West Virginia

Industrywide Issues | Statewide WV | Taxation | West Virginia

18 WV Lawmakers Flying to ND for a $20K Overnighter on Drill Tax
August 19, 2013August 19, 2013

West Virginia Senate President Jeff Kessler really really wants the WV legislature to set up a rainy day fund or “WV Future Fund” with some of the severance tax money raised from shale drilling in the state, so this week he’s flying himself and 17 other state lawmakers to North Dakota for an overnighter to hear from ND leaders about how their “Legacy Fund” has worked in that state. Total cost to WV taxpayers: $18,000 – $20,000.

Er, why are they not flying one or two ND officials to Wild, Wonderful WV to make the presentation–for $2,000? Best not to ask such questions of the political ruling class…
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Economic Impact | Industrywide Issues | Pennsylvania | Statewide PA | Statewide WV | West Virginia

Astonishing: Marcellus Gas Production Up Estimated 50% Over 2012
August 15, 2013August 15, 2013

According to Bentek Energy, Marcellus Shale gas production is up 50% compared with the same time last year–much more than energy experts had predicted. And apparently there’s no end in sight.

Bentek also says Marcellus production is so prolific it’s “actually starting to displace” natural gas production from the Gulf of Mexico…
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Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

July Permits Issued in Utica/Marcellus for Tri-State Area
August 15, 2013August 15, 2013

An excellent permit “check-in”–a roundup of how many drilling permits were issued by county and driller, from Farm and Dairy, for the month of July in eastern Ohio, southwestern Pennsylvania and northern West Virginia:
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Aveda Transportation | Energy Services | Upshur County | Utica Shale | West Virginia

Aveda Transportation Opening WV Branch Office to Move Utica Rigs
August 15, 2013August 15, 2013

Aveda Transportation and Energy Services Inc., a Canadian oilfield hauling services and equipment rental company, released their second quarter financials yesterday. Aveda currently operates a branch office in Williamsport, PA to service Marcellus drillers.

An interesting little announcement was tucked in yesterday’s release. Aveda is opening another branch office in the northeast–this one in West Virginia–to service the rapidly growing number of rigs in the Utica Shale. According to CEO Kevin Roycraft, he’s counting on the new WV office to contribute to the company’s bottom line by fourth quarter of this year…
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Energy Services | GreenHunter Resources | Industrywide Issues | Marshall County | Regulation | Wastewater | West Virginia

Wheeling, WV Approves GreenHunter Frack Wastewater Facility
August 14, 2013August 14, 2013

With capes gently flapping in the breeze, it was a crushingly sad defeat for the brave and noble Wheeling Water Warriors who sought to stop the evil frackwater company from establishing yet another facility along the shores of the pristine (*cough*) Ohio River…. OK, enough of that drivel! A great victory for GreenHunter Water and for sanity: The Wheeling (WV) Planning Commission has approved GreenHunter’s plan to develop a frack wastewater recycling/barge facility at the former Seidler’s Oil Service site on North 28th Street. The plan, opposed by a small band of anti-drilling protesters who called themselves the Wheeling Water Warriors, came before the Planning Commission several times without a vote in recent months (see Wheeling Delays Vote Again on GreenHunter Wastewater Facility).

The Commission took up the matter again at it’s Monday meeting and finally voted to approve GreenHunter’s plan. Eventually, GreenHunter hopes to use the facility to not only recycle shale drilling wastewater, but also ship some of it (by barge) down the Ohio River to locations in Ohio for disposal via injection wells. Shipping wastewater by barge is currently under review at the federal level, awaiting approval…
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Antero Resources | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia

Antero Resources Rolls Dice on 1/2 Billion Dollar Marcellus Pipe
August 14, 2013August 14, 2013

According to a story in The Wall Street Journal, Antero Resources will spend half a billion dollars to construct an 80-mile pipeline in the Marcellus/Utica Shale region. But this rather expensive pipeline will not carry natural gas, gas liquids or even oil. Instead, it’s a pipeline that will deliver water from the Ohio River to some of Antero’s most active drilling locations scattered in West Virginia and Ohio–to be used for fracking.

For Antero with some 100K acres of leased land in the Marcellus, committing to half a billion dollars (the company grossed $265 million last year) is a huge roll of the dice…
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Blue Racer Midstream | Caiman Energy | Dominion Energy | Energy Services | Industrywide Issues | Marshall County | Processing Plants | West Virginia

Dominion Sells $500M Natrium NGL Plant to… Itself
August 13, 2013August 13, 2013

Dominion, a huge energy company that does everything from shale drilling to pipelines and processing plants to selling gas and electric as a utility, has just sold the newly built and operating $500 million NGL processing plant in Natrium, WV to…itself. The Natrium plant was due to go online late last year. Then it was forecast be online in the spring of this year. The plant, which separates natural gas liquids from methane in the Marcellus/Utica Shale, finally went online in late June (see Blue Racer Midstream’s Natrium, WV NGL Plant Now Up & Running).

Blue Racer Midstream officially took title to the Natrium plant as of August 9th. Blue Racer is a joint venture between Dominion and Caiman Energy II. Dominion essentially owns Blue Racer, ergo Dominion sold the plant to itself. These things happen on paper–no doubt for more favorable tax and accounting purposes for investors. Dominion’s announcement from yesterday:
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Accidents | Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | West Virginia

Antero Given Green Light to Resume Drilling at WV Blast Site
August 12, 2013August 12, 2013

In early July, MDN told you about an explosion at an Antero Resources drillpad in Doddridge County, WV (see Update on Antero Well Explosion in Doddridge County, WV). Half a dozen workers were injured in the resulting fire. Sadly, two of those workers recently died from their injuries.

We now know what caused the blast: open hatches on a number of wastewater tanks that allowed gas to build up, which led to a flash fire. The WV Dept. of Environmental Protection (DEP) shut down drilling at the site after the fire to investigate. The DEP is now satisfied that Antero knows what happened and has put in place measures to prevent it from happening again, so the DEP has just lifted the “cease operations” order. Antero is now free to resume drilling at the site…
Read More “Antero Given Green Light to Resume Drilling at WV Blast Site”
Energy Companies | Statewide WV | Stone Energy | Upper Devonian Shale | West Virginia

Stone Energy Update: On Track to Drill 30 Marcellus Wells in 2013
August 6, 2013August 6, 2013

Stone Energy is an independent driller with operations both off- and on-shore. Last December MDN told you about Stone’s plan to start spending 33% of its $650 million exploration and production budget for 2013 on drilling in the West Virginia Marcellus Shale (see Stone Energy 2013 Plans: Spend 33% of Budget on Marcellus). Plans were to drill 28-32 new Marcellus wells this year. According to Stone’s second quarter 2013 report released yesterday, they’re right on track. So far they’ve drilled 16 wells and are on track to complete up to 30 Marcellus wells by the end of this year.

In yesterday’s update, Stone CEO David Welch reiterated the company’s strategy is to move away from drilling in the relatively shallow Continental Shelf area of the Gulf of Mexico (less than 1,000 feet of water), and drill more in both the deep water Gulf region as well as in the Marcellus. Welch said their strategy continues to benefit the company with rising production numbers, particularly from the Marcellus wells drilled. We also learn from yesterday’s update that Stone has drilled a test well in the Upper Devonian Shale and expects to bring it online later this year. Select portions of yesterday’s 2Q13 update:
Read More “Stone Energy Update: On Track to Drill 30 Marcellus Wells in 2013”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Statewide WV | West Virginia

Marcellus Hiring Practices “Under a Microscope” by DOL
August 5, 2013August 5, 2013

Are you a driller, oilfield services or other supply chain company whose primary activity revolves around the PA or WV Marcellus Shale? If so, there’s a good chance you’re going to get audited by the U.S. Labor Department (DOL). Best to get your records (and hiring practices) in order now.

The biggest violation found by the DOL’s so-called Marcellus Shale Initiative: improperly classifying workers as independent contractors instead of salaried or hourly employees. Hiring workers as independent contractors is coming back to bite a number of companies, large and small. If the DOL finds a violation, they helpfully pass it on to the IRS, so after the DOL is done fining you, the IRS typically shows up on your doorstep for a second pound of flesh. Sweet…
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Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Statewide WV | West Virginia

The Marcellus Continues to be Star Performer for Chesapeake
August 5, 2013August 5, 2013

Different media outlets have analyzed the comments made last Thursday by Chesapeake Energy officials, looking for Chessy’s “take” on their particular region. A newspaper in West Virginia published the report below that looks at Chessy’s update on the Marcellus Shale in the southwestern corner of the play–otherwise known as the “wet gas” area. Bottom line: Although everyone continues to focus on the Chesapeake’s love affair with the Utica Shale, the Marcellus Shale is the play actually contributing to the company’s bottom line–in a big way. The Marcellus is helping turn around the good ship Chesapeake.

Of particular interest to MDN in this brief article is a short paragraph that mentions the signing bonus/royalty deals landowners in the Upper Ohio Valley have recently landed with Chesapeake and other drillers–some of the highest bonus and lease terms we’ve seen to date in the Marcellus…
Read More “The Marcellus Continues to be Star Performer for Chesapeake”
Economic Impact | Industrywide Issues | Pennsylvania | Pipelines | Processing Plants | Statewide PA | Statewide WV | West Virginia

“Notable Increase” in WV/PA NatGas Production from New Pipelines
July 31, 2013July 31, 2013

The U.S. Energy Information Administration (EIA) published a brief article in their online “Today in Energy” publication that points out natural gas production for both dry gas and wet gas has gone up in West Virginia and southwestern Pennsylvania because of new infrastructure–pipelines and processing plants.

Here is the EIA article, complete with nifty chart showing the rather dramatic increase in daily production:
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Beaver County | Chesapeake Energy | CONSOL Energy | Energy Companies | EQT Corp | Hancock County | Pennsylvania | Range Resources Corp | Rex Energy | Upper Devonian Shale | West Virginia

5th Upper Devonian Driller + Maps of Best UD Spots to Drill
July 29, 2013July 29, 2013

It seems as if “out of the blue” the Upper Devonian Shale (UD) has popped up on the radar screen–quite suddenly and in quite a big way. The Upper Devonian is located a few hundred feet above the Marcellus Shale layer in the northeastern U.S. Over the past few weeks, MDN has highlighted stories of drillers expanding their UD drilling programs–including CONSOL, Rex Energy, Range Resources and EQT Corporation (see EQT 4th Driller to Target Upper Devonian Shale Layer). Courtesy of a sharp MDN reader, we can add a fifth UD driller to the list: Chesapeake Energy. Todd Sigler reports that Chesapeake has drilled an Upper Devonian well in Hancock County, WV and has several Upper Devonian permits in extreme western Beaver County, PA.

Todd also pointed us to two excellent drilling presentations about the UD, one from Range Resources and one from Rex Energy, which we’ve embedded below. The Range presentation includes a good backgrounder on the UD and a great series of maps showing where the best places to drill in the UD can be found–currently–based on our knowledge and experience so far. The Range presentation also discusses how Range (and others) are adopting a “stacked play” strategy of drilling the Upper Devonian, Marcellus and Utica layers–all in the same well bore. How cool is that?!
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Statewide WV | Upper Devonian Shale | West Virginia

More Interesting Facts about the Upper Devonian Shale
July 29, 2013July 29, 2013

Some more interesting facts are coming to light about the new shale kid on the block: the Upper Devonian Shale. A recent AP article says Upper Devonian (UD) wells are a lot cheaper to drill than Marcellus and Utica wells because they are closer to the surface. And, surprise! UD wells are usually fracked using hydrogen, not water and chemicals–at least UD wells drilled in West Virginia. That is a revelation.

Will we now start to see more UD wells drilled in the northeast? That will depend on the commodity price of natural gas, because UD wells typically yield dry gas (methane) and not wet gas (with liquids and/or oil)–at least so far. If the price is right to make dry gas drilling profitable, you can expect to see the UD getting more attention…
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Hydraulic Fracturing | Industrywide Issues | Statewide WV | West Virginia | Wetzel County

Striking a Balance: Preserving the Surface While Drilling in WV
July 29, 2013July 29, 2013

What happens when the mineral rights for oil and gas under a piece of land are owned by someone other than those who own the surface land itself? In West Virginia, that happens a lot–it’s a called a “split estate” and was done years ago for coal mining. Furthermore, what happens if the surface owner is the county or state government, and the land is a nature preserve, used for hunting and outdoor enthusiasts? It is a conundrum. Clearly the mineral owners have the right to access the minerals under the land, but in doing so, there’s going to be inconvenience for hunters and others using the surface land. Both sides have to work together.

The Lewis Wetzel Wildlife Management Area in Wetzel County, WV is a good example where both sides have not found a perfect solution, but it seems they have found a workable one…
Read More “Striking a Balance: Preserving the Surface While Drilling in WV”
Lease & Royalty Payments | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

New Report Shows Permits, Wells Drilled & More Near Your Address
July 23, 2013July 23, 2013

As you may know, MDN editor Jim Willis has been partnering with ShaleNavigator founder Ed Camp for more than a year now to bring you the three volume Marcellus and Utica Shale Databook series. The 2012 series was a huge success, and the new 2013 series (Volume 1 is out now) is shaping up to be the same. The Databook is a series of maps created using the excellent ShaleNavigator service to display where (and to whom) permits have been issued, county by county, throughout the Marcellus and Utica Shale region. However, the ShaleNavigator itself service is far more than just permits, displaying multiple “layers” of information users can turn on and off to display lease offers, pipeline locations, compressor station locations and much more (24 different layers in all).

Ed has just released an exciting and important new feature for the ShaleNavigator service: Subscribers may now produce reports displaying shale oil and gas wells, well permits, pipelines, and lease offer information near a specific address “on the fly.” Type in any address (your address maybe?), wait a few seconds, and get a PDF report detailing all of the permits issued, wells drilled, pipelines and lease offers within both a 2 mile radius and within a 5 mile radius of that address (see an example report embedded below). Folks, this is beyond cool!…
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