Marcellus Drilling News

Industrywide Issues | Pipelines | Research

ScottMadden Report: Getting Marcellus/Utica Gas to Market
November 24, 2015November 24, 2015

ScottMadden, Inc., a top energy consulting firm, recently released the latest edition of their twice-per-year report called The Energy Industry Update. The current report, titled “Strange Brew: Adapting to Changing Fundamentals” (full copy below), offers insights into major events and emerging trends in the energy industry. This particular edition takes a close look at the natural gas industry–in particular how ever-increasing gas resources can find adequate infrastructure to make their way to market. We really like this report, for a couple of reasons. First, it gives you the wider context. Natural gas (and oil) doesn’t exist on its own. It is part of a complex tapestry of energy options and needs to be viewed that way. This report helps contextualize natural gas–helps you see the natgas puzzle piece in the larger energy puzzle. Second, we like the deep dive they do on natural gas. Not so long ago the estimates were that with shale gas in the U.S.–particularly in the Marcellus/Utica–we have a “100 year supply” of natural gas. Now? That number has risen to 140 years of supply. And it keeps growing. The report looks at rig counts and well productivity, pipelines that are (or will) move gas from the northeast to other markets, regulations and more. Take time to read it!…
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Industrywide Issues | Ohio | Research | Statewide OH

Value of OH’s Oil & Gas Production a Straight Line Up in 2014
November 24, 2015November 24, 2015

Last Friday the Ohio Dept. of Natural Resources (ODNR) released their annual report on Ohio’s extraction/mineral industries, including the oil and gas industry. The report, titled “2014 Report on Ohio Mineral Industries: An Annual Summary of the State’s Economic Geology” (full copy below) contains precisely five pages of interest to MDN readers. But those five pages, which detail what happened (and where) in Ohio oil and gas during 2014, are loaded with good information. For example, natural gas production in Ohio in 2014 was 512,964,465 thousand cubic feet (Mcf), a 207% increase from 2013. The dollar value of natural gas produced in Ohio in 2014 was $1,939,005,678, an increase of 229% from 2013. The report has one page detailing how many wells were drilled by rock layer/resource play. Unsurprisingly the Utica/Point Pleasant shale layer was the most-drilled layer, with (as of the end of 2014) 521 wells drilled. The second most-drilled layer was the Clinton-Medina sandstone layer, with 92 wells drilled…
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Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

PTT Taps Swiss Company INEOS for OH Cracker Plant Technology
November 24, 2015November 24, 2015

Yet another piece of the Belmont County, OH ethane cracker falls into place–further indicating the project is likely to get built. It was only April of this year that MDN brought you the announcement that partners PTT Global Chemical (based in Thailand) and Marubeni Corporation (financial company based in Japan) were teaming up to potentially build a new $5.7 billion ethane cracker/petrochemical complex in Belmont County (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since that time, PTT hasn’t let any grass grow under its feet. Already PTT (and Marubeni) are spending $100 million with Bechtel Enterprises and Fluor Corporation to design the plant (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). PTT has also signed an option to buy the property where they plan to build the plant (see 300 Acres Next to FirstEnergy Site Part of Belmont Cracker Plan). All very good signs that this is indeed a serious project moving forward. And now, another piece of the puzzle falls into place. INEOS Technologies, a Swiss-based petrochemical technology company, announced they have been selected to provide a key piece of the technology for the new Belmont cracker plant…
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Industrywide Issues | Research | Reserves (Proved and Unproved)

EIA: Shale Rockets U.S. Proved O&G Reserves to New Records
November 24, 2015November 24, 2015

Our favorite government agency, the U.S. Energy Information Administration (EIA), yesterday released their annual report of proved oil and natural gas reserves in the United States for 2014. The report, titled “U.S. Crude Oil and Natural Gas Proved Reserves, 2014” (full copy embedded below) shows proved reserves for natural gas rose by 34.8 trillion cubic feet (Tcf), or 10%, to a record high of 388.8 Tcf in 2014. Oil reserves rose 3.4 billion barrels, or 9%, to 39.9 billion barrels. That’s the highest oil reserves have been since 1972! This is the second year in a row for a new natural gas proved reserves record high, and the sixth year in a row for oil proved reserves (see last year’s report, EIA: Proved Reserves for Natgas Up 10% Last Year, Marcellus Leads). As a quick reminder, proved reserves are, according to the EIA, “those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.” That is, proved reserves are what’s in the ground now, can be gotten out, and we can prove it. This is a great report, full of excellent data and interesting charts and graphs…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Wolf Can’t Get Current Budget Done, Vows Severance Tax Next Year
November 24, 2015November 24, 2015

Will Pennsylvania’s governor, Tom Wolf–the most liberal governor in America according to the nonpartisan website InsideGov–finally agree to a budget framework and budget to end a nearly six month delay he has caused? He promised to try and get the budget done by Thanksgiving–but you know all about politicians and promises. That promise is now out the door. The latest news we’ve been able to locate says Wolf’s plan to hike the sales tax in order to give a break on property taxes is now dead. The one thing that every news account we read says is this: Wolf is promising to resurrect the issue of a Marcellus Shale severance next year and every year thereafter of what we predict will be a very short tenure as PA’s governor. Wolf is fixated on raiding drillers and landowners in order to transfer their hard-earned money to those who don’t earn money–teachers unions…
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CNX Resources | CONSOL Energy | Energy Companies

CONSOL’s Bankers Say Company has $2B Worth of Gas in the Ground
November 24, 2015November 24, 2015

CONSOL Energy, one of the larger drillers in the Marcellus/Utica (based in Pittsburgh, a coal company transitioning to a gas company) issued an announcement yesterday that they’ve passed their twice-per-year test by their bankers and that once again their “borrowing base” is reaffirmed as being worth $2 billion. So what’s a borrowing base and why is it important?…
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Industrywide Issues | New York | Pipelines | Regulation | Statewide NY

Will Pilgrim Pipeline be Allowed to Settle in the NY World?
November 24, 2015November 24, 2015

Pilgrim Pipeline Holdings is developing an East Coast pipeline to carry refined petroleum products such as gasoline, diesel, heating oil, and jet and aviation fuel northbound from Linden, New Jersey to Albany, New York (178 miles). In addition, a second pipeline will carry crude oil from Albany south to NJ and other locations. Two pipelines, side by side, liquids flowing through them in different directions. Pilgrim (how apropos this announcement comes at Thanksgiving) has just filed an official application with the Thruway Authority. Their plan is to lay 79% of the pipeline within the Thruway right of way. No, technically this is not a Marcellus/Utica story–although some of the crude they plan to flow from Albany to NJ refineries may indeed come from the Marcellus/Utica. It’s a pipeline for fossil fuels and that will surely bring the crazies right out of the woodwork, which is why we bring you this story…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Both MarkWest Co-Founders Strongly Against Sale to Marathon
November 24, 2015November 24, 2015

There is a fevered battle going on to prevent Marathon Petroleum from consummating a deal to buy MarkWest Energy. Yesterday we told you that MarkWest was touting two more proxy advisory firms, in addition to a previously named advisory firm, have endorsed the deal (see War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale). We also told you that one of MarkWest’s two co-founders and a former CEO of the company, John Fox, is dead set against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). The other MarkWest co-founder, Brian O’Neill, has now come out against the sale as well…
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Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Nov 24, 2015
November 24, 2015November 24, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Maryland targeted by fractivists, again; Guernsey County opposes waste treatment facility; Lebanon West II pipeline approved by FERC; uncompleted wells will stunt production growth in 2016; Steins’s law and oil prices; the billionaires behind attacks on Exxon; and more!
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Energy Companies | EnerVest | Industrywide Issues | Jobs | Range Resources Corp | Statewide VA | Virginia

158 Range Resources Employees in SW VA May Lose Jobs by Dec 30
November 23, 2015November 23, 2015

Three weeks ago MDN told you that Range Resources had decided to sell 3,500 operated wells and approximately 460,000 net acres in the Nora/Haysi combined fields located in southwestern Virginia for $876 million to an unnamed buyer (see Range Sells Coal Bed Methane Wells in VA, Focusing on Marcellus). The Nora/Haysi operation consists of coal bed methane natural gas wells–an operation more akin to conventional drilling than shale drilling. The reason for the sale, as we told you at the time, is so Range can pay off debt and continue to concentrate on more profitable Marcellus Shale drilling. We now know that EnerVest is the buyer of the Nora/Haysi fields. We also have sad news that it’s possible (not certain but possible) that 158 jobs associated with the wells/operation may not make the transition. Range has filed a WARN notice (Worker Adjustment and Retraining Notification Act) that 158 workers in Dickenson and Washington counties (in southwest Virginia) could be out of a job by December 30th. Merry Christmas…
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Energy Services | Industrywide Issues | Michigan | NEXUS Pipeline | Ohio | Pipelines | Regulation | Spectra Energy | Statewide MI | Statewide OH

Spectra Energy Files Formal FERC Application for NEXUS Pipeline
November 23, 2015November 23, 2015

Pop the cork on the champagne bottle! Last Friday Spectra Energy and its partners filed their full, formal application with the Federal Energy Regulatory Commission (FERC) to get the federal agency’s approval for the NEXUS Gas Transmission pipeline project. The NEXUS is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. It is a critically needed pipeline to move Utica and Marcellus Shale gas from an over-saturated market in the northeast to markets in the Midwest and Canada. Below is the official good news press release from Spectra Energy announcing the filing…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Tennessee Gas Pipeline

Kinder Morgan Files Formal FERC Application for NED Pipeline
November 23, 2015November 23, 2015

Friday was a big day for pipelines in the Marcellus/Utica. Spectra Energy filed an application with the Federal Energy Regulatory Commission (FERC) to build the NEXUS Gas Transmission pipeline (see our companion story today). In addition, Kinder Morgan filed their formal application with FERC to build the massive $5 billion expansion of the Tennessee Gas Pipeline system from Pennsylvania into New York, Massachusetts, New Hampshire and back into Massachusetts where it will end near Boston–called the Northeast Energy Direct (NED) project. All pipeline projects face irrational opposition, but the NED project faces some of the fiercest opposition, including an anti-fossil fuel crusade against NED by the Massachusetts Attorney General Maura Healey (see Anti-Drilling MA Attorney General: We Don’t Need No Pipelines). The battle is about to reach fevered pitch now that Kinder Morgan has filed the official application…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources

GreenHunter Board Member Sells All of His Company Stock
November 23, 2015November 23, 2015

GreenHunter Resources, the wastewater subsidiary of Magnum Hunter Resources (MHR), has essentially become a penny stock. Parent company MHR is close to declaring bankruptcy (some are saying it’s all but a formality at this point). MRH’s status seems to be weighing on its subsidiary companies, like GreenHunter. One of the members of the Board of Directors for GreenHunter, Ronald H. Walker, sold 196,470 shares of company stock he owned last Wednesday and Thursday. That is, he sold ALL of the stock he owned in GreenHunter–every last share. What did he get for all of those shares? A measly $35,364.60. Next to nothing. It averaged 18 cents per share. What does Walker know that we should know?…
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Industrywide Issues | Pennsylvania | Warren County | Wastewater

WTC Upgrades Warren, PA Plant, Accept Marcellus Wastewater Again?
November 23, 2015November 23, 2015

We’re returning to a story we last wrote about over a year ago. In October 2013 MDN told you the radical national anti-drilling organization Clean Water Action (CWA) had sued a small Pennsylvania company by the name of Waste Treatment Corporation (WTC) in Warren, PA in federal court claiming the company continued to accept, treat and discharge Marcellus drilling wastewater into the Allegheny River (see CWA Sues/Accuses Waste Treatment Corp of Continued Shale Pollution). WTC was supposed to have stopped that practice two years earlier, in 2011, after then-Secretary of the Dept. of Environmental Protection (DEP), Michael Krancer, got all such operations to cease and desist. Responses to the CWA lawsuit from both the WTC and the DEP raised more questions than they answered for us (see Waste Treatment, PA DEP Respond to CWA Lawsuit). In September 2014, CWA announced they had reached a settlement of the case with WTC agreeing to immediately stop accepting/discharging Marcellus wastewater (even though they say they don’t), install expensive new equipment, and then restart accepting Marcellus wastewater processing again (see CWA v Waste Treatment Corp Wastewater Discharge Lawsuit Settled). The new news is that WTC has installed the aforementioned new technology, news that we get from a press release from the company that sold them the technology. What we don’t know is when, or if, WTC will once again begin to accept Marcellus Shale wastewater at the plant…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale
November 23, 2015November 23, 2015

The public relations battle between the current management and board of MarkWest Energy, who stand to personally benefit from a sale of the company to Marathon Petroleum (via Golden Parachutes), continues. On Friday MarkWest issued another press release (seems they’re coming along almost daily now) to encourage people to vote “yes” with their units. MarkWest is claiming two more proxy advisory firms have endorsed the deal–Glass Lewis and Egan-Jones. It was just last week that MarkWest’s former CEO issued another press release of his own telling the world this is a bad deal for common unitholders and should be voted down (see War of Words: Battle to Sell MarkWest Energy to Marathon Heats Up). MarkWest, in their latest press release, re-issued their plea for anyone with even a couple of units (think “shares of stock) laying in a drawer somewhere to vote–every vote counts in this battle…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Politicians: Raise Severance Tax, Lower Property Tax
November 23, 2015November 23, 2015

What is it about politicians needing to get their grubby hands on YOUR money? A group of West Virginia state politicians–delegates and one state senator, both Democrats and Republicans–held a town hall meeting at West Virginia Northern Community College last Thursday in which they pontificated that the severance tax in WV is too low, and property taxes for Marcellus/Utica Shale landowners are too high. Below is a summary of the back and forth at the meeting. The somewhat ominous (from our perspective) talk at the meeting is that in this down market politicians want to further kill the drilling industry (the one bright spot) in their state by taxing it higher…
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