Statewide OH

Ohio | Statewide OH | Utica Shale

Ohio Utica Shale Just Keeps Chugging Along – Issues Permit No. 1799
February 16, 2015February 16, 2015

The Ohio Utica Shale is a quiet engine that just keeps chugging along. Yes, companies are cutting their capital expenditure budgets–some by a lot–but you wouldn’t know that based on the number of permits being issued for Utica Shale wells. As of Feb 7, Ohio has issued 1,799 permits for Utica Shale wells. Of those, 1,348 wells have been drilled and 740 wells are online and producing. Below is the latest updated ODNR map showing where the permits/drilled/producing wells are located…
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Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

OH Court: Developing Shallow Wells Enough to Hold Utica Layer
February 16, 2015February 16, 2015

An important Ohio Appellate Court case was recently decided in Ohio relating to Utica Shale lease rights. The case is called Marshall v Beekay Company. Beekay Company had drilled shallow, non-shale wells on the property of Gary and Cora Marshall. At some point along the way, Beekay had separated the deeper mineral rights (shale) from the shallower mineral rights. The landowners said because Beekay didn’t develop the deeper mineral rights by drilling in the deeper layers, they had broken the original contract. The upshot was the landowners hoped to lease the lower layer to someone who would develop it. But the court found that development and continuous extraction of gas from the shallow layer effectively holds the rights to the deeper layer. That is, the court shot down the request by the landowners to force development of the shale layer…
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Earthquakes | Industrywide Issues | Ohio | Research | Statewide OH | Statewide WV | Wastewater | West Virginia

EPA Sees Connection Between Some Injection Wells & Earthquakes
February 13, 2015February 13, 2015

On February 5th the Underground Injection Control National Technical Workgroup, part of the federal Environmental Protection Agency, released their final report on a potential link between wastewater injection wells (called Class II wells) and earthquakes. To which we say, we knew a probable connection existed three plus years ago. That’s the typical lag you get with when the federal government “investigates” something. The report is titled “Minimizing and Managing Potential Impacts of Injection-Induced Seismicity from Class II Disposal Wells: Practical Approaches” (the full 415-page copy is embedded below). The report says, in essence, while they can’t prove there’s connection between injection wells in some locations and earthquakes, the relationship is “undeniable.” MDN’s comment: What everyone acknowledges is that when you inject fluid into the earth over an active fault line, that fluid acts like grease and eventually the rock layers can, in RARE circumstances, slip and slide, causing a LOW LEVEL earthquake–typically so light no one feels it at the surface. The EPA study was based on cases from four states, two of them (OH & WV) in the Marcellus/Utica region…
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Energy Services | Harrison County | Industrywide Issues | Marathon Petroleum | Ohio | Pipelines | Statewide OH

Marathon Announces Open Season on New Wet Gas Pipelines
February 10, 2015February 10, 2015

Marathon Pipe Line and Ohio River Pipeline, both subsidiaries of Marathon Petroleum Corp., announced binding open seasons on two new pipeline projects in Ohio and beyond. The first is called Cornerstone Pipeline is a 16-inch pipeline for condensate, natural gasoline, diluent and butaine (NGLs) that will begin in Harrison County, OH and run for about 50 miles to Marathon’s refinery in Canton, OH. Along the way it has the potential to connect various processing facilities. The second project is something they’re calling the Utica Build-Out Projects–a pipeline or pipelines that will carry product beyond Canton to other Midwest refineries, reaching Chicago and even into Canada…
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Energy Companies | EQT Corp | Ohio | Statewide OH | Utica Shale

EQT Shutters OH Utica Drilling, Still Likes PA/WV Utica Drilling
February 9, 2015February 9, 2015

On an earnings call with analysts last Thursday, EQT’s top management said that they are “writing off” their Ohio Utica Shale acreage, taking a $162 million hit. The acreage performed “significantly below expectations.” However, that doesn’t mean EQT is giving up on the Utica–just their Utica acreage in Ohio. EQT owns a LOT of acreage in southwest Pennsylvania and West Virginia (over 400,000 acres) with dry gas Utica under much of it–and they’re eyeing the Utica in those locations very closely. EQT is in the midst of drilling two dry gas Utica test wells–one in Greene County, PA, the other in Wetzel County, WV…
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Guernsey County | Industrywide Issues | Ohio | Statewide OH | Supply Chain | Utica Shale

Small Fracking Co Leaving OH Utica, Heading South of the Border
February 9, 2015February 9, 2015

It hardly seems worth mentioning, but we will anyway. Oilfield services company GoFrac LLC once had great hopes for the Utica Shale. GoFrac does frack jobs. Think of the company as a very (very) small Halliburton or Schlumberger. The company is based in Texas but a few years ago bought 90 acres in Cambridge (Guernsey County), OH with high hopes of hiring 250 people to work in the fracking fields of the Ohio Utica. No more. The company is closing up whatever presence they have had and leaving the northeast. Apparently, from their website (with a copyright of 2012 on it), they plan to go frack in Central and South America instead…
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Coshocton County | Industrywide Issues | Ohio | Statewide OH | Wastewater

Coshocton County, OH #1 in Frack Wastewater Injection Volume
February 9, 2015February 9, 2015

The amount of wastewater, both flowback and brine going down Ohio’s injection wells increased by a full third (35% actually) in 2014, according to research by Bob Downing at the Akron Beacon Journal. Wastewater in-state (produced in Ohio) jumped 32% while wastewater from out of state (Pennsylvania and West Virginia) jumped 37% in 2014. Here’s some statistics…
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Industrywide Issues | Ohio | Statewide OH | Taxation

OH Gov. Kasich Increases Proposed Severance Tax Rate by 236%
February 3, 2015February 3, 2015

It now appears Ohio Gov. John Kasich (RINO), wants to completely kill Utica Shale drilling. On Monday he released his latest budget and his severance tax proposal has gone from his previously preferred rate of 2.75% to an astonishing 6.5%–a 236% increase. Yes, you read that right–it’s not a typo. Over the past several years, Kasich has squabbled with his own Republican legislature over how much of (not if) an increase there should be. The legislature proposed 2.25% as a new severance tax rate, Kasich wanted 2.75%. Eventually the legislature proposed a compromise at 2.5% (see OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!). Kasich dearly wanted that extra 0.25% and held out, losing the battle. There was no increase passed. Kasich, whom we refer to as “the foreigner hunter” for his jingoistic disdain for “foreign” oil and gas workers from exotic places like Texas and Oklahoma, has just upped the ante considerably with a proposed 6.5% severance tax. Did Ohio just become Colorado and is Kasich now smoking pot?…
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Energy Companies | Energy Services | EV Energy Partners | Ohio | Statewide OH | Utica East Ohio Midstream | Utica Shale

EVEP Wants to Sell Interest in Utica East Ohio/More Utica Acreage
February 3, 2015February 3, 2015

EV Energy Partners (EVEP) is a master limited partnership, or MLP, which distributes profits to “unit holders” instead of plowing profits into more projects. They like to invest in mature, already drilled wells and pipeline companies–things that act like an annuity throwing off profit with very little risk. Over the years EVEP amassed a huge amount of acreage in Ohio–before the Utica was known–mostly for conventional (vertical only) wells. However, some of that property is in prime Utica territory–so EVEP has been looking, since 2009, to sell it. They reiterated that in November (see EVEP Selling More Ohio Utica Acreage in 2015). There’s another fleeting reference to selling more Utica leases in EVEP’s fourth quarter 2014/guidance for 2015 press release issued yesterday. The “new news” (for us) in yesterday’s announcement is that EVEP plans to sell their 21% interest in Utica East Ohio–a midstream/pipeline company operating in Ohio…
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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy’s Interesting 2014 – “Dynamite” in the Utica
January 30, 2015January 30, 2015

PDC Energy had an interesting 2014 in the Marcellus/Utica. During the year they sold off their 131,000-acre Marcellus Shale operation to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). They entered the year intending to drill 18 Utica Shale wells (they came close). Along the way they had an accident and spilled drilling mud into a creek (see PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH). During the year they fired (?) reassigned (?) their CEO back to the board and promoted the COO to be CEO (see Changing Chairs at PDC Energy: New President/CEO). And at the end of last year, the company announced they will push the pause button on new Utica drilling in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). Yesterday PDC provided a high level overview of 2014 (none of the above items mentioned) which includes a few brief statements about the Utica and Marcellus. One of the items their most excited about? A 4-well Utica pad called (we kid you not), “Dynamite”…
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Carrizo Oil & Gas | Energy Companies | Guernsey County | Ohio | Statewide OH | Utica Shale

Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015
January 29, 2015January 29, 2015

Carrizo Oil & Gas is the latest Marcellus/Utica driller to cut their 2015 capital expenditures (capex) budget–by 35% over 2014. According to the Carrizo announcement below, they plan to spend $450-$470 million on drilling, most of it in the Eagle Ford (Texas) where they’re running three drilling rigs. They will spend only has much as they have to on “lease maintenance” in the Utica Shale–which we take to mean they’ll only do what they must to show they still intend to drill on leases that may soon expire. In the update below we get some numbers for Carrizo’s second Utica Shale well, in Guernsey County, OH. The update also indicates Carrizo continues to throttle back production in the Marcellus. It says nothing about new drilling in the Marcellus, so we presume there isn’t any planned for 2015…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines | Richland County | Statewide OH

Advice to OH Landowners Approached for Pipeline Easements
January 29, 2015January 29, 2015

The Energy Transfer Partners Rover pipeline (ET Rover) is probably the biggest pipeline project currently under way in the U.S. It’s bigger than the Keystone XL pipeline! In places like Richland and Crawford counties in Ohio, ET Rover is actually two pipelines–42 inches in diameter, sitting side by side. The entire length is 820 miles and will stretch from WV and PA through OH and into Michigan and eventually to Canada. Landowners in Richland and Crawford attended a meeting sponsored by a Columbus law firm last night to hear some sobering truth: the pipeline will happen and it is coming. But that doesn’t mean landowners are helpless. The attorneys offered some good advice that all landowners approached for pipeline easements should listen to…
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Allegheny County | Lease & Royalty Payments | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Pittsburgh Private Equity Fund Looks to Lease in Marcellus/Utica
January 28, 2015January 28, 2015

Not everyone is sitting on the sidelines during the downturn in shale drilling in the northeast. And yes, there is no doubt there’s been a downturn, along with the dropping price of gas (and oil). Ridgetop Capital, located in the Pittsburgh area, has just raised it’s sixth round of private investment capital (cash from wealthy people)–a huge $200 million. Ridgetop’s owner, Brad Carpenter, is now on the prowl to snap up Marcellus and Utica Shale leases that he hopes to get at a bargain because of the slow-down…
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Energy Companies | Hess | Ohio | Statewide OH | Utica Shale

Hess Cuts Utica Drilling Budget 42% for 2015
January 27, 2015January 27, 2015

Hess Corporation, with some 90,000 leased acres in the Ohio Utica Shale, announced yesterday they are whacking their Utica budget, reducing it by 42% for 2015. Last year Hess spent $500 million in the Utica. This year they plan to spend $290 million and drill 20-25 wells (around $11-$12 million per well). Hess will continue their joint venture with CONSOL Energy in the Ohio Utica. Here’s the announcement from yesterday:
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Chesapeake Energy | Energy Companies | Ohio | Statewide OH | Total | Utica Shale

Total Scales Back Investment in Utica Shale, Blames Low Oil Price
January 21, 2015January 21, 2015

Total (pronounced “toe-tail”), is a French multinational integrated oil and gas company and one of the six “supermajor” oil companies in the world. Yesterday the relatively new CEO of Total, Patrick Pouyanne, announced that he’s scaling back in the North Sea fields and in U.S. shale plays. In 2012, Total plowed more than $2 billion into the Utica Shale, partnering with Chesapeake Energy (see Chesapeake Sells More of its Utica Leases to Total). In September 2014, Total sold off a smallish investment they had in Cardinal Midstream, a Utica midstream company, to South Korean investors for $400 million (see Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M). Patrick Pouyanne became CEO of Total last October after a freak runway accident killed Total’s colorful and long-time CEO Christophe de Margerie (see French Supermajor Total CEO Killed in Freak Runway Accident). Pouyanne is now making his mark on the company. He blames the plunge in oil prices for his action. Here’s what Pouyanne said at a conference in Davos, Switzerland earlier this morning…
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Allegheny County | Economic Impact | Energy Services | Industrywide Issues | Jobs | New York | Ohio | Pennsylvania | Pipelines | Statewide NY | Statewide OH | Statewide PA | Transco | Williams

Williams Spending $100 million Per Month in the Marcellus/Utica
January 14, 2015January 14, 2015

There’s an excellent regional television program in Pittsburgh called “Our Region’s Business” hosted by veteran reporter Bill Flannigan. On December 7, Jim Scheel, Senior Vice President for Northeast G&P for Williams, appeared in a segment on the program (video embedded below). Scheel shared some eye-popping statistics about the Marcellus/Utica, and about Williams and their commitment to the region. Scheel said, among many things in the short 7-minute segment, that in 2014 Williams spent an astonishing $100 million per month on pipeline projects in the northeast region. They currently employ 750 people in the northeast and over the next year or so expect to add another 160 people to the payroll. What an exciting, dynamic company! Here’s a few more stats Scheel mentioned…
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