Marcellus Drilling News

Industrywide Issues | Jobs

Looking for an O&G Job? Check Out This Resource
May 6, 2016May 6, 2016

Hey, it’s tough out there in the oil and gas patch. Something like 200,000+ workers in the industry have been laid off in the past year and a half. Now, somebody wants to do something about it. Oilandgaspeople.com, an online job site for the oil and gas industry, recently announced they are making their service 100% free for recruiters. Now companies with jobs in the industry can advertise those jobs, for free, on website that gets an astounding 1 million+ visitors a month. Let’s help the industry out! Post your jobs and get them filled with a qualified candidate…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, May 6, 2016
May 6, 2016May 6, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA energy advisor moves from gov to PUC; PA lawmakers attempt to stop new o&g drilling regs; energy infrastructure in New England badly needs an update; new underground storage rules coming from the feds; is fracking as dirty as coal?; what the failed Halliburton/BH deal means for the oil service industry; skeptics mock White House “support” for natgas; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, May 6, 2016”
Industrywide Issues | Ohio | Research | Statewide OH

2 New Shale Layers in Eastern Ohio “Good Candidates” for Drilling
May 5, 2016May 5, 2016

Click for larger version

A new report has just been issued by the Ohio Dept. of Natural Resources (ODNR) Division of Geological Survey. The report is titled “Mapping Source Rock and Thermal Maturity of the Devonian Shale Interval in Eastern Ohio” (full copy embedded below). The report, with lots of helpful maps, takes a close look at the Devonian Shale layer, which is composed of a number of sub-layers. The report concludes that two of those sub-layers–the Huron Shale and Rhinestreet Shale–have “significant oil and gas potential and may be good candidates for modern-day horizontal drilling techniques.” Cool! Beyond the Utica/Point Pleasant and the Marcellus, it appears that there are now other very promising layers in eastern Ohio–enough shale oil and gas to keep Ohio drillers busy for the next 100 years and more…
Read More “2 New Shale Layers in Eastern Ohio “Good Candidates” for Drilling”
Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Spectra Energy | Westmoreland County

Preliminary Guess on TETCO Pipeline Explosion Cause: Corrosion
May 5, 2016May 5, 2016

There was an explosion and fire in Spectra Energy’s Texas Eastern Transmission’s (TETCO) “Delmont Line 27” pipeline last Friday (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). The explosion occurred in Salem Township in Westmoreland County, PA, about 30 miles east of Pittsburgh. Although the cause of the explosion is still not known for sure, investigators do have a working theory–corrosion along welded seams in the pipeline. Investigators from the U.S Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) still say, officially, that the cause is “unknown” and the investigation “ongoing.” However, those same investigators have said they found evidence of corrosion and they’ve ordered another section of the pipeline in the area to be dug up, removed, and sent for analysis. Here’s the latest on the situation, along with an estimate of when service might be returned on this very important pipeline…
Read More “Preliminary Guess on TETCO Pipeline Explosion Cause: Corrosion”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Says PA Cracker Decision Coming < 12 Months - Looking Good
May 5, 2016May 5, 2016

The muckety-mucks from Shell held their quarterly earnings phone call with analysts yesterday–and there is what we consider big news to report coming from that call. In response to a question from an analyst, Shell’s Chief Financial Officer, Simon Henry, commented there are four major “chemicals” projects currently under consideration by Shell. He also said a decision on the PA cracker plant project planned in Beaver County will likely be the first decision to be made because of “the timing of certain commitments that are already in place.” He added these glowing words about the PA cracker: “It’s an excellent project…[that] provides quite some portfolio resilience relative to the rest of the opportunities.” He later said “It’s a very strong and robust project.” If the price of oil were higher than the current $40, pulling the trigger on the PA cracker would be “a very easy decision.” When you read his comments, it’s hard to miss the enthusiasm at the highest echelons inside Shell…
Read More “Shell Says PA Cracker Decision Coming < 12 Months - Looking Good"
Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

PTT Global Says OH Cracker Decision “Delayed” Until 2017
May 5, 2016May 5, 2016

It’s only been one year since Thailand-based PTT Global Chemical announced they are interested in building a $5 billion ethane cracker plant complex in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since that time PTT has been busy, spending (by our estimates) at least $150 million on the project (see our list of PTT stories here). However, from the very beginning, PTT let it be known a final decision on whether or not to invest the whole $5 billion would not come until 2016 or 2017. We know have confirmation from PTT that the final decision will (disappointingly) come in 2017. The reason for the “delay” in the decision? Falling oil prices…
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Energy Services | Patterson-UTI

Patterson-UTI Rig Count for April Hits Another New Low
May 5, 2016May 5, 2016

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). Month by month Paterson’s rig count has declined over the past year plus. April was no different. Patterson reports operating an average of 56 rigs in April, versus 64 in March–a big 12.5% drop and a new low. Once again we ask, how low can it go? Below is our running Patterson-UTI rig count chart that shows the sad story…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | M&A | TC Energy/TransCanada

TransCanada to Refile FTC Merger Notification in Columbia Deal
May 5, 2016May 5, 2016

In March MDN reported that Canadian midstream giant TransCanada wants a bigger piece of the Marcellus/Utica midstream (i.e. pipeline) pie and has decided to buy Columbia Pipeline Group for $10 billion (see TransCanada Makes Play to Buy Columbia Pipeline for $10B). Columbia Pipeline shareholders are due to vote on the deal in June (see Columbia Pipeline Shareholders to Vote on TransCanada Deal June 22). But what’s this? Apparently there’s been a small bump on the road to a happy union. TransCanada announced yesterday they have withdraw their pre-merger notification with the U.S. Federal Trade Commission (FTC) and will refile the notification again on May 6 (tomorrow). Why? To restart the clock for FTC regulators who are reviewing the deal. Apparently there is a 30-day period at the end of which the FTC must render an opinion. Sometimes big, complex deals like this one take longer than 30 days, so a common practice is to pull the notification and re-file to buy the FTC more time…
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Energy Companies | Energy Services | Rice Energy | Rice Midstream

Rice Energy 1Q16: Prod. Up 53%; Drilled 19 New Wells; Lost $21M
May 5, 2016May 5, 2016

Rice Energy, one of the newest and brightest drillers in the Marcellus/Utica, released their first quarter 2016 update yesterday. The company reports production averaged 675 million cubic feet equivalent per day (Mmcfe/d) during 1Q16, a 53% increase over 1Q15 (and up 8% from 4Q15). On the financial side the company lost $21 million during 1Q16, versus making $152,000 in 1Q15. Pretty mild compared to most. During 1Q16 Rice drilled 11 new Marcellus wells and 8 new Utica wells. Good to see someone is still drilling! Here’s the update, along with a great PowerPoint slide deck…
Read More “Rice Energy 1Q16: Prod. Up 53%; Drilled 19 New Wells; Lost $21M”
Eclipse Resources | Energy Companies

Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes”
May 5, 2016January 4, 2017

Eclipse Resources released their first quarter 2016 update yesterday. Although Eclipse, a Marcellus/Utica pure play driller headquartered in State College, PA (but drilling mostly in Ohio), has curtailed or shut-in some of it’s production given low prices for gas, they still posted an impressive 26% increase in production in 1Q16 over 1Q15. While we’ve heard of Prince and his “Purple Rain,” we hadn’t heard of Eclipse’s “Purple Hayes”–which is a Utica well with an underground lateral reaching out 18,500 feet–3.5 miles! During 1Q16 Eclipse drilled their Purple Hayes well in under 18 days. Amazing! Even more amazing–the well was completed with 124 frac stages. It is believed to be the longest onshore later well ever drilled. Kudos to Eclipse! On the downside, the company lost $41 million in 1Q16…
Read More “Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes””
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, May 5, 2016
May 5, 2016May 5, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: The well runs dry for the little guy; BLM finds “no significant impact” in WNF from o&g leasing; Vallourec posts big loss; Hilcorp pad still shut down for earthquake investigation; Baker Hughes evolving; future of U.S. shale is…Mexico?; how is natgas stored?; Trump to keynote Bakken event; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, May 5, 2016”
Allegheny County | Industrywide Issues | Litigation | Pennsylvania | Regulation

South Fayette, PA Restrictive Drilling Ordinance Tossed by Judge
May 4, 2016May 4, 2016

Something noteworthy has happened in western Pennsylvania and (so far) local media has chosen not to cover it. So MDN is happy to break the following story about South Fayette Township in Allegheny County (near Pittsburgh). South Fayette is one of seven PA towns that sued the state after the Act 13 law was enacted in 2012 (see Lawsuit Filed: PA Towns Sue State over Marcellus Act 13 Law). Ultimately the towns won their case at the PA Supreme Court level, winning the right to enact their own ordinances with respect to oil and gas drilling. A nutty concept that towns have the necessary skills to regulate a complex industry like oil and gas–but there you go. Range Resources and landowners in the town, including Cuddy Partners, have had a long-running feud with the town over their hyper-restrictive ordinances (see Pittsburgh Post-Gazette article Drilling regulations face challenge in South Fayette). In 2015 South Fayette decided to revise their ordinance yet again with respect to shale drilling, making the ordinance even more restrictive than before. Cuddy Partners and Alpine Partners (landowners in the town) sued over the revised ordinance. The lawsuit alleged the ordinance was improperly enacted–rushed through without proper public notice. Last week Allegheny Court of Common Pleas Judge Joseph James agreed and ruled that the South Fayette revised ordinance is “invalid, null and void”…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | PennEast Pipeline

PennEast Responds to Sham NJ Lawsuit Re Surveying w/o Permission
May 4, 2016May 4, 2016

PennEast Pipeline Route Map – click image for larger version

A couple of radical anti-fossil fuel groups, aided and abetted by a few landowners (members of said groups) have filed a frivolous lawsuit on Monday in New Jersey Superior Court against PennEast Pipeline claiming surveyors have illegally trespassed on private property to conduct surveys–against the wishes of said radicals, some of whom happen to be landowners in the path of the proposed pipeline. PennEast Pipeline is a $1 billion, 118-mile pipeline project that will run from near Wilkes-Barre, PA to near Trenton, NJ. The two groups behind this latest sleazy lawsuit are Homeowners Against Land Taking – PennEast Inc. (HALT PennEast) and the New Jersey Conservation Foundation. There’s nothing like a good lawsuit to drive more donations. “Help! We’re David and we’re suing Goliath. We need YOUR money.” Pathetic. PennEast has responded that the claims of trespassing to survey are (our words) horse manure. PennEast checks carefully before entering a property to survey. The pipeline company said when they get a copy of the frivolous lawsuit they will mount a vigorous defense. The radicals just may have bitten off more than they can chew this time…
Read More “PennEast Responds to Sham NJ Lawsuit Re Surveying w/o Permission”
Alpha Natural Resources | Energy Companies | EQT Corp | Equinor/Statoil | Lease & Royalty Payments | Rice Energy

EQT, Rice Energy Deals Show Price per Acre for Leases Still High
May 4, 2016May 4, 2016

Yesterday MDN brought you the news that EQT has cut a deal to buy all of Norwegian Statoil’s operated Marcellus assets in West Virginia for $407 million (see EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M). One of MDN’s favorite energy analysts, Richard Zeits, writing on the Seeking Alpha website, does a close examination of the deal. We have a portion of this thoughts below. As part of Zeits’ deep dive on this deal, he takes a side road and compares how much EQT is paying per acre in this deal with the recently announced Rice Energy deal to purchase the Marcellus assets of bankrupt coal company Alpha Natural Resources (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). Zeits finds the per-acre price being paid by EQT is less than the Rice deal. But the real eye-opener is that the prices each are paying is still quite high–perhaps an indication that once unleased or expired lease acreage heats up again, prices will remain high…
Read More “EQT, Rice Energy Deals Show Price per Acre for Leases Still High”
Baker Hughes | Energy Services | Halliburton

Halliburton CEO Talks About Failed BH Merger, Industry Turnaround
May 4, 2016May 4, 2016

David Lesar

Halliburton, the second largest oilfield services company in the world, released its first quarter 2016 update yesterday. Along with it, Halliburton CEO Dave Lesar held court with stock analysts on a ubiquitous quarterly earnings call. Among Lesar’s comments is that he thinks the oil and gas industry is right now beginning to turn more positive. Lesar believes that drilling will begin to pick up again later this year. He also had a number of comments, and questions, about the failed takeover/merger attempt with Baker Hughes (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). We found Lesar’s prepared remarks interesting and thought you would too…
Read More “Halliburton CEO Talks About Failed BH Merger, Industry Turnaround”
Energy Companies | EXCO Resources

EXCO Resources 1Q16: Marcellus Production Up w/o New Drilling?
May 4, 2016May 4, 2016

EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point (see EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%). Yesterday EXCO issued its first quarter 2016 update. The update shows the company continues to ignore the Marcellus and instead concentrate on other areas. They drilled 5 wells in Louisiana during 1Q16. EXCO did increase production in the Marcellus from 4Q15 (although down from 1Q15, year over year). The reason for more production although they didn’t drill or complete any new wells? They had been shutting in production due to low prices. The prices went up a bit, and EXCO eased off a bit on the shut-in wells, resulting in a slight bump in production. Here are select portions of yesterday’s EXCO update…
Read More “EXCO Resources 1Q16: Marcellus Production Up w/o New Drilling?”