Statewide WV

Antero Resources | Doddridge County | Energy Companies | Energy Services | Industrywide Issues | MarkWest Energy | Pipelines | Processing Plants | Statewide WV | West Virginia

MarkWest Opens Sherwood I Wet Gas Processing Facility in WV
October 31, 2012October 31, 2012

MarkWest, a huge midstream (pipeline & processing facilities) company and Antero Resources, a Marcellus Shale driller, inked a deal in May 2012 for MarkWest to gather and process Antero’s wet gas, or natural gas liquids in West Virginia (see this MDN story).

MarkWest announced today the first phase of that deal is now online with the commencement of operations at the Sherwood I facility in Doddridge County, WV. The Sherwood I facility has the capacity to process 200 million cubic feet per day of wet gas. MarkWest is building Sherwood II now, which would add an additional 200 Mmcf/d of capacity. Eventually a third Sherwood facility may be built for a total capacity of 600 Mmcf/d.

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Economic Impact | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Sandy’s Effect on Marcellus/Utica Shale Drilling & Production
October 30, 2012October 30, 2012

It seems the entire country watched with morbid fascination as Hurricane-now-Super Storm Sandy slammed into the northeast yesterday. The exceptionally large and powerful storm—some 1,000 miles across—lingers over what is essentially the Marcellus and Utica Shale region of the U.S. As of early Tuesday more than 5 million people are without power due to storm damage. New York was heavily hit with the highest storm surge to hit Manhattan in over 200 years, flooding subway tunnels and covering some city streets. The New York Stock Exchange is closed for two consecutive days for the first time since 1888. Truly history in the making.

How will Sandy affect drilling, production and refining in the Marcellus? Reports came in yesterday that refineries were shutting down in advance of the storm. Production coming from the field likely will not be affected all that much, but drilling is another matter. Some drilling operators reported they would lay down rig masts until the storm passes.

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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Industrywide Issues | M&A | Ohio | Statewide OH | Statewide WV | West Virginia

Magnum Hunter Buys Virco for $106.7M with 51,500 Net Acres
October 25, 2012October 25, 2012

Magnum Hunter announced this morning they’ve purchased 100% of privately-held Viking International Resources, Inc. (“Virco”) for $106.7 million using a stock swap and cash. The deal means Magnum Hunter will get an additional 51,500 net acres in the Marcellus and Utica Shale in West Virginia and Ohio, pushing their total acreage to something just over 166,000 acres throughout the Appalachian region. Management already has it’s eye on the new acreage and has identified 74 new drilling locations in the Marcellus and 31 new locations in the Utica Shale.

Details on the transaction and what it means:

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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Tax Dept. Will Not Tax Well Pad Sites for Landowners
October 23, 2012October 23, 2012

The West Virginia Tax Department has decided they will not assess a property tax value to well pad sites for landowners. Officials were concerned that by assessing a value for a well pad site it would cause the landowner, who may not even own the mineral rights, to be classified in a higher tax bracket. This is good news for West Virginia landowners.

How the decision to not assess well pad sites was made:

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Statewide WV | West Virginia

WV Shale Marcellus Drilling & Production – By the Numbers
October 19, 2012October 19, 2012

A fantastic article in the West Virginia The State Journal takes a close look at natural gas production numbers from shale gas drilling in the state. It’s the kind of article MDN wishes it had written! In their review of the numbers, The State Journal asks a teaser question in the opening: Which county has produced the most shale gas in the state? You might guess Wetzel or Marshall counties. But you would be wrong. The county producing the most shale gas (to date, since shale gas drilling began in Dec. 2007), is Harrison County.

Here’s a few interesting highlights from this “mother load of information” article:

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Hydraulic Fracturing | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Surprising Data on Rig Counts for Dry vs Wet Gas Drilling
October 15, 2012October 15, 2012

Seeking Alpha blogger Richard Zeits, whom we’ve highlighted before on MDN, is back with a new analysis of the latest Baker Hughes rig count. You need rigs to drill the holes—so the rig count is a good indicator of whether new drilling is going up, down or staying constant.

In Zeits’ extensive analysis (well worth your time to read and digest), he draws some conclusions about wet gas (natural gas liquids) versus dry gas (methane only) drilling as evidenced by the Baker Hughes numbers. His conclusions may surprise you, as it did us:

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Lease & Royalty Payments | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Lease Bonus Payments for Marcellus & Utica Reach New Highs
October 12, 2012October 12, 2012

Because the sale price of domestically produced oil and natural gas has gone down over the past year, royalties for landowners have gone down as well. However, the bonus payments landowners receive when signing a new lease agreement have gone up—way up in the Marcellus and Utica Shale.

A newly released survey (embedded below) from Farmers National Co., a real estate management company for property owners, shows a dramatic increase for bonus deals in West Virginia (up 1.75 times), in Pennsylvania (more than doubling, up 2.3 times), but most dramatically, in Ohio (up nearly 13 times from a year ago). The largest reported lease signing bonus in Ohio for 3Q12 was a whopping $8,200 per acre.

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Economic Impact | Industrywide Issues | Maryland | New York | Ohio | Pennsylvania | Research | Statewide MD | Statewide NY | Statewide OH | Statewide PA | Statewide VA | Statewide WV | Utica Shale | Virginia | West Virginia

USGS Releases Official Estimate of Oil & Gas in Utica Shale
October 5, 2012October 5, 2012

The U.S. Geological Survey (USGS) has just released their first official assessment (i.e. estimate) of how much recoverable natural gas, oil and gas liquids is located in the Utica Shale throughout Ohio, West Virginia, Pennsylvania, New York, Maryland and Virginia (a full copy of the USGS assessment is embedded below).

The USGS estimates the Utica is #3 in size behind the Marcellus (#1) and Green River Basin (#2) for volume of recoverable natural gas in the U.S. Here are the numbers from the USGS, along with and a brief introduction to their first-ever assessment of the Utica:

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Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Processing Plants | Statewide PA | Statewide WV | West Virginia | Williams

Williams Official Gives WV Huge Compliment, Disses PA
October 5, 2012October 5, 2012

At a Chamber of Commerce dinner in Marshall County, WV held last night, Darrell Bull, the general manager of Williams Ohio Valley Midstream (a division of midstream giant Williams) paid a huge compliment to West Virginia and dissed Pennsylvania.

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Industrywide Issues | Litigation | Statewide WV | West Virginia

Important Case in WV Supreme Court This Week
September 24, 2012September 24, 2012

An important case for surface rights owners goes before the West Virginia Supreme Court on Tuesday. The court will hear a case to determine whether or not surface landowners—those without the rights to minerals in the ground—have the right to appeal oil and gas drilling permits that allow companies to erect drilling sites on their land. As with most legal matters, this one gets complicated:

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Industrywide Issues | Jobs | Statewide WV | Upshur County | West Virginia

Tangible Evidence of the Change from Dry to Wet Gas Drilling
September 19, 2012September 19, 2012

For some time there have been rumblings of how drilling activity is moving from “dry gas” (methane only) to “wet gas” (methane plus natural gas liquids like ethane, pentane and butane) areas. It seemed you couldn’t read a quarterly financial update from an energy company that didn’t mention such a move. And while slowdowns were apparent in some isolated areas, frankly, the actions just didn’t seem to match the words.

Here’s a bit of news that provides tangible evidence of the change from dry to wet gas drilling. Great Plains Oilfield Rentals, a company that employs 120 people in and around Buckhannon in Upshur County, WV (center of the state), is moving—to the upper panhandle area of West Virginia. Why? Wet gas drilling.

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Commodity Price | Economic Impact | Hydraulic Fracturing | Industrywide Issues | Statewide WV | West Virginia

WV Gas Utility Files to Reduce Rates for All Customers
September 17, 2012September 17, 2012

Once again an abundance of clean-burning Marcellus Shale natural gas is benefiting everyone—not just energy companies and landowners. Mountaineer Gas Company, serving 226,000 residential and business customers and the largest natural gas distribution company in West Virginia, recently filed to lower rates on natural gas for its customers by a substantial amount:

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Hydraulic Fracturing | Industrywide Issues | Statewide WV | West Virginia

WV Chapter of Sierra Club Takes MDN to Task
September 13, 2012September 13, 2012

Yesterday MDN reported on a Tuesday gathering of anti-drillers in West Virginia calling for no further Marcellus Shale drilling permits to be issued until certain conditions are met (see this MDN story). Jim Sconyers, chairman of the WV Sierra Club, wrote to MDN, taking us to task over our characterization of that meeting.

Here’s Mr. Sconyer’s email:

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Hydraulic Fracturing | Industrywide Issues | Statewide WV | West Virginia

Sierra Club, Others Call for Moratorium on New Drilling in WV
September 12, 2012September 12, 2012

Eleven so-called environmental groups, led by the nose by the Sierra Club, held a small anti-drilling protest rally yesterday at the West Virginia State Capitol where they demanded a moratorium on granting any new permits to drill in the Marcellus Shale. They handed Gov. Earl Ray Tomblin and legislators in town for meetings their list of demands.

The groups are anti-drilling and anti-fracking and want stricter rules for drilling than currently exist in WV, among them:

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Housing | Industrywide Issues | Statewide WV | Taxation | West Virginia

Hotel Tax Loophole in WV Benefits Drillers, Ending Soon?
September 11, 2012September 11, 2012

A tax loophole in West Virginia on hotels and motels, designed to benefit politicians, has had an unintended consequence: It’s now benefiting the Marcellus Shale drilling industry.

In 1975 the West Virginia legislature passed a law allowing local municipalities the option of charging up to a 3% tax on hotel and motel rooms. In 2005, they raised it to 6%. However, the politicians included an exemption: No tax on hotel and motel stays of over 30 days.

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Economic Impact | Industrywide Issues | Jobs | Statewide WV | West Virginia

New Study: Decline of Coal/Rise of Shale Gas in WV
September 7, 2012September 7, 2012

The West Virginia Center on Budget & Policy has just published a new report in an ongoing series called “The State of Working West Virginia.” This new report is titled “In Depth: The Gas Boom and Coal Bust” (a full copy is embedded below). The 34-page report, as the title indicates, takes a look at the tax and employment impacts of West Virginia’s coal industry which is sinking fast, and the upcoming Marcellus Shale industry which is rising fast.

The authors of the study advocate a new severance tax on shale gas (and coal) as one way to help the state. They also think the minimum wage should be increased from $7.25 per hour to $9.80. While most of the study centers on jobs and the economy of West Virginia, the section most MDN readers will want to read is Section Five, pages 21-27. That’s the section dealing directly with coal and natural gas in the state, including this interesting graph showing an estimate for natural gas production in WV through 2035:

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