Carbon Natural Gas Targets Chattanooga Shale in TN
Carbon Natural Gas Company, an independent oil and gas exploration and production company, owns, operates and develops oil and gas properties in the Appalachian, Illinois and Ventura Basin areas of the U.S. Most of the wells they own and operate are conventional. However, the company is dipping its toe into unconventional shale as well. Yesterday Carbon issued a press release to announce they have formed a subsidiary called Carbon Appalachian Company, with backing from two unnamed institutional investors. The new venture has access to a whopping $100 million to get them going, with $20 million of that going to the purchase of “natural gas producing properties and related facilities” located in Tennessee. Currently the existing wells just purchased by Carbon in TN produce a measly 3.6 million cubic feet per day (Mcf/d) of mostly natural gas. You paid $20M for that?! Aaahh, there’s more to the story. The acreage that comes with the wells is located in the Chattanooga Shale–a shale layer much shallower than the Marcellus or Utica. Carbon plans to drill horizontal wells in the Chattanooga. Which got us to thinking: How active is the Chattanooga? Who else is drilling there? Is there shale drilling in TN? We found some answers…
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The Mountain Valley Pipeline (MVP) is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. The project has faced stiff opposition from landowners in both West Virginia and Virginia. Although the project is not yet fully approved by the Federal Energy Regulatory Commission (FERC), the project did get a favorable Draft Environmental Impact Statement from FERC last September (see 
On Monday Pennsylvania House Republicans released their version of a state budget, and yesterday (Tuesday) they voted to pass it. Ba-boom! The budget is noteworthy for many reasons. Of prime interest to MDN is that the budget does NOT include PA Gov. Tom Wolf’s insane 6.5% severance tax (see 
Luuucy! You have some ‘splainin’ to do! Somebody at the Scranton Times-Tribune, a reliably anti-drilling rag in the heart of Marcellus country, will have some explaining to do about an editorial that just ran in the Times-Tribune’s sister publication the Wilkes-Barre Citizens’ Voice. We can’t remember the last time we read a positive editorial about the drilling industry in either the Times-Tribune or the Citizens’ Voice, but yesterday it happened. A editorial in the Citizens’ Voice deals with eminent domain being used for pipeline projects, including Atlantic Sunrise. You may recall we recently highlighted the news that Williams has (regrettably) had to file eminent domain cases against 27 holdout landowners in northeast PA (see 
Pssst. Hey buddy. Got a spare power plant you want to sell? Consumers Energy is Michigan’s largest utility, providing natural gas and electricity to 6.7 million of the state’s 10 million residents in all 68 Lower Peninsula counties. Consumers is canceling an existing contract with Entergy’s Palisades nuclear plant in 2018 and needs to replace the electricity they were buying from the plant. So Consumers is going shopping–for a natural gas-fired power plant that can provide up to 800 megawatts of electricity. Who wants to lay odds that whichever plant they end up buying will be supplied, at least partially, but Utica/Marcellus gas…
As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Patterson was our “canary down the mine shaft” for discerning when the deep, dark recession in drilling would turn around. It happened in June 2016–and every single month since that time, including the month of March. In fact, Patterson’s March rig count jumped by 10, to an average of 88 active rigs operating in the U.S. That’s the biggest single monthly increase since they began adding rigs again last June…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: US natgas storage capacity increased in 2016; US coal companies ask Trump to stay in Paris climate deal (huh?); the rigs just keep on a comin’; is natgas in the midsts of a boom and bust cycle; petroleum exports from US grow; cyber attack risk for o&g industry; Fox eats EPA’s Scott Pruitt, alive; and more!
Early Sunday morning there was a low-level earthquake in Monroe County, OH–that literally nobody felt–but was picked up on seismic monitors by the U.S. Geological Survey. There was, according to the Ohio Dept. of Natural Resources (ODNR) one fracking operation “near” the earthquake that ODNR shut down within an hour after the event–out of an abundance of caution. Immediately several radical anti-drilling groups, including the Ohio Environmental Council and the Sierra Club, jumped on the news and declared fracking unsafe and too risky in the nearby Wayne National Forest. With zero proof that it was tied to either fracking or wastewater injection wells. Here’s the news, and the way the news is being distorted by antis…
This is a story we have not previously covered on MDN. It goes back to 2010 and involves two of the biggest Marcellus/Utica drillers–although in this case the issue is not related to the Marcellus/Utica. Landowners in southwestern Virginia previously sued both EQT and CONSOL Energy’s CNX subsidiary over charges that EQT and CNX shorted landowners out of royalties owed to them, claiming post-production expenses, deductions for severance taxes, etc. that should not have been taken. The wells drilled were conventional wells–some 3,347 EQT wells and 4,261 CNX wells. The vertical wells targeted methane extraction from coal seams–not horizontal wells through shale, which is far more common today. Some lawsuits were green lighted as class action cases in 2013, with a potential for “thousands of landowners” to participate in sharing $30 million in payouts. Last week a federal judge certified three of the five class action lawsuits, allowing them to move forward…
A few weeks ago MDN reported on an upcoming meeting (to be held March 27) in Monroe County, OH to announce a new project to build a 485-megawatt Utica gas-fired electric plant (see 
West Virginia has become a hotbed of pipeline projects. You don’t realize it until you stand back and consider all of the proposed projects for major interstate natural gas (or gas liquids) pipelines. There are, in fact, nine such major projects on the board. Some of them either are, or soon will be, under construction. Not all of them are yet approved by their respective regulatory agencies–but most are. If we were to bet, we’d bet most of the nine will get built. Can you name all nine projects? Let us give you some help: Atlantic Coast, Mountain Valley, Western Marcellus, WB XPress, Leach XPress, Mountaineer XPress, Buckeye XPress, Rover, and Appalachian Storage Hub. Actually that last one, the storage hub, is a series of six pipelines–but we lump them all into one project. Here’s a summary of each project, most of them coming soon to the Mountain State…
Antero Resources is one of the biggest drillers in the Marcellus/Utica. Antero can’t seem to buy enough Marcellus acreage, mostly in West Virginia. Last year the company snapped up close to 80,000 Marcellus acres, mostly in WV (see 
EXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out a year ago, has abandoned the Marcellus at this point (see 
Big news broke Friday afternoon. Short history lesson for those who are new to MDN: There were 14 families along the Carter Road area of Dimock Township, PA (Susquehanna County) that reportedly experienced turbidity in their water from methane migrating, supposedly from Cabot’s drilling operations nearby. The state Dept. of Environmental Protection (DEP) investigated in 2010 and declared Cabot guilty and imposed stiff fines and requirements, including a requirement to install permanent water treatment systems at each home and even an offer to each of the families to pay twice what their property was worth at the time (see 
As sometimes happens, Williams has had to file 27 eminent domain lawsuits against landowners in northeastern and central Pennsylvania–landowners who have refused to negotiate with the company to allow the now FERC-approved Atlantic Sunrise Pipeline to cross their property. We understand the reluctance of some landowners who would rather not have the pipeline cross their property. But we also understand the necessity of the project–and the need to be reasonable. Some landowners are not reasonable. And so eminent domain is a rare, option-of-last-resort necessity in those cases. But don’t shed too many tears for landowners now being sued. One PA landowner in Luzerne County (Wilkes-Barre area) was originally offered $260,000 for an easement on 7.6 acres of land ($34,211/acre!). He refused. The price has now dropped to $225,000. Guess he should have signed before eminent domain was on the table…