Marcellus Drilling News

Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

Why Did Shell Choose PA for its Ethane Cracker Plant?
September 6, 2016September 6, 2016

A great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…
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Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | Landfills | Wastewater | West Virginia

Antero Responds to Critics of New WV Wastewater Facility
September 6, 2016September 6, 2016

Two weeks ago MDN provided an update on the new Antero state-of-the-art frack wastewater treatment plant and landfill being built in West Virginia (see Update on Antero’s $275M Wastewater Facility in WV). Once built, this new plant will recycle 98% of the water used, for re-use by Antero in its fracking and drilling operations. According to Antero’s regional senior vice president and chief administrative officer, Al Shopp, although it may be cheaper to just inject the wastewater down an injection well somewhere, the more environmentally friendly, long-term solution is to do what they are doing–recycle it all. You might think that would please environmental Nazis–but you would be wrong. They want zero drilling and anything, including a better way to handle wastewater, will lead to more drilling and therefore is opposed by these nutters. Al Shopp responds to some of their nonsensical arguments against the new plant…
Read More “Antero Responds to Critics of New WV Wastewater Facility”
About MDN | Calendar

Calendar of Events for Sep 6 – Dec 5 (90 Days)
September 6, 2016September 6, 2016

Events related to drilling in the Marcellus and Utica Shale, primarily pro-drilling.

To have your event included (or if you are aware of a worthy event you believe should be on this page), please send the details and/or a link to have it included to the calendar@marcellusdrilling.com email address. Thank you!
Read More “Calendar of Events for Sep 6 – Dec 5 (90 Days)”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Sep 6, 2016
September 6, 2016September 6, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: GE Oil & Gas lays of workers in Western NY; fire at OH gas processing plant; the Geisinger embarrassment – no study, just junk science; why Rhode Island desperately needs a natgas pipeline; fracking fuels half of U.S. oil output; powergen demand for natgas jumped 9.4% in June; when will oil prices go up?; end in sight for natgas glut; and more!
Read More “Marcellus & Utica Shale Story Links: Tue, Sep 6, 2016”
Industrywide Issues | Ohio | Research | Statewide OH

Ohio 2Q16 Utica Production – Who Produced O&G Where & How Much
September 2, 2016September 2, 2016

The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the second quarter of 2016. Compared with second quarter 2015, production numbers in 2Q16 were a mixed bag. Oil production in 2Q16 dropped by 19%–that’s the bad news. But natural gas production from shale is up 51% year over year–that’s the good news. CONSOL Energy’s CNX Gas division had the #1 producing gas well in Monroe County, the Brewster well, producing 1.6 billion cubic feet of natgas during 2Q16. Eclipse Resources had the #1 producing oil well in Guernsey County, the monster Purple Hayes, which produced an astonishing 71,072 barrels of oil in 2Q16. Below we have the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference!…
Read More “Ohio 2Q16 Utica Production – Who Produced O&G Where & How Much”
Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Rice Energy Prime Prospect for M&A Buyout?
September 2, 2016September 2, 2016

One of the lowest cost producers that gets some of the highest prices for its natural gas in the Marcellus/Utica is Rice Energy. The difference between what it costs Rice to produce gas ($0.90/thousand cubic feet, or Mcf) verses what they sell it for (an average $3.12/Mcf) means Rice makes a whopping 247% internal rate of return, or IRR–which is THE most profitable driller among 10 of the largest Marcellus/Utica drillers surveyed (see today’s companion post on Hedging Gas Prices in the Marcellus/Utica). The Rice boys’ stellar performance has not gone unnoticed by analysts at investment and research firms. In fact, one such analyst, from Wolfe Research, says Rice “could be” a target for takeover/buyout by a larger competitor. Which competitor? Let’s name names…
Read More “Rice Energy Prime Prospect for M&A Buyout?”
Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PIOGA Loses Court Case Challenging PA DEP Standards for Permits
September 2, 2016September 2, 2016

UPDATE: PIOGA sent MDN an exclusive statement about the case. They intend to appeal. Read PIOGA’s statement below…

In 2013 a RINO justice on the Pennsylvania Supreme Court, Chief Justice Ron Castille, sold out the Marcellus industry and joined with three Democrats on the state’s high court to overturn a large and important part of the newly minted Act 13 drilling law, in a case known as Robinson v. Commonwealth of Pennsylvania (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). Part of the Act 13 law was left intact, but part of it, the part that directed local municipalities to craft zoning laws to include certain statewide uniform provisions concerning the location of oil and gas operations, was tossed (see What Does PA Supreme Court Decision on Act 13 Mean?). In June of this year, the Pennsylvania Independent Oil & Gas Association (PIOGA) argued a lawsuit against the PA Dept. of Environmental Protection (DEP) based on the tossed Act 13 case. PIOGA argued that part of the Act 13 law–the part that granted the DEP sweeping power to consider proposed impacts a well might have on public and natural resources when considering whether or not to issue a permit–was no longer valid. PIOGA said those parts of the law are directly related and intertwined with the part struck down by the Supreme Court. In other words, Act 13 in its original form, as passed, said the DEP could consider impacts on public and natural resources as part of the decisional process for issuing permits, but the Supremes struck down that part of the decisional process because they said it could not be implemented consistent with Act 13’s intent. PIOGA’s lawsuit pointed out that public natural resources were still protected by other laws operators must comply with and that the Supreme Court’s invalidation of Section 3215(c) meant that DEP ould no longer impose conditions in permits related to these other laws. A Commonwealth Court in PA ruled yesterday against PIOGA’s argument (full copy of the ruling embedded below). In essence, the court is picking and choosing which parts of a law that was duly passed it wants to have enforced, and the parts it doesn’t like it willy nilly tosses, which is bass ackwards. DEP must obey the Supreme Court’s rulings just as everyone does, but not for now courtesy of the Commonwealth Court…
Read More “PIOGA Loses Court Case Challenging PA DEP Standards for Permits”
CONSOL Energy | Energy Companies | Monroe County | Ohio | Statewide OH

Why CONSOL Energy Chose Ohio Utica as Place to Restart Drilling
September 2, 2016September 2, 2016

In 2015 CONSOL Energy temporarily quit all new drilling activity. In July of this year, they said they would restart their drilling activities, targeting the Ohio Utica (see CONSOL Energy to Restart Drilling in August – Mainly in Utica). The drill bit is now chewing away. CONSOL, once a coal company, has been a huge driller in the Marcellus. Why did it change focus to the Utica? What, about the Utica, turned CONSOL’s head in that direction?…
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Commodity Price | Industrywide Issues | Research

Hedging Gas Prices in Marcellus/Utica – Who Hedges & How Much?
September 2, 2016September 2, 2016

S&P Global Market Intelligence recently conducted research on 10 of the largest Marcellus/Utica drillers to discover which have “hedged” their 2017 production, and for how much. Hedging is a concept of pre-selling the gas you produce at a price you agree to now, in advance. Although that may sound risky, it’s actually an exercise in risk avoidance. It’s less risky to lock in favorable prices in advance rather than wait and potentially get far less. How do these drillers know what the prices will be a year from now? They don’t know, for sure, but there is something called the forward market, that predicts what prices will be at future dates. In fact, traders create contracts now based on prices in the future, and those contracts are reported by various news and data services, like NGI’s Forward Look publication. The S&P analysis finds that Antero Resources has hedged all of its 2017 production–in fact MORE than all (111% of it). National Fuel Gas Company’s Seneca Resources has hedged or pre-sold 87% of its 2017 production. A related and important question is, How much does it cost these drillers to produce their gas? Profit is the difference between what it costs to produce an Mcf (thousand cubic foot) of gas and what you get paid for it. Below is a VERY interesting table outlining those details for 10 of the top drillers in the Marcellus/Utica…
Read More “Hedging Gas Prices in Marcellus/Utica – Who Hedges & How Much?”
Carroll County | Electrical Generation | Industrywide Issues | Ohio

Crews Work Around the Clock on Carroll County Gas-Fired Elec Plant
September 2, 2016September 2, 2016

Carroll County Energy power plant – artist rendering

In July 2013 MDN brought you news that Carroll County Energy in Carroll County, OH–a subsidiary of Advanced Power Services–would spend $800 million to build a new 700-megawatt natural gas electric generating plant in the county to be fed by Utica Shale gas (see New NatGas Powered Electric Plant Coming to Carroll County, OH). It took a while, but in July 2015, two years later, officials held the official ground-breaking ceremony for the plant (see $800M Utica Gas-Fired Electric Plant Breaks Ground in Carroll Cnty). What about since then? Today crews are “working around the clock” on the plant. Here’s an update on yet another new natgas-fired electric plant getting built in the Utica/Marcellus…
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Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | Wastewater | West Virginia

Mon Power Completes Project to Support WV Shale Industry
September 2, 2016September 2, 2016

Last week MDN provided an update on Antero Resources’ $275 million state-of-the-art frack wastewater treatment plant in Doddridge County, WV (see Update on Antero’s $275M Wastewater Facility in WV). Things are progressing very nicely at the facility. Another important piece has just fallen into place for the facility. In order to operate it, you need LOTS of electricity. Enter Mon Power. Mon has just completed a new substation and power lines–a $5 million project–to provide electric service to the Antero frack wastewater treatment plant being built…
Read More “Mon Power Completes Project to Support WV Shale Industry”
Air Quality | Industrywide Issues | Research

EID Destroys Johns Hopkins “Research” on Marc. Fracking & Asthma
September 2, 2016September 2, 2016

Last week MDN alerted you to yet another study, in a long line of such studies, issued by anti-drilling zealots pretending to be researchers at Johns Hopkins University (see Johns Hopkins Junk Science: Fracking Gives You Headaches). In July this same group of agenda-driven researchers released a report supposedly tying Marcellus drilling to asthma (see Sham “Study” from Johns Hopkins Says Fracking Makes Athsma Worse). An opinion article run on the mighty United Press International wire, authored by Energy in Depth’s Dr. Katie Brown, takes Johns Hopkins to the woodshed. In Brown’s article, she obliterates the so-called research done by this group, in particular their shoddy report on asthma, and exposes them for the agenda-driven environmental frauds they are. It is a superb article…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Sep 2, 2016
September 2, 2016September 6, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FERC rejects open bidding exemption for Access Northeast; MPLX’s plan to move northeast condensate and natural gasoline; pipeline cybersecurity issues in the Marcellus; PA says NY’s Cuomo is screwing PA’s energy industry; NY AG is hiding something; Utica rig count & permits up; natgas vehicles in OH; LNG pricing changes ahead; French shale gas? Maybe!; and more!!
Read More “Marcellus & Utica Shale Story Links: Fri, Sep 2, 2016”
Geauga County | Ohio | Portage County | Stark County | Summit County

PA Conventional Driller Seeks $25M to Begin Shale Drilling in OH
September 1, 2016September 1, 2016

Click for larger version

A Pittsburgh-area investment company with a conventional oil and gas drilling division has decided the time is right to enter the unconventional (shale) drilling game. Bryan Investment Group, which operates Discovery Oil & Gas, LLC, is tapping its investors on the shoulder looking for $25 million to begin drilling in the Clinton/Medina sandstone layer–a rock layer that sits between the Marcellus Shale above it (Devonian group), and the Utica Shale below it (Ordovician group). According to president and general managing partner Richard Bryan, targeting the spaces between good wells drilled in the past is “painstaking work,” but it’s their specialty/niche. Bryan Investment intends to drill new Clinton/Medina wells in “the land between” in a four-county area of northeastern Ohio…
Read More “PA Conventional Driller Seeks $25M to Begin Shale Drilling in OH”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf Searching for New DEP Sec 3 Mo After Firing Quigley
September 1, 2016September 1, 2016

Patrick McDonnell Acting Secretary, DEP

In May (three months ago), Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was fired for using a PRIVATE email account to collude with his Big Green friends to try and bully PA’s legislators into supporting his onerous proposed regulations (see Smoking Gun: Copy of the Email that Got John Quigley Fired). Richly deserved. The man who took his place as Acting Secretary is Patrick McDonnell, a 19-year veteran of the DEP. We haven’t seen or heard much of McDonnell, but what we have seen and heard (via media reports) seems to be that McDonnell is a “get it done without generating controversy” kind of guy. Radical environmental groups don’t seem overly thrilled with McDonnell as Secretary (see PA’s New Acting Sec DEP: What Do We Know? Will He Be Permanent?). He is a man-made global warming flummery believer, so that’s a strike against him. But a lot of otherwise rational adults believe in such fairy tales, so we won’t hold it against him (too much). One thing is for sure: McDonnell wants to move from “Acting” to permanent Secretary of the DEP. However, it’s not looking promising that Gov. Tom Wolf will make his appointment permanent. It’s now been 90 days since Quigley was given the boot. Wolf has only 90 days to nominate someone. A common practice, when you’re not ready to nominate, is to use a placeholder name. Wolf has done so, and the placeholder name is not McDonnell’s…
Read More “PA Gov Wolf Searching for New DEP Sec 3 Mo After Firing Quigley”
Energy Services | Industrywide Issues | Pipelines | Regulation | Spectra Energy

Spectra Energy Pushes Back Against New England Pipeline Naysayers
September 1, 2016September 1, 2016

Two weeks ago the Massachusetts Supreme Judicial Court (MA’s highest court) ruled that utility companies, which are heavily regulated and the prices they can charge controlled, cannot pass along the cost of a pipeline to electric ratepayers (see MA Supreme Court Ruling Endangers New England Gas Pipelines). The ruling had the effect of ending contracts from several utility companies with Spectra Energy for their Access Northeast pipeline–to bring Marcellus/Utica natural gas to critically starved-for-gas New England. We speculated at the time that this action may end the Access Northeast project. But a week later, Spectra Energy committed to continuing the project (see Spectra Spits in MA High Court’s Eye – We’ll Still Build Pipeline). However, regional natgas distribution companies, along with LNG importer GDF Suez, continues to try and sink the Access Northeast project for selfish reasons–to suppress competition that would come from the pipeline. It’s all wrapped up in a “tariff” case now before the Federal Energy Regulatory Commission (FERC). It’s complicated, but we’ll try and explain it in lay terms. At the root of the issue is that some existing natgas suppliers in New England benefit from lack of supply in the region (including Engie Gas & LNG, NextEra Energy Resources and PSEG). They benefit from “congestion” and lack of supply in New England–therefore Spectra has taken to calling them “Congestionaters” in their filings with FERC. We call them the Terminators…
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