Statewide OH

Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

EIA Feb DPR: Utica NatGas Output Continues to Increase
February 10, 2016February 10, 2016

Earlier this week our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The February 2016 report shows what the EIA predicts oil and natural gas production will be in March from the seven largest commercial shale plays in the U.S. What does the report (full copy below) show? Very broadly, it shows that the decline in natural gas production is picking up speed, while the decline in oil slowed (reversed, actually). In January’s report, the EIA said for February the combined output of natgas would decline by 405 million cubic feet per day (MMcf/d). In this report, forecasting March production, the EIA says the decline will go down another 451 MMcf/d over the February number. That is, the rate of decline is increasing. There’s only one shale play of the seven with an increase in natgas output from the previous month. Can you guess which one? That’s right–the Utica…
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Baker Hughes | Energy Services | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Rig Counts for World, US & Marcellus/Utica Continue to Tumble
February 8, 2016February 8, 2016

The number of active drilling rigs worldwide, in North America and in the Marcellus/Utica continued to tumble in January. Baker Hughes released their average rig count data for January last Friday. The news, as we expected (but nevertheless hoped wouldn’t be the case) was not good. Worldwide the number of active oil and gas rigs fell by 78. In North America the rig count went down by 28 rigs, but that’s not the full story. Rig counts in the United States fell by a whopping 60 while the rig count in Canada went up by 32. So here at home the story was bloodier than the top level numbers indicate. What about in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. Region-wide rigs went down another by seven in the Marcellus/Utica. All three states that we track–PA, OH, WV–had rig count losses in January…
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Air Quality | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH | Statewide WV | West Virginia

29 States Ask Supreme Court to Stop Obama Clean Power Plan ASAP
February 8, 2016February 8, 2016

On January 26, 2016, 29 states and state agencies, including Ohio and West Virgina, filed an application with the U.S. Supreme Court seeking an immediate stay of President Obama’s Clean Power Plan (CPP). A week before the D.C. Circuit Court of Appeals denied such a stay, so the states are taking it to the final authority in such matters. The states are begging the court for a stay because the CPP will do “irreparable harm” if it is allowed to be implemented by the dictatorial Obama Administration. For background on how this horrible plan will damage natural gas and our economy in general, see 9 Fatal Flaws with Obama EPA Clean Power Plan. Energy law firm Baker Hostetler LLP is the law firm of record for the State of Oklahoma and Oklahoma Department of Environmental Quality in this case. Below is an update from Baker Hostetler on the Supreme Court filing…
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Energy Companies | Gulfport Energy | Industrywide Issues | Ohio | Reserves (Proved and Unproved) | Statewide OH

Gulfport 2015 Update: Reserves Up 83%, NatGas Production Triples
February 3, 2016February 3, 2016

Gulfport Energy, a Utica Shale driller quite active in Ohio until mid-2015 when they began to pull back, released their fourth quarter and full year 2015 operational update yesterday. But not their financials–that comes later this month. There is no mention of drilling activity in 4Q15 (nor any guidance for 2016). We previously brought you the rumor that Gulfport was pushing the pause button on their drilling activities, back in November (see Rumor: Gulfport Energy Suspends Some (All?) Ohio Utica Drilling). However, data from the forthcoming Volume 3 of the 2015 Marcellus and Utica Shale Databook, which covers permit activity for from September through December 2015, shows that Gulfport received 30 permits in Ohio during that period of time. So it appears they have continued their program, albeit scaled back. The 4Q15 and full year 2015 update shows Gulfport’s oil and gas reserves have grown 83% for 2015 over 2014, and natural gas production tripled year over year. Production/operations-wise, 2015 was a very good year for Gulfport. What’s left to be seen is whether it was a good year for Gulfport financially too. Here’s the operations update…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Ohio | Statewide OH

Federal Judge Tosses Anti Lawsuit Against MWCD re OH Lease Deals
February 2, 2016February 2, 2016

In some older news (but good news) that has until now escaped our notice, late last year a federal judge dismissed a lawsuit we first told you about in October 2013 (see Muskingum Watershed Taken to Court by Anti-Frackers (Yawn)). Lea Harper and her husband Steve filed a lawsuit challenging the right of the Muskingum Watershed Conservancy District to enter into lease agreements with drillers to allow shale drilling on Conservancy-owned land. The Harpers were assisted in this lawsuit by the radical and odious Food & Water Watch. Judge Sara Lioi of the U.S. District Court for the Northern District of Ohio found the lawsuit lacking in merit and tossed it. The Harpers and their Big Green backers have appealed the decision…
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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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