Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Tallgrass Energy | Wastewater
Tallgrass Expanding Wastewater Disposal Biz in Marcellus/Utica
We caught wind of something on the Tallgrass quarterly conference call yesterday that had previously eluded our otherwise reliable radar. Tallgrass, via its subsidiary BNN Water, bought out and merged in Central Environmental Services back in May. That’s important because Central is a “water services” provider in the Marcellus/Utica. Namely, Central (now BNN) operates three injection wells in Ohio. On yesterday’s Tallgrass conference call, company officials said they are working on a plan to build pipelines to those injection wells, saving a whole bunch of truck trips.
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It’s hard to miss the stories in oil and gas (even national) media: Company after company, in particular oilfield services companies, are predicting a big slowdown in drilling during the second half of 2019. Over the past few days OFS companies including Schlumberger, Halliburton, Patterson-UTI, Superior Energy Services, Helmerich & Payne, and RPC have all predicted a coming decline (crash?) in drilling in the near future. What about the Marcellus/Utica region? Does the coming slowdown affect us too?
Yesterday MDN brought you the news of a newly passed Ohio law to prop up two bankrupt nuclear power plants and coal-fired plants (see 
A new law passed in Ohio to bail out two bankrupt nuclear plants was pitched as a way for ratepayers to save money. That was a lie. A bunch of squishy RINOs along with some Democrats in the Ohio legislature passed a new bill yesterday, signed into law immediately by Ohio’s RINO governor, Mike DeWine, to add a new surcharge to every residential and business electric bill in order to keep the two financially failing nuke plants operating for years to come. It’s a $5.4 billion boondoggle.
Super secret sources are whispering to Bloomberg that Energy Transfer is seriously considering selling its 33% ownership stake in the 713-mile, 3.25 billion cubic feet per day of natural gas Rover Pipeline, a line that flows Utica Shale gas from Ohio into Michigan and all the way to Ontario, Canada. Such a sale would net ET somewhere around $2.5 billion. Yes, we’re shocked!
It’s been some time since we’ve checked in on EnerVest, a private equity firm that owns a lot of acreage and wells (most of them conventional) in the Marcellus/Utica region. We spotted an update on the company’s holdings given by Steve Downey, EnerVest’s vice president of business development. Steve also happens to be president of the Ohio Oil & Gas Association (OOGA).
We caught some news of interest coming from last week’s Hart Energy DUG East Conference about Equinor, formerly known as Statoil. According to reporters at the event, Nicole Baird, an asset manager with Equinor, said the company has increased its Utica production five-fold from 2016 to 2018 and now produces in the range of 300 million cubic feet per day (MMcf/d) of Utica shale gas.
A group of antis at the University of Toledo thought they’d slip in a new “study” that attempts to tie the proximity of Utica Shale wells to radon. It’s a total sham. From the authors of the study: “The data in the study are from self-reported devices and not distributed equally throughout Ohio.” So first, they base their “study” on self-reported numbers without a even a random scientific sampling. Second, the “study” reports that Athens County, OH has the most Utica fracked wells–108 of them to be precise. One little problem: There are ZERO shale wells in Athens County. Translation: This is junk science. Or more properly, political science.
The legal beagles at Vorys represented Antero Resources in a recently-decided case with far-reaching implications for Ohio drillers and landowners. The Vorys team won the case. As with most lawsuits, this one is complicated and gets in the weeds. The short short version is that under an original lease signed years ago, a landowner and drilling company (at that time) removed a section of the lease that allows the landowner’s property to be pooled (called “unitized” in Ohio) with other properties.
The hits keep coming from OOGEEP, the Ohio Oil and Gas Energy Education Program. In May we brought you OOGEEP’s top notch new resource to help workers discover new careers in the oil and gas industry (see 
President Trump is pushing members of his administration to work with state regulators in Appalachia–Ohio, West Virginia and Pennsylvania–to “build the country’s first natural gas and petrochemical hub” outside of the Gulf Coast. According to Energy Secretary Rick Perry, such a plan is in the the country’s national security interests. Members of the Trump team are also having discussions with leftists like NY Gov. Andrew Cuomo, to try and convince him to allow pipelines into and through the state. If states like NY won’t allow it, Perry holds out the hope/threat that the feds will invoke the Constitution’s interstate commerce clause to make them.
The Ohio Dept. of Natural Resources (ODNR) issued first quarter 2019 numbers for Utica shale oil and gas production last Friday. Both natural gas and oil production increased over last year’s 1Q. Natgas production was up 14.5% over the same period last year, to 609.5 billion cubic feet (Bcf). However, 1Q19 production is down from Ohio’s all-time high of 663.5 Bcf in 4Q18. Oil production was 5.1 million barrels, up 29% over last year’s 1Q, but down from 4Q18’s 5.8 million barrels. So, 1Q19 numbers are up from last year’s 1Q, but down from the previous quarter (4Q18). A mixed bag.
In March MDN brought readers a pair of posts about a new bill in the Pennsylvania House of Representatives, HB 247, which would allow fully leased parcels that are part of one drilling “unit” to be combined with parcels in a different unit–“cross-unit drilling” if you will (see 
“Quit playing that @#$% video game!” How often have young people heard that refrain from a parent? Hey parents, you may want to lighten up a bit on the video game thang. The eye-hand coordination and quick thinking skills built by long hours of playing video games are helping youngsters who grow up and enter the work force get jobs operating seriously big pieces of construction equipment used in the Marcellus/Utica, like cranes and earthmovers.