Statewide OH

Hydraulic Fracturing | Industrywide Issues | Ohio | Regulation | Statewide OH | Wastewater

New Drilling Regulations Coming to OH in Next 30-60 Days
December 11, 2013December 11, 2013

The Ohio Department of Natural Resources (ODNR) will soon release new rules for shale drilling in the state. The new rules will cover well pad construction, wastewater treatment and a number of other aspects of drilling. According to ODNR’s Chief of the Division of Oil and Gas Resources Management, Rick Simmers, the new rules are “good stuff.” The question is, good for who?

Some of the new rules will be released later this month and some in early January. Others will take longer. The route to becoming enforceable “law” (or “regulation” which is the same thing) is somewhat circuitous. The rules will be subject to a 30-day public comment period and will go before a special committee with members from both the OH State Senate and House before final approval and acceptance…
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Energy Companies | Ohio | PDC Energy | Statewide OH | Statewide WV | Taylor County | Utica Shale | West Virginia

PDC Energy to End Marcellus Drilling in 2014, Continue in Utica
December 11, 2013December 11, 2013

It’s the “Get out an update on what we plan to do in 2014” time of year. Doesn’t exactly roll off the tongue like “It’s the most wonderful time of the year!” End of year is not only about holidays but also about telling investors what they can expect next year–how a company plans to make money and provide a good return. Even though these statements are sometimes routine and dry, often you find interesting details when you pick through them. Like yesterday’s 2014 guidance statement from PDC Energy, a driller in both the Marcellus and Utica Shale.

In a low-key but to us surprising announcement, PDC’s statement says they will suspend drilling in the Marcellus in 2014. They plan to finish drilling four wells already under way in Taylor County, WV and then not drill any more Marcellus wells, but instead concentrate their time and effort on the Utica Shale and on Colorado’s Wattenberg Field. For those interested in Marcellus and Utica drilling, reading these updates is anything but dry! Take time to look over PDC’s plans for 2014, particularly their plans for the Utica…
Read More “PDC Energy to End Marcellus Drilling in 2014, Continue in Utica”
Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport Energy Beefs Up Management Team for OH Utica
December 11, 2013December 11, 2013

Gulfport Energy may be based in Oklahoma City, OK, but their heart (and most of their focus) is in Ohio–in the Utica Shale. Gulfport is one of the premier Utica drillers with some of the most impressive wells drilled to date (see Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d). In keeping with their laser focus on the Utica, Gulfport announced yesterday a bunch of new hires and promotions–all of them focused on the Utica Shale.

At the top of the hit parade is a brand new Chief Operating Officer (COO) for the Utica–Ross Kirtley–who was previously a VP with Sandridge Energy. Robert Jones was appointed VP of drilling for Ohio, Mark Malone was appointed VP of operations for Ohio, and Ty Peck was appointed Managing Director of Midstream Operations. Certainly seems like a pretty major restructuring on the part of Gulfport as they prepare to do more great things in the OH Utica. Here’s the press release with details…
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Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH Repubs Offer Excuses Why This Time High Utica Taxes are OK
December 10, 2013December 10, 2013

Speaker of the Ohio House William G. Batchelder (Republican-Medina), Speaker Pro Tempore Matt Huffman (Republican-Lima), and other members of the Ohio House Republican Caucus offered their pathetic excuses on why this time it’s a-OK to steal money from Ohio landowners and drilling companies and give it to other residents of Ohio–in the form of an income tax break. Apparently there’s lack of spine to do the right thing and reduce spending in Ohio (although that particular disease is not endemic to Ohio).

Here’s the Republican so-called leadership’s bland, generic ~~excuses~~ statement about why it’s OK to raise taxes on drilling this time:
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Economic Impact | Ethane | Industrywide Issues | Jobs | Ohio | Processing Plants | Statewide OH | Statewide WV | West Virginia | Wood County

More Details Leak About Proposed WV Ethane Cracker Plant
December 9, 2013December 9, 2013

A few weeks ago WV and Brazilian-based Odebrecht announced plans to build an ethane cracker plant near Parkersburg, WV (see WV Announces Brazilian Company to Build Ethane Cracker Complex). Wayne Dunn, the president of the commission that governs Wood County, WV where the cracker would be built, recently said some very interesting things about the cracker. One comment: he’s known about the Odebrecht cracker for more two years! Congratulations to a politician that can keep a secret that long.

Dunn also said he pegs the chances that the Odebrecht cracker will be built at somewhere between 60-80%. He says it’s far from a done deal, but the odds are better that it will be built than not. Here’s a few more interesting “insider” insights into the proposed cracker plant coming to Parkersburg, WV:
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Ohio | Statewide OH | Utica Shale

Ohio Passes 1,000 Utica Shale Permits Issued, No End in Sight
December 6, 2013December 6, 2013

Three cheers for Ohio! Hip hip, hooray! Ohio has just flown past 1,000 Utica Shale permits issued. The number, as of last Saturday, is 1,006 to be exact. Of that number 617 wells either are or have been drilled (two-thirds!). Perhaps most fitting is that Aubrey McClendon’s new company, American Energy Utica, received it’s first five permits to drill in this latest batch issued by the Ohio Dept. of Natural Resources (ODNR). McClendon was the first to recognize the potential of the Utica Shale and moved his then-company, Chesapeake Energy, into purchasing 1 million acres of leases in the Ohio Utica.

What is truly mind-blowing is that it took only three years for Ohio to go from zero permits to 1,000+ permits for Utica wells, establishing the Utica as one of the country’s hottest shale plays. Here’s a rundown on the latest numbers from Ohio’s Utica Shale:
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Energy Services | Industrywide Issues | Marathon Petroleum | Ohio | Pipelines | Statewide OH | Utica Shale

Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline
December 5, 2013December 5, 2013

Another new pipeline is on the way in the Utica Shale. This one will be built by Marathon Petroleum Corporation, the largest refiner in the Utica Shale region. The Cornerstone pipeline, as they’re calling it, will stretch nearly 50 miles from the MarkWest cryogenic processing plant in Cadiz, OH northwest connecting to M3’s fractionator plant in Scio and M3’s cryogenic processing plant in Leesville along the way as it terminates and connects to Marathon’s refinery in Canton, OH (see map below). The pipeline will carry, at various times, crude oil, condensate and natural gasoline.

The Cornerstone pipeline is slated to be built and in operation in 2016, according to Marathon officials. Here’s what Garry Peiffer, President of Marathon’s Master Limited Partnership MPLX GP said about the Cornerstone project on an analyst call yesterday:
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Industrywide Issues | Ohio | Statewide OH | Taxation

OOGA Caves, Endorses New Higher Tax on OH Utica Shale
December 5, 2013December 5, 2013

It looks like taxes on the Utica Shale in Ohio will go up. Yesterday OH Rep. Matt Huffman and Speaker William Batchelder (both Republicans) introduced House Bill 375 which would raise taxes on Utica Shale drilling. Efforts have been under way for the past two years by OH Gov. John “foreigner-hunter” Kasich. He’s into socialism these days–raise taxes on one set of people and give it to another. He’s had some assistance from his fellow Republicans in this regard–but the efforts have (thankfully) gone nowhere.

But now it’s different. This time the Ohio Oil & Gas Association (OOGA), long opposed to raising the Utica Shale tax, has endorsed the latest proposal, which means it’s probably not as much as Kasich wanted, but it’s certainly more that what it is now. Sadly, OOGA has also (for political expediency) endorsed the concept of giving “the extra money” raised by new taxes to voters (i.e. vote buying) in the form of a state income tax cut…
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Ohio | Statewide OH | Utica Shale

OH Utica Shale Status Report – Red Hot & Growing
December 3, 2013December 2, 2013

The Utica Shale is being developed faster than other shale plays–it is perhaps the fastest ramp-up in the short history of U.S. shale plays: 0 to almost 1,000 shale wells permitted (609 of them drilled) in the last 3 years. Some of the lessons being learned in the Utica are being carried to other, more “mature” plays like the Marcellus and the Bakken. So what’s going on in the red hot Utica?

A status report on the Utica Shale, courtesy the Youngstown Business Journal and the recent DUG East conference in Pittsburgh…
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Economic Impact | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

List of U.S. Shale Plays Ranked by Profitability (IRR)
December 3, 2013December 2, 2013

Thanks to our ever-helpful second set of eyes, Chris Acker, MDN was alerted to a Seeking Alpha article with a table showing the Internal Rate of Return (IRR) for commercially developed U.S. shale plays. It is a way of ranking shale plays (specific regions within plays) that shows the profitability of the plays. The higher the IRR percentage, the better/more profitable that play is. A dollar of investment goes further with a higher IRR.

And what did we spot in scanning the chart? The top spot–the most profitable shale play in America–is the “Marcellus Super Rich” area located in southwest PA and the northern panhandle of WV. The second most profitable play, virtually tied with the Marcellus? The “Utica Liquids Rich” region in eastern OH. It’s a fascinating table. Have a look…
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Industrywide Issues | Jobs | Ohio | Statewide OH | Utica Shale

The Real Employment Numbers in Ohio’s Utica Shale
December 3, 2013December 2, 2013

There’s a lot of trash talking about how many jobs shale drilling “actually” creates–by those desperate to stop drilling. In classic disinformation style they throw out wildly inflated numbers, say those of us on the pro-drilling side made those claims, and then knock down the “straw man” they created when employment numbers don’t measure up. “See! The drilling industry lied to you about how many jobs they would create.” That’s the tact they use to try and discredit this jobs-creating industry.

The truth is, shale drilling has created thousands of new, direct jobs in the oil and gas industry–in Pennsylvania, West Virginia and Ohio. It’s also created thousands more jobs in related industries, like environmental consulting, trucking, etc. So let’s, for a change, talk about real numbers, shall we? The Ohio Dept. of Job and Family Services, official tallying agency for employment numbers in Ohio, says Ohio’s natural gas and shale employment numbers have gone up 30% over the past two years…
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Carroll County | Economic Impact | Harrison County | Industrywide Issues | Ohio | Statewide OH | Utica Shale

Meet Ohio’s New Utica Millionaires – Hundreds of Them
December 2, 2013December 2, 2013

As part of a story about the Morgan County (OH) Landowner Group, or MCLG (see our companion story today), near the end of the story we get this short mention which, although an “off-hand” comment, comes as a startling thunderclap to MDN about the sheer number of millionaires created by the Utica Shale (i.e. “shaleonaires”):
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Processing Plants | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Deloitte & EIA: 90,000 Marcellus Wells Drilled in Next 20 Years
November 25, 2013November 25, 2013

A new report published by consulting powerhouse Deloitte references (and affirms) U.S. Energy Information Administration’s predictions that it will take at least $5 trillion of investment in the oil and gas sector between now and 2035 to main current levels of oil and natural gas production and meet future demand as it rises. The report is titled “The challenge of renaissance: Managing an unprecedented wave of oil and gas investment.” Unfortunately we couldn’t locate a copy–but reportedly it’s full of interesting facts–like the $5 trillion number.

Another eye-popping number from the report: Current estimates are that 90,000 Marcellus Shale wells will be drilled over the next 20 years. That kind of activity will spur an unfathomable economic revival in the northeast like we haven’t seen in since, well, forever! The study says while “trillions” will be spent on upstream (drilling), “hundreds of billions” will need to be spent on midstream (pipelines & processing plants) in order to keep up with the production. More from the Deloitte study…
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Economic Impact | Hydraulic Fracturing | Industrywide Issues | New York | Ohio | Pennsylvania | Research | Statewide NY | Statewide OH | Statewide PA | Statewide WV | West Virginia

Marcellus/Utica States Slip in Global Petroleum Survey
November 21, 2013November 21, 2013

Each year, the Canadian-based Fraser Institute surveys petroleum industry executives and managers (864 of them for 2013) asking them their opinions on the barriers to investing in exploration and production in various geographies across the globe. That is, what makes them more likely or less likely to spend money drilling in a particular location? It’s vitally important to understand what drives investors because without money, drilling doesn’t happen.

The Global Petroleum Survey, as it’s called, tallies the survey responses and ranks each geography from most desirable place to invest, to least desirable. MDN reported the rankings last year (see Energy Execs Rank Drilling Locations Including WV, OH, PA, NY). A copy of this year’s full report/rankings is embedded below. How did Pennsylvania, Ohio, West Virginia and (yes) New York fare this year, compared to last?…
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Hydraulic Fracturing | Industrywide Issues | Ohio | Research | Statewide OH | Utica Shale

OH Annual O&G Report: Utica 36% of All Wells Drilled in 2012
November 21, 2013November 21, 2013

On Tuesday the Ohio Dept. of Natural Resources (ODNR) published their 48th annual “McCormac Report”–the 2012 Ohio Oil & Gas Summary report chocked full of charts, maps and statistics about oil and gas drilling in Ohio (full copy embedded below). As you can imagine, a lot of the report is dedicated to Utica Shale drilling. The report covers calendar year 2012, the year when Ohio’s Utica Shale really started to blossom. However, it does not include data for 2013, which is the year when the OH Utica grew up and became a serious shale play contender. Still, there’s lots to love about the McCormac Report, so named for Mike McCormac, the guy who’s been producing it for the past 32 years.

We learn in the report that in total, $706 million worth of natural gas and oil was drilled in Ohio in 2012. We also learn the state saw it’s longest ever horizontal well drilled–16,664 feet! That’s an astonishing 3.15 miles long (drilled in Jefferson County). And we learn that 36% of all wells drilled in 2012 were Utica Shale wells. Here’s a few highlights from the report:
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BP | Energy Companies | Ohio | Statewide OH | Trumbull County | Utica Shale

Decision Point: Will BP Drill Their Utica Acreage? Or Pass?
November 19, 2013November 19, 2013

In March 2012, BP leased 84,000 Utica Shale acres in Trumbull County, OH for $3,900 per acre and 17.5% royalties (see BP’s Big Utica Shale Deal, Leases 84K Acres in Ohio). They now have a total of 104,000 acres under least in northeast Ohio. But it’s been hurry up and wait. For an entire year we heard nothing from BP about drilling. A year later, in March 2013, BP obtained their first permit to drill in the OH Utica (see Better Late than Never: BP Gets First Permit for OH Utica). The original plan was to drill 10 test wells. So far they’ve drilled four, one of which is actually producing and online. Which seems like an awfully slow start for one of the world’s largest oil & gas companies. Landowners are frustrated at BP’s lack of drilling.

BP’s problem is, of course, that the more profitable “wet gas” zone for Utica drilling is well south of the acreage they’ve leased. So the question becomes, how much wet gas is there in the BP acreage? And if there’s not much, how productive (and cost effective) is the methane or “dry gas” they’re able to extract from the acreage? The jury is still out. NGI’s Shale Daily reports BP will make a decision “early next year” about whether or not they’ll commit to drilling on their OH Utica acreage…
Read More “Decision Point: Will BP Drill Their Utica Acreage? Or Pass?”