Marcellus Drilling News

Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Jan 12, 2016
January 12, 2016January 12, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Purple squirrel syndrome; PA PUC exploring different rate structures; UGI wins court case in Lycoming County; IHS buys OPIS; Hawaii’s $300M LNG project; stay away from Chessy; oil and gas prices worsen; is natgas killing coal mining?; world’s largest oil company may go public; and more!
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Cunningham Energy | Energy Companies | Kanawha County | West Virginia

Cunningham Using Horizontal Drilling to Target Weir Sand in WV
January 11, 2016October 23, 2017

This story is, for us, fascinating. A small driller based in West Virginia, Cunningham Energy, is zagging while everyone else is zigging. We told you in 2013 that Cunningham planned to drill three “shallow” horizontal wells in Clay County, WV (see The Injuns are Coming! Injun Formation Drilling, that is). Cunningham targeted the Big Injun sandstone formation, looking for oil. They struck oil this past year (see Cunningham Strikes Oil in West Virginia’s Big Injun Territory). Once again Cunningham is targeting a shallow formation, this time the Weir Sand formation, a few layers below the Big Injun (same group of rocks called the Mississippian system), once again looking for oil. Cunningham announced last week they are drilling two new horizontal wells, this time in Kanawha County, WV…
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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

Bill Sponsor Says It’s Now or Never for WV Forced Pooling Law
January 11, 2016January 11, 2016

At 11 pm on the last day of the 2015 legislative session in West Virginia, a session that lasts only 60 days at the beginning of each year, the WV legislature voted down what everyone thought was a sure thing to pass–House Bill (HB) 2688, otherwise known as the forced pooling bill (see The Real Story of Why Forced Pooling Bill Failed in WV). As we reported at the time, it was defeated by Democrats who had their knickers in a twist over another bill they wanted passed that Republicans defeated. So the Dems decided to give as good as they got and voted down HB2688 in retribution. Last March, following the negative vote, we said this: “Forced pooling is a dead issue in WV this year. Will it be back next year? You can bank on it.” And back it is. The Republican chairman of the House Energy Committee, Lynwood “Woody” Ireland believes a new version of the forced pooling bill is as fair as it gets for both landowners and drillers. Ireland also believes if the bill doesn’t pass this year, it is likely a dead issue–period. It’s “now or never” for a forced pooling bill in WV…
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Baker Hughes | Energy Services

Baker Hughes Dec Rig Counts Down Everywhere – Global, US, NE
January 11, 2016January 11, 2016

The number of active drilling rigs worldwide was down by 14 rigs according to the December Baker Hughes rig count report. The worldwide rig count in November was down just 2 from October, which shows the trend of idling rigs is once again picking up steam. Bummer. Active rigs in the U.S. fell by a whopping 46 month over month. There were 760 active drilling rigs operating in the U.S. in November, and 714 rigs operating during the month of December. Ouch. What about active rigs in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. This month’s chart is disheartening. The region lost another 5 active rigs in December over those operating in November. Which states lost rigs?…
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Ethane | Exporting | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Marcellus Ethane Sets Sail for Europe Next Month
January 11, 2016January 11, 2016

We’re almost there! As MDN told you last June, INEOS, one of Europe’s largest petrochemical companies, had commissioned and purchased two tankers to ferry Marcellus/Utica ethane from the Marcus Hook refinery near Philadelphia to Norway and Scotland (see Ineos Gets Ready to Begin Ethane Exports from Marcus Hook, PA). The final leg of the Mariner East Pipeline is ready to go online, and the twin tankers are ready to be loaded. In February, the first shipment of Marcellus ethane will set sail from Philadelphia bound for Norway…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Kanawha County | Pipelines | West Virginia

Columbia Pipeline Gets FERC Approval for WV Utica Access Project
January 11, 2016January 11, 2016

Columbia Pipeline Group has just received a green light from the Federal Energy Regulatory Commission (FERC) to proceed with their Utica Access Project. The project will cost Columbia $45 million and involves building five miles of new pipeline and upgrading compressor stations in Kanawha County, WV. When complete, the project, begun under NiSource (before Columbia separated into its own company), will transport 200 million cubic feet per day of Utica Shale gas for Eclipse Resources Corporation to liquid trading points on the Columbia Gas Transmission interstate pipeline system…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA
January 11, 2016January 11, 2016

In addition to receiving Federal Energy Regulatory Commission (FERC) approval for the Utica Access Project, Columbia Pipeline Group has just filed their full, official application with FERC for approval of the $850 million WB XPress Project, consisting of two new compressor stations, 26 miles of pipeline replacement located along existing corridors, and 2.9 miles of new pipeline in Virginia and West Virginia. The WB XPress Project will expand capacity of the Columbia Gas Transmission pipeline in the region by 1.3 billion cubic feet per day, linking Marcellus gas supplies to new markets…
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Commodity Price | Industrywide Issues | Pipelines

New Pipelines in the Marcellus Dramatically Improved Prices in 2H15
January 11, 2016January 11, 2016

What a difference a few pipelines can make. Last week the U.S. Energy Information Administration (EIA) issued their Natural Gas Weekly report (excellent report, great overview of the industry at large). One of the brief articles included in last week’s EIA update was story about the “basis differentials” for the Marcellus, and how they’ve narrowed. Basis differential means “how much does the gas trading at a given location trade above or below the standard Henry Hub price.” For example, last summer gas trading at Transco’s Leidy Hub in the Marcellus was trading for $1.65 million British Thermal Units (MMBtus) BELOW the Henry Hub price. In December, the gap had narrowed and Transco Leidy Hub prices were, on average, trading around 89 cents/MMBtu below the Henry Hub price. That’s a vast improvement in just six months. Why the narrowing in trade price? New pipelines came online in the latter half of last year, carting Marcellus Shale gas to new markets. More demand (i.e. new markets) equals a bump up in price…
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American Water Management | Energy Services | Industrywide Issues | Litigation | Ohio | Trumbull County | Wastewater

AWMS Appeals Decision Upholding Trumbull Injection Well Closure
January 11, 2016January 11, 2016

American Water Management Services (AWMS) owns a wastewater injection well in Trumbull County that supposedly caused a low-level earthquake (that nobody could feel) in 2014. Two wells located at the site, both operated by AWMS, were “temporarily” shut down by the Ohio Dept. of Natural Resources following the quake (see ODNR Temporarily Shuts Down Injection Wells After Low-Level Quake). One of the two injection wells was allowed to re-open, but not the other (see ODNR Clears Trumbull Co. Injection Well in August Quake). However, AWMS can’t open just the one well. They need to open both and operate both. The ODNR is supposedly crafting new regulations that will govern the offending well that may or may not have caused the low-level quake and a year-and-a-half later the ODNR has not released those new regs. Meanwhile, everyone at that operation is out of a job. AWMS appealed the closure and last month a county judge threw out the appeal (see Judge Tosses Appeal to Re-Open Trumbull, OH Injection Well). So AWMS has appealed it to the next level up–the 10th District Court of Appeals…
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Allegheny County | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania

Pittsburgh Plans to Divest from Mutual Funds that Own Fossil Fuels
January 11, 2016January 11, 2016

Can this POSSIBLY be true? The City of Pittsburgh, which has fashioned itself as “the new Houston” and center of the energy universe, is beginning a program to divest from any investments it has in fossil fuel companies?! It appears it is true. Ever hear the phrase, “Don’t bite the hand that feeds you”? Of course the drive to divest is coming from Democrats–they’re the ones who run city government. If they actually go forward with it, we predict they will rue the day they decided to do it. The plan, as it’s been outlined, would be to divest “gradually,” over a period of years. The real kicker is that Pittsburgh doesn’t invest directly in stocks like CONSOL Energy or EQT or many of the other big independents who call the Pittsburgh region home. But they do invest in mutual funds that own those stocks. It is the mutual funds they plan to shed, over time. Talk about blithering idiots…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Dem Media Spins New PA Severance Tax Proposal as “Conservative”
January 11, 2016January 11, 2016

At least one Republican, Pennsylvania State Rep. Jim Christiana (from Beaver County, PA), is pushing a new severance tax plan he considers kinder and gentler than that proposed by PA Gov. Tom Wolf. Christiana has proposed a tax with a rate of “just” 3%, instead of Wolf’s demand of 5% (see Some PA Republicans Beginning to Cave on Severance Tax). However, Christiana’s tax plan would, in time, increase to 5%–just like Wolf’s. Of course all of these numbers are hocus pocus horse manure. The actual percentage goes much higher when you factor in all of the extras. What’s interesting to us is how Democrat-controlled media organizations like the Scranton Times-Tribune (and its subsidiary the Wilkes-Barre Citizens’ Voice) are attempting to spin this news. They published an article referring to Christiana as a “conservative” trying to imply conservatives are now on board with a severance tax on drilling in the Keystone State. Let us assure you, such is not the case. It is another sterling example of media bias and spin…
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About MDN | Calendar

Calendar of Events for Jan – Apr 10 (90 Days)
January 11, 2016January 11, 2016

Below are upcoming events for the next three months (90 days). To see the full list of future events, visit this page: //marcellusdrilling.com/calendar/.

NOTE: To have an item included, please email it to: calendar@marcellusdrilling.com.
Read More “Calendar of Events for Jan – Apr 10 (90 Days)”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Jan 11, 2016
January 11, 2016January 11, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus “most susceptible” to rig departures; DEP gives Keystone Sanitary Landfill more time to make case; CONSOL flaring Greene County well; Penn State caves to global warming nutters; Vermont pipeline goes forward; some E&Ps are zombies–the “walking dead”; world benefits from U.S. LNG exports; OPEC’s trillion dollar miscalculation; and more!
Read More “Marcellus & Utica Shale Story Links: Mon, Jan 11, 2016”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Research

EPA Takes First Step to Renounce its Own Fracking/Water Research
January 8, 2016January 8, 2016

As we pointed out just last month, the so-called “scientists” who belong to the federal Environmental Protection Agency’s (EPA) Science Advisory Board have begun the long process of getting the EPA to change the outcome of its 4-year study of fracking that concludes fracking doesn’t pollute groundwater (see Will EPA Whore Itself to Antis and Change Fracking Water Study?). The EPA originally launched a 2-year study, that later turned into a 4-year study, in which they analyzed 950 studies related to fracking. The EPA also designed and completed 9 of their own studies. At the end of this arduous and scientifically rigorous process, the EPA concluded, in a published report in June 2015, that fracking does not pollute water (see EPA Draft Report Says Fracking Doesn’t Pollute Groundwater Supplies). Ever since the EPA report was issued anti-drilling radicals have demanded the EPA change the outcome of its science (see Anti Groups Try to Convince EPA They Got it Wrong with Water Study). True science doesn’t change nor cave to political pressure. A few dozen members of what is called the EPA Science Advisory Board (SAB) released a draft a letter (copy below) yesterday. The letter calls into question the conclusion that fracking doesn’t pollute water. Voila. Another example of “science” being corrupted by political philosophy…
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Economic Impact | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Shortages Begin: Tangible Result of No Pipelines in New England
January 8, 2016January 8, 2016

In December 2014 the Massachusetts-based utility Berkshire Gas Company announced the amount of natural gas they could purchase from the Tennessee Gas Pipeline (TGP) was at full capacity. There’s no additional gas supplies to buy–unless TGP builds their Northeast Energy Direct (NED) expansion project. So Berkshire was forced to tell new customers for natural gas in portions of Franklin County they won’t be able to tap into Berkshire’s line (see Guts: No New Pipeline in MA? Then No New Natgas for Utility Customers). In September, the Massachusetts Dept. of Public Utilities (DPU) approved long-term contracts for three utilities, including Berkshire Gas, to buy natural gas supplies from TGP’s NED pipeline when/if it gets built (see Mass. Approves Plan for Utilities to Buy Gas from New Pipeline). Anti-drilling nutters promptly sued to stop that plan (see Anti Group Sues to Stop Mass. Utilities from Buying Natural Gas). It’s now a year after Berkshire’s first announcement that some communities in Franklin County won’t get new natgas service. Berkshire has had to expand the prohibition area. They’re now turning down new businesses in neighboring Hampshire County, which is causing a stir. We’re not sure why antis don’t get it. No new gas, no new service. It’s pretty simple. Below is the story of a jilted Texas Roadhouse, who says they wouldn’t have purchased land and built had they known they couldn’t get natgas service. Translation: more businesses will stay away, or perhaps even leave, because they can’t get natgas due to the shortage…
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Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Southwestern Energy | West Virginia

Southwestern Energy Renewing Leases in WV, PA
January 8, 2016January 8, 2016

Tick tock tick tock. Every day that passes brings landowners and drillers closer to the end of an initial five-year lease contract. In October 2014, Southwestern Energy purchased a humongous 413,000 acres of leases from Chesapeake Energy, most of that land in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Southwestern paid over $5 billion for the deal. That leased acreage came with an expiration–which is happening now, at least for some (most?) of the acreage. Every lease is different. Some leases allow the driller to pay the same (or a different) renewal payment to keep the lease going for another period of time, typically another five years. The $5 billion question is, what will Southwestern do? Everyone is scaling back right now. Companies just can’t afford to do much drilling. Will Southwestern opt to renew those leases that they paid big bucks for? It seems we have an answer to that question. A WV newspaper is reporting that Southwestern has begun extending leases in Ohio and Marshall counties…
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