Marcellus Drilling News

Atlas Energy | Carrizo Oil & Gas | Chevron | Energy Companies | Pioneer Resources | Reliance Industries

Indian Giant RIL Looking to Dump its Marcellus Joint Ventures
July 29, 2015July 29, 2015

The single largest company in India, and one of the largest energy companies in the world, is Reliance Industries Limited (RIL). As of July 2013, RIL had invested a massive $5.7 billion in three shale joint ventures–the bulk of that in the Marcellus Shale. The company was planning to double it’s shale investment to over $10 billion! But a funny thing happened on the way the Forum. Prices for oil and gas started to slump, and RIL’s return on their shale investments slumped with it. RIL invested $3.5 billion in a Marcellus joint venture with Atlas Energy in 2010 (see Joint Venture Between Reliance Industries and Atlas Energy Worth $3.5 Billion Over 10 Years). RIL later battled Chevron to buy Atlas–but Chevron won, so RIL became a jv partner with Chevron (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). RIL currently has 3 jv’s, the Chevron jv in the Marcellus (owns 40% of that acreage), a jv with Carrizo Oil & Gas in the Marcellus (owns 60% of that acreage), and a jv with Pioneer Natural Resources in the Texas Eagle Ford (owns 45% of that acreage). Now comes word that RIL wants to exit all of their jv’s and wash their hands of U.S. shale, a 180 degree reversal from just a few years ago…
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Energy Companies | Range Resources Corp

Range Resources 2Q15: Record High Production, Net Inc. Drops 168%
July 29, 2015July 29, 2015

Range Resources Corporation, the very first Marcellus driller and one of the largest, continues to focus primarily on the Marcellus/Utica region. They also drill in the Midcontinent region, but most of their effort and time is spent in the Appalachian Basin. Yesterday Range released their operating and financial update for second quarter 2015. Among the highlights: Production averaged 1.373 billion cubic feet per day equivalent (Bcfe/d), a 24% increase over 2Q14 and a new record high for the company. Range reduced drilling costs by 11% year over year. However, the company is clearly scaling back in 2015. Range drilled and completed 89 wells in the Marcellus/Utica region during the first half of 2015, but they plan to cut that in half for the second half of 2015–planning to drill and complete an additional 44 wells. Low prices have affected Range like all of the other E&Ps we’ve covered thus far. Quarterly revenues dropped 68% year over year–from $765.5 million in 2Q14 to $247.5 million in 2Q15. Adding in expenses, Range’s net income for 2Q14 was $171.4 million in 2Q14 and dropped to minus $118.6 million in 2Q15–a 169% drop. But help on the price front for Range is on the way according to the update, in the form of two pipeline projects Range expects to go online soon…
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Energy Companies | Range Resources Corp

Range Resources Updated PowerPoint Presentation for 2Q15
July 29, 2015July 29, 2015

In addition to providing a quarterly update yesterday, Range Resources also updated its investor presentation with expected well economics, rates of return and other operational information. We have a copy of that newly updated PowerPoint below, along with a list of slides to check out…
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Eclipse Resources | Energy Companies

Eclipse Resources Releases Operations but not Financial Update
July 29, 2015July 29, 2015

Using the same strategy used by Gulfport Energy that we noted yesterday, Eclipse Resources, a smaller but important Utica/Marcellus driller based in State College, PA but drilling mostly in the Ohio Utica, released an operational update yesterday–but not their financials. Typically the operations updates are the good news, and the financials are the bad news. Eclipse’s operations update boasts an impressive 374% increase in production to 198.6 million cubic feet equivalent (MMcfe) per day in 2Q15 over 2Q14. Of particular note: Eclipse drilled a dry gas Utica well in eastern Monroe Country, OH with a 10,220 foot lateral (21,330 foot total measured depth), its longest lateral and deepest well to date–in just 17 days from Spud to Total Depth…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY | Tioga County (NY)

NY Antis Now Want LPG Fracking Banned Too, Letter to DEC
July 29, 2015July 29, 2015

At the risk of sounding pedantic and endlessly repeating what we’ve said many times before–the frack ban in New York is not about water quality concerns or any of the other myriad so-called “problems” that come from using water to hydraulically fracture an oil or gas well. This is how we know. If you remove water from the equation, which is the major concern and why the New York Dept. of Environmental Conservation (DEC) has decided to ban fracking (supposedly), anti-drillers still object to fracking. A group of virulent, hardened, and frankly nutty anti-drillers from the National Resources Defense Council (NRDC), Earthjustice and Frack Action have just sent a letter to the NY DEC asking the DEC to ban ALL fracking, including LPG (propane) fracking that a group of landowners in Tioga County, NY plan to use (see NY Landowners File to Frack Horizontal Well w/Waterless Tech). What has anti-drillers so terrified of LPG fracking? If LPG fracking is used in NY, it will prove that fracking can be done safely in NY–and once that happens, it’s game over for those who object to fracking. Anti-drillers’ call to ban LPG fracking points out what we’ve said for years: these people object to fracking because they irrationally, psychotically, hate fossil fuels–not because fracking pollutes water supplies, because it doesn’t…
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Broome County | Chenango County | Hydraulic Fracturing | Industrywide Issues | New York | Statewide NY

Special Election for NY Senate in Binghamton Tied to Fracking
July 29, 2015July 29, 2015

Sadly, pro-drillers in New York State recently lost a big supporter in the NY Senate–Sen. Tom Libous. For those who don’t live in New York, Libous was the long-time Senator from the Binghamton area, in the Senate for 27 years and a powerful member as deputy majority leader of the Senate. Libous was recently found guilty of lying to the FBI about using his influence to get his son a politically connected job. Libous has been removed from office. Essentially Libous got his son a job he didn’t have to work at but got paid for (see this Gannett story). Slimy to say the least, but we can list numerous ethics violations far worse on the Democrat side of the isle. For all of his faults, Libous was a friend to the pro-drilling movement in the state. The race is now on to replace Libous in a special election. The early leader, if you believe local news outlets (which we don’t), is Democrat Barbara Fiala–someone who once supported drilling but now, because she’s in Andrew Cuomo’s back pocket, opposes it…
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Hydraulic Fracturing | Industrywide Issues | Monongalia County | Research | West Virginia

Researchers Look for Life in Marcellus Shale – Natural Fracking?
July 29, 2015July 29, 2015

This sounds like something out of a Jules Verne novel. You may recall from school that Verne wrote some of the earliest sci-fi adventures ever, like 20,000 Leagues Under the Sea and Journey to the Center of the Earth. In Journey, Verne wrote about strange and mysterious critters that live deep in the earth–in rock caverns. Turns out Verne may not have been so far from the truth after all. And there’s a tie-in with the Marcellus Shale and with fracking. In November West Virginia University and Ohio State University received an $11 million grant by the federal government to study the Marcellus and Utica Shale (see WVU/OSU Get $11M Grant to Study Shale Energy Best Practices). Work is progressing. Researchers with the Marcellus Shale Energy and Environment Laboratory are taking rock core samples to see if there are microbes living 7,000 feet below the surface in the Marcellus Shale rock layer that could, if present, potentially be “fed” causing them to multiply and grow and maybe even naturally frack (break apart) rock layers, allowing us to get more natural gas and oil from those layers. It sounds pretty far-fetched–but stranger things have happened! Here’s the story of looking for life miles below the surface of the earth in the Marcellus…
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Belmont County | Housing | Industrywide Issues | Ohio | Supply Chain

Rural Belmont County, OH Gets Another New Hotel – in St Clairsville
July 29, 2015July 29, 2015

St. Clairsville with a population of just over 5,000 is the county seat for rural Belmont County, OH. Small villages like St. Clairsville typically have a handful of stores and other businesses. It’s highly unusual for a small town like St. Clairsville to score a major new hotel–but it just has, thanks to the Utica Shale. Belmont County is in the epicenter for the sweet spot in the Utica Shale. Even with drilling scaling back from low prices, there is still plenty of activity–especially in Belmont County. Commonwealth Hotels yesterday announced the opening of the newly constructed 92-room Candlewood Suites St Clairsville. Located at Mall Ring Road, the Candlewood Suites is the newest hotel in the region, conveniently located near I-70…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Jul 29, 2015
July 29, 2015July 29, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Wastewater

GreenHunter Brings 2 New Injection Wells Online in Meigs County, OH
July 28, 2015July 28, 2015

Big news for GreenHunter Resources: They finally have two more wastewater injection wells up and running at their Mills Hunter facility in Meigs County, OH. In May we reported that GreenHunter was hoping to have four new injection wells operating at the Mills Hunter facility by the end of June, for a total of six operating wells (see GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells). However, Mills Hunter has just two new wells now operating, for a total of four, and it’s nearly August. GreenHunter’s COO Kirk Trosclair continues to express his frustration at delays from the Ohio Dept. of Natural Resources (ODNR), saying instead of taking 30-45 days for approvals (which is what it used to take), it’s now taking ODNR more than 90 days to issue approvals. GreenHunter has two more wells at the Mills Hunter facility working their way through the approval process now. But let’s not dwell on the negatives…
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Energy Companies | Southwestern Energy

Southwestern Energy 2Q15: Production Up 30%, Net Inc. Down 481%
July 28, 2015July 28, 2015

Southwestern Energy, one of the largest natural gas producers in the Marcellus Shale and the fourth largest natural gas producer in the Lower 48 States, issued their second quarter 2015 update yesterday. There is a lot to digest in this massive update. Southwestern, you may recall, added to their already-considerable northeastern Pennsylvania Marcellus holdings by purchasing WPX’s NEPA leases, wells and operations in a $300 million that closed in February of this year (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). So this 2Q15 update will be the first full quarter to include numbers from the WPX purchase. Late last year Southwestern picked up a massive amount of new acreage and already-drilled wells in the southwestern portion of the Marcellus–most of it in West Virginia–in a $5.375 billion deal with Chesapeake Energy (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Yes, Southwestern is serious about the Marcellus! What do the 2Q15 numbers for Southwestern show?…
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Energy Companies | Southwestern Energy

Southwestern Energy Slide Deck w/MDN’s Favorites Identified
July 28, 2015July 28, 2015

Southwestern Energy Company turned in their latest quarterly update yesterday (see our companion story today). Perhaps the biggest eye-opener for us is learning that Southwestern is now the fourth largest natural gas producer in the United States (lower 48 states). In addition to yesterday’s quarterly update, Southwestern released their latest PowerPoint presentation for analysts a couple of weeks ago. We have a copy of that presentation below along with our list of favorite slides. Lots of charts and graphs and yes, even useful information for landowners, investors, supply chain companies and competitors…
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Energy Companies | Gulfport Energy

Gulfport Releases Half of 2Q15 Update – The Good News Part
July 28, 2015July 28, 2015

Gulfport Energy released their second quarter 2015 operational (but not financial) update yesterday. Among the highlights: Production was up a huge 196% year over year–to an average 473.9 million cubic feet equivalent per day (MMcfe/d). Of that number, 457.6 MMcfe/d (97%) came from the Utica Shale. Gulfport’s current production mix is 77% natural gas, 13% natural gas liquids and 10% oil. How much money did Gulfport get for their products? They received, on average, $1.99 per Mcf for natural gas, $0.30 per gallon for NGLs, and $47.40 per barrel of oil. If you average it all together, it works out to be $2.60 per Mcfe. Gulfport is clever. They released the good news yesterday–how much production is up, etc. But they haven’t released the bad news about earnings–yet. The bad news shoe will drop on August 5th when Gulfport publishes their 2Q15 financial report. Meanwhile, let’s bask in the glow of good news…
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CONSOL Energy | Energy Companies

CONSOL Energy 2Q15: Marcellus Production Up 64%, CNX Rev Down 12%
July 28, 2015July 28, 2015

CONSOL Energy released their second quarter 2015 operating and financial update today. No mention of the pressure they are currently under by their #1 shareholder to spin off or sell off the gas drilling division (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). There are some bright spots from CONSOL for 2Q15, including a 64% increase in Marcellus Shale production (39 billion cubic feet equivalent in 2Q15) and a 524% increase in Utica Shale production (1.7 Bcfe in 2Q14, 10.6 Bcfe in 2Q15). If you read through the update you’ll find CONSOL believes Utica dry gas may be where they focus their future efforts, given recent results from some of their drilling. CONSOL is a complicated company–a lot of their operations and revenue deal with coal. It was a coal company long before it began drilling for natural gas. To analyze their financials–separating out the gas from the coal–is not easy. What we can tell you is that revenue from natural gas, NGLs and oil went down year over year, from $229.7 million in 2Q14 to $201.9 million in 2Q15 (12%), which isn’t nearly as bad as some of the other drillers in the Marcellus/Utica…
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Economic Impact | Industrywide Issues | Research

Marcellus/Utica Provide 85% of Natgas Production Growth Since 2012
July 28, 2015July 28, 2015

If you look at the incredible increase in shale production from 2012 to the present, 85% of that growth comes from two shale plays: the Marcellus and the Utica. So says the venerable U.S. Energy Information Administration. Why from those two plays? According to the EIA, “because of ongoing improvements in precision and efficiency of horizontal drilling and hydraulic fracturing occurring in those regions.” Not only do we have the biggest reserves in the northeast–we also have better tech and ways of getting at those reserves. How cool is that?…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA House Speaker Stands Firm Against Gov Wolf’s Severance Tax
July 28, 2015July 28, 2015

Thank God for Pennsylvania House Speaker Mike Turzai, Republican from Allegheny. Turzai continues to stand against the lunacy of Tom Wolf’s insane budget proposals, including a proposed Marcellus Shale severance tax that would further gut shale drilling in the state–handing the money raised over to teachers’ unions. Turzai said it’s time to think about overriding Wolf’s veto of the proposed Republican budget–a plan which balances the budget instead of running up the tab as Wolf would do. The Republican budget would INCREASE spending on education (something mainstream media doesn’t tell you) all while not increasing taxes on the middle class and without killing the Marcellus industry with a new/high tax. Socialist Tom Wolf won’t hear of it. So Turzai is putting out the word: Are there 16 Democrats in the House and 4 Democrats in the Senate that will be brave and bipartisan and reach across the isle to vote for a sane budget–to override Wolf’s veto? Apparently not yet–but perhaps there will be in time. Meanwhile, Wolf’s dirty tricks division continues to launch advertisements to smear Republicans, something Turzai calls “tawdry and unproductive”…
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