sometimes it’s more economic to simply keep a stripper pumping (and losing money) rather than pony up big bucks to close the well. It’s a conundrum.
Read More “Conventional Drillers Face Tough Decisions re Stripper Wells”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH | Total

Chesapeake Energy & Total Beat Class Action Royalty Lawsuit in OH
March 31, 2020March 31, 2020

In 2015 a group of Ohio landowners did what landowners had previously done in Pennsylvania, Texas and elsewhere–they filed a proposed class-action lawsuit against Chesapeake Energy claiming Chessy had screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments (see OH Landowners File Royalty Class Action Lawsuit Against Chesapeake). It took nearly five years with a lot of twists and turns, but yesterday the U.S. District Court for the Northern District of Ohio ruled in favor of Chesapeake, dismissing the claims against them.
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Belmont County | Economic Impact | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global | Taxation

PTT Cracker Project Reaches Tax Agreement with Belmont County, OH
March 31, 2020March 31, 2020

Even amid the coronavirus pandemonium and economic destruction happening everywhere, important oil and gas (and petrochemical) projects continue to make progress. In particular, the PTT Global Chemical plan to build an ethane cracker plant in Belmont County, OH still shows signs of life. In February PTT’s CEO signaled that a final investment decision on whether (or not) to build a multi-billion dollar ethane cracker in Belmont County, OH is coming by “mid-year 2020” (see PTT CEO Sends Loud & Clear Signal of Positive FID on OH Cracker). While work to prep the site and get it ready is now paused, work behind the scenes continues. Last week Belmont County commissioners, Mead Township trustees and the Shadyside Board of Education approved a new deal on tax payments should the project get built. This is a major milestone.
Read More “PTT Cracker Project Reaches Tax Agreement with Belmont County, OH”
Beaver County | Belmont County | Energy Companies | Energy Services | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | PTT Global | Shell

Will Shell Cracker Construction Delay Affect Ohio Cracker Timing?
March 30, 2020March 30, 2020

Nearly two weeks ago Shell, at the prompting of local officials, shut down construction of the mighty ethane cracker plant the company is building in Beaver County, PA (see Shell Shuts Down SWPA Cracker Plant Construction re COVID-19). How long will construction be stopped? According to a Shell spokesman, “I have no timeline for a return at this time.” What if the work stoppage drags on for months? It could, potentially, have a domino effect on another nearby cracker project–across the river in Belmont County, Ohio.
Read More “Will Shell Cracker Construction Delay Affect Ohio Cracker Timing?”
Belmont County | Energy Companies | EQT Corp | Ohio

EQT Stops Fracking After Worker Gets COVID-19; Suspends Dividends
March 27, 2020March 27, 2020

The Pittsburgh Business Times is reporting that a contractor working in EQT’s hydraulic fracturing (“completions”) operation who last worked at a site in Belmont County, OH has tested positive for COVID-19 coronavirus. Because that worker has been in contact with a number of other workers in EQT’s completions unit, the company has temporarily shut down all completions (fracking) operations. In a separate and unrelated announcement, EQT told investors they are (for now) suspending quarterly dividend payments and will use the money instead to pay down near-term debt.
Read More “EQT Stops Fracking After Worker Gets COVID-19; Suspends Dividends”
Energy Companies | Equinor/Statoil | Ohio | Statewide OH

Equinor (Statoil) Stops All U.S. Shale Drilling, Incl. Marcellus
March 26, 2020March 26, 2020

Oil and gas drilling giant Equinor (formerly called Statoil) is owned by the Norwegian government. Equinor/Statoil has drilled in the Marcellus/Utica for years. As recently as last June the company reported drilling 9-14 Utica wells per year (see Equinor (Statoil) Drilling Long Utica Laterals, Production Up 5X). The company also drills oil wells in the U.S., primarily in the North Dakota Bakken. All of that–both Utica and Bakken drilling–has come to a screeching halt. Yesterday the company announced it is reducing its drilling budget worldwide by $400 million and is “halting” all U.S. onshore (i.e. shale) drilling and completion activities.
Read More “Equinor (Statoil) Stops All U.S. Shale Drilling, Incl. Marcellus”
Diversified Energy | Energy Companies | Ohio | Statewide OH

Diversified Agrees to Plug an Extra 2 Wells per Year in Ohio
March 26, 2020March 26, 2020

Diversified Gas & Oil owns close to 8 million acres of leases with some 60,000 (mostly) conventional oil and gas wells. Their focus has been to acquire quality production and cash flow–regardless of the well or commodity type (gas or oil)–in the Appalachian Basin. They currently have over 400 Marcellus/Utica shale wells in their portfolio too. When a gas or oil well quits producing, it needs to be plugged. We were aware of deals Diversified has cut with both Pennsylvania and West Virginia to plug old, non-producing wells (see DEP and Diversified Gas & Oil Compromise on Plugging Old PA Wells and Diversified Deal in WV to Plug 730 Abandoned Wells Over 15 Years). It turns out Diversified also has a deal in place with Ohio to plug old wells, a deal that was recently modified.
Read More “Diversified Agrees to Plug an Extra 2 Wells per Year in Ohio”
Encino Energy | Energy Companies | Ohio | Statewide OH

Encino Tops IP Charts with Ohio Utica Wells in 2019
March 24, 2020March 24, 2020

Encino Acquisition Partners (aka Encino Energy) bought all of Chesapeake Energy’s Ohio assets for $2 billion in 2018 (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B). The deal included all of Chessy’s 933,000 Ohio acres (with 320,000 net Utica acres) and 920 operated and non-operated Ohio Utica wells. Since that time Encino has quietly become one of the state’s top producers. The biggest news to come from the recently released Debrosse Memorial report is the high initial production (IP) rate for the wells Encino drilled in 2019. The IP rates are through the roof!
Read More “Encino Tops IP Charts with Ohio Utica Wells in 2019”