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Magnum Hunter 2014 CapEx: Utica/Marcellus

In our season of 2014 guidance statements, Magnum Hunter Resources has just issued theirs. And what do we find when we open this particular Christmas present? The company will spend $400 million on capital expenditure projects in 2014, and the vast majority of it will go to the Utica and Marcellus Shale. Magnum Hunter plans to lease more acreage in the Marcellus/Utica, increase drilling rigs from two to three, and build out more pipelines in the northeast too. The Ohio Utica is a particular focus for Magnum Hunter in 2014.

Here is their 2014 blueprint, including which counties in OH and WV will see drilling action from Magnum Hunter in 2014:
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PDC Energy 3Q13: “Excited” about Utica in Washington County, OH

PDC Energy, headquartered in Denver, CO, has drilling operations in both the Marcellus and Utica Shale region. In June of this year, PDC sold off “non-core” assets they owned in Colorado and said they would invest that money in drilling the Utica Shale (see PDC Energy Sells CO Assets, Will Use Money for Utica Drilling). In their third quarter update, issued yesterday, PDC is positively effusive about their first Utica Shale well in Washington County, OH. It is the first well they’ve drilled in their “southern Utica” acreage and judging by the results, they plan to drill many more in that area.

In addition to good tidings from the Utica, PDC announced they raised $276 million from floating a new stock offering. They were also listed in the Russell 2000 index. It’s been a busy three months for PDC. Relevant (Utica) portions of their 3Q13 update:
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Drilling Impact: Rental Housing Soars Around Marietta/Parkersburg

One sector typically affected early in the drilling process is real estate. In some areas where drilling comes to town, sales of single family homes increase. So far there’s only been a slight uptick in home sales for the Marietta (Washington County), OH/Parkersburg (Wood County), WV area.

Apartment and house rentals, however, are a whole other matter. They’ve taken off like a rocket in the region. New hotel and motel construction is now under way as well…
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GreenHunter Begins Operation of New OH Wastewater Injection Well

GreenHunter Water announced today they’ve started operating a brand new injection well at their Newport (Washington County), Ohio location–just a stone’s throw from the Ohio River (where they dearly hope to be able to barge wastewater soon). GreenHunter says the new injection well, called a “salt water disposal” or SWD facility, has the potential to pump 1,200 barrels per day of frack wastewater and brine…
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OH Students Get High-Paying Jobs in OH Utica Shale Industry

A group of Ohio schoolteachers went on a field trip recently, touring drilling sites in eastern Ohio–Washington County, to be specific. A reporter tagged along to get their impressions and produced an interesting article. As part of that article, the reporter spoke to several educators about job opportunities in the Ohio oil (and gas) field patch. We’ve brought you such stories before, but it bears repeating that (in this case) Ohio students graduating from Marietta College’s petroleum engineering and geology department are actively, aggressively recruited and many get jobs right out of college with starting salaries of over $100,000 per year!

In addition, there’s plenty of high-paying jobs for those without a degree who have skills–like welding, truck driving and diesel mechanic. You can see how the Ohio Utica Shale is radically improving the jobs situation in Ohio:
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Magnum Hunter 2Q13: 1st Utica Well Drilled, WV Marcellus Continues

Magnum Hunter Resources Corporation, both a driller and a midstream (pipeline) company with operations in the Marcellus and Utica Shale region, released their company wide operational update yesterday for the second quarter of 2013. Among the highlights: Magnum Hunter has just completed drilling its first Utica Shale well (Washington County, OH) and the well will be fracked in late July; the company continues to actively drill Marcellus wells in Wetzel County, WV in a 50/50 joint venture with Stone Energy; and Eureka Hunter is active across both the Marcellus and Utica with new pipeline and compressor station construction projects.

Relevant portions of the update below…
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GreenHunter Frack Wastewater Plant Opens in Washington County, OH

Seems like GreenHunter Water is on fire in the Marcellus/Utica. Perhaps that’s a poor choice of metaphor! Here’s what we mean: GreenHunter is building fracking wastewater facilities at a prodigious rate in the northeast. Just a few weeks ago GreenHunter cut the ribbon on a new frack wastewater injection well in Meigs County, Ohio (see GreenHunter Opens Brine Injection Well in Meigs County, OH). Next week the Wheeling City Council will vote on whether or not to allow GreenHunter to build and operate a wastewater recycling facility on the Ohio River in the city (see GreenHunter’s Wheeling Frack Wastewater Plant Up for Vote July 8).

In the meantime, another GreenHunter frack wastewater recycling plant started operations last week–in Washington County, OH:
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Seismic Testing in Marietta, OH Called Off

After much discussion and reconsideration, there will be no seismic testing inside the city limits of Marietta, Ohio, according to city officials. Precision Geophysical was set to test in early July, but that’s now off. However, Geophysical will test around the city in other Washington County locations, and they will set up listening devices in the city to try and capture whatever data they can for lies below the city and just outside of the city.

The details for how and why Marietta testing is now off, and where seismic testing will take place in Washington County in the near future:
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Latest OH Utica Permit Numbers, Rig Count Discrepancy

As of June 1, Ohio has issued 693 Utica Shale drilling permits. Of the permits now issued, 339 (about half) of the wells have been drilled. Of the half now drilled, Utica has 102 wells (almost one-third) now online and producing natural gas, gas liquids and oil. According to the Ohio Dept. of Natural Resources (ODNR), there are currently 37 drilling rigs operating in the Utica Shale. That number is different from the Baker Hughes weekly tracking number which reports for the last week of May there were 32 active rotary rigs in Ohio. Why the difference? We don’t know. (We’ve included the Baker Hughes monthly averages in a handy chart below for OH, PA and WV.)

During the week of May 26 – June 1, the ODNR issued 18 new permits, most of them to the usual suspects. Here’s where the permits were issued, and the companies that received them:
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Magnum Hunter Drills First OH Utica Shale Well

Although Friday for Magnum Hunter Resources was marred by the sad news of the flash fire in Tyler County, WV, the company (earlier in the day) issued a good news press release, one of importance: Magnum Hunter, through it’s subsidiary Triad Hunter, has just started drilling it’s first Utica Shale well in Ohio—northern Washington County.

The press release identifying where it’s being drilled:

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OH Group “Demands” Coast Guard Do Assessment of Brine Facility

Anti-drilling group Meigs Citizens Action Now (Meigs CAN) is “demanding” an answer from the U.S. Coast Guard about whether or not they will require an environmental impact study for a proposed brine wastewater transfer facility that will store and send brine on barges down the Ohio River. The brine wastewater transfer station is located in New Matamoras (Washington County), OH and is already operational (run by GreenHunter) using trucks. GreenHunter proposes to reduce the number of trucks in and out of the facility by using barges to move the brine. This is the same facility that was vandalized a few weeks ago by protesters who shut down the facility for part of a day (see Protesters Get Violent, Shut Down OH Frack Water Plant).

Meigs CAN, via a press release (see below), erroneously claims the facility handles fracking wastewater containing diesel fuel and chemicals classified as hazardous waste. In fact the facility does not handle fracking wastewater—it only handles water that comes of of the hole weeks and months after fracking is done—after the water containing chemicals is already removed. Brine is naturally occurring water from the depths full of minerals and yes, perhaps even a touch of radium (well below radiation safety limits).

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Marietta, OH Feels the Economic Effects of Utica Drilling

Marietta (Washington County), Ohio is starting to feel the impact from Utica and Marcellus Shale drilling. It’s showing up in a dramatic increase in tax revenue from hotels and motels. It’s also showing up in the local real estate market that’s turned from being a buyers market into a seller’s market:

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Protesters Get Violent, Shut Down OH Frack Water Plant

I'm Adult Aren't I GreenHunter Energy operates a bulk storage and shipping facility near New Matamoras (Washington County), Ohio for salt water (“brine”) that comes from shale wells long after they are drilled and fracked. Brine is naturally occurring water from deep below the ground—water without chemicals from fracking—it just contains a lot of minerals. That fact doesn’t seem to matter to some obtuse protesters.

Yesterday, a group of 100 or so protesters, organized by an extremist group called Appalachia Resist!, stormed the New Matamoras brine facility and shut it down. They engaged in criminal acts by plugging the toilets, stealing keys and in general terrorizing the employees at the facility. Ten of the protesters were arrested (their names, ages and home cities are listed below). More will be charged once police are done reviewing video tapes of the incident.

You may be interested to know that almost all of the people arrested were from other states—not even Ohio residents. GreenHunter is pressing charges, which includes felony counts and possibly charges under the Anti-Terrorism Act.

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Encore Energy to Anadarko: We’ve Got OH Land for You

A for-profit company that pools acreage from both landowners that want to lease their land, and from energy companies with leases who want to re-sell those leases, is trying to get the attention of Anadarko and other drillers in the Ohio Utica Shale. Encore Energy issued a press release yesterday announcing they have land available for lease. They specifically tap Anadarko on the shoulder to tell them they have 1,300 Utica Shale acres “just 3 miles” from land they’re already drilling on in Washington County, OH.

Encore is shopping more than 18,000 acres across a number of Ohio counties, including Morgan, Washington, Noble, Guernsey, Monroe, Athens and Meigs. Here’s their “hey Anadarko, pay attention” press release:

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Magnum Hunter Spends $1M on Office in OH, Here for “Long-Term”

Magnum Hunter Chairman and CEO Gary Evans was on hand Monday in Marietta, Ohio for the grand opening of the new regional office building for Magnum’s Marcellus and Utica Shale subsidiary Triad Hunter. Triad has (so far) leased 85,500 acres in the Marcellus Shale and 81,800 acres in the Utica Shale. The new office is located centrally to both the Marcellus and Utica plays—together referred to as Appalachia.

Triad spent $1 million to remodel a downtown Marietta building that will be their Marcellus/Utica regional headquarters. So far over 40 Triad employees have moved in. Magnum Hunter, through subsidiaries including Triad Hunter, Alpha Hunter, Eureka Hunter, Green Hunter Water and Viking International Resources has its fingers in a lot of different pieces of the drilling pie. According to Gary Evans, their commitment to Appalachia is long-term…

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Magnum Hunter Ramps up in OH Utica Shale with 4 Test Wells

The Marcellus Shale is the powerhouse workhorse, but the Utica Shale continues to be white hot for development. Magnum Hunter Resources and its subsidiary Triad Hunter announced yesterday the company will drill a minimum of four Utica “test wells” in 2013. Provided they find a good result, they plan “further development” of their 107,000 gross acres of Utica Shale leases later in 2013—which connotes they’ll drill those test wells early this year. In fact, Triad Hunter is already working on their first Utica well pad in Washington County, OH. A second well pad in Washington County is already in the planning stages, as is a well pad in Noble County.

Magnum Hunter’s press release outlining their plans for Ohio, including references to new OH Marcellus wells just completed and new pipelines on the way for some of their existing OH Marcellus wells:

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