Marcellus Drilling News

Industrywide Issues | Wastewater

The One Part of the Marcellus/Utica Industry Still Booming
February 12, 2016February 12, 2016

There’s one part of the Marcellus/Utica shale industry that is still booming–and will continue to boom as long as the wells drilled flow oil and gas. What it is? Wastewater injection wells. Sometimes called SWDs, or salt water disposal wells. How can that be? If rigs are being laid down and fracking is vastly reduced–even ceased–how is there any wastewater to dispose of? Good question young padawan. Flowback is the water coming out of the hole right after fracking. But long after flowback is done, a well will still bring up what is called produced water–water from the depths that is very salty with minerals. Hence, salt water disposal wells. As long as wells are producing and not shut in, they produce varying amounts of produced water. Until now, drillers in the Marcellus would typically recycle the produced water and use it for fracking the next well. If they aren’t fracking, what do they do with all of that produced water? It must go to an SWD well. A company called Sourcewater has cooked up a clever service, an online exchange where SWD operators can list their wells and drillers who need to find new places to dispose of their produced water can find someone to take it…
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BP | Energy Companies | Industrywide Issues | Research

BP Energy Outlook 2016: NatGas Surpasses Coal by 2035
February 12, 2016February 12, 2016

UK oil and gas giant BP released the 2016 edition of their BP Energy Outlook on Wednesday. BP, being a European company, lards the Outlook up with flowery talk of renewable this and sustainable that. But there are a few facts from the Outlook that slap you in the face: (1) By 2035, across the entire world, 80% of all energy will come from fossil fuels. So much for renewables riding in to the save us all “any day now.” (2) Natural gas is the largest-growing fossil fuel and by 2035 it will have replaced coal as the #2 source of energy in the world. (3) The U.S. will achieve overall energy self-sufficiency by 2021, and oil self-sufficiency by 2030. Another fun fact from the BP Energy Outlook: shale gas will account for 20% of total global gas output by 2035. Read the full report below…
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BG Group | CNG/LNG | Energy Companies | Industrywide Issues | M&A | Shell

Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash
February 12, 2016February 12, 2016

The last major hurdle has been scaled in the Shell buyout of BG–the largest such oil and gas deal since Exxon bought Mobil in 1999. Yesterday the High Court of Justice in England and Wales approved the merger. Previously Shell stockholders approved the $69.7 billion deal (see Shell Shareholders Vote in Favor of BG Buyout/Merger). Not long after BG stockholders approved it too (see It’s a Deal – BG Shareholders Approve Shell Buyout). Shell canceled a loan it previously arranged, for $14.4 billion to help with the purchase. Instead, the company will use its own hefty piles of cash for the buyout. The unfortunate news is that Shell intends to layoff 10,000 people after the merger is complete–to save money…
Read More “Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash”
Industrywide Issues | Wastewater

Water Recycler with NE Operations Expanding with $40M Investment
February 12, 2016February 12, 2016

Fountain Quail Water Management, a Texas-based wastewater recycler with operations in the Marcellus/Utica, announced earlier this week that the company has a new investor who has ponied up $40 million so they can further expand in North America. As MDN pointed out in a companion story today (see The One Part of the Marcellus/Utica Industry Still Booming), treatment of produced water is booming in all shale plays and likely to continue, even though drilling and fracking has tapered off. Why? Because long after a hole is drilled, water from the depths (water a mile or more below the surface) continues to come out of the hole. Water with a high concentrate of minerals (i.e. “salty”, hence salt water injection wells). You can dispose of such water via injection wells, or you can use a technology like Fountain Quail’s to recycle it…
Read More “Water Recycler with NE Operations Expanding with $40M Investment”
Energy Services | Industrywide Issues | Sand/Proppant | U.S. Silica

U.S. Silica Introduces New Resin-Covered Sand for Fracking
February 12, 2016February 12, 2016

A key ingredient in fracking is a “proppant” like sand. But not just any old sand. The sand used in fracking typically used in fracking is silica and comes from the Midwest–Wisconsin and other states. U.S. Silica is one of the largest sand companies in the world. Strangely enough, it’s headquartered in Maryland. Proppants are so-named because after being washed into fractures the sand stays behind to “prop open” the cracks, allowing oil and gas to escape from shale. Always looking for an edge, particularly against competitors that manufacture ceramic proppants, U.S. Silica recently announced a new resin-covered sand product line…
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About MDN

MDN Off Monday for President’s Day
February 12, 2016February 16, 2016

MDN will take a day off on Monday, the President’s Day Holiday. It’s a stock exchange and bank holiday, and we figured quite a few will not be in, so we figured what the heck. We hope you enjoy the day!

Jim Willis, Editor
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Feb 12, 2016
February 12, 2016February 12, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Why Marcellus production fell for 4th month in a row; tax revenues in Monroe County, OH up 340% thx to Utica Shale; UPS & Clean Energy expand deal; rigs would roaring back with $60 oil; utilities abandoning coal for natgas; Fed chief Yellen says oil bust good for U.S. economy; what does Aubrey McClendon see in Argentina?; and more!
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Belmont County | Energy Companies | Gulfport Energy | Industrywide Issues | Monroe County | Ohio | Pipelines | Rice Energy

Rice Energy, Gulfport Midstream Form Midstream JV in Eastern OH
February 11, 2016February 11, 2016

Rice Energy, a pure play driller in the Marcellus/Utica, and Gulfport Midstream, a subsidiary of Gulfport Energy (big driller in the Utica) have entered into a joint venture. The new jv is called Strike Force and the purpose is to connect to and gather natural gas from wells drilled in Belmont and Monroe counties in Ohio. That is, this is a new midstream business. Rice contributed $41 million, certain pipelines, facilities and rights of way in return for a 75% ownership of the jv. Gulfport contributed an existing gathering system in return for their 25%. Neither Rice nor Gulfport have made a public announcement about the new venture. We know of it via a Securities and Exchange Commission 8-K filing…
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Industrywide Issues | Litigation | North Carolina

Whatever Happened to Fracking in North Carolina?
February 11, 2016February 11, 2016

Last year North Carolina was ready to begin drilling in shale layers of the Triassic Basin, which is part of a broader area called the Deep River Basin. Everything was set to go. And then the lawsuits began. A NC judge issued a ruling that prohibited the Mining and Energy Commission (MEC) from issuing any permits until another case currently before the NC Supreme Court–questioning the legality of the appointment of several boards that manage state resources and the environment–plays out (see Judge Puts NC Fracking on Hold Pending Outcome of Lawsuit). That case was just resolved at the end of January. However, in the meantime, the NC Department of Environment and Natural Resources (DENR) didn’t let the lawsuit stop them from drilling a series of test holes in Stokes, Scotland, Hoke and Cumberland counties to see whether shale gas is present in those locations (see Lawsuit Won’t Stop NC Agency from Drilling Test Holes in Shale). The results are now in. Three of the four counties tested show there’s no measurable presence of Triassic shale and therefore not suitable for drilling…
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Economic Impact | Greene County (PA) | Industrywide Issues | Jobs | Pennsylvania | Washington County

More Evidence of the Slowdown in the Marcellus
February 11, 2016February 11, 2016

We won’t continue to beat the drum indefinitely that “it’s bad out there.” Everyone knows it. However, we did honestly and truthfully report when the Marcellus industry was on the upswing and it seemed like everything was coming up roses. So we will now honestly and truthfully report when our beloved industry is on the downswing. We don’t sugarcoat it here at MDN. The latest bit of “it’s bad out there” evidence comes from Greene County, PA and Hot Rod’s House of Bar-B-Que where it used to be you couldn’t get a seat at lunchtime, but now it’s “walk right in, sit right down”…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

More on Wolf’s New 6.5% Severance Tax – What Could of Been
February 11, 2016February 11, 2016

A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
Read More “More on Wolf’s New 6.5% Severance Tax – What Could of Been”
Air Quality | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Wolf Vows to Push Forward with Clean Power Plan in PA
February 11, 2016February 11, 2016

Are there any doubts remaining that Pennsylvania Gov. Tom Wolf is anti-fossil fuel? He’s trying to tax the Marcellus gas industry out of existence (see Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%). He’s now trying to regulate the coal industry in PA out of existence. Yesterday we brought you the great news that the U.S. Supreme Court has stayed the execution of coal by stopping–for now–implementation of President Obama’s draconian and misnamed Clean Power Plan (see Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan). That means a decision on whether or not the plan can proceed will come from the courts no earlier than 2017. So what does Tom Wolf say? PA is going to go ahead and put a bullet in the head of coal (and to some degree natural gas) by moving forward with its own implementation of the Clean Power Plan. Arrogance personified…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Ohio | Research | Statewide OH

Anti Groups Abruptly Cut Funding for OH Fracking Study
February 11, 2016February 11, 2016

Two days ago we told you about a three-year study conducted at the University of Cincinnati that looked at fracking and its potential affects on water wells in five Ohio counties. The research found no evidence that fracking had led to any kind of water well contamination (see Antis Not Happy with Results of OH Fracking Study They Funded). We now have a bit more to the story. The two anti groups that funded the research, the Deer Creek Foundation in St. Louis and the Alice Weston foundation from Cincinnati, abruptly stopped funding the study when they got the preliminary (and as yet, unpublished) results. The foundations thought they had bought and paid for a particular outcome, and when that didn’t happen, they withdrew their money and presumably will now support someone they can buy off. Here’s an update on this developing story from the Ohio Oil and Gas Association…
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Industrywide Issues | Research

Oil & Gas Investment in 2015 Down Average 35% – 2nd Largest Ever
February 11, 2016February 11, 2016

Another interesting article from our favorite government agency, the U.S. Energy Information Administration (EIA). We all know that drillers spent a lot less last year than the year before on drilling. How much, on average? According to new research by the EIA, mining and exploration investment (which includes oil and gas and coal) declined 35% in 2015, the second largest year-over-year decline since the U.S. Bureau of Economic Analysis (BEA) began reporting the series in 1948. Did you catch that? Last year investment in oil and gas decreased the second largest amount since the government has kept records on it. Wow. This year promises even more cuts. Here’s what the EIA says in their latest report…
Read More “Oil & Gas Investment in 2015 Down Average 35% – 2nd Largest Ever”
CNG/LNG | Industrywide Issues | M&A

Love’s Travel Stops Buys Trillium CNG, Expands CNG Network
February 11, 2016February 11, 2016

Loves, the big truck stop chain, has just purchased Trillium CNG. The purchase will add 37 public-access CNG locations to the Love’s network, bringing the number of Love’s-operated public CNG facilities to 65. Why is that an MDN story? For a few reasons. It shows the growth and importance of CNG (compressed natural gas) as a use in passenger vehicles and long-haul trucking. As demand grows for CNG, prices paid for natural gas will grow too. It’s an important developing market for natural gas. Also, there’s a Love’s and a Trillium CNG about three miles from where MDN editor Jim Willis lives. So this is a “local” story of interest for him! Here’s the good news of Love’s being in love with Trillium (along with a cool map)…
Read More “Love’s Travel Stops Buys Trillium CNG, Expands CNG Network”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Feb 11, 2016
February 11, 2016February 11, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH antis gear up to protest injection well; oil & gas downturn not all bad; where Wolf is leading; court rules WV oil & gas lease not divisible; VA bills to stop pipeline going nowhere; natgas still on the ropes; why oil & gas is still a great industry to work for; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Feb 11, 2016”