Statewide WV

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    Marcellus DUCs Lay Golden Eggs for Northeast Drillers

    We’ve written a number of times about DUCs–otherwise known as drilled-but-uncompleted wells. When a shale driller drills a new well, it doesn’t always happen all in one go. You first drill the hole down, and then curve the drillbit and drill the horizontal portion–called the lateral. Then you pull the drill bit out of the ground and (at some point) the fracking process begins. Fracking doesn’t always happen right away. Sometimes wells are initially drilled but not fracked–essentially putting them in inventory to be fracked later. Those wells are DUCs. Since a lot of the cost to develop the well has already been spent in preparing the site and drilling the hole, to come along at a later time and frack is much “cheaper” if you (as a driller) want to bump up your production. Price of gas low right now? Drill the initial hole, mothball the project, and come back later when the price of gas goes up and finish it off and hook it up to production. The DUC inventory is a closely watched number. Analysts at Platts have been watching and have noticed something interesting. In most shale plays–particularly oil plays like the Permian in Texas–drillers are sinking initial holes as fast as they can and the DUC inventory numbers are going up up up. The Permian has seen 476 new DUCs added since January! But in the Marcellus, only 3 new DUCs have been added since last December. Which is “puzzling.” What does it mean?…
    Read More “Marcellus DUCs Lay Golden Eggs for Northeast Drillers”

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    Poll: Majority of Voters in VA, WV, NC Support Atlantic Coast Pipe

    Leftist anti-fossil fuelers are only too happy to poll anything and everything–except for what really matters. How do the VOTERS in Virginia, West Virginia and North Carolina feel about the Atlantic Coast Pipeline (ACP)? ACP is Dominion Energy’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. The Consumer Energy Alliance (CEA), the “voice of the energy consumer,” set out to answer the question: How do voters feel about ACP? In a poll commissioned by ACP, a majority of voters in all three states support the project–by an overwhelming majority. ACP hired Hickman Analytics Inc., a “Democratic-leaning,” Maryland-based firm to do the polling. Harrison Hickman, founder of the firm, said, “By any measure, whether it’s a policy matter or a voting matter, the pipeline has widespread support.” That’s something you won’t read in most news outlets. Here’s the results of the poll… Read More “Poll: Majority of Voters in VA, WV, NC Support Atlantic Coast Pipe”

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    Energy Cos. Hedge Bets in WV Senate Race, Donate to Both Sides

    Something we find distasteful, but a fact of political life, is that the energy industry is playing both sides of the isle when it comes to making campaign contributions in West Virginia’s U.S. Senate race. Up for reelection next year (2018) is Sen. Joe Manchin, a former WV governor. Manchin, a so-called moderate Democrat, ran to fill the seat of Robert Byrd when he passed away while in office, in 2010. Manchin ran again two years later for a full term, in 2012. When it came down to voting based on principle or party regarding the issue of overturning a midnight-before-he-left-office-Obama-onerous-methane-regulation, Manchin chose party (see Methane Repeal Fails in Senate as McConnell Falls a Vote Shy). To be fair, three traitorous Republicans abandoned us too–John “crazy” McCain, Lindsey “Grahamnesty” Graham (disgusting man), and Susan “spineless” Collins. However, Manchin could have changed the vote–and he chose to sell out. He’s not on our favorite list. But, the oil and gas industry can’t seem to give him money fast enough in his reelection bid. On the other hand, some in the industry are also giving money to his main Republican rival (Evan Jenkins) in what will be a hotly contested seat. Some are giving money to both candidates, presumably to curry favor with the winner. We find the practice revolting. Choose a candidate and back him (or her). Let the chips fall where they may… Read More “Energy Cos. Hedge Bets in WV Senate Race, Donate to Both Sides”

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    Dominion Contacting First Responders re Atlantic Coast Pipeline

    Atlantic Coast Pipeline (ACP), Dominion Energy’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina, has begun an outreach program with Local Emergency Planning Committees in several West Virginia counties. The pipeline is not yet fully approved by the Federal Energy Regulatory Commission (FERC). Dominion expects that approval sometime this fall (see Dominion CEO Says Atlantic Coast Pipeline is Full Speed Ahead). However, Dominion and ACP would not be wasting their time and the time of local first responders with meetings, if they didn’t believe the project is already in the bag. So we take these meetings as a good sign that ACP is on the way… Read More “Dominion Contacting First Responders re Atlantic Coast Pipeline”

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    2017 Shale Gas Innovation Contest Winners Share $60K in Prizes

    Envelope please! (No, this is not Warren Beatty, we have the correct envelope!) Each year the Ben Franklin Shale Gas Innovation & Commercialization Center (SGICC) runs a contest and awards a $20,000 prize to three companies ($60,000 purse) for the “best shale energy-oriented innovations, new product ideas, or service concepts that are either in the development stage or recently launched” in the Marcellus Shale. This year’s winners were recently announced: Frontier Natural Resources, Inc. won for commercializing the first small scale LNG facility in Pennsylvania, using natural gas from an adjacent gathering and compression facility. PetroMar Technologies, Inc. won for commercializing FracView™, a low-cost borehole imaging tool that takes high resolution pictures, even through drilling mud. And Sensor Networks, Inc. won for its product line of permanently installed battery powered ultrasonic sensors, providing remote, wireless data collection of critical pipe infrastructure wall thickness. Here’s the deets… Read More “2017 Shale Gas Innovation Contest Winners Share $60K in Prizes”

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    WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub

    Sen. Shelley Moore Capito

    Both West Virginia U.S. Senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat), along with Ohio Sen. Rob Portman, have introduced and co-sponsored a bill to study if and how an ethane storage hub can be constructed in the Marcellus/Utica region. According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Others have also taken up the cause, making the point that West Virginia, Ohio, Pennsylvania and Kentucky need to band together to build such a project (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). You mean, set aside competition between states and cooperate? Yes! Why? Such a project will cost an estimated $10 billion–far more than a single ethane cracker project. No one state can do it on its own. And that’s where this new bill comes in. The bill proposes a study be done by the Departments of Energy and Commerce within the next two years to analyze potential locations based on favorable geology, the economic feasibility and benefits of the project, infrastructure, and proximity to production sites and potential industrial consumers…
    Read More “WV/OH Senators Intro Bill to Study Appalachian Ethane Storage Hub”

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    IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?

    The West Virginia legislature only meets for 60 calendar days each year and move quickly when the do meet. Unless the governor calls for a special session. Which has happened–to consider and pass a budget for the state. During the regular session earlier this year, newly-minted Gov. Jim Justice wanted and got a bill, Senate Bill (SB) 415 (full copy below) that tiers the severance tax on natural gas and oil. Justice would keep the existing 5% severance tax on oil and gas as the bottom tier–to be assessed if the “annualized gross value of natural gas per MCF” is $3 or lower. When the annualized value goes to $3.01, the tax goes to 5.5%. At $3.51, it goes to 6%. And so on to $9/Mcf when the tax would be 10%. It’s a crazy idea and frankly, we’re surprised a Republican governor that supports the shale industry wants it. Other o&g states are looking at lowering their severance taxes, not raising them. At any rate, the Independent Oil & Gas Association of West Virginia (IOGAWV) is strongly opposed to the plan. From what we can tell, as of a few days ago, the tiered severance tax for natural gas/oil plan has been withdrawn. Which is good news for both drillers and landowners…
    Read More “IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?”

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    Titan Energy Sells Marcellus Assets, Buyer Rapidly Expanding

    In February, MDN told you that Titan Energy, which used to be known as Atlas Energy/Resource Partners, was listing what appeared to be the rest of the acreage they still own on the Appalachian basin–some 494,229 acres–including rights for drilling in the Marcellus (see Titan Energy Puts 494K Appalachian Acres Up for Sale). On Friday, Titan announced it has signed an agreement to sell the acreage, along with 8,400 oil and gas wells across Pennsylvania, Ohio, Tennessee, New York and West Virginia, for $84.2 million to Diversified Gas & Oil (DGO). Yes, the vast majority of those wells are conventional (vertical only) and not shale wells. In fact, we’re not sure any of the wells are shale wells. However, Marcellus assets were part of the sale–so at least some of the acreage will allow for Marcellus drilling, should DGO want to pursue it. Although Titan is keeping its Utica Shale acreage, the company says it use the money from this sale to concentrate efforts on oil drilling in the Texas Eagle Ford Shale play. Titan is moving its headquarters from Pittsburgh to Houston, TX. In addition to the news about Titan selling its conventional assets and moving, the twin story (perhaps even more interesting) is that the buyer, DGO (nominally headquartered in Birmingham, Alabama, although actually a UK company), has been on a buying spree–snapping up 75,250 conventional acres (1,300 wells) in PA & WV earlier this year. All told, DGO now owns 1.6 million acres of leases and 10,000+ conventional oil and gas wells in Appalachia…
    Read More “Titan Energy Sells Marcellus Assets, Buyer Rapidly Expanding”

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    Commerce Secretary: Shale Gas is the Future of West Virginia

    More than 300 people attended the West Virginia Manufacturers Association’s Marcellus and Manufacturing Development Conference in Morgantown yesterday. Among the topics discussed–the need for faster approvals of pipelines, and the positive economic of shale on the Mountain State. Among the speakers was new State Commerce Secretary Woody Thrasher–who spent most of his career in the private sector. According to Thrasher, “shale gas is the future of economic opportunity in West Virginia.” Thrasher said the industry with the biggest potential for growth in WV is shale energy–and it’s “only begun to emerge.” He urged audience members to get involved and make their voices heard–at the local, state and federal level. We think it’s a fair statement to say that Thrasher rallied the troops and is leading the charge to see more shale energy developed in WV… Read More “Commerce Secretary: Shale Gas is the Future of West Virginia”

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    Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?

    Yesterday Noble Energy dropped a bombshell that it has sold its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer.” That works out to be $3,181 per acre. Not included in the sale is Noble’s half operating interest in the CONE Midstream pipeline gathering system. It was just three years ago that Noble announced it would lease 138,000 feet in a new office building in Southpointe, and move in 200 employees (see Noble Energy’s Huge Vote of Confidence in the Marcellus). At the time, Noble’s CEO said the Marcellus is “the premiere gas play in the United States” and that the Marcellus figures prominently in Noble’s future plans. That was then, this is now. Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy–a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). All of the above is what you get from other news sources. The reason you read MDN is because we’ve found out who the buyer of the Noble acreage is…
    Read More “Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?”

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    WV Supreme Court Post-Production Royalty Case Hinges on 3 Words

    Yesterday the five justices of the West Virginia Supreme Court reheard a case involving post-production deductions from royalty payments. Last week we reported that the court *might* rehear the case this week–if they didn’t grant a late-breaking motion to dismiss the rehearing (see WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe). In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). Those who won the case say newly elected Supreme Court Justice Elizabeth D. Walker has conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed, and yesterday the lawyers were in court arguing. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead”… Read More “WV Supreme Court Post-Production Royalty Case Hinges on 3 Words”

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    Big Pittsburgh Foundation Funds Education for Shale Industry

    Seems like every time we talk about Big Money foundations, those foundations (which are tax exempt) are far-left in philosophy and when they fund anything to do with the environment or education or business, it’s always with strings attached that said activity will have an anti-drilling bias. Need money for a new “study” to bash shale energy? Take your pick. In Philadelphia, there is the William Penn Foundation. In New York (and North Carolina) there’s the Park Foundation. And in Pittsburgh, the Heinz Foundation–run by Teresa Heinz Kerry (whom we call Mamma Teresa here on MDN). Hard left, all of them. So when we spotted an article about another Pittsburgh-based foundation–the Benedum Foundation–that is donating money to HELP the shale industry, well, we knew that’s a “man bites dog” story worthy of highlighting. The Benedum Foundation does a great deal of its grantmaking for science, technology, medical and engineering (STEM) education. Lately they’ve concentrated on training students who will, after school, land a job at someplace like CONSOL Energy, or the under-construction Shell ethane cracker plant in Beaver County. Although Benedum doesn’t spend nearly as much as the larger Heinz Foundation, we see Benedum as the antidote–a counterbalance–to some of the damage caused by Mamma Teresa and her married-into, huge piles of money that she spends to oppose shale energy…
    Read More “Big Pittsburgh Foundation Funds Education for Shale Industry”

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    WV Forced Pooling Lite Not Dead Yet – EQT Wants Special Session

    In early April MDN reported that West Virginia’s effort to pass a law dealing with co-tenancy and joint development–what we called forced pooling lite–had gone up in pot smoke (see WV Force Pooling Lite Goes Down in Flames – Lawmakers Blame Pot). Legislators in the House go bogged down debating pot smoking and didn’t have enough time to finish debate and vote on Senate Bill (SB) 576 (for background on what the bill would do, see Analysis of New WV Bill SB 576 re Co-Tenancy & Joint Development). The West Virginia Oil & Natural Gas Association (WVONGA) pulled out all the stops to support the legislation. They organized a bus-in rally at the Capital where nearly 1,000 people showed up to support the legislation (see WVONGA Delivers ~1,000 at Rally to Support Co-Tenancy, Joint Dev.). We thought for sure it was a fait accompli, because WV’s new Governor, Jim Justice, threw his support behind the bill. But at the last minute, the bill failed–as forced pooling bills have failed five times before. However, we did say this back in early April: “So is it curtains for the sixth time on forced pooling? We’re not ready yet to declare it dead during this legislative tenure. The governor in West Virginia has the power to convene a special session. We saw it happen when Earl Ray Tomblin was governor.” It seems our words were prophetic. EQT, one of the biggest drillers in the state, is pushing hard for Gov. Justice to convene a special session and to pass SB 576. EQT is providing some not-so-subtle pressure by indicating they may reallocate some of their drilling budget elsewhere if WV doesn’t pass the law…
    Read More “WV Forced Pooling Lite Not Dead Yet – EQT Wants Special Session”

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    WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe

    More twists and turns to report with respect to an issue we previously reported with the potential to impact every mineral rights owner and driller in West Virginia. In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). A member of the West Virginians for Property Rights group said members are “pretty nervous about this.” Those who already won the case say the high court’s decision to rehear is tantamount to playing the fourth quarter of a playoff game all over again–fundamentally unfair. The court will rehear the case next Tuesday–IF they don’t grant a motion to dismiss the rehearing. The mineral rights owners involved filed the motion saying the newest justice who just came on the bench in January should not have voted to rehear a case she previously didn’t hear…
    Read More “WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe”

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    NETL Researchers Find Tiny Earthquakes Help Marcellus Production

    Broadband seismometer used for surface seismic monitoring

    We hesitated to use the headline that we did, given the way virulent anti-drillers bastardize the issue of fracking and earthquakes. But we used it to make a point. Quick history: The headline-grabbing “fracking causes swarms of earthquakes” in places like Oklahoma is about frack wastewater that is injected in special saltwater injection wells, deep below the surface. There are, literally, hundreds of thousands of such wells across the country. Unfortunately, when such a well is located directly over or very close to an underground fault (large crack), the fluid getting injected acts like grease, allowing rock layers to slip and slide–in some cases causing low level earthquakes–typically earthquakes under 2.0 on the Richter scale (can’t be felt on the surface). Is fracking itself ever the cause? Statistically, no. But it has been documented to happen in a handful of cases–under 10 times in the entire world, out of millions of fracked wells. And again, it only happened because of fracking directly over an underground fault. However, any time you explode charges underground, which is what fracking is, if you have equipment sensitive enough, you can detect it. Is that an “earthquake”? We’d say no. Perhaps it is considered an “earthquake” according to a technical definition, but those extremely low vibrations are brief–typically 30-60 seconds–and they never cause any kind of harm on the surface. In fact, the vibrations can’t be felt at the surface. So our headline referring to “tiny earthquakes” is somewhat tongue-in-cheek, a way to tweak antis. Researchers at the National Energy Technology Laboratory (NETL) have discovered that those vibrations from fracking–what they call “low frequency tremors”–can be measured and used to figure out how to get more production out of Marcellus Shale wells in PA and WV…
    Read More “NETL Researchers Find Tiny Earthquakes Help Marcellus Production”

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    New 3.5 Mile Pipeline Project to Drill Under the Potomac River

    Click for larger version

    Columbia Pipeline, now owned by TransCanada, recently (in March) filed an application with the Federal Energy Regulatory Commission (FERC) to build a 3.5 mile, 8-inch pipeline that will carry natural gas from Pennsylvania to connect the Mountaineer Gas system in West Virginia with the Columbia Gas Pipeline in Pennsylvania. The purpose of the Eastern Panhandle Expansion project is to deliver natural gas via local distribution channels to a new industrial facility in Berkeley County, WV (scheduled to open in Fall 2017), and to provide gas to other local businesses and residents in the Tri-State area. Most of the pipeline crosses through a tiny sliver of Washington County, Maryland. The main issue with the project is that the pipeline will be drilled underneath the Potomac River, which serves as the border between WV and MD. That has antis in an uproar. The good news is that FERC has agreed to prepare an environmental assessment (EA) for the project. That is, this is now a real project with a high degree of likelihood it will get built…
    Read More “New 3.5 Mile Pipeline Project to Drill Under the Potomac River”