Marcellus Drilling News

BG Group | Energy Companies | Industrywide Issues | M&A | Shell

LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger
April 9, 2015April 9, 2015

It’s an LNG love story. Yesterday Shell announced they are buying BG Group, the former British Gas, for $69.7 billion dollars. To put it in perspective, in 1998 Exxon bought Mobil for $80 billion, forming what is now ExxonMobil. So this is that kind of scale–really really huge. The oil and gas industry is buzzing about the deal. Is this the first of many such consolidations, given the low price of oil? Will the Shell/BG deal impact shale drilling? What does it ultimately mean? We’ll leave it to others to discuss the broader implications. What we always wonder is, how will this affect the Marcellus/Utica? We have a few thoughts. Both Shell and BG have acreage in the Marcellus/Utica. But before we get to that, the first thing to understand about the Shell/BG deal is that it’s about LNG. This merger will make Shell the largest player in the global LNG market–easily twice the size of the nearest competitor…
Read More “LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger”
CNG/LNG | Exporting | Industrywide Issues | Research

Moody’s: “Vast Majority” of LNG Export Projects Will be Canceled
April 9, 2015April 9, 2015

The analysts at Moody’s Investors Service have turned decidedly bearish on the plethora of proposed LNG (liquefied natural gas) export plants in both the U.S. and Canada. There are nearly 30 LNG export plants proposed in the U.S., 18 proposed projects in western Canada, and 4 in eastern Canada. One of them–Cove Point, Maryland, being built by Dominion–is right now in the midst of construction. The Cove Point plant will export Marcellus and Utica Shale gas to Japan and India. A number of the other LNG plants would also export Marcellus/Utica gas–in particular the four proposed plants in Nova Scotia (see Canadian LNG Exports, New England Pipelines & the Marcellus). However, according to Moody’s, the “vast majority” of proposed LNG projects, including the four in Nova Scotia, will never happen…
Read More “Moody’s: “Vast Majority” of LNG Export Projects Will be Canceled”
Industrywide Issues | Research | Reserves (Proved and Unproved)

New Report: Marcellus/Utica Holds 35% of U.S. Recoverable Natgas
April 9, 2015April 9, 2015

The Potential Gas Committee (PGC), a private non-profit organization loosely affiliated with the Colorado School of Mines, performs a comprehensive study of potential supplies of natural gas in the United States every two years. In April of 2013 MDN reported the committee’s findings of just how much gas is down there (see Marcellus Region Contains Huge 33% of All U.S. Recoverable NatGas). It’s two years later and time for a new report. PGC is reporting because of shale and new technology, the U.S. now has more technically recoverable natural gas than it has ever had in its history–over 2,515 trillion cubic feet. Two years ago the Marcellus/Utica represented 33% of the entire supply of recoverable natural gas. Now? That number is up to 35%. Below we have the press release and detailed summary of the report, along with a slide deck published by the PGC yesterday…
Read More “New Report: Marcellus/Utica Holds 35% of U.S. Recoverable Natgas”
Chesapeake Utilities | Energy Services | Industrywide Issues | M&A | Ohio | Pipelines | Statewide OH

Chesapeake Utilities Completes $59M Purchase of OH Midstream Co.
April 9, 2015April 9, 2015

In February MDN told you about Chesapeake Utilities, a diversified energy company with businesses in natural gas distribution, transmission and marketing, electricity distribution, propane distribution and wholesale marketing (nothing to do with Chesapeake Energy) purchasing a small midstream company in Ohio–Gatherco, Inc (see Chesapeake Utilities Buys OH Midstream Co, Targets Shale Industry). Part of the motivation is to target the Utica Shale industry in Ohio by building gathering pipelines. Last week Chesapeake Utilities announced the deal is now done and Gatherco has been renamed and merged with Chesapeake subsidiary Aspire Energy of Ohio…
Read More “Chesapeake Utilities Completes $59M Purchase of OH Midstream Co.”
Carrizo Oil & Gas | Energy Companies

Carrizo CEO Sells 6K Shares of Stock for $307K
April 9, 2015April 9, 2015

Chip Johnson, CEO of Carizzo Oil & Gas, an active driller in both the Marcellus and Utica Shale, has just sold 6,000 shares of company stock that he owns, netting him a cool $307,380. Does it mean anything? Not really. After selling those 6,000 shares, he still owns 608,356 shares worth $31 million. So we think about all it means is that Chip and his family are planning a summer vacation…
Read More “Carrizo CEO Sells 6K Shares of Stock for $307K”
Industrywide Issues | Ohio | Regulation | Trumbull County | Wastewater

ODNR Shuts Down 5 Injection Wells in Vienna, OH After Spill
April 8, 2015April 8, 2015

The Ohio Dept. of Natural Resources last week ordered the operator of five injection wells–all located in one area in Vienna Township (Trumbull County), OH–to close them all down. That somewhat radical action came following a finding that some of the frack wastewater meant to go down into the wells for injection had instead ended up in a nearby pond and wetland, contaminating both. The operator of the five injection wells is Kleese Development Associates of Warren, OH…
Read More “ODNR Shuts Down 5 Injection Wells in Vienna, OH After Spill”
CONSOL Energy | Energy Companies

CONSOL Energy Becomes 3rd Driller to Receive CSSD Certification
April 8, 2015April 8, 2015

And then there were three. The Center for Sustainable Shale Development (CSSD) has been fighting some pretty stiff headwinds. The organization was founded by a group of shale industry people and environmentalists reaching across the isle to forge strict standards that both sides can live with. Environmental leftists, like Mamma Teresa Heinz Kerry and her Heniz Endowments, pulled support and have actively worked against the CSSD (see She Speaks! Teresa Heinz Kerry Talks re Endowments Firings, CSSD). Other so-called environmental groups like the William Penn Foundation also bailed. But new supporters stepped into the breach to take their shoes (see CSSD Thrown a Lifeline from Richard King Mellon Foundation). On the industry side, not all that many stepped up to receive the CSSD’s thorough examination. The first to do so was Chevron. The second, not along ago, was Shell. And now CONSOL Energy has become the third Marcellus driller to apply for and receive CSSD certification. All three were part of the original working group that formed the CSSD–it’s good to see they’re setting an example…
Read More “CONSOL Energy Becomes 3rd Driller to Receive CSSD Certification”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Research | Reserves (Proved and Unproved)

Expert” Predicts Marcellus Production Will Peak in 2015
April 8, 2015April 8, 2015

An alarmist article appears on the Seeking Alpha website which posits (indeed strongly implies) that production in the Marcellus Shale will top out in 2015 and then begin to decline. The article bases this assertion on the observation that other shale plays in the U.S. have already turned the corner and have started to decline. The article is authored by Bill Powers–ring a bell? He’s been making the same prediction since 2012 when he published a “peak natural gas” book–and he’s been trying to peddle his book ever since (see Energy Industry Expert Says Shale Gas Will Last < 10 Years). Back in 2012 Powers said we have a 5-7 year supply of shale gas and that’s it. Last time we checked the numbers (now 2 1/2 years later from Powers’ original prediction date), shale production continues to go through the roof with no signs of slowing down, and proved reserves of shale gas continue to grow exponentially…
Read More “Expert” Predicts Marcellus Production Will Peak in 2015″
Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Halliburton Shotgun Divorce – Forced to Sell Certain Divisions
April 8, 2015April 8, 2015

Some interesting news from Halliburton concerning their takeover of Baker Hughes (see Halliburton & Baker Hughes Vote to Approve Shotgun Wedding). It seems the table has been turned on Halliburton. In order to avoid anti-trust violations, Halliburton will, grudgingly, sell off several profitable divisions: Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD). Yesterday Halliburton said they will likely have the merger with Baker Hughes done before selling off those divisions. They stressed it will be business as usual for customers while the divorce, er, sale proceeds…
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Industrywide Issues | Research

USA is #1 Natgas and #1 Oil Producer in the World in 2014
April 8, 2015April 8, 2015

Some astonishing new numbers from the U.S. Energy Information Administration. For the third year in a row, when you add both natural gas and oil together, the United States has been the #1 producer of hydrocarbons in the world. But this is even more astonishing and something MDN’s friends disbelieve when we tell them: for the third year in a row the U.S. has produced more natural gas than another other country in the world (namely Russia, who is #2). And get this: for two years running the U.S. has produced more oil than any other country in the world, including Saudi Arabia. When was the last time you heard that on the evening news? Yeah, NEVER. Fracking is nothing short of a miracle that has radically changed the energy outlook of this country–and it’s a miracle that should be celebrated every chance we get. Here’s the numbers and story from the EIA with news that once again, USA is #1!!!…
Read More “USA is #1 Natgas and #1 Oil Producer in the World in 2014”
Carroll County | Electrical Generation | Industrywide Issues | Ohio | Utica Shale

New Utica-Powered Electric Plant Breaks Ground in Carrollton, OH
April 8, 2015April 8, 2015

A new Utica Shale-powered electric generating plant to be built in Carroll County, OH was first announced back in 2013 (see New NatGas Powered Electric Plant Coming to Carroll County, OH). Advanced Power Services’ Carroll County Energy LLC plans to plunk down $900 million to build an electric plant north of Carrollton. Good news: the company now has all of its approvals and will break ground later this week…
Read More “New Utica-Powered Electric Plant Breaks Ground in Carrollton, OH”
Belmont County | Energy Companies | Gulfport Energy | Industrywide Issues | Litigation | Ohio

Barnesville Officials “Didn’t Think” When Signing Gulfport Water Deal
April 8, 2015April 21, 2015

A few weeks ago MDN told you about a legal battle shaping up in Belmont County. Gulfport Energy has sued the town of Barnesville over a contract dispute (see Gulfport Energy Sues Barnesville, OH for Access to Water in Reservoir). Barnesville signed a contract with Gulfport to sell them water for drilling and fracking from the Slope Creek Reservoir–for 1 penny per gallon. Then Barnesville signed a contract with Antero Resources to lease land, and of course Antero needs water too (and apparently went to the head of the water line). Barnesville now says the reservoir has been drawn down too low to sell water to Gulfport (other drillers dipping in the reservoir?) so Barnesville wants to renege on the contract and now finds themselves in federal court. Now the 4,100 residents of Barnesville will pay out the nose for outside legal council to defend the town because of their leaders “didn’t think”…
Read More “Barnesville Officials “Didn’t Think” When Signing Gulfport Water Deal”
Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

WV House Republican Pat McGeehan Takes Aim at Forced Pooling
April 8, 2015April 8, 2015

Pat McGeehan is a member of the West Virginia House of Delegates. His district includes Hancock and northern Brooke counties, which is the very tippy top of the northern panhandle in WV. Pat was born in Oklahoma (an Okie! LOVE Oklahoma) and he lives and works in and loves West Virginia (LOVE West Virginia!). Pat is an author, having penned “Printing Our Way to Poverty–The Consequences of American Inflation” and a new book coming out this spring titled, “Liberty and the Christ: Why Christians Should Embrace Political Freedom.” Pat is a Republican and a strong supporter of the shale drilling industry. He’s also against forced pooling. Pat is a man after our own heart. He recently penned an excellent and eloquent article taking direct aim at forced pooling in WV…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pipelines | Statewide OH

ET Rover Pipeline Launches New Website, Updated Route Maps
April 8, 2015April 8, 2015

ET Rover is a now 711-mile (down from 830-mile) Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers that will cost $3.7 billion (down from $4.4 billion) to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada (see ET Rover Pipeline’s 800-Mile Journey Begins with FERC Filing). As with all Marcellus/Utica pipeline projects, ET Rover hasn’t been without its detractors and legal issues (see OH Law Firm Asks FERC to Stop ET Rover Pipeline Eminent Domain). Yesterday Energy Transfer Partners, the company that will build ET Rover, announced a new website. They also provided updated maps to county libraries along the proposed path of the pipeline’s route…
Read More “ET Rover Pipeline Launches New Website, Updated Route Maps”
Hydraulic Fracturing | Industrywide Issues | Maryland | Regulation | Statewide MD

Maryland Republican Senator Votes to Delay Fracking (Say What?)
April 8, 2015April 8, 2015

Another “with friends like these, who needs enemies” stories when it comes to fracking in Maryland. It had seemed as though fracking in the Old Line state might take off–perhaps not soon, but at least at some point in the next year or two (see Maryland Gets Ready to Frack! Gov O’Malley Files New Regulations). We should have known former Maryland Gov. Martin O’Malley, a lefty Democrat, only issued new fracking regs on his way out of office because he wants to run for president (he never wanted fracking). Still, we take our victories any way we can get them. But then the House and Senate started larding up the issue by passing all sorts of bills that would throttle or even prevent fracking. Last week the Maryland House passed a moratorium for three years, and on Monday of this week, the Maryland Senate passed a mortatorium for two years. The curious thing is that Maryland Republican State Senator George Edwards, whose district in Western Maryland is about the only district that would conceivably see fracking, voted FOR the two year moratorium! He supposedly supports fracking. Wait…did we miss something? Did logic and common sense just go out the window? More politics as usual?…
Read More “Maryland Republican Senator Votes to Delay Fracking (Say What?)”
About MDN | MDN Resources

Will the Marcellus/Utica Overtake the Henry Hub? We Have an Answer
April 8, 2015April 8, 2015

MDN Editor Jim Willis had the pleasure of hosting a webinar yesterday on behalf of NGI – Natural Gas Intelligence. Jim’s “other day job” includes helping NGI with marketing their great publications–including Shale Daily, Daily Gas Price Index, Forward Look and more. Yesterday Jim moderated a webinar provocatively named “Will the Marcellus/Utica Overtake the Henry Hub?” On the call was NGI’s in-house expert Pat Rau, director of strategy and research for NGI, who laid out a top-notch analysis of what’s coming down the pike for the Marcellus, and his thinking on whether or not the venerable Henry Hub delivery point (in south Louisiana), which is used as a proxy for the average price of natural gas, might one day be replaced with a different “basis” point–say Dominion South (from the Marcellus). The whole shebang went about 45 minutes.

MDN readers can listen to the on-demand replay and download the slides for free by going to: www.naturalgasintel.com/webinar.