Marcellus & Utica Shale Story Links: Wed, May 13, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Energy Companies | Energy Services | EV Energy Partners | GASFRAC | Hydraulic Fracturing | Industrywide Issues | Ohio | Tuscarawas County
EVEP Reports Waterless Fracked OH Well is a Bust
Reading through earnings calls transcripts (hey, somebody has to do it), we discovered what we believe no one else has (yet) discovered or reported. On an earnings call yesterday, top management from EV Energy Partners, one of the largest acreage holders in the Utica Shale, shared interesting initial results from the test Utica well they drilled in Tuscarawas County, OH–a well drilled using waterless fracking technology from GASFRAC (see Details on GASFRAC’s Waterless Frack Test in OH Utica). The theory being tested by EVEP is that using water during fracking of a well targeted for oil recovery somehow damages the chances of oil recovery. GASFRAC used a mix of 75% butane and 25% mineral oil to frack EVEP’s “Nettles” well. The results? On yesterday’s earnings call EVEP Chairman John Walker revealed that after 90 days in production, the Nettles well is producing about half the production of a similar nearby well fracked using water. That is–the waterless frack job was a big disappointment…
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Magnum Hunter’s 5-Point Plan to Raise Cash in 2015
Yesterday MDN reported on Magnum Hunter Resources’ (MHR) first quarter 2015 update yesterday (see Magnum Hunter 1Q15: Prod. Up 66%, Financials Worse Than Expected). Something slipped by our notice–the section in the update that we call “Magnum Hunter’s 5-Point Plan to Raise Cash in 2015.” Buried in the update is a section called “2015 Liquidity Events” that outlines MHR’s strategy for raising money and keeping afloat in 2015. Below we show you what MHR said, and then we break it down and tell you what it means–we interpret what they said. The standout point (#5) is MHR’s plan to sell of $450 million worth of Utica Shale acreage…
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EIA DPR May 2015: Shale Production Slips, But Not in Marc/Utica
Our favorite government agency, the U.S. Energy Information Administration (EIA), released our favorite government report, the Drilling Productivity Report, yesterday. There is important news to report from the DPR. First, the total amount of natural gas produced across all of the seven major commercial shale plays tracked in the DPR slide backward for the second month in a row. Last month, you may recall, was the very first time in the modern shale era when production month to month was not higher than the month before (see First Time Ever: US Shale Produces Less Oil/Gas Month Over Month). That trend continued this month (forecasting for volumes in June). Last month the total volume reduced by 23 million cubic feet per day (Mmcf/d) than the month before. This month? It goes down 112 Mmcf/d. That is, the shrinkage in production is accelerating. Except in two plays. Can you guess which two shale plays are still in positive territory–producing more shale gas this month than last month, hitting new all-time highs? That’s right–the Marcellus and Utica. All other shale plays produced less natural gas this month than last with the exception of the Marcellus, hitting a new high of 16,737 Mmcf/d (or put another way, 16.737 billion cubic feet), and the Utica, hitting a new high of 2,509 Mmcf/d (2.509 Bcf/d)…
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Butler County | Energy Companies | Industrywide Issues | Pennsylvania | Processing Plants | Regulation | XTO
XTO Files Paperwork to Double Size of NGL Plant in W PA
In 2013 XTO Energy began operation at its very own natural gas liquids (NGL) cryogenic processing facility in Butler County, PA (see XTO’s New NGL Recovery Plant in Butler County, PA Now Online). Life is good in the midstream. According to the Pittsburgh Business Times, XTO has just filed paperwork with the state to build a new plant at the site, doubling capacity at the facility…
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USGS Research – Marcellus Wastewater from 13 PA Wells Tested
The U.S. Geological Survey (USGS) has just published a new research paper on the topic of produced water–the water that comes out of a drilled hole, drilled for an oil or gas well. The paper, titled “Organic and inorganic composition and microbiology of produced waters from Pennsylvania shale gas wells” was published in the journal Applied Geochemistry and looked at produced water samples from Pennsylvania Marcellus Shale wells. The weakness in the research is that it is based on water samples from only 13 wells. Quite frankly, the research (which we think pursues a worthwhile line of inquiry) raises more questions than it answers. What can we divine from this study? In our cursory review, it appears two things stand out: (1) Although the inorganic chemistry of the produced water was pretty consistent across all 13 wells, there were big differences in the organic geochemistry and microbiology (bacteria) from well to well; and (2) volatile organic compounds (VOCs) were found in only a few samples–just 4 of the 13 wells…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline
Lunacy: NH Group Votes Against Pipeline Because of Global Warming
It’s maddening. It makes one want to scream, “You idiots! Can’t you see the utter hypocrisy?” But it happens more than we’d like to admit. A group of “volunteers” who advise the Select Board in the New Hampshire community of Wilton have unanimously voted to oppose Kinder Morgan’s proposed expansion of the Tennessee Gas Pipeline that would run through Hillsborough County. The reason they oppose it? Natural gas is not a “renewable” energy source. They don’t oppose it because pipelines are unsafe or in any way threaten the environment. Nope. They oppose it because they cling to the belief that mankind is causing catastrophic global warming by using fossil fuels. Meanwhile, everything in their lives is made possible by the very fossil fuels they profess to loathe. And they don’t see it–don’t understand it–don’t seem to comprehend it. We want to point out that, in their own words, they voted against support for the pipeline because they are prejudiced against fossil fuel energy and they seek to deny everyone else the option of using it…
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The #1 Factor in Earth’s Temps/Weather (Hint: It’s Not Mankind)
Do you know what the single biggest factor is that governs earth’s weather and temperatures across the globe? If you guessed burning fossil fuels and the amount of carbon in the atmosphere–you would be dead wrong. The single biggest factor affecting our climate has nothing to do with mankind–it is the sun. You know, that bright yellow thing in the sky? The sun heats the earth, and when the sun has sunspots–or radiation storms–that activity causes temps on ole Mom Earth to spike up. What happens when there is an absence of sunspots? What has happened over the past 20 years that there have been fewer and fewer sunspots–the earth stops getting warmer and begins to cool. Nearly all of the opposition to natural gas drilling and pipelines comes from people with an irrational hatred of fossil fuels–people who believe we’re about to fry because of “global warming.” That’s what drives opposition to good, wholesome, beneficial use of fossil fuels. So every now and again we highlight stories on so-called climate change–because that’s at the root of why most people oppose natural gas. Paul Driessen, author of the book “Eco-Imperialism: Green Power – Black Death” and Senior Policy Analyst with the Committee For A Constructive Tomorrow has written a top shelf article on the always excellent Natural Gas Now website. We think this article does a great job of explaining why the earth warms and cools–in cycles. So we’re bringing you his article here in total…
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Marcellus & Utica Shale Story Links: Tue, May 12, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Belmont County | Energy Companies | Greene County (PA) | Ohio | Pennsylvania | Rice Energy | Washington County
Rice Energy 1Q15 Earnings Call: 100% Focused on 3 Counties
Last Friday MDN brought you the Rice Energy first quarter 2015 update (see Rice Energy Doubles Production 1Q15; Utica Flows; Ekes Out a Profit). On Friday, Rice’s upper management held an earnings call with analysts and as always, quite a bit more comes out in the call than in the official press release. Below is Rice Energy CEO Dan Rice’s prepared remarks on that call with some interesting details on both their Marcellus and Utica operations. Among the interesting comments: Rice is 100% focused on just three counties in the Marcellus/Utica…
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Butler County | Carroll County | Energy Companies | Lawrence County | Ohio | Pennsylvania | Rex Energy
Rex Energy to Sell Acreage in OH & PA, Focus on 3 Counties
Last week MDN brought you the first quarter 2015 update for State College, PA-based Rex Energy (see Rex Energy 1Q15: Production Up 61%, Revenue Down 33%, Gulf Coast Deal). Rex’s management held an earnings call later that day, and as is typical, a some important news was revealed on that call that was not included in the press release update. Namely, Rex is looking to sell it’s leased Utica Shale property in Belmont, Guernsey and Noble counties in Ohio. They also plan to sell leases in Westmoreland, Clearfield, and Centre counties in PA. When it’s all over and done, Rex will be concentrating on just three counties…
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American Energy Partners | Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | XTO
Another Belmont County Landowner Threatened with Forced Pooling
In April MDN told you about a landowner in Belmont County, OH who had questions and objections to phrasing in a proposed lease agreement from XTO Energy that talks about “nuisance oil” (see XTO Threatens Belmont County, OH Landowner with Forced Pooling). NEVER sign a lease without running it by a competent oil & gas attorney, and ALWAYS get the sometimes obscure terminology in a lease explained before you sign it. That’s our advice. We have another story along the same lines as the “nuisance oil” story–language that energy companies can’t or won’t explain to landowners. This one also comes from Belmont County, OH–perhaps the hottest of the hot places for drilling right now in the Utica Shale. A landowner from Martins Ferry, OH says XTO offered him an eye-popping $8,000 per acre signing bonus with 20% royalties, and Aubrey McClendon’s American Energy Partners offered $6,000 per acre with 20% royalties. Both have a “market enhancement clause” in the lease. The landowner didn’t like the clause, fearing it would reduce his royalties. The landowner was told by either XTO or AEP or both (we’re not sure), that they would force pool him if he didn’t sign. By force pooling him he would not get a signing bonus at all and only a 12.5% royalty. These kinds of strong-arm tactics give the industry a black eye in our opinion…
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Magnum Hunter 1Q15: Prod. Up 66%, Financials Worse Than Expected
Magnum Hunter Resources, now a pure play company focused on the Marcellus and Utica Shale region, released their first quarter 2015 update this morning. On the positive side we learn that production as up a healthy 66% in 1Q15 vs 1Q14. Production costs–how much it costs to produce the natural gas/oil/liquids, went down a big 36% year over year. And Magnum Hunter now owns ~80,000 net acres located in the Marcellus Shale and ~130,000 net acres located in the Utica Shale. Eureka Hunter, the company’s pipeline subsidiary, had new record high throughput volumes. But on the downside the company lost $0.57 per share. The “consensus” estimate was that they would lose $0.32 per share, so the performance of the company financially, if you want to think of it this way, was roughly twice as bad as Wall Street watchers thought it would be. Look for the stock price, which (before the opening) was trading at $1.86 per share–well off the typical $8 per share or so over the past year–to take a further beating…
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More Marcellus Gas for Philly: Texas Eastern Pipeline Expansion
A new pipeline expansion project that will bring more cheap, abundant and wholesomely fracked Marcellus Shale gas to the Philadelphia, PA area was announced late last year by Spectra Energy–and somehow it escaped our notice! The Greater Philadelphia Expansion Project will not involve building any new greenfield pipeline but rather will expand (using larger diameter pipes and looping new pipes next to existing pipes) for the Texas Eastern pipeline that already serves the Philly area. Currently, the Texas Eastern pipeline delivers 550,000 dekatherms per day (Dth/d) of natural gas into the greater Philadelphia region (roughly 550 million cubic feet per day). The expansion will add an additional 475,000 Dth/d (or 475 Mmcf/d)–nearly doubling capacity. The open season–the time when customers can officially sign contracts to reserve capacity–ended last Friday. No word yet on how that went. According to Spectra Energy, this is very early days yet in the life of this proposed project. Below we have more details about the project along with a map…
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Washington Gas $126M Deal to Bring Marcellus Gas to DC Suburbs
Washington Gas, a natural gas utility serving customers in Washington, DC, Maryland and Virginia, announced a deal last week to purchase Marcellus Shale natural gas directly from 22 producing wells in Pennsylvania to be used to sell to Washington Gas’ customers in Virginia. Yes, some of that cheap, abundant and wholesomely fracked Marcellus Shale gas will be going to the Washington, DC suburbs. The deal is with Energy Corporation of America (ECA) for $126 million and runs for 20 years. It is the first such deal under a new 2014 Virginia law that allows such investments. Here’s the details…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell
Shell to Close on PA Cracker Plant Property in “Next Few Months”
Last week we told you a positive sign that the proposed $2-$3 billion ethane cracker plant to be built by Shell in Monaca (Beaver County), PA was the joint information session recently held by the Dept. of Environmental Protection and Shell to discuss an air quality permit the DEP will issue for the project (see Progress: DEP & Shell Hold Info Session on PA Cracker Plant). Here’s yet another very encouraging sign: Horsehead Corporation, which still owns the site Shell would use to build the plant, said in their first quarter update that they expect to close on a sale of the property to Shell “within the next few months”…
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Reading through earnings calls transcripts (hey, somebody has to do it), we discovered what we believe no one else has (yet) discovered or reported. On an earnings call yesterday, top management from EV Energy Partners, one of the largest acreage holders in the Utica Shale, shared interesting initial results from the test Utica well they drilled in Tuscarawas County, OH–a well drilled using waterless fracking technology from GASFRAC (see 
Last Friday MDN brought you the Rice Energy first quarter 2015 update (see