OOGA Reviews Ohio 1Q16 Utica Production – Finds a Cloud
On Monday MDN brought you the latest quarterly production numbers for the Ohio Utica Shale, direct from the Ohio Dept. of Natural Resources (see MDN Exclusive: Analysis of Ohio’s 1Q16 Shale Production). As we pointed out, year over year (comparing first quarter to first quarter 2015 and 2016) natural gas production from shale is up 80% year over year, and oil production is up 24%. However, that’s not the entire story. The Ohio Oil & Gas Association (OOGA) has done a deep dive into the numbers and finds that 1Q16 oil production in Ohio is the first time in the modern shale era that production has gone DOWN from the previous quarter by 12.3%. Here’s OOGA’s analysis of the numbers…
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The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the first quarter of 2016. Compared with first quarter 2015, production numbers in 1Q16 continue to impress. Natural gas production from shale is up 80% year over year, and oil production is up 24% y/y. 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. So 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 they haven’t yet been online a full three months. We also include a link to the complete list of 1,351 wells included in the 1Q16 ODNR report–in a more usable format than that provided by the ODNR…
Gentlemen, start your engines! Your economic engines, that is. The news earlier this week that Shell has made the commitment to move ahead and build an ethane cracker plant in Monaca, PA has, as we knew it would, set the region buzzing (see 
The NEXUS Pipeline is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada (see 
A group of business and government leaders from Ohio and West Virginia in what is called the Mid-Ohio Valley have banded together to form an economic development group called Shale Crescent USA. The group has been some two years in the making and officially launched yesterday at a public event in Washington County, OH. The aim of the group is to attract manufacturers (particularly petrochemical manufacturers) to set up shop in the region. Leaders of the new organization point out the unique location, with the mighty Ohio River to barge materials and products in and out, and the location right on top of the most abundant supplies of cheap natural gas in the entire world. In addition to yesterday’s event, the group launched a website: 
Some 160 people showed up for the Utica Midstream Seminar held yesterday at the National Football Hall of Fame in Canton, OH. The event, sponsored by the Canton Regional Chamber of Commerce and ShaleDirectories.com, provided updates on three major pipeline projects either under construction or soon to be under construction in the Buckeye State: Marathon Petroleum’s Cornerstone Pipeline, Spectra Energy’s NEXUS pipeline project, and Energy Transfer’s Rover pipeline project. Here’s what reps from each organization had to say about their respective projects…
We often debate whether or not a bit of news is actually interesting for the MDN audience. Will this bit of news help either a landowner, driller, midstreamer, supply chain company or investor if they knew about it? The following story comes down right on the line for us. We could go either way, but we elected to include it. We don’t know when, exactly, but at least two years ago SemGroup Corporation, a publicly traded (shares of stock) midstream company that moves mostly oil from the wellhead to market, started up a master limited partnership (MLP) subsidiary called Rose Rock Midstream. An MLP issues “units” instead of shares of stock. MLPs have certain tax advantages for investors. We ran a story in June 2014 about Rose Rock buying some of Chesapeake Energy’s assets, including a trucking operation that services the Utica Shale in Ohio (see 
We love it when we spot a company adopting a contrarian strategy. Received wisdom and prevailing thought says that the oil and gas industry–especially in the Marcellus/Utica–is contracting. Drillers aren’t drilling, and that affects the supply chain (those companies supplying goods and services to the industry) in a big and negative way. Yep–true enough. But the received wisdom also says companies should diversity–look for business outside of the oil and gas industry. What’s contrary is to take advantage of this downturn to expand capacity–to get ready for when the downturn turns again into an upturn. That’s just what Watco Transportation Services is doing with their Kanawha River Railroad short line subsidiary. Kanawha River Railroad has just cut a deal to lease 309 miles of rail lines from Norfolk Southern in Ohio and West Virginia. One of the customers on these short haul lines will be, yep, Marcellus and Utica drillers and sand suppliers and chemical suppliers and equipment suppliers. Nope, there’s not all that much shipping right now, which makes this a step of faith. But the company believes that the future will be here soon and things will turn and the Kanawha River Railroad will be ready to take full advantage of it. We love a railroad story, and we love a contrarian story. This is both…
Fairmount Santrol is a proppant manufacturer/supplier headquartered in Ohio. Proppants are things like sand and ceramic beads used to “prop open” tiny fractures created in hydraulic fracturing of shale oil and gas wells. In other words, Fairmount Santrol is a regional sand supplier for shale drillers–and a good proxy to understand what’s happening (or not happening) in our neck of the woods when it comes to drilling. If drillers aren’t drilling as much, that will show up first in the balance sheets of companies like Fairmount. And so it does. Fairmount reports in their first quarter 2016 update that revenues in 1Q16 were down 52% from 1Q15. But you can’t automatically assume that means there was half the drilling one year later. Fairmount also reports the volume of sand sold was down just 8% from 1Q15 to 1Q16. Why the discrepancy between revenue and volume? Fairmount doesn’t say, but we think we know: drillers have been putting the squeeze on supply chain companies like Fairmount, forcing them to deeply discount their prices…
Yesterday we reported that a group of Ohio landowners calling themselves LEASE (Landowners for Energy Access and Safe Exploration) are encouraging Ohio residents to write in support of drilling in the Wayne National Forest (see 