Utica Shale

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    New Houston-based E&P Targeting Oily Plays, Including Utica Shale

    A brand new shale exploration & production (E&P or what we calling driller) has formed in Houston, TX, but it has its eyes set on the Utica Shale–at least in part. Rock Oil Holdings recently began operations and received a nice little $250 million cash infusion from New York-based energy equity firm Riverstone Holdings LLC. Rock Oil says they will concentrate their efforts in the Eagle Ford Shale, the Utica Shale and the Permian Basin, “which are well suited to the Company’s land and technical capabilities.” In other words, they’re targeting “oily” shale plays–those with the potential for crude and for natural gas liquids (NGLs).

    We’ll keep an eye out for Rock Oil in the coming months to see if they lease any Utica acreage. Meanwhile, here’s the announcement of Rock receiving start-up capital from Riverstone:
    Read More “New Houston-based E&P Targeting Oily Plays, Including Utica Shale”

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    OH KOA Campground Says No Better Guests than Shale Workers

    One of the refrains from anti-drillers who desperately seek ways to bash shale drilling is to say that when shale drilling comes to town, so too do higher rents (making it impossible for welfare slugs to get a decent apartment), and loud, carousing, hell-raising men who spread sexually transmitted diseases all over the place (see Shale Gas Drillers Spread STDs Says PA Democrat Legislator).

    And then there’s the truth. A KOA campground in eastern Ohio is now open in the winter as well as summer because of the demand from the Utica Shale drilling industry. The campground is full to capacity with shale workers and reports that after workers have put in a 10-12 hour shift, they just want a place to rest and relax. The campground even holds a “family food night” for the men, serving them a free meal once a week as their token of appreciation. Once again, the truth is far different from the fictional lies spun by those who oppose drilling…
    Read More “OH KOA Campground Says No Better Guests than Shale Workers”

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    Gastar Update: First Utica Well Coming in April, Marcellus Grows

    Gastar Exploration released their fourth quarter and full year 2013 report yesterday. Gastar drills in both the northeast (Marcellus) and the Mid-Continent shale play areas in the U.S. What do we learn about Gastar’s recent history and plans going forward in our neck of the woods? First, the update says that Gastar plans to drill their very first Utica Shale well in April. Gastar says they believe there is drillable Utica acreage under their leased land in Wetzel and Marshall counties in West Virginia–and they plan to take full advantage of it starting this year.

    We also learn that the company’s Marcellus Shale production increased by 37% year over year. In Q412 Gastar produced 29.9 million cubic feet per day of natural gas, and in Q413 it was 41.0 MMcf/d. Which is tiny when compared to the 1 Bcf/d being produced by several Marcellus producers. But still, the numbers are going in the right direction. Here’s a small portion of yesterday’s update that deals with the Utica and Marcellus…
    Read More “Gastar Update: First Utica Well Coming in April, Marcellus Grows”

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    OH Gov. Kasich’s One-Track ‘Tax the Utica’ Mindset

    You have to hand it to Ohio’s RINO Gov. John “foreigner hunter” Kasich–he has a single-track mind when it comes to taxing Utica Shale drilling. He wants a piece o’ that drillin’ pie so he can transfer the money from those who produce (the drillers and the landowners), to those who don’t (voters). Kasich is hell-bent on assessing a 2.75% tax on all Utica Shale drilling. The Ohio Oil and Gas Association (OOGA), which did support a smaller increase, is pushing back against Kasich’s latest demand saying it’s “unacceptable to the association.” Good for them–someone needs to be the voice of reason on this issue.

    Here’s more on Kasich’s desire to take the easy way out–to tax more–instead of manning up and doing the right thing–cutting more:
    Read More “OH Gov. Kasich’s One-Track ‘Tax the Utica’ Mindset”

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    Fired ODNR Official Returns with Views on Best Locations in Utica

    Larry Wickstrom used to be Ohio’s official state geologist and chief of the ODNR’s Division of Geological Survey. He was fired in May 2012 because he updated and released a map showing new boundaries for the Utica Shale–where the best places to drill would be located (see Did This Map Get the Ohio State Geologist Fired?). The map update caused some of the previous lines to change, and that upset a few people, especially Larry’s political bosses. That map has since changed by quite a bit. Drilling has drifted south to counties like Harrison, Guernsey, Belmont, Noble and Monroe.

    The very talented Wickstrom had been employed for 29 years by ODNR, but his exit didn’t mean he was washed up. Far from it. Larry is back (in private business). Last week he shared his keen and experienced insights with the 1,500 people who attended the recent Ohio Oil and Gas Association winter meeting in Columbus on the latest thinking about the best places to drill in the Ohio Utica. He notes that the sweet spot for Utica drilling is much smaller than folks thought just a few years ago…
    Read More “Fired ODNR Official Returns with Views on Best Locations in Utica”

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    MDN’s Guide to New TENORM Rules for OH Utica Drillers

    Last year, the Ohio state legislature passed an omnibus “everything but the kitchen sink is in there” bill (HB59) that covered, among other things, a requirement that oil and gas drillers need to test drilling waste for TENORM–or Technologically Enhanced Naturally Occurring Radioactive Material. Drillers need to test for TENORM (or naturally occurring radioactivity) in wastewater and drill cuttings under certain conditions, according to the legislation. MDN tracked down House Bill 59 and read it. We include the relevant section from the massive 699-page law below.

    It appears to MDN’s eye that if OH shale drillers recycle the waste and re-use it on site (in the case of fluids), there is no need to test. Likewise, if they cart fluids to another nearby drill site for re-use, no need to test. If they dispose of it via a Class II injection well–no need to test. That covers about all of the ways Utica drillers handle liquid waste. It seems to us the only real requirement will be to test drill cuttings (leftover rock and dirt) for radioactivity before disposing of them in landfills. The reason this is news now is because the Ohio Dept. of Health was charged with drafting guidelines for how such materials should be sampled and analyzed to determine whether TENORM levels are high enough to warrant special treatment. The DOH recently released those guidelines, which OH drillers will now need to pay attention to when it comes to testing at the drill site…
    Read More “MDN’s Guide to New TENORM Rules for OH Utica Drillers”

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    Investment Firm Backs 3 Hotels, in Hunt for Restaurants in Utica

    Energy investment firm Drill Capital is not only in the process of building one hotel in the Utica Shale with plans on the boards to build two more (all in eastern Ohio), the company also wants to lure a restaurant chain to the Utica too. You don’t put up investors’ money to build hotels and restaurant in rural locations unless you firmly believe the business will be there for years to come. That’s precisely what Drilling Capital’s young founder and managing partner, Farid Guindo, believes…
    Read More “Investment Firm Backs 3 Hotels, in Hunt for Restaurants in Utica”

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    Aubrey McClendon: Utica Shale ‘Man in Motion’

    If you (foolishly) believed the stories about Aubrey McClendon and his oversight of the company he co-founded, Chesapeake Energy, you would believe that after he was bounced out of the company no one would ever again give him a dime. Under McClendon, supposedly Chessy spiraled out of control with debt and mismanagement. McClendon was cast as a maverick–a wildcatter who threw money around on $300 champagne lunches and managed to grow the company beyond his ability to run it. The problem with that view is the truth of what’s happened to Chesapeake since McClendon’s departure. Corporate raider Carl Icahn is the one controlling Chessy these days–for his own personal benefit. Icahn and his lieutenant CEO Doug Lawler have sold off key assets right and left and fired thousands–actions that don’t have squat to do with improving the financial health of the company. It only improves Icahn’s per share value.

    McClendon, less than a year from being unceremoniously dumped by Icahn, has a new company with $3 billion of OPM (other people’s money) in his hip pocket to spend on drilling “at least” 1,600 Utica Shale wells in Ohio. McClendon’s new venture, called American Energy Partners, has already amassed 260,000 acres of leases in less than a year, on which to drill those 1,600+ Utica wells. McClendon right now has drilling rigs on the job in Ohio. The man does not let any grass grow under his feet (or on his drill pads). Here’s an update on Aubrey McClendon, a Utica Shale man in motion…
    Read More “Aubrey McClendon: Utica Shale ‘Man in Motion’”

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    OOGA’s DeBrosse Report: Utica Drilling Ramps Up in 2013

    reportEach year the 3,200-member Ohio Oil and Gas Association (OOGA) issue the DeBrosse Memorial Report. The report is a high level look at where (and how much) drilling there has been in the state–and what they’re finding (methane, oil, NGLs). OOGA’s Peter MacKenzie presented the findings of the latest DeBrosse Report at last week’s OOGA Annual Winter Meeting in Columbus. According to MacKenzie, the data in this year’s report, “should get people’s attention,” saying it sure got his.

    OOGA supplied us with a copy of the report to share with MDN subscribers (full copy embedded below). It’s chock full of great maps and charts and statistics about oil and gas drilling in Ohio. The numbers (and maps) show the dramatic impact Utica Shale drilling has had. First up are some of the highlights as shared by the Akron Beacon Journal, followed by the full report…
    Read More “OOGA’s DeBrosse Report: Utica Drilling Ramps Up in 2013”

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    Trickle Down Shale Economics Benefit Belmont County, OH

    A few weeks ago MDN highlighted the results of a recent survey by Ohio University of local elected officials across 17 counties experiencing the majority of shale activity and development in Ohio (see Survey Says! OU Survey of Local OH Officials on Utica’s Impacts). Two county officials in Belmont County, OH did not participate in the survey, but agree with it’s findings. That is, Utica Shale drilling is having a major impact on their county.

    Here’s a closer look at how drilling in Belmont County is affecting those who live there, including beneficial “trickle down” economics that go along with an infusion of large amounts of money…
    Read More “Trickle Down Shale Economics Benefit Belmont County, OH”

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    Utica Shale Drilling Ripple Effect in Northern Part of Play

    Just because you don’t see a drilling rig and holes being drilled in the ground, it doesn’t mean Utica Shale drilling isn’t having enormous, positive economic benefits in a community. So says Youngstown-Warren Regional Chamber officials. They point to the hundreds of permanent new jobs at area manufacturers–jobs created and sustained directly by the drilling industry.

    More on the Utica supply chain and how it’s benefiting areas that haven’t (yet) seen their own Utica wells drilled…
    Read More “Utica Shale Drilling Ripple Effect in Northern Part of Play”

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    Drilling Shifts South in OH Utica Shale + More on Halcon Exit

    There is no doubt Utica Shale drilling in eastern Ohio has made a transition. Once upon a time Chesapeake (and a few others) looked to places like Columbiana, Mahoning and Trumbull counties. Carroll County is still quite active with drilling, but much of the new drilling has drifted south, to places like Harrison, Guernsey, Belmont, Noble and Monroe counties, as evidenced by the latest round of permits issued by the Ohio Dept. of Natural Resources. To the north in places like Trumbull? Not so hot anymore. Two days ago we told you about Halcon Resources’ decision to say adios to Trumbull County (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale).

    The shift southward and Halcon’s exit doesn’t seem to concern one of Halcon’s contractors, Kleese Development Associates, that hauls Halcon’s frack wastewater to area injection wells. Below are two articles: one illustrates the shift south in permits for new wells, and one that interviews Kleese, providing us with a bit more insight into Halcon’s decision to stay away from the Utica, for now…
    Read More “Drilling Shifts South in OH Utica Shale + More on Halcon Exit”

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    BP Shifts into First Gear with Shale – Splits Offshore/Onshore

    BP is one of the world’s largest integrated oil and gas companies, with operations that span from exploration and production in the upstream to midstream pipelines and even downstream (one of the world’s largest energy traders). A truly huge company. They also own 84,000 acres of leases in the Ohio Utica Shale–acreage they’ve done almost nothing with since leasing in early 2012. According to Volume 3 of the Marcellus and Utica Shale Databook (published in January), we count 5 drilling permits for BP in the OH Utica Shale for all of 2013. Barely a pulse.

    Our course hindsight is 20/20, but one of the problems is BP leased all of that land in the northern part of the Utica play–in Trumbull County. As we’ve noted elsewhere today on MDN, Utica drilling has decidedly shifted southward (away from Trumbull and other northern counties). But perhaps geography hasn’t been the only thing holding BP back in their Utica drilling program. Could it be an inefficient management structure in the company? Perhaps! Two days ago BP announced they are splitting offshore and US onshore drilling into separate divisions within the company. Judging from the announcement, it appears the decision to split operations is an effort to take better advantage of shale drilling. While they don’t mention the Utica specifically, we believe part of the reason BP has not drilled in the Utica is due to their own internal structure, which they’re moving to remedy…
    Read More “BP Shifts into First Gear with Shale – Splits Offshore/Onshore”

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    Tiny SE OH Town Sees Hotel Construction Boom Thx to Utica Shale

    As we’ve previously written, one way you know shale drilling is on the horizon is when there the county clerk or county recorder’s office gets busy with title abstractors researching. We told you way back in 2012 that Belmont County, OH was about to see a drilling boom (see Belmont County, OH Drilling to Take Off Soon). How do you know when an area’s drilling is about to expand even more? When companies are willing to build not one but four new hotels–in a town with only 10,555 residents!

    Here’s the story of drilling about to reach a fevered pitch in Belmont’s neighboring county, Guernsey and the little town of Cambridge which is having a boom in hotel construction…
    Read More “Tiny SE OH Town Sees Hotel Construction Boom Thx to Utica Shale”

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    Halcon Pull Back from Utica: What about Their $70M Oil Terminal?

    Yesterday MDN brought you the bombshell news that Halcon Resources has shaken the dirt of their shoes in the Utica and is heading to greener (so they say) pastures in other shale plays (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale). Not so long ago–last July–Halcon announced they were working on a $70 million oil storage and rail transloading terminal in Lordstown (see Halcon Resources Plans $70M Oil Terminal in Lordstown, OH). The first of three planned phases for that project were, at the time, predicted to be completed in 2014. Is that project now in jeopardy too, with Halcon taking their “wait and see” attitude in the Utica?

    Lordstown area officials have no official word from Halcon on the oil terminal’s fate, but they’re nervous…
    Read More “Halcon Pull Back from Utica: What about Their $70M Oil Terminal?”

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    St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids

    St. Clairsville (Belmont County), OH put out a request for bids on 195 acres of city-owned land. They want to lease the land for shale drilling. The RFP sought bids from drillers and contained these minimum terms: $7,300 per acre signing bonus, and 20% royalties. Yikes! Apparently St. Clairsville believes they hold all the cards. The deadline for bids was yesterday. How many bids did they get? Zero. Nada. None. But city leaders aren’t discouraged. Apparently putting it out for bid was a requirement under Ohio state law–a dance that they had to dance, motions they had to go through–and now that the RFP has come and gone, the real negotiations will begin. And make no mistake, drillers are interested in leasing the property. It sits in one of the sweetest sweet spots in the Utica Shale.

    Here’s the St. Clairsville RFP story, and a good roundup showing the terms other municipalities have recently gotten for leasing their land…
    Read More “St Clairsville RFP to Lease 195 Utica Acres Comes & Goes, No Bids”