Statewide OH

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    Benesch Shale Report: Chesapeake Sale Rumors Swirling

    The Ohio law firm of Benesch, Friedlander, Coplan & Aronoff are one of the northeast’s top energy law firms. Each quarter they publish a Shale Industry Report, largely focused on what’s been happening in the Ohio Utica Shale (most recent report covering fourth quarter 2013 is embedded below). It’s a great update–one that we like to read and enjoy being able to bring it to you. The top issue listed in the opening of the report is the rumor that, unsurprisingly, corporate raider Carl Icahn (Chesapeake Energy’s second largest shareholder) is shopping Chesapeake for sale to other companies. We’ve warned you about this from the beginning, when Icahn first started flexing his raider muscles and bullying the company into submission.

    Everyone yells at MDN, “Chesapeake needed fiscal discipline…Aubrey McClendon was reckless and almost bankrupted the company…a strict hand was needed at the helm and Icahn came along at the right time…etc.” We say bunk. This has always been about adding more zeros to Icahn’s bank account–from firing more than 1,200 people to selling off assets right and left in the equivalent of fire sales. There’s nothing disciplined or wholesome or good about it. It’s about fat cats getting fatter (i.e. richer). Yes it’s a free country (maybe, we need to check how many more illegal executive orders have been issued in the past 24 hours by Obama)–and in a free country this kind of thing can happen. But we don’t need to like it, and we sure as heck don’t. Icahn and his toady Doug Lawler need to go. End rant. So who’s rumored to be interested in buying Chessy?…
    Read More “Benesch Shale Report: Chesapeake Sale Rumors Swirling”

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    In the Year 2020, if the Utica Shale is Still Alive…

    Remember the classic Zager & Evans hit song from 1969, “In the Year 2525“? Yeah, brings back memories. (Our headline is a nod to that classic hit.) Let’s dial those numbers back just a bit to say, 2020. A conference organized by the Tuscarawas (OH) Oil and Gas Association, recently held on the Tuscarawas campus of Kent State University, tackled the question: What will the Utica shale region look like by the year 2020?

    Some interesting opinions were shared about Ohio’s Utica future by local and state officials along with representatives from the business sector. Energy in Depth’s Shawn Bennett served as moderator:
    Read More “In the Year 2020, if the Utica Shale is Still Alive…”

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    Chesapeake: My Rig’s Better than Your Rig, Cuts Capex Another 20%

    My Dog's Bigger than Your DogThe executives at Chesapeake are channeling the boastful ghost of Aubrey McClendon. Yesterday Chesapeake released its 2014 Outlook and capital program. The big news is they will spend 20% less on drilling and related activities this year. The Utica Shale remains one of the most important plays in their portfolio. Apparently in an attempt to dress up the 20% decrease in spending as a good thing, unnamed Chesapeake executives made this boast: “Chesapeake said it expects to operate seven to nine drilling rigs in its Utica shale properties this year, saying that is the equivalent of a 20-rig operation by competitors.” Which made us laugh out loud. “Hey, our 7-9 rigs are worth 20 of anybody else’s.” OK. Must be nice to have an inside track on how to repeal the laws of physics over at Chessy HQ. Maybe they should patent it! Anywho…

    Below is the Chesapeake announcement from yesterday with some fairly detailed information about where they plan to drill in 2014, and how much they think they’ll produce. Liquids (NGLs in the Utica, oil in other plays) are a big focus for Chessy this year. There’s a lot more money in liquids–and boss man Carl Icahn likes that. Below the Chesapeake announcement is a bit of analysis from the Akron Beacon Journal, from which we took the “our rigs are better than your rigs” quote…
    Read More “Chesapeake: My Rig’s Better than Your Rig, Cuts Capex Another 20%”

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    OSU Tech/Money Backs Ohio Start-up Bringing CNG to Everyone

    We have a chicken and egg problem with CNG (compressed natural gas) vehicles: you need vehicles with engines converted, or designed, to run on CNG, and you need a way to fuel up. Detroit is listening–they’re coming out with a flurry of new CNG vehicles this year, including the Ford F-150 pickup truck. The only thing holding it all back seems to be a way to keep the tank filled. Americans have always been of the mindset that you head on down to the local filling station or these days, convenience store, to fill ‘er up. Filling stations are slowly beginning to offer CNG (and along interstate highways, LNG for big rigs), but it’s not happening nearly fast enough.

    Since you can burn the very same natural gas in your vehicle that you use to heat your home and cook with, wouldn’t it be great if there were a box you could hang on your garage wall that enables you to compress the gas from the local utility company to be used at home–just fill ‘er up at home? Wow, that would be awesome–and that’s just what an Ohio start-up company, using technology innovated at Ohio State University, is doing. With a $1 million investment from OSU, Simple-Fill is launching a very cool solution for businesses and homeowners that will enable them to use their existing natural gas hookup to fill up their CNG vehicles. Imagine never having to stop by the convenience store again (except to pick up a lottery ticket)…
    Read More “OSU Tech/Money Backs Ohio Start-up Bringing CNG to Everyone”

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    Can a Single Canceled Airline Route Affect Utica Shale Development?

    Could a single canceled airline route have an impact on the development of one of the hottest shale plays in the U.S. (the Utica)? Maybe, is the surprising answer. United Airlines has announced they will discontinue their non-stop daily flights to and from Cleveland and Oklahoma City. OKC is the headquarters for Chesapeake Energy, and Chessy is the #1 driller (for now) in the Utica Shale. It’s also HQ for Gulfport Energy, one of the most prominent and prolific drillers in the Utica next to Chesapeake. By cutting out that direct route it will mean much longer flights with layovers “at best” according to the Oklahoma Independent Petroleum Association. They leave us to think about the “at worst” possibilities.

    “No problem!” you say. Pittsburgh is probably closer to the oil and gas fields of eastern Ohio than Cleveland anyway. Or Columbus. Ahhh, but there’s the rub. Neither of those airports go direct to OKC either. Cleveland was the only one in the entire region to do so. And so this spring when United cuts the direct routes, it will mean a major disruption for the flow of “foreigners” (as Gov. John Kasich refers to them) coming into Ohio to work in Ohio’s oil and gas fields…
    Read More “Can a Single Canceled Airline Route Affect Utica Shale Development?”

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    Ohio Petroleum Council Gets a Name Change to API Ohio

    The Ohio Petroleum Council, which has always been an arm or division of the national American Petroleum Council, has officially changed it’s name. It’s no longer the OPC but is now API Ohio. The OPC decided to take on the name of its parent organization to strengthen its brand, and name, recognition. OPC (or rather API Ohio) is not to be confused with OOGA–the Ohio Oil and Gas Association. Both organizations are competitors, of a sort. OPC/API Ohio has not endorsed the Republicans’ proposed Utica Shale severance tax increase. OOGA has endorsed it and helped craft it (see The Secret Back Room Deal to Raise OH’s Utica Shale Tax).

    Here’s more about the OPC name transformation:
    Read More “Ohio Petroleum Council Gets a Name Change to API Ohio”

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    Spectra Energy Files Formal Request with FERC for OPEN Pipeline

    When it comes to building a new natural gas pipeline, it’s a loooooong process to get the route planned and approved. Once that’s done, depending on how long the pipeline is, it takes a fair bit of time to actually build it. We started telling you about a proposed new pipeline project from Spectra Energy back in December of 2011 called the Ohio Pipeline Energy Network, or OPEN (see Chesapeake Investing in New 70-Mile Ohio Pipeline). We brought you an update on this interesting project last August (see Spectra’s OH Pipeline Project Advances, Sept 20 Deadline w/FERC).

    OPEN is an interesting project because it will build 76 miles of new pipeline that connects to the Texas Eastern Pipeline, and then reverses the flow on the Texas Eastern to carry Marcellus and Utica Shale gas from eastern Ohio to the Gulf Coast. The Texas Eastern will become a bi-directional pipeline, sometimes bringing gas north from the Gulf, other times sending it to the south to the Gulf. The new news about the OPEN project is this: Spectra Energy made their full, official filing with FERC (Federal Energy Regulatory Commission) last week seeking FERC’s blessing to go ahead build it starting the new pipeline in December of this year. Here’s the story as reported by Reuters:
    Read More “Spectra Energy Files Formal Request with FERC for OPEN Pipeline”

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    McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma

    Aubrey McClendonAubrey McClendon’s American Energy continues its rapid expansion. Aubrey is raising money like crazy–and spending it like crazy too. Last week Aubrey landed another half billion dollars to spend in the Utica (see McClendon’s New Company Gets Another Half Billion $ for Utica). Then he spent it! The rumor was the mystery buyer of Hess’ 74,000 Utica Shale acres they sold for $924 million last week was McClendon (see Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer). It’s no longer a mystery–American Energy verified it is the buyer of the Hess acreage.

    But hey, that was last week. It’s a new week, so it’s time for a new deal for Aubrey and American Energy. And right on cue, we have one: XTO Energy has announced they’ve done a deal whereby American Energy will fund 100 percent of XTO’s near-term drilling costs in a “core area” of 55,000 Utica Shale acres. In return, American Energy will get ownership of 30,000 net acres of XTO’s holdings in three Ohio counties. Yesterday Aubrey said he’s cut three deals recently–Hess, XTO and Paloma Partners. Between the three deals, Aubrey says he’s picked up another 130,000 acres in the Utica in the past week. The man is on a tear…
    Read More “McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma”

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    Welders Needed in Utica/Marcellus – Training Options in Mahoning

    Of all the jobs in the Marcellus and Utica Shale that need qualified, skilled people in them, perhaps none is more needed (right now) than welding. According to Marty Loney, training director for Local 396 in Mahoning County, OH, there’s a shortage right now of between 2,000-3,000 welders for the Utica and Marcellus in the Mahoning Valley area. Local 396 has developed an innovative apprenticeship program to address the need (although it takes five years to complete). Other organizations, like the Trumbull Career and Technical Center also train welders and other hands-on types of jobs for the drilling industry.

    Here’s a good review of a couple of training options for those interested in getting a hands-on job in the Marcellus/Utica in the tri-state area when it comes to welding and other physical jobs:
    Read More “Welders Needed in Utica/Marcellus – Training Options in Mahoning”

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    MarkWest: 7 New NE Plants Online in Past 4 Mos, 17 More Coming!

    Number 1There are a number of midstream (pipeline and processing plants) companies operating in the Marcellus and Utica region. The country’s largest midstream company, Kinder Morgan, increasingly has a presence in the region. Joint ventures of various kinds, like Blue Racer Midstream (Dominion and Caiman Energy) are important new–and big–players. Williams Partners is one of the biggest. But if we had to identify which midstream company has the most assets, the most presence in the region, we’d have to say it’s MarkWest Energy. Yesterday MarkWest issued an operational update on their Marcellus and Utica projects–and frankly, it’s really impressive. This is a “time to crow about what we’ve done and will do” update. They’ve earned the right.

    Over the past four months MarkWest has brought seven new, major projects online: 5 new cryogenic processing plants (separates wet gas into two streams, methane and NGLs), and 2 new fractionation plants (further separates the NGLs into their components, like ethane, butane and propane). Each one of these projects represents hundreds of millions of dollars of investment and hundreds of jobs. Here’s the kicker: MarkWest has another 17 major processing and fractionation projects under construction! Incredible. Below is the update issued yesterday by MarkWest which identifies many of projects and customers. It’s well worth your time to read:
    Read More “MarkWest: 7 New NE Plants Online in Past 4 Mos, 17 More Coming!”

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    OH Gov. John Kasich: Goldilocks and the Utica Shale Tax

    John “foreigner hunter” Kasich, who sounds more like a Democrat every day, says he won’t accept a “puny” severance tax increase on Utica Shale drilling. He wants him a big, fat, mother of a tax increase on Utica drilling–and nothing less will do. In comments yesterday, Kasich (strangely) started to channel fairy tales, telling reporters that tax increases on drilling are “…kind of like porridge. It can’t be too cold, it can’t be too hot, it’s got to be just right.” Wow, Kasich would make Karl Marx proud.

    Here’s the latest back and forth between Kasich and his own Republican Party, a party ready to cave (yet again) on the issue of taxes:
    Read More “OH Gov. John Kasich: Goldilocks and the Utica Shale Tax”

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    Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer

    Looks like the end of 2014 came in January of 2014 for Hess. On Oct 30, 2013 Hess’ Executive VP and President of Worldwide Exploration & Production, Greg Hill, said that Hess was working on figuring out their Utica Shale acreage and where the wet gas area is located so they could make decisions about where they will and won’t drill. Hill said they would make their final decision “at the end of 2014 once we finish delineation” (see Hess Officials Talk About the Utica on 3Q13 Earnings Call). Yesterday Hess announced they have struck a deal to sell to sell 74,000 Utica Shale dry gas acres to an unnamed buyer for $924 million. End of 2014 (and Christmas) came early for Hess. Why sell now? And, who was the buyer? MDN thinks we know (we speculate below).

    Hess owns a 100% interest in 95,000 Utica Shale acres, and a 50% interest (in a joint venture deal with CONSOL Energy) for another 65,000 Utica acres. In consulting the Hess map of their Utica acreage below (from a November 2013 investor presentation), you can get a pretty good idea of where the acreage they’ve sold is probably located. Much of Hess’ 100%-owned acreage is in the “dry gas” area on the map–our money is that most of that acreage is what got sold. No doubt landowners will soon receive notifications if they are among those being traded to another drilling team. Below is the Hess announcement (which is brief), the map we located which helps shed light on the brief announcement, and our speculation on why they sold now, and who purchased…
    Read More “Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer”

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    McClendon’s New Company Gets Another Half Billion $ for Utica

    Former Chesapeake Energy CEO Aubrey McClendon’s new company, American Energy Partners, keeps the money rollin’ in. Last fall AEP lined up a big pile of cash to be used to purchase leases in the Utica Shale (see McClendon Gets a Little Help ($1.7B) from His Friends in OH Utica). In December, Aubrey floated 100 million “units” (i.e. stock) in an effort to raise up to $2 billion more (see McClendon Plan to Raise Additional $2B in “Unit” Offering). No word on how that effort is going.

    In the meantime, time’s a wastin’, so Aubrey has raised another $500 million in private equity to help fund Utica Shale ventures (see the story below). MDN wonders, is it just coincidence that AEP’s brief announcement was issued yesterday, on the same day that Hess announced their sale of 74,000 Utica Shale acres to a mystery buyer? Interesting, no?…
    Read More “McClendon’s New Company Gets Another Half Billion $ for Utica”

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    Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO

    Gulfport Energy announced yesterday that CEO James Palm will retire as of February 15 (just two weeks from now). Gulfport is one of the most important (and increasingly prolific) drillers in the Utica Shale. In 2013 Gulfport stole many headlines with their southeastern Ohio Utica shale wells breaking records left and right (see Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d).

    Palm has been CEO of Gulfport for the past eight years. Was he pushed? No indications of that. It appears he’s simply exiting while Gulfport, under his expert guidance, is at a high point. No doubt he leaves the company as a very wealthy man. Here’s the brief Palm retirement announcement from Gulfport:
    Read More “Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO”

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    New SW Ohio Electric Generating Plant to be Powered by Natgas

    Middletown, OH, located on the border of Butler and Warren counties in southwestern Ohio, is about to get a new $500 million natural gas-fired electric generating plant. That is, they will if NTE Energy’s plan is approved. The new plant will generate enough electricity to supply 400,000 homes. Although the story we found about the plant doesn’t say where the gas will come from, you can bet your bottom dollar it will be fueled by Utica and Marcellus Shale gas…
    Read More “New SW Ohio Electric Generating Plant to be Powered by Natgas”

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    More on Antero’s Record Shattering Utica Shale Wells

    but wait theres moreYesterday MDN brought you the news that Antero had turned in some of the highest producing wells–ever–in the Utica Shale (see Another Antero Utica Well Top of the Heap: IP Rate of 40.2 Mmcf/d!). We got the context of their announcement slightly wrong, and admitted it at the top of that article. We believed one of those wells to be the #1 overall producing well in the Utica–but such is not the case. As we explained, Antero is now converting the production output from their wells into “gas equivalent” because many of these wells produce a lot of natural gas liquids, including ethane, butane and propane. Even though we got it slightly wrong, the wells are still awesomely impressive for the their record-breaking output.

    MDN thanks our friend and intrepid reporter Bob Downing at the Akron Beacon Journal for pointing out the change-up in how Antero reports its numbers (he gave us a courtesy call). Bob went on to research the Antero announcement and found that three of their recently announced wells are ranked in the Utica “top 10” most productive wells overall. Although the Antero wells may not be #1 in producing the most methane (“dry gas”), they produce an enormous amount of NGLs, which are a lot more profitable than plain methane! Here’s a pair of reports from Bob from yesterday:
    Read More “More on Antero’s Record Shattering Utica Shale Wells”