Marcellus & Utica Shale Story Links: Thu, Feb 26, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Member of Wolf DEP Transition Team Confused by Severance Tax Plan
Charlie Schliebs is managing director of Stone Pier Capital Advisors in Pittsburgh–a boutique mergers & acquisitions (M&A) advisory firm that provides “highly sophisticated services to companies with enterprise values ranging from $5 million to over $50 million” according to their website. Charlie was on the PA Gov. Tom Wolf transition team for the Dept. of Environmental Protection (DEP) and said “it was a good experience.” Charlie is also, generally, a Tom Wolf fan. He likes the fact that Wolf isn’t a typical politician and was/is a successful businessman. Charlie supported Wolf in the last election. Charlie is also an MDN reader. You know we’re not Tom Wolf fans–in particular with respect to his severance tax proposal. In Stone Pier’s latest newsletter for friends and customers, Charlie writes an important cover story about Wolf and his severance tax proposal–and why he’s confused by it. We’re happy to bring it to you–it’s an important read…
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OH Utica Hits 1,824 Permits – Top 10 Counties & Top 10 Drillers
It’s been a while since we’ve “run the numbers” on the Utica Shale. As of February 21st, there have been a total of 1,824 Utica permits issued. Of that, 816 are currently online and producing. Below we share the numbers, including the top 10 counties by number of permits, and the top 10 companies by number of permits…
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Range Resources Cuts 2015 Budget 46%, Focus Continues on Marcellus
Yesterday Range Resources published a recap of the company’s performance in 2014 along with comments and guidance on 2015. In 2014, Range production averaged 1.16 billion cubic feet equivalent per day (Bcfe/d) which was 32% liquids. That’s a 24% increase from 2013 levels. Range’s proved reserves rose 26% to 10.3 trillion cubic feet equivalent by the end of 2014. Range expects 2015 output to reach 1.3 Bcfe/d. Even with an expected 20% increase in production for 2015, Range, like most other drillers is cutting way back. Their 2015 capital budget is being slashed 46% to $870 million (down from $1.3 billion in 2014). The good news is that 95% of the 2015 budget will be spent right here–drilling in the Marcellus Shale…
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Eclipse Resources Proved Reserves for 2014 Jump 353%
Eclipse Resources is a “pure play” energy company–concentrating their efforts in the Marcellus and Utica Shale region. They’re one of the smaller drillers in the northeast. But hey, we love ’em all–big and small. Well, we love almost all of ’em. 😉 Eclipse reported last week that their proved reserves–the amount of gas that can be economically extracted from their acreage–increased 353% last year! That’s an impressive number. Of course you have to put it in perspective. The total amount of proved reserves for Eclipse’s acreage is 355.8 billion cubic feet equivalent. The northeast’s largest drillers–like EQT, Antero Resources and Range Resources–have proved reserves exceeding 10 trillion cubic feet equivalent, which is 28 times or more the size of Eclipse’s proved reserves…
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Chesapeake Utilities Buys OH Midstream Co, Targets Shale Industry
Chesapeake Utilities Corporation is a diversified energy company with businesses in natural gas distribution, transmission and marketing, electricity distribution, propane distribution and wholesale marketing, and “other related services.” The utility branch of Chesapeake serves 225,000 customers with natural gas, electricity or propane gas. Chesapeake Utilities employs approximately 800 people. And no, Chesapeake Utilities, headquartered in Delaware, has nothing to do with Chesapeake Energy, headquartered in Oklahoma. Chesapeake Utilities has decided it’s time to pursue the shale market, so they recently purchased a small midstream (i.e. pipeline) company in Ohio–Gatherco, Inc….
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Carrizo Call Reveals Recent Results for Guernsey, OH Utica Well
A few weeks ago Carrizo Oil & Gas announced they would not do any new drilling in the Marcellus/Utica in 2015 and instead pull back and concentrate on other plays–namely the Eagle Ford in Texas (see Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015). In an analyst call yesterday Carrizo officials reiterated that strategy, saying they were still “early” to the play and lack of pipeline infrastructure played a role in their decision to suspend Utica drilling. They also had some interesting things to say about the production coming from a Utica well just brought online in Guernsey County and their future prospects for drilling in the condensate window of the play–whenever they return to the Utica…
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WV HB2688 Forced Pooling Bill Continues March Toward Passage
Last week MDN gave you a heads-up that a new forced pooling bill has picked up steam and is moving through the process in the West Virginia legislature (see WV Forced Pooling Bill HB2688 – Good or Bad for Landowners?). The 60-day legislative session in WV is now just past the halfway mark and HB2688 continues to move. It passed the House Energy Committee and is now before the House Judiciary Committee. The bill is polarizing. It seems, at least at a distance, that Republicans (who control both the House and Senate in WV) are lining up to support the bill, and Democrats are lining up to oppose it. Which puts us in the strange circumstance of tilting to the Dem side on this issue. Below we’ve located a good rundown of the main provisions in the bill, along with an editorial written by a House Democrat who opposes the bill–listing his reasons…
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Chevron Consolidates Reduced Marcellus Workforce Under One Roof
In January, Chevron announced it is cutting 23% of its Marcellus Shale workforce in the Pittsburgh area (see Chevron Laying Off 23% of their Marcellus Workforce in Pittsburgh). Last July, the company put a long-planned massive new 350,000 square foot office complex project they planned to build in Moon Township on hold (see Chevron Puts Moon Twp, PA Office Building Project on Hold). The new office complex project is still under reconsideration. Meanwhile, since they’ve downsized, Chevron is consolidating the workforce under one roof, renting a new office space in Moon Township…
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Atlas Resources Takes Out “2nd Lien” to Raise $250M in Cash – Why?
Sometimes the world of high finance and elaborate corporate structures–particularly in the oil and gas industry–just boggles our minds. Sometimes it’s hard to wrap your brain around it. This is one of those times. In the past we’ve chronicled the rise and sale of Atlas Energy, a once-major driller in the Marcellus Shale. In 2011 Chevron bought a big chunk of Atlas for $4.3 billion (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). The Cohen family that runs the company is interesting and colorful. They bought into the company in the 1990s and happened to be in the right place at the right time, just prior to the discovery of the Marcellus (see The Unconventional Rise & Sale of Atlas Energy). Then in October of last year, the Cohens did it again. They sold more of what was left–for a truly astonishing $7.7 billion–to Targa Resources Partners (see Atlas Energy/Pipeline Sells Itself (Again) – for $7.7 BILLION!). What’s left now? With respect to the Marcellus, we don’t think there’s much left. But Atlas still does own operating interests in Marcellus wells, so when we saw a press release from the company saying they have just taken a “second lien” on the company to raise $250 million in cash, it piqued our interest…
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USGS Scientists: Earthquakes from Injection Wells Can be Mitigated
Last week a scientific research paper was published in the magazine Science on the topic of earthquakes related to injection wells. The paper is the result of a series of workshops by the U.S. Geological Survey. Although we don’t have a copy of the full paper, we do have a summary. A summary of the summary is this: fracking shale results in a lot of fluid that gets disposed of via Class II injection wells. Some of those wells are near faults and result in tremors–most of the time unfelt. There is, in the opinion of the USGS scientists, a direct connection between the increase in fluid injection from shale drilling and the rise (and clusters) of low-level earthquakes. The good news? There are strategies for “mitigating the effects of human-induced earthquakes caused by wastewater injection” which are discussed in the paper…
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ShaleNavigator Adds Updated Frack Waste Facilities Layer to Maps
As many MDN readers know, MDN editor Jim Willis partners with Ed Camp from ShaleNavigator, using ShaleNavigator’s top-notch mapping software to create the marvelous maps found in the Marcellus and Utica Shale Databook series. Ed maps the most recent round of permits issued (over the previous four months) on county maps, showing driller name and location for each volume of the Databook. But the maps show a lot more than just permit locations–like major natural gas pipelines, the locations of compressor stations and over a dozen other “layers” available to users of the ShaleNavigator service.
You can now add one more updated layer to the service: the location of frack waste facilities used by Marcellus and Utica Shale drillers. The most recent volume of the 2014 Databook, Volume 3, contains that very information: a complete list (with addresses and phone numbers) for frack waste facilities. Ed has used the location data for those waste facilities compiled for the Databook and has added the updated layer for users of his excellent service. The press release is below. Be sure to give ShaleNavigator a try by signing up for a free 7-day trial account…
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Marcellus & Utica Shale Story Links: Wed, Feb 25, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Allegheny County | Energy Companies | Industrywide Issues | Olympus/Huntley & Huntley | Pennsylvania | Statewide PA | Taxation
Wolf’s Severance Tax Threat Costs Small PA Town $315,000
Two weeks ago the hapless newly elected governor of Pennsylvania, Tom Wolf, introduced a new 7.5% severance tax plan to soak the Marcellus Shale industry in his state (see PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax). Wolf wants to target one industry, oil and gas, to give their hard-earned money away to another industry, teachers. He’s trying to pay back all of those good union voters in Philadelphia who elected him. But Wolf’s threat of a tax is already having very tangible consequences. Huntley & Huntley Energy Exploration has pulled out of a deal to lease 90 acres of land owned by Harmar Township (Allegheny County), PA. That just cost Harmar $315,000. Why did Huntley & Huntley pull out? The uncertainty over Wolf’s severance tax. If the tax passes, a great deal of drilling in PA’s Marcellus Shale will be idled–and that’s not idle speculation…
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Cabot Cuts 2015 Budget 44%, Will Drill 70 New Marcellus Wells
Last week Cabot Oil & Gas issued its fourth quarter 2014 and full year 2014 update, along with guidance on what they plan to do for 2015. In October Cabot said they would spend upward of $1.6 billion on drilling in 2015 and planned to grow their production a very healthy 20-30% (see Cabot O&G 3Q14: A Wandering Eye + Welcome to the 2 Bcf/d Club!). Last week Cabot slashed the budget to $900 million and their new planned growth projection is 10-18%. Cabot also said they’re downsizing their rig fleet–in the Marcellus they’re going from 5 rigs to 3, and in the Eagle Ford (Texas) they’re cutting back from 3 rigs to 1. Revenue for 2014 was down 63% over 2013 due mostly to the low price of natgas along with certain other “impairment” charges. Amidst the bad news of budget cuts and lower revenue, there was really good news: Cabot hit a new production high of 531.8 billion cubic feet in 2014, up 29% from 2013; proved reserves increased 36%–to 7.4 trillion cubic feet equivalent; and they still plan to drill upward of 70 new wells in 2015 in the PA Marcellus (in Susquehanna County)…
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American Energy Partners | Chesapeake Energy | Energy Companies | Harrison County | Lease & Royalty Payments | Ohio | Utica Shale
Harrison County, OH Hauls in $1.6M in 2 Weeks from Utica Leases
Even though the price of oil and natural gas is depressed, there are still lease deals happening–particularly in the Ohio Utica Shale region–that make your eyes pop out. Whoops! Just had to put an eyeball back in. It popped out at the latest lease numbers coming from Harrison County, OH where they’ve taken in $1.6 million over the past couple of weeks…
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Charlie Schliebs is managing director of 
It’s been a while since we’ve “run the numbers” on the Utica Shale. As of February 21st, there have been a total of 1,824 Utica permits issued. Of that, 816 are currently online and producing. Below we share the numbers, including the top 10 counties by number of permits, and the top 10 companies by number of permits…
Two weeks ago the hapless newly elected governor of Pennsylvania, Tom Wolf, introduced a new 7.5% severance tax plan to soak the Marcellus Shale industry in his state (see