Statewide OH

Industrywide Issues | Ohio | Statewide OH | Taxation

OH’s “Low” Severance Tax will Raise $30M+ in FY 2016
February 1, 2016February 1, 2016

For all of Ohio Gov. John “foreigner hunter” Kasich’s bellyaching about a low severance tax, the state is doing very nicely, thank you. According to a report appearing in the Akron Beacon Journal, the severance tax collected mostly from Utica Shale wells in the Buckeye State for fiscal year 2016 (runs from July 1, 2015 throught June 30, 2016) could top $30 million. That pales in comparison to the $200 million or so Pennsylvania collects each year via an impact fee, their version of a severance tax. PA collects 6.5 times more in taxes on drilling than Ohio–but then again, there are 6.5x more wells drilled in PA than in OH…
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Energy Companies | Hess | Ohio | Statewide OH

Hess Drilling 5 More Utica Wells 1Q16 Then Stopping
January 27, 2016January 26, 2016

Hess Corporation released their 2016 capital and exploration budget yesterday. Last October Hess said they would spend $2.9-$3.1 billion during 2016. Throw that out the door. They’ve now dropped the capex budget to $2.4 billion, which is 40% less than they spent in 2015. Hess has maintained an active drilling program in the Ohio Utica Shale. What part of that $2.4 billion do you suppose they plan to spend in the Utica this year? The number is $45 million, which will be spent on drilling five new wells and bringing a total of 14 wells online–all in the first quarter. After that? They’re releasing the single rig they now have under contract. So Hess is spending 1.9% of their budget on the Utica for 2016…
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Ohio | Statewide OH

The Rise and Fall of Utica Drilling – In One Graph
January 26, 2016January 26, 2016

MDN spotted a nifty listing of how many Utica wells have been drilled in Ohio, by quarter, since 2011 when the Utica revolution in the Buckeye State was just getting started. We decided instead of just showing a list of disembodied numbers, we would graph it out for you. The graph (below) tells the story of the rise, and now fall, of Utica drilling…
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Ohio | Statewide OH

OH Landowners, Politicians, Businesses Want Drilling in Wayne NF
January 25, 2016January 25, 2016

As we reported a couple of weeks ago, there has been some progress on finally allowing drilling in the Wayne National Forest (WNF) in Ohio (see Small Progress with Drilling in Ohio’s Wayne National Forest). WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. The federal government has delayed drilling in WNF for nearly 10 years, and is finally moving. Like a glacier, but at least there’s movement. Landowners and others in that region are keeping up the pressure. Last week a group called Landowners for Energy Access and Safe Exploration (LEASE) issued a press release to detail just how much support there is (it’s a lot) to get moving with drilling in WNF…
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Industrywide Issues | Ohio | Regulation | Statewide OH

Real Property Bill in OH Legislature has Big Implications for O&G
January 25, 2016January 25, 2016

A bill in the Ohio Senate, SB 257 (copy below), would have a “substantial effect” on determining whether or not you have a good title in a real property transaction. Which may sound rather boring, like watching paint dry. Except in this case, the changes to the real property law may have a profound impact on oil and gas interests in Ohio–impacting mineral rights that are part of a property. The changes being proposed under SB 257 expand the scope of what kinds of “defects” in a title that can be “cured,” and reduces the amount of time a title can be contested from 21 years down to 4 years…
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Beck Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH | XTO

OH Supreme Court Upholds Victory for Beck Energy in Lease Case
January 22, 2016January 26, 2016

A major victory for oil and gas drillers in Ohio was just handed down by the Ohio Supreme Court. You may recall MDN brought you the news in October 2014 that the Seventh District Court of Appeals in Ohio overturned a lower court ruling in the case of Hupp v. Beck Energy Corp (see Major OH Court Victory for Beck Energy & XTO in Lease Case). Brief background: three landowners filed suit claiming that their leases with Beck Energy Corp. were void and should be terminated because Beck never drilled wells on their property and that a provision allowing Beck to pay a nominal delay fee was against public policy. The lower court agreed and granted summary judgment. The court then granted class certification to the lawsuit brought by the three landowners–meaning between 600-700 landowners would also be able to invalidate their leases. On appeal to the Seventh District Court, the case was overturned and decided in favor of Beck Energy (and XTO Energy who had purchased the leases from Beck). It was appealed again, to the OH Supreme Court, and the high court has sided with Beck/XTO…
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Energy Services | Ethane | Industrywide Issues | Kinder Morgan | Ohio | Pipelines | Regulation | Statewide OH

Kinder Morgan Ready to Move Forward with UTOPIA East Pipeline
January 19, 2016January 19, 2016

In April 2015 MDN told you that the Federal Energy Regulatory Commission (FERC) will not be involved with approving or overseeing construction for Kinder Morgan’s UTOPIA (Utica To Ontario Pipeline Access) ethane pipeline (see FERC Will Not Oversee UTOPIA NGL Pipeline Project in Ohio). Why not? Because UTOPIA, a 12-inch ethane pipeline running 240 miles will only be built in Ohio–it won’t cross state lines. It will, however, connect to another pipeline that crosses Michigan and enters Canada where the ethane (and some propane) will feed a NOVA Chemical cracker plant in Windsor, Ontario. Because it’s all within Ohio, the lead agency for approval and oversight for UTOPIA will be the U.S. Army Corps of Engineers, with an assist from the Ohio Dept. of Natural Resources (ODNR), the Ohio Environmental Protection Agency and the U.S. Fish and Wildlife Service. Kinder is saying they are ready to move forward with the UTOPIA project and will file for the necessary permits from state and federal authorities “within the next few months”…
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Industrywide Issues | Ohio | Regulation | Statewide OH | Wastewater

OH Dem House Members Introduce Bill to Restrict Injection Wells
January 14, 2016January 14, 2016

Three Democrat members of the Ohio State House of Representatives have just introduced a new bill, HB 422, that will clamp down on injection wells in the state, creating new hoops and regulations for injection wells. Reps. Sean O’Brien (D-Bazetta), Mike O’Brien (D-Warren) and John Patterson (D-Jefferson) want to ban injection wells in hundred-year flood plains, require GPS trackers in brine-hauling trucks, require dye be used when injecting fluids and several other measures. The Dems say they’ve worked with both the industry and environmentalist wackos in crafting the bill. We have a full copy of the bill as introduced, below. One of the provisions is that you can’t have an injection well within 2,000 feet of a…stream, river, watercourse, water well, pond, lake, other body of water (mud puddles?), railroad tracks, or the traveled portion of a public street, road, or highway. That pretty much covers it all. You just can’t have an injection well, period…
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Electrical Generation | Industrywide Issues | Ohio | Statewide OH

Dynegy Proposes 6,300 MW of Shale Gas-Fired Electric Plants in OH
January 14, 2016January 14, 2016

There is a tug of war brewing in Ohio over who has the best plan to provide an increase in electricity while at the same time complying with Obama’s onerous Clean Power Plan. American Electric Power Company (AEP) and FirstEnergy have floated plans to Ohio that involve a mix of methods to produce electricity. Dynegy, on the other hand, wants to construct 6,300 megawatts of new electric capacity using natural gas-fired plants. AEP and FirstEnergy say Dynegy’s plan is dangerous because it ties the state too closely to one source of electric generation. Are they right?…
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Ohio | Statewide OH

OH Releases Another 1,850 Geophysical Well Logs
January 13, 2016January 13, 2016

Pssst. Hey buddy. Wanna buy some more well logs? The Ohio Dept. of Natural Resources (ODNR) has just published another 1,850 newly scanned geophysical logs for oil and gas wells in the Buckeye State. Last summer they released 3,300 new well logs (see OH Releases Another 3,300 Geophysical Wells Logs). What’s a well log and why would you want one?…
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Commodity Price | Industrywide Issues | Ohio | Pipelines | Processing Plants | Statewide OH

Brutal Honesty from OOGA: ‘No Way to Sugar Coat’ the Bad News
January 12, 2016January 12, 2016

In December we highlighted comments by Shawn Bennett, executive vice president of the Ohio Oil and Gas Association (OOGA), in which he predicts 2016 for Ohio’s oil and gas drillers won’t be pretty (see OOGA Tells Ohio to “Sit Tight” – 2016 Won’t be Pretty). Must be Bennett is on a truth-telling tour. Last week he addressed the first Guernsey Energy Coalition meeting of the year last week in Cambridge, OH. He told the audience he wasn’t going to sugar coat the bad news, and he didn’t…
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Ohio | Statewide OH | Utica Shale

Updated Map of Ohio Utica Permits/Wells for Jan 2016
January 8, 2016January 8, 2016

Every few months the Ohio Dept. of Natural Resources (ODNR) produces a map that shows where Utica permits have been issued, where Utica wells have drilled, and where drilled wells are now flowing natural gas (and oil and NGLs). We bring you a copy of this map from time to time. Below is the most recent version, issued on Jan. 4. Here’s a few MDN observations about this map…
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Industrywide Issues | Ohio | Regulation | Statewide OH | Taxation

OOGA’s 2015 Year in Review: No Hike in OH Severance Tax in 2016
January 4, 2016January 4, 2016

David Hill, president of the Ohio Oil and Gas Association (OOGA), provides an enlightening “year in review” for 2015. As part of his summary of the issues facing the oil and gas industry in the Buckeye State, he offers this with respect to an impending increase in the severance tax: “I am pleased to report that it looks like we won’t have to discuss the severance tax for the next year or so.” Good news indeed for drillers in Ohio in 2016. As Hill says, the price of oil and natural gas have collapsed–oil because of a worldwide oversupply, and natural gas (in the northeast) because of lack of pipelines. Among the issues Hill tackles is the so-called Community Bill of Rights movement, unitization laws, and more. It’s a good read…
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Ohio | Statewide OH | Utica Shale

OOGA Tells Ohio to “Sit Tight” – 2016 Won’t be Pretty
December 30, 2015December 30, 2015

We get a rather sobering assessment of the Utica Shale industry in Ohio from Shawn Bennett, executive vice president of the Ohio Oil & Gas Association (OOGA). Shawn tosses around phrases like “survival mode” and “significant turmoil” and “perfect storm” when talking about the Utica and what’s ahead in 2016. His advice? Ohio needs to “sit tight” and wait (and pray) for energy prices to rise. Here is what Shawn recently had to say about drilling prospects in Ohio for 2016…
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Energy Companies | EQT Corp | Industrywide Issues | Jefferson County (OH) | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Federal Judge Rules for EQT in Ohio Lease Dispute – Ramifications
December 29, 2015December 29, 2015

An important decision was recently made in a lease case in Ohio–a case which has implications for both drillers and landowners with Marcellus/Utica leases. Driller EQT signed a lease with Jefferson County, OH landowner Alex Cooper on Oct. 6, 2008. The initial term of the lease was for five years, with a five year extension IF EQT makes an extension payment. The lease also stipulates that EQT MUST drill a well on or before Oct 6, 2013–the end of the first term of the lease. EQT opted to extend the lease, making (or rather attempting to make) a payment to Cooper–but EQT did not drill a well by Oct 6, 2013. Cooper claimed since EQT hadn’t drilled, the lease expired on Oct 6, 2013 and he is free to lease again. The case ended up in Federal District Court for the Southern District of Ohio and U.S. District Judge Algenon Marbley decided in favor of EQT, even though the language in the lease stipulates a well MUST be drilled during the first term of the lease. How and why did Judge Marbley decide the case as he did? Below is a recap of the case, followed by a copy of the full decision from Judge Marbley…
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Ohio | Statewide OH

ODNR Boss: Ohio Will be Net NatGas Exporter in 2016
December 29, 2015December 29, 2015

Little-know fact: Ohio is the seventh most populous state in the U.S. The only states with more population are California, Texas, Florida, New York, Illinois and Pennsylvania. Another little-known fact: In 2015 Ohio produced enough natural gas to meet the needs of 95% of what the state uses. Just four years ago that number was 9%. The director of the Ohio Dept. of Natural Resources (ODNR), James Zehringer, predicts that next year Ohio will produce more natural gas than can be used by the entire state–making Ohio a net exporter of natgas. Zehringer issued a year-end message from ODNR to tout not only the enormous production coming from Ohio’s shale fields, but also the big emphasis his agency places on safety for people and the environment…
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