Even with Capex Budgets/Jobs Slashed, NE Production Still Rising
Capital expenditure budgets slashed 20%, 30%, 40% and more. Mass firings in the thousands by oilfield services companies. The mad dash to raise cash to keep going. Shutting in wells to slow or stop production. Some days it seems like the news is all doom and gloom. But what’s this? Even though rig counts are down, capex is slashed and jobs are dwindling, production in the Marcellus/Utica will continue to go UP in 2015. You read that right. How can that be? According to some excellent research published by NGI’s Shale Daily, production will continue to go up because “efficiencies in drilling techniques and low operating costs are overcoming the energy industry downturn.” That is, good old American ingenuity is once again figuring out how to do more with less. What did the ace reporters at Shale Daily discover when they dug down into the data?…
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The Vikings are Coming! Er, well, at least the Norwegians are. And they’re not coming to conquer but to drill–underneath the Ohio River in West Virginia on the border of Marshall and Wetzel counties. The West Virginia Department of Commerce has cut a deal with Norway-based Statoil which allows the company to drill and frack for oil and natural gas on 474 acres thousands of feet beneath the Ohio River. What are the lease terms? An average price of $8,732 per acre with 20 percent production royalties. That translates into a signing bonus of $4.14 million. And that’s not all. WV is near to signing a deal with Noble Energy and Gastar Exploration on two other Ohio River tracts that will provide lease bonuses of $4.9 million and $749,000 (respectively) along with 20% royalties…
In February, West Virginia passed a new law “fixing” an old law. The old law, which was itself a new law just a few years ago, stipulated if oil and gas leases/operations change hands, the new owner must apply for permits to drill all over again, even if the previous owner had already been awarded those permits. This was a really big problem for Southwestern Energy that had just purchased $5 billion worth of leases and operations from Chesapeake Energy, most of it in WV. So the WV legislature passed, in record time, a law to fix the problem–and Gov. Earl Ray Tomblin signed it (see
Yesterday MDN reported a story that (so far) few others have bothered to report: West Virginia’s House Bill (HB) 2688 failed to gain passage at literally the eleventh hour–one hour before the annual 60-day session ended (see
In a stunning upset at the eleventh hour, WV House Bill (HB) 2688, a bill that allows forced pooling (and a bill that seemed assured of passage just last Friday) died in a rare tied vote. On Friday, we told you HB2688 was all but a done deal (see
Local media in West Virginia is reporting that early Tuesday afternoon a Gastar Exploration worker was injured in an accident at a brine injection well (owned by Gastar) in New Martinsville (Wetzel County), WV. The only thing we know is that the man’s leg was injured. We don’t know his condition or, frankly, many other details. Here’s what we’ve been able to find out so far…
On March 3, a federal judge awarded a Tyler County, WV mineral owner $4.8 million in present and future royalties (plus interest) as damages in a dispute involving the operator’s failure to follow through on some unusually generous lease terms. The operator, Cunningham Energy LLC of Charleston, WV, had promised to horizontally drill eight wells to and through the Marcellus Shale formation within three years, but was unable to do so–largely because the leaseholds were far too small to develop as stand-alone units, and the surrounding lands turned out to be already under lease to other drillers…
Three weeks ago MDN reported a Buffalo, NY-based company had successfully gotten all necessary permits to move forward with building a $615 million, 549 megawatt electrical generating plant near Moundsville, WV that will be powered by Marcellus Shale gas (see