Ohio

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    Drilling Mud Co. Opens in Monroe County, OH, 40 New Jobs

    American Mud Works held a ribbon-cutting ceremony last week to officially open up a new regional headquarters in Monroe County, OH. The company specializes in mixing drilling mud–the stuff used to cool drill bits as they chew away at solid rock some 1-2 miles below the surface. They also recycle used drilling mud and wastewater/brine. The company’s main headquarters is in Texas. They’re locating a branch operation in Monroe to service the Utica and Marcellus industries in our region. In the short-term, the new office, due to be fully operational in about four weeks, will staff up by hiring 30-40 people. However, American Mud has bigger goals in view. They aim to add more service lines and expand their operations down the road. The number of employees will likely go much higher as they expand. Let’s welcome American Mud and another 40 jobs to Appalachia!…
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    Chesapeake Energy 2Q18: $2B Utica Deal Last Major Asset Sale

    CHK stock – Click for larger version

    Chesapeake Energy released its second quarter 2018 update yesterday, and hosted a conference call with investor/analysts. Some of the big talk revolved around Chessy’s recent announcement it is selling its Ohio Utica assets for $2 billion (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B). While that announcement last week caused Chesapeake’s stock price to pop up, yesterday’s announcement that the company lost $40 million in 2Q18 caused stock prices to go back down. CEO Doug Lawler put a good spin on the news, and indeed there is reason to be optimistic. The company is moving in the direction of profitability. Lawler said the $2B sale of Ohio Utica assets will be used to pare down the company’s $9+ billion debt. He also said the Utica sale is the last major asset the company will sell in its bid to reduce outstanding debt. So what will they do to further reduce the company’s high debt? Lawler said, “Going forward, organic production growth, exploration, strategic acquisitions and portfolio management” will get the job done. As we’ve previously noted, Chesapeake is in the midst of converting itself from primarily a gas-drilling company to primarily an oil-drilling company. Doug is betting the ranch on oil. Below is an overview of yesterday’s update, a copy of the full update, and some excerpts of interest from the conference call…
    Read More “Chesapeake Energy 2Q18: $2B Utica Deal Last Major Asset Sale”

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    Cabot’s Lease Terms for Ohio Landowners + Antis Stage Tiny Rally

    We spotted an article covering a “rally” of maybe 20 people (judging by the pictures) who gathered on the bank of the Clear Fork of the Mohican River in Ashland County, OH this past Sunday. The group was there to protest Cabot Oil & Gas drilling a few test wells in the area to see if there’s anything in the region worth drilling for. Out of state radicals calling themselves “pipeline fighters” who had engaged in illegal activities against the Dakota Access Pipeline where there to whip up the locals–maybe convince them to do something illegal too. That’s how this kind of insanity spreads–by human contact. Anywho, the most interesting part of the article for us was not about the machinations of antis and their big boasts of how they’ll stop fracking. Instead, the most interesting part was an explanation of how Cabot came by the acreage they’ve leased in central Ohio, and how much money Cabot is offering landowners to amend existing lease agreements…
    Read More “Cabot’s Lease Terms for Ohio Landowners + Antis Stage Tiny Rally”

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    Chesapeake’s $2B Exit from Ohio Utica “Is a Good Thing”

    Last week MDN shared the blockbuster news that Chesapeake Energy is exiting the Ohio Utica, selling all of its Ohio assets for $2 billion (see Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B). The buyer is Encino Acquisition Partners, a joint venture between Encino Energy and the Canada Pension Plan Investment Board. At the time we speculated this may be good news for Ohio’s landowners signed with Chesapeake–that perhaps landowners now stand a better chance of seeing new drilling. That was just speculation/hope on our part. Looks like we’re not the only ones thinking that way. A couple of industry experts are saying the same thing. One of them said Chesapeake’s sale and exit “is a good thing” because it means Encino will sink money into new drilling programs in a way that Chesapeake, larded up with debt, could not…
    Read More “Chesapeake’s $2B Exit from Ohio Utica “Is a Good Thing””

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    OH Wayne Natl Forest Landowners Tired of Waiting, Take Fight to DC

    Bureaucrats deeply embedded in the federal Bureau of Land Management (BLM) are engaged in denying private property owners with property in the Ohio Wayne National Forest (WNF) their property rights. That’s the very serious (and true) charge being levied by members of the National Association of Royalty Owners (NARO). After “seven years of inaction,” property owners in WNF have taken their case to Washington, D.C.–to elected representatives from Ohio, along with federal agencies–in hopes of getting Utica drilling under way in WNF. After 10 long years, the BLM finally auctioned 719 acres in WNF in December 2016 (see BLM Auction Leases 17 Parcels, 719 Acres in OH Wayne Natl Forest). Since then BLM has held three more auctions. Ultimately there are some 18,000 acres under consideration for leasing by the BLM in WNF, a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned! Those mineral rights owners have been denied the use of their property rights for more than a decade. It was thought with the beginning of auctions the situation would be remedied. Not so. Not a single drilling permit has been issued following the auctions. BLM bureaucrats are threatening private landowners that their property, if it belongs to a drilling unit along with BLM auctioned land, will be subject to a full National Environmental Policy Act (NEPA) review. Enough! It’s time to put an end to unelected DC swamp dwellers blocking Utica drilling in WNF…
    Read More “OH Wayne Natl Forest Landowners Tired of Waiting, Take Fight to DC”

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    Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B

    In what is perhaps the second biggest thing to hit Ohio since maybe the plow (the first being the Utica Shale, borrowing a phrase from Aubrey McClendon), Chesapeake Energy announced yesterday it is selling ALL of its 933,000 Ohio acres (including 320,000 net Utica acres) and 920 operated and non-operated Ohio Utica wells to Encino Acquisition Partners for $2 billion. This is truly big news! Encino Energy is a young company, founded in 2011, headquartered in Houston, TX. Last year Encino formed a partnership with Canada Pension Plan Investment Board to form Encino Acquisition Partners. It is the Encino subsidiary that is buying Chessy’s Ohio Utica assets. The burning question is, Will Encino drill more wells? Or just sit on its new acquisition? Based on how they describe themselves, we think Encino is going to pursue an active drilling program in the Ohio Utica. According to their own boilerplate, the company’s mission is to, “focus on driving long-term investor returns by acquiring and developing high-quality assets with an established base of production and a large, low-cost development inventory across the lower 48 states of the United States.” They’ve certainly acquired a high-quality asset with an established base of production and it has a large, low-cost development inventory. All the boxes are checked in buying Chesapeake’s Utica assets. So we’ll hold Encino to their word that they will “develop” it–meaning drill new wells. Chesapeake plans to use the $2 billion to pay down some of their ginormous debt…
    Read More “Stop Press: Chesapeake Sells ALL of its Ohio Utica Assets for $2B”

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    Squabbling Over 2nd Lordstown Utica-Fired Elec Plant Near an End

    There is an ongoing legal squabble in Trumbull County, OH over a proposed second Utica gas-fired electric plant in Lordstown. Clean Energy Future (CEF) is currently building the Lordstown Energy Center, and has been since June 2016 (see Lordstown Energy Center Breaks Ground on $890M Electric Plant). That project is 95% built. CEF proposed, and got the Ohio Power Siting Board (OPSB) to approve, plans to build a second Utica-fired plant next door to the first (see Ohio Approves 2 Utica-Fired Power Plants in Guernsey, Trumbull Counties). As is typically the case, CEF (the builder) sold most of the first project to investors. In this case the new majority owner for the first power plant is Macquarie, an international investment firm. CEF sued Macquarie last September saying Macquarie is preventing CEF from building the second plant. Macquarie says if a second plant gets built in the same location, the first plant (now owned by Macquarie) will take a $6.7 million hit on earnings each year. Macquarie wants CEF to pay them that amount annually when/if the second plant gets built. To which CEF says, “They’re looking for an extortion payment.” Even though the legal wrangling continues, it’s now close to resolution. Trumbull County Court ruled in favor of CEF, instructing Macquarie to sign paperwork allowing the second plant to get built, and to sell property owned by the first plant to the second plant (as provided for under the original contract). Macquarie has refused to sell the land. CEF has asked the court to find them in contempt and make them sell. CEF also wants Macquarie to pay them $130 million for delaying the second project for more than a year…
    Read More “Squabbling Over 2nd Lordstown Utica-Fired Elec Plant Near an End”

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    Ascent’s $1.5B OH Utica Deal Yields $1.4M in Fees for 2 Counties

    In late June Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, announced it is buying 113,400 Utica Shale acres along with 93 operating wells located in eastern Ohio for $1.5 billion (see Ascent Resources Spends $1.5 Billion to Buy OH Utica Acreage, Wells). It’s a big deal, making Ascent one of the largest privately owned exploration and production companies in the U.S. It’s also a big deal for the counties where the land is changing hands. A large part of the acreage is located in Jefferson County, with sizable chunks in Belmont, Noble and Harrison counties. Why is it a big deal for the counties? It takes time (and consequently fees) to transfer all those thousands of leases from one owner to another. Counties stand to make a big windfall. For example, in Jefferson County, some $305 million worth of transfers will take place between CNX and Ascent, netting the Jefferson clerk’s office $1.2 million in fee revenue! It is the single largest ownership transfer in Jefferson County history. In neighboring Belmont County (to the south of Jefferson), $58 million worth of transfers are taking place, netting the county $173,000 in transfer fees. No word yet on how much money Noble and Harrison stand to make…
    Read More “Ascent’s $1.5B OH Utica Deal Yields $1.4M in Fees for 2 Counties”

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    Ohio EPA Takes One More Swipe at Rover Pipe with FERC Notice

    Craig Butler (aka Captain Ahab) has risen up with the Ohio EPA (aka harpoon) one last time to see if he can skewer his great white whale, the Rover Pipeline (aka Moby Dick). According to Energy Transfer Partners, builder of Rover, the Ohio EPA, which Butler heads, has filed a Notice of Violation with the Federal Energy Regulatory Commission as a backdoor attempt to prevent the final segments of the pipeline from going online. ET says the NOV is baseless. An ongoing delay in blocking several Rover lateral segments from going into service is causing economic harm to ET’s customers (and to ET). This isn’t the first, nor even second time Butler and OEPA have gone after Rover. It’s the upteenth time (see our Butler/Rover stories here). What’s the baseless charge this time? OEPA says Rover disposed of “spent” drilling mud containing low levels of the chemical solvent tetrachloroethene (PCE) without approval. Rover has fired back at OEPA in a letter to FERC, accusing OPEA of recycling the PCE issue after it had already been investigated and addressed…
    Read More “Ohio EPA Takes One More Swipe at Rover Pipe with FERC Notice”

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    Lordstown 2nd Gas-Fired Plant in Jeopardy from Trump Policy

    The outspoken Bill Siderewicz, builder of a string of gas-fired electric generating plants in Ohio and elsewhere, is (surprise!) speaking out. Siderewicz, president of Boston-based Clean Energy Future, is the builder of the Lordstown Energy Center in Trumbull County, a project begun in 2016 and now nearing completion (see Lordstown Energy Center Breaks Ground on $890M Electric Plant). The plant will generate 940 megawatts of electricity when it goes online. In addition to the Lordstown plant, Siderewicz has plans to build a second plant right next to the first. Except maybe now it won’t get built. President Trump’s Dept. of Energy, under Secretary Rick Perry, is hellbent on devising a scheme to “protect” coal-fired and nuclear electric generating plants–in the name of grid resiliency and national security. It’s bogus. We’ve previously written that we do not support it. Neither does Siderewicz. He calls Trump’s energy policy “un-American,” and said, “Everyone [who] has an IQ of more than 25 is upset about this.” Ouch. Tell us what you really think, Bill! The reason he’s upset: If you make the electricity market noncompetitive by favoring certain types of energy sources, there are consequences. Plants like the second Lordstown Energy Center, and the close-to-one billion dollars it takes to build it (and the tax revenues that flow from it) won’t materialize. If you favor coal and nukes, making their more expensive form of electricity artificially cheaper (by using government subsidies), then those who compete freely, like Siderewicz, can no longer compete. The markets are not truly free. And people like Siderewicz decide to not build these important projects…
    Read More “Lordstown 2nd Gas-Fired Plant in Jeopardy from Trump Policy”

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    OH Antis Attack Loudonville for Selling Water to Cabot for Drilling

    Little red dot indicates where Loudonville, OH is located

    At the Loudonville Village Council meeting on Monday, a dozen anti-drilling kooks “assailed” Mayor Steve Stricklen and council members over selling water to Cabot Oil & Gas to use in drilling (not fracking) several test wells in the area. Cabot is exploring north central Ohio as a potential spot for “what’s next” after their wildly successful Marcellus drilling program in Susquehanna County, PA. In typical fashion, lies and fearmongering were used in an attempt to shame Loudonville officials over water sales to Cabot. Loudonville sits on the border of Ashland and Homles counties. The village sells water to anyone who wants to buy, for 0.65 cents per gallon (a little over half a cent per gallon). So far Cabot has purchased 650,000 gallons from the village ($4,358). One of the antis said she’s fearful Cabot will dump the used fracking wastewater “contaminated by chemicals” in nearby Charles Mill Lake. It’s an outrageous and scurrilous allegation. We’ve personally seen Cabot’s first-rate wastewater recycling center in Susquehanna County. They recycle 100% of the wastewater coming out of the ground. But antis don’t bother to check on the facts–not when any old lying allegation will do…
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    Stark County, OH Farmer Sues NEXUS Pipeline for Erosion Damage

    The NEXUS Pipeline project, owned by DTE Energy and Spectra Energy (Enbridge), is being sued by a farmer in Stark County, OH. NEXUS is a $2 billion, 255-mile interstate pipeline that runs from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. The Stark County farmer signed an easement with NEXUS in 2016. Construction began earlier this year. In late March, a lawyer hired by the farmer sent NEXUS a letter telling the company of erosion at the farm, due to their digging activities. The farmer estimated about $23,000 of damage at the time. But, according to the lawsuit, NEXUS didn’t fix the problem and that led to more damage–now up to $55,000 worth. The problem is that topsoil on the farm has been washed away. The farmer wants it replaced. If true, it certainly seems like a reasonable request to us. The farmer isn’t demanding millions of dollars, just the cost to replace soil swept away by NEXUS-related digging…
    Read More “Stark County, OH Farmer Sues NEXUS Pipeline for Erosion Damage”

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    Fracking Acid Leaks from Truck in Ohio, Forces Brief Evacuation

    A spill of hydrochloric acid on Monday in Weathersfield (Trumbull County), Ohio caused a brief evacuation of three hours for 23 homes and several businesses in the area. Nobody was hurt. The acid was stored in a tanker truck. The trucking company, Predator Trucking, is headquartered in Texas but maintains a regional operation in Weathersfield. Predator is a shale subcontractor hauling various liquids, including hydrochloric acid, used in fracking. The truck in question has two chambers that hold 2,500 gallons each. A valve became corroded on one of the chambers and while the truck was parked at the company’s facility, all 2,500 gallons leaked out. It created a vapor cloud and the concern was that it may shift, hence the evacuations, out of “an abundance of caution.” This accident points out one of the negatives of fracking. Oil and gas extraction is an industrial process that uses industrial chemicals hauled by trucks to drill sites. If a truck gets in an accident, or there is equipment failure, bad things can happen. But we hasten to add, in having observed and written about the Marcellus/Utica for nearly 10 years now, this is the first such incident we can recall of hydrochloric acid leaking. In other words, this type of accident is extremely rare. And thanks to the fast action of local first responders, there were no injuries. The acid was contained inside temporary dams, and soaked up with sand. The dirt the acid leaked into has been dug up and removed. Predator is now on the hook to pick up the cost–which no doubt will be considerable…
    Read More “Fracking Acid Leaks from Truck in Ohio, Forces Brief Evacuation”

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    Former Ormet Site in OH Handles 3 Frac Sand Unit Trains at a Time

    Long Ridge Energy Terminal

    Back in 2014 MDN told you that the former Ormet aluminum plant in Hannibal (Monroe County), OH had been purchased out of bankruptcy by Niagara Worldwide and turned into the Center Port Transload Facility, with an emphasis on providing services for the Marcellus/Utica industry (see Center Port Transload Facility Already Up & Running in OH). In April 2017, we brought you news about plans to build a 485-megawatt Utica gas-fired electric plant at the Center Port location (see More on Gas-Fired Elec Plant Coming to Center Port Terminal). And in January we told you that most of the facility (not all) had changed hands again, selling to Fortress Transportation and Infrastructure for $30 million, changing the name to Long Ridge Energy Terminal (see Former Ormet Site in SE OH Changes Hands, Gas-Fired Plant Coming). We spotted a new announcement from Long Ridge (née Center Port) that says the facility has just completed a rail construction project that allows the terminal to accept and load/unload three different “unit trains” of frac sand–at the same time. A unit train is a train hauling all the same commodity, in this case frac sand. Typical unit trains are 70-100 cars long. With new loop tracks now in place, Long Ridge can handle way more frac sand than it previously could. And it’s a good thing, because demand for frac sand in the Utica/Marcellus is through the roof. Long Ridge is also a barge terminal, sitting on the Ohio River. In fact, Long Ridge is the only terminal in the M-U region with both unit train and barge transloading capabilities…
    Read More “Former Ormet Site in OH Handles 3 Frac Sand Unit Trains at a Time”

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    Top 25 Producing Gas & Oil Wells in Ohio Utica for 1Q18

    The Ohio Dept. of Natural Resources (ODNR) issued production numbers yesterday for the first quarter of 2018. Natural gas production was up an astounding 43% over the same period last year. In fact, Utica natgas production hit a new all-time high of 531.3 billion cubic feet (Bcf) in 1Q18. However, Utica oil production was down 3.6% over the same period last year. Ohio’s oil production has seesawed over the past few years. It increased last quarter and the quarter before. But prior to 3Q17, oil production was mostly down. Once again Ascent Resources, founded by the late Aubrey McClendon, dominated the top 25 highest-producing gas wells (17 of the top 25). However, Eclipse Resources grabbed the top slot in 1Q18 with a well in Monroe County that produced an amazing 2.9 Bcf all by itself! Eclipse also (as in the previous quarterly report) grabbed a majority of the top 25 most-producing oil wells, with 13 of 25 wells on the list. The top 4 oil wells were Eclipse wells, all located in Guernsey County. Below we have the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference. The longer an oil or gas well is online, the less it produces. Newer wells produce more. We show you which wells are not just producing the most quantity overall, but which wells are producing at the fastest (most productive) rates–even if those wells haven’t yet been online a full three months. We also include a link to the complete list (Google Spreadsheet) of 1,949 wells included in the 1Q18 ODNR report, in a more useful format than that provided by ODNR…
    Read More “Top 25 Producing Gas & Oil Wells in Ohio Utica for 1Q18”

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    “Strong” Well Results in Northern Utica During 1Q18

    As MDN reports in today’s lead story, Ohio has just achieved a new milestone by producing more natural gas than the state has ever produced during the first three months of this year (see Top 25 Producing Gas & Oil Wells in Ohio Utica for 1Q18). The best performing individual wells are located in the southern part of the Utica play–in Belmont, Jefferson, Monroe, and Guernsey counties. However, don’t overlook the wells and overall performance of counties in the northern part of the play–places like Columbiana, Mahoning and Trumbull counties. Particularly Columbiana County. The Youngstown Business Journal does a deep dive into the numbers for the northern tier counties and finds that wells drilled by Hilcorp in Columbiana produced “strong results” in 1Q18. Here’s a closer look at the northern Utica counties and the drillers who work there…
    Read More ““Strong” Well Results in Northern Utica During 1Q18″