Marcellus Drilling News

Chief Oil & Gas | Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Tug Hill Operating | West Virginia

More Details on Tug Hill $100M Lease in WV Panhandle
November 13, 2014November 13, 2014

We have some more details about that lease deal for $100 million by Tug Hill Operating to lease land in Marshall and Ohio counties in the northern panhandle of West Virginia that we wrote about yesterday (see Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating). We know a bit more about Tug Hill and the person behind it, and we now know that the $100M deal is with about 500 families (average of $200,000 signing bonus per family), and that it’s not too late for others to get in on the deal…
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Energy Companies | Rice Energy

Rice Energy 3Q14: Production Up 93%, 2 Board Members Resign
November 13, 2014November 13, 2014

Rice Energy, focused solely on the Marcellus and Utica region, released their third quarter report yesterday and reports adding another 10,000 acres to their Marcellus/Utica portfolio–now with 136,422 acres under lease in the northeast. The company keeps drilling at a rapid clip, operating two rigs in the northeast. Because of previously drilled wells, production is up 93% from last year at this time–to 247 million cubic feet per day (Mmcf/d) on average during 3Q14. On the P&L side, Rice narrowed its loss during 3Q14 to $6.9 million, or 5 cents per share, down from $33.7 million, or 38 cents per share in 3Q13. Below is the update for Rice’s Marcellus and Utica drilling program, including midstream operations. At the very bottom of the update are details about the resignation of two board members…
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Energy Companies | Rice Energy

Rice Energy Readies Midstream Subsidiary IPO – How Much?
November 13, 2014November 13, 2014

Following in Antero’s footsteps, Rice Energy announced last week that they will launch an initial public offering (IPO) for stock in a new spun-off midstream subsidiary–Rice Midstream. You may recall Antero Resources, a company that concentrates on the Marcellus/Utica region, launched an IPO for their company a year ago that hauled in $1.57 billion (see Antero’s IPO Fetches $1.57B, Company Valued at $11B!). The much smaller Rice followed with their own IPO which did better than hoped, bringing in a cool $924 million (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Antero very recently floated an IPO for a midstream subsidiary and hauled in another $1B (see Antero Midstream IPO Hauls in $1B, Stock Trading High). Now Rice is floating an IPO for a midstream subsidiary. No, not to keep up with the Jones (we don’t think, anyway). But because it makes sense. How much is Rice looking to make?…
Read More “Rice Energy Readies Midstream Subsidiary IPO – How Much?”
Axiall | Energy Companies | Energy Services | Gastar Exploration | Hydraulic Fracturing | Industrywide Issues | Litigation | Marshall County | West Virginia

Gastar Fracking Near WV Chemical Plant Halted Pending Court Review
November 13, 2014November 13, 2014

Chemical manufacturer Axiall, with a plant in Natrium (Marshall County), WV, has successfully stopped Gastar from fracking several drilled shale wells located near the chemical plant. Why? They’re afraid that the fracking process will allow gas to travel underground and affect their previously drilled brine wells in the area. That exact scenario, according to Axiall, played out last year when Triad Hunter fracked wells nearby. The fracking, according to Axiall, led to a blowout at one of their brine wells and the well began emitting natural gas–an explosion hazard. A judge agreed with Axiall and put a stop to any fracking by Gastar pending a full hearing before the court…
Read More “Gastar Fracking Near WV Chemical Plant Halted Pending Court Review”
Energy Companies | Hess | Utica Shale

Hess Talks Utica at Investor Day – Predicts 40,000 Boe/d by 2020
November 13, 2014November 13, 2014

Earlier this week Hess hosted an analyst/investor day to discuss the company’s plans and strategies now that it has shed its retail and transportation operations (Hess doesn’t own those green Hess gas stations any more, see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Two weeks ago we noted with interest that Hess said almost nothing about the Utica in its third quarter update (see Hess 3Q14: Says Almost Nothing About Utica Operations). That changed earlier this week. During the analyst/investor soirée, Hess had quite a bit to say about the Utica…
Read More “Hess Talks Utica at Investor Day – Predicts 40,000 Boe/d by 2020”
American Energy Partners | Antero Resources | Energy Companies | Gulfport Energy | Ohio | Statewide OH

Muskingum Watershed District Sells only 136M Gal of Water So Far
November 13, 2014November 13, 2014

The Muskingum Watershed Conservancy District (MWCD), organized in 1933 to reduce the effects of flooding and conserve water for beneficial public uses, oversees 16 dams and reservoirs across 22 counties in Ohio, covering 20% of the state. It is a massive area under the oversight and control of the MWCD. We’ve previously covered their deals with Antero Resources to lease District property for drilling. We’ve also covered District deals to sell water to Antero and other shale drillers (see Muskingum Watershed Votes to Sell 209M Gals of Water for Fracking). Although the district has voted to sell 209 million gallons of water, so far in 2014 they’ve only sold 136 million gallons–or the amount of water used in four days by the city of Akron, OH. According to officials with the MWCD, water sales have had a “negligible” impact on the reservoirs–lowering the several reservoirs used by less than 3/4 of an inch. MWCD lowers reservoirs more than that each year for winter anyway–so actually there’s been no impact, especially since much of the water sold flows through pipelines instead of tanker trucks…
Read More “Muskingum Watershed District Sells only 136M Gal of Water So Far”
Energy Companies | Energy Services | Pennsylvania | Shell | Tioga County (PA) | UGI Energy Services | Utica Shale

UGI First Utility in PA with Direct Connection to Utica Shale
November 13, 2014November 13, 2014

The next big story for the Pennsylvania Marcellus Shale is not the Marcellus…it’s the Utica Shale, a layer a few thousand feet below the Marcellus. Our first piece of evidence? In September we brought you the exciting news that Shell has drilled six Utica wells in Tioga County, PA, two of them going online with stellar production (see Shell Drills 2 Successful Utica Wells in NEPA Marcellusland). Our second piece of evidence? UGI, a major utility company in Pennsylvania, reports they’ve just hooked one of those Utica wells into their natural gas distribution system–making UGI the first PA utility to directly tap into a Utica Shale well for retail residential delivery…
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Industrywide Issues | Pennsylvania | Research | Statewide PA

Bernstein: Marcellus Production Will Slow, Hit 25 Bcf/d in 2017
November 13, 2014November 13, 2014

A fascinating pair of research reports from Sanford C. Bernstein & Co. LLC as been analyzed and summarized in a top notch article by SNL Financial. Historically the Marcellus has been divided into northeast Pennsylvania and southwest PA, the SW including WV and a tiny bit of eastern OH. Also historically, the NE portion of the Marcellus has produced more dry gas (methane only) than the SW, which is richer in wet gas (or natural gas liquids). However, because of lack of pipelines in the NE, researchers say dry gas production throughout the Marcellus–particularly in the NE–will slow over the next few years. Another juicy tidbit from the report: Bernstein researchers predict natgas production from the Marcellus will hit 25 billion cubic feet per day (Bcf/d) by end of 2017–just three years from now…
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CNG/LNG | Energy Services | Industrywide Issues | Pennsylvania | Statewide PA | UIL Holdings

LNG Facility the Crown Jewel in Scuttled PGW Sale
November 13, 2014November 13, 2014

We find it interesting now that the corrupt Philadelphia City Council has torpedoed the deal to sell the Philadelphia Gas Works (PGW) to Connecticut utility company UIL Holding, the talk by council members has returned to the shiniest jewel in the PGW crown: their small LNG facility. You may recall that MDN previously warned of an ex-Enron employee, Boris Brevnov, who wanted to tank the sale to UIL so he could gain control of the LNG facility for himself (see Former Enron Exec Makes “Unethical” Play to Derail PGW Deal). With the deal now hosed, is Brevnov working in the background to get the LNG facility? We have no proof of that, but the thought has crossed our mind. The Philadelphia Inquirer has an article delving into the LNG facility and what may happen next in the ongoing saga of the PGW sale…
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Allegheny County | Industrywide Issues | Pennsylvania | Supply Chain

Non-Destructive Testing Company Opens Branch in Pittsburgh
November 13, 2014November 13, 2014

The depth and variety of companies that provide services for the shale industry never ceases to surprise us. Would you think that non-destructive testing (NDT) has a role in shale exploration and drilling? It does! And it has enough of a role that Applus RTD, a global energy service provider that delivers “technical assurance through non-destructive testing, inspection, and certification in every region of the world” has just opened a new branch office in Pittsburgh to service the demand for their services in the Marcellus/Utica region. One of their happy customers is Range Resources…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Nov 13, 2014
November 13, 2014November 13, 2014

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
Read More “Marcellus & Utica Shale Story Links: Thu, Nov 13, 2014”
Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Tug Hill Operating | West Virginia

Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating
November 12, 2014November 12, 2014

We have some information, but not a lot, on a recent deal to lease land in Marshall and Ohio counties in West Virginia. Tug Hill Operating, a small, privately owned exploration & production company headquartered in Fort Worth, TX, has just brokered a deal with the Marshall and Ohio County Landgroup. We don’t know how many acres are involved in the lease, nor how many families. What we do know is that the money Tug Hill is paying the landowners, collectively, is an eye-popping $100 million. We don’t have a copy of the lease, but we have little doubt that both Marcellus and Utica layers are part of the deal. Here’s what we do know about Tug Hill and the deal:
Read More “Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating”
Carroll County | Energy Companies | EnerVest | EV Energy Partners | Ohio | Statewide OH | Utica Shale

EVEP Selling More Ohio Utica Acreage in 2015
November 12, 2014November 12, 2014

When you’ve been writing about the Marcellus and Utica since 2009, you notice some stories that just keep repeating–year after year. EV Energy Partners selling (more of) their Utica acreage is one of those stories. EVEP is still one of, if not the, largest acreage holder in the Ohio Utica Shale. The company is a master limited partnership, or “MLP”, which means it’s organized to distribute all profits to shareholders (or unit holders) instead of plowing profits back into investments and large projects. MLPs don’t make good exploration and production companies. The way MLPs are structured makes them more suited for mature, already-drilled wells and businesses like pipelines. They want less risk and more long-term revenue potential. So it’s no surprise that EVEP has, since 2012, tried to sell large swaths of their massive holdings (see EnerVest Puts 539,000 Utica Shale Acres on Auction Block). Over time they’ve sold some of that acreage, but they still hold hundreds of thousands of acres. On an analyst phone call Monday, EVEP President & CEO Mark Houser once again said “next year” the company will sell more Utica acreage. How much acreage, and where?…
Read More “EVEP Selling More Ohio Utica Acreage in 2015”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lebanon County | Pennsylvania | Pipelines | Sunoco Logistics

Sunoco Presents on Mariner East Pump Station in Lebanon, PA
November 12, 2014November 12, 2014

On Monday we told you that a few committed anti-drillers in Lebanon County, PA have been distracted from opposing the Williams Atlantic Sunrise pipeline project by shiny object syndrome–another pipeline project, from Sunoco Logistics (see New Target for Lebanon, PA Antis: Mariner East Pipeline). The Mariner East pipeline has been in the ground for decades, but Sunoco is repurposing the pipeline to flow natural gas liquids and that requires building a new pump station. A Sunoco rep presented information about the pipeline and the pumping station last night at the West Cornwall town board meeting–but the three Lebanon residents appealing the permits for the station with the zoning board weren’t allowed to ask questions, and boy oh boy did that tick them off…
Read More “Sunoco Presents on Mariner East Pump Station in Lebanon, PA”
Allegheny County | Pennsylvania

Allegheny, PA Councilman Reveals Why He Voted Yes on Park Lease
November 12, 2014November 12, 2014

Pretty soon drilling will begin under (not on) Deer Lakes Park in Allegheny County, PA. After months and months of anti-drillers showing up at county council meetings to drone on and on about the disaster that awaits us all if drilling takes place a mile below the earth underneath the 1,180-acre park, council members voted to approve the plan (see Allegheny Cty Approves Deer Lakes Park Lease, Antis Throw Tantrum). The deal gives the county a $4.7 million signing bonus and 18% royalties. Sweet. It’s not often you get a full explanation from one of the politicians who faced the droning anti-drillers and then voted in favor of a project like this–but we have such a unique opportunity. Councilman Tom Baker, who cast one of two deciding votes in favor of the project, recently published his thinking and explanation for why he cast a “yes” vote for the Deer Lakes Park deal…
Read More “Allegheny, PA Councilman Reveals Why He Voted Yes on Park Lease”
Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

PA Utility’s Innovate Plan to Deliver Marcellus Gas to Customers
November 12, 2014November 12, 2014

Although there’s a lot a cheap, abundant, and clean-burning natural gas being produced in Pennsylvania, there’s still a lot of customers who can’t burn it because of lack of pipelines through their neighborhoods. Natural gas prices currently are 61% less than fuel oil and 68% percent less than propane. But when it costs between $500,000 and $1 million a mile to install the pipelines to carry the gas–you need a lot of customers to sign up to make it work. Not everyone signs up at the beginning–some wait and see. So in places like the suburbs of Philadelphia where there’s a lot of people, it has still been a conundrum–a complex problem with no obvious solution. One of the utilities serving the Philly area, Peco, believes they have solved the problem. Peco has proposed a new formula to the Public Utility Commission (PUC) that will allow them to assume that 75% of their customers will sign up for gas over the next 20 years. The Peco plan will allow current customers to stretch the natgas hook-up fee across 20 years, radically changing the economics and lowering the hook-up price for customers–making it a no-brainer to make the change–now or in future years. Here’s the details of Peco’s plan…
Read More “PA Utility’s Innovate Plan to Deliver Marcellus Gas to Customers”