Leftwing Academic Hacks Trash Talk PA, OH Cracker Plants

A group of leftwing radical professors (all of the Democrats) from seven universities in Ohio and Pennsylvania have colluded to write a letter to the governors of Ohio, Pennsylvania and West Virginia. The letter trash talks the billions of dollars in economic impact and tens of thousands of jobs ethane cracker plants and the petrochemical industry will have in the region. The leftist gang of seven poo-poos those estimates and says the proposed PTT cracker is too “risky” to approve. How do they figure?
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Marcellus/Utica NatGas Production Drops 1.5 Bcf/d Jan to May

Enverus (formerly known as Drillinginfo) recently released its latest FundamentalEdge report that explores the ongoing supply response to demand destruction caused by the COVID-19 pandemic. As part of the report, Enverus estimates how much dry gas production each major shale play produced, month by month, from January through May of this year. The numbers show that production from the Marcellus/Utica, which produces the most natural gas of any play, decreased the most of any play–by some 1.5 billion cubic feet per day (Bcf/d) from January to May.
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More Frack Crews Now Active in the Marcellus than the Permian!

This has to be a first in the modern shale era. There are now more active fracking crews working in the Marcellus Shale than in any other shale play, including the oily Permian. There are 450 fracking fleets available in the U.S., but only 70 of them are active right now. The Marcellus is using 31% of those active fleets, while the Permian is using 30%. We never thought we’d live to see the day!
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Diversified Buys 900 EQT Wells (67 Shale Wells) for $125M

Diversified Gas & Oil (DGO) continues its program of buying up mostly older conventional oil and gas wells in Appalachia. In April DGO cut a deal to buy 6,500 conventional wells spread across West Virginia, Kentucky, and Tennessee, along with a 4,700-mile gathering pipeline system located in WV, for $110 million (see Diversified Deal to Pick Up Another 6,500 O&G Wells in WV, KY, TN). DGO has done it again, this time buying 900 wells from EQT located mostly in West Virginia. The deal also includes 67 shale wells in Pennsylvania.
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Natl Rig Count Falls Another 59; Marcellus Loses 4 Rigs Last Wk

Not unsurprisingly, the U.S. rig count (for both oil and gas, although mainly oil) continues to plummet week after week. The latest numbers show rigs taken out of active duty (laid down) decreased another 59 over the past week. That’s better than the 76 laid down the week before (see Carnage Continues: Rig Count Down Another 76, Marcellus Down 2), but still not great. Hundreds of rigs have been laid down over the past month–most of them in the oil patch. But not all. Last week the Marcellus lost four rigs after losing one the week before.
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Former EV Energy Partners Looks to Sell or Merge Remaining Assets

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In June 2018, EV Energy Partners (EVEP), the drilling subsidiary of EnerVest, emerged from bankruptcy court a mere two months after entering with $355 million of debt erased and sporting a new name: Harvest Oil & Gas Corp. (see EV Energy Partners Emerges from Bankruptcy with New Name). Harvest’s drilling and assets are focused in Ohio, Pennsylvania, West Virginia, where they own/operate 9,787 conventional wells. (The company cut a deal in March to sell off all of its Michigan assets.) In a fourth-quarter (everyone else’s first quarter) and full-year update released yesterday, Harvest announced it is “actively considering the potential divestiture of all of its remaining assets as well as a potential sale or merger of the Company.”
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Diversified Deal to Pick Up Another 6,500 O&G Wells in WV, KY, TN

Diversified Gas & Oil (DGO) owns close to 8 million acres of leases with some 60,000 (mostly) conventional oil and gas wells. Their focus has been to acquire quality production and cash flow–regardless of the well or commodity type (gas or oil)–in the Appalachian Basin. They currently have over 400 Marcellus/Utica shale wells in their portfolio too. DGO announced it has a conditional deal to buy another 6,500 conventional wells spread across West Virginia, Kentucky and Tennessee, along with a 4,700-mile gathering pipeline system located in WV. The deal, “subject to ongoing due diligence,” is for $110 million.
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M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1

The Pittsburgh Post-Gazette is reporting Marcellus/Utica condensate, produced in places like southwestern Pennsylvania and eastern Ohio, briefly touched and went below $0/barrel last week, before recovering slightly. The article says the price M-U drillers are getting for condensate is down 91% from January of this year. What’s lacking in the Post-Gazette story is context for how important (or not) condensate is as a revenue stream for M-U drillers.
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WV Outlaws Anti Protesters Who Try to Block Pipeline Construction

Last week MDN told you about a flurry of oil and gas bills passed by the West Virginia legislature signed into law by Gov. Jim Justice (see Flurry of WV O&G Bills Signed into Law Incl. Petchem Tax Credits). At the time we focused on a couple of petrochemical tax credit bills, but there’s another important bill in the batch we’d like to call your attention to today: House Bill (HB) 4615, a bill (now law) that clamps down on anti-fossil fuel protesters who like to take the law into their own hands.
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Conventional Drillers Face Tough Decisions re Stripper Wells

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Although some Marcellus/Utica drillers also own conventional (vertical-only) oil and gas wells as part of their portfolio, most conventional drillers are smaller “mom and pop” types of companies. Conventional oil well owners in the M-U, as well as across the country, face some of the same problems as shale drillers with a crash in oil prices: What to do with older wells? Thousands of older conventional oil wells produce as little as 10 barrels of oil per day. These low-producing wells are called stripper wells. With oil selling at $20/barrel, some stripper wells can still break even, but many cannot. It costs an average of $20,000-$40,000 to plug an old stripper well. Sometimes it’s more economic to simply keep a stripper pumping (and losing money) rather than pony up big bucks to close the well. It’s a conundrum.
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Flurry of WV O&G Bills Signed into Law Incl. Petchem Tax Credits

MDN previously told you about two (of a number) of bills working their way through West Virginia’s annual 60-day legislative session that will create new tax credits aimed at luring petrochemical plants to the state (see WV Advances Bills to Attract NGL Hub, Cracker Plant, Downstream). One bill, House Bill (HB) 4421, is meant to attract a natural gas storage hub and an ethane cracker plant to the state. The other, HB 4019, is meant to attract downstream natural gas manufacturing facilities. We’re delighted to tell you that both bills are now law in the Mountain State, part of a package of 13 bills related to oil and gas that Gov. Justice signed into law on Wednesday.
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FERC Denies Rehearing on Mountaineer XPress 2 Yrs After Approval

The final bits of Columbia Gas Transmission’s Mountaineer XPress pipeline project (most of it located in West Virginia) went online just over one year ago (see FERC Says Rest of Mountaineer XPress Pipeline OK to Start Up). The Federal Energy Regulatory Commission (FERC) approved the project more than two years ago. At the time FERC approved the project, anti-fossil fuelers challenged the approval, as they do every single square inch of every single new oil or gas pipeline. We have to chuckle because FERC finally responded to antis’ request for a “rehearing”…on Wednesday. FERC turned them down more than two years after their objection was lodged.
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WV Advances Bills to Attract NGL Hub, Cracker Plant, Downstream

The West Virginia House of Delegates Finance Committee approved two bills yesterday that would create two new tax credits. The aim is to boost more development in the natural gas industry in the Mountain State. One bill, House Bill (HB) 4421, is meant to attract a natural gas storage hub and an ethane cracker plant to the state. The other, HB 4019, is meant to attract “downstream” natural gas manufacturing facilities. Both bills now go to the full House for a vote.
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Proposed OH, WV Laws Clamp Down on Illegal Pipeline Protests

Bills aimed at clamping down on illegal pipeline protests (which pretending to be free speech but aren’t) have been introduced in both the Ohio and West Virginia legislatures. In WV, House Bill (HB) 4615 passed the House last week and is now under active consideration in the WV Senate. In Ohio, Senate Bill (SB) 133 was passed last May. The bill was recently reported out of a House committee and likely to see a full House vote soon. It’s obvious that regular folks are tired of radicals and their illegal attempts to block pipeline projects.
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“Kill NatGas Later” Plan Floated by WV Republican Congressman

While we’re sure he means well, Congressman David McKinley, a professional engineer (P.E.) from West Virginia (Republican) has thrown his support behind a “bipartisan” effort to create a new federal bureaucracy to oversee the decarbonization of the power generation sector. In other words, an effort that will end the use of natural gas to generate electricity–by 2050. We just can’t support something like that. It’s short-sighted, heavy-handed, and creating a new federal bureaucracy simply goes in the wrong direction. Period.
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3 O&G Bills Advance in WV Senate, Including Lease “Cancellation”

The work is happening fast and furious at the West Virginia state legislature right now. Legislators only have a 60-day session each year in which to pass new laws. More states should limit the time like WV! Yesterday two different Senate committees voted to pass three different bills, including SB 554, also known as the Lease Cancellation Bill.
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