Marcellus Drilling News

Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | Taxation | West Virginia

Best Way to Kill Drilling in PA/OH/WV: “Uniform” Severance Tax
March 26, 2014March 26, 2014

A few weeks ago MDN said the plan floated by lefties and libs to create a so-called uniform severance tax across PA, OH and WV is one of the dumbest things we’ve heard in a long time (see Stupid Idea of the Year: Create Uniform Severance Tax in PA-OH-WV). The plan as proposed means all three states hold hands and jump off the economic cliff together. Apparently it’s more fun to die together (economically) than alone.

MDN is not the only voice to point out the lunacy of this plan. The head of the PA Chamber of Business and Industry also says the proposed mega-tax is nuts. As Gene Barr highlights in the following letter to the editor, it’s apparent the people proposing such a plan–including the Pennsylvania Budget and Policy Center–are ignorant of how taxes in PA and other places actually work. You would think an organization with a name that includes the word “budget” would employ at least one economist or accountant. Apparently they don’t. They are economic illiterates who don’t realize what they are proposing is anything but fair–especially to Pennsylvanians…
Read More “Best Way to Kill Drilling in PA/OH/WV: “Uniform” Severance Tax”
Belmont County | Carroll County | Columbiana County | Guernsey County | Harrison County | Lease & Royalty Payments | Monroe County | Noble County | Ohio | Utica Shale | Washington County (OH)

Company Targets OH Landowners – Buy Future Royalties for Cash Now
March 26, 2014March 26, 2014

Gateway Royalty is back and has $58.5 million on the bank they can’t wait to give landowners in the Ohio Utica Shale in return for future royalty payments. MDN told you about Gateway last summer. They were the company that the town of Carrollton, OH sold 1/4 of their royalty rights to (see OH Town Votes to Give Up 1/4 Royalties for Cash Payment Now). The way it works, in brief: Gateway pays landowners a lump sum now in return for the right to receive that landowner’s future royalty payments for years to come. You (the landowner) get your money now, they (Gateway) get the money you would have gotten dribbled out over time. Of course the money you receive now is discounted and in all likelihood far less than you would have gotten if you had waited just a few years (the bulk of royalty payments come in the first four years). It’s a bit of a gamble by both parties because no one really knows how much a well will produce.

Still, there are reasons why someone may want to get cash up front–pay off debt, ill health, etc. So in that vein, we bring you the latest press release from Gateway announcing they are ready, willing and waiting to give Ohio Utica Shale landowners money now. Specifically they are targeting landowners in Washington, Noble, Guernsey, Monroe, Belmont, Harrison, Carroll and Columbiana counties…
Read More “Company Targets OH Landowners – Buy Future Royalties for Cash Now”
Accidents | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Statewide PA

Anti-Drillers Attack Crude-by-Rail Traveling Through PA
March 26, 2014March 26, 2014

The leftist anti-drillers at the Pennsylvania news organization called PublicSource, backed by the likes of Teresa Heinz Kerry, is taking aim at shale-produced crude oil that travels by railroad. In a hit piece in which they begin by doing a bait-and-switch, starting with a derailment of ethanol (nothing at all to do with oil or gas), they then parry and say derailments of oil in Pennsylvania are an imminent threat and danger to PA residents. The hue and cry has gone up: Either have the feds regulate shale oil on railroads out of existence, or preferably just stop shipping crude by rail. Who wants all that nasty crude from North Dakota anyway? Funny how the answer is always the same no matter the question: just stop extracting fossil fuels.

Here’s how the latest PublicSource hit piece begins…
Read More “Anti-Drillers Attack Crude-by-Rail Traveling Through PA”
Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

Birthplace of Fracking (NE USA) Once Again Leads O&G Innovation
March 26, 2014March 26, 2014

Fracking as a concept has been around for a long time. Would you believe us if we said the first rudimentary forms of fracking date back to the 1860s–around the time of the American Civil War? That’s when liquids were first used to fracture “shallow, hard rock wells” in places like PA, NY and WV. Somewhere along the way oil and gas drilling drifted to places like Texas and Louisiana and Oklahoma. In the modern era, fracking started to be widely used commercially in 1947. Oil and gas drilling “grew up” in, and innovations came from, drilling in the southwestern part of the U.S.

Shale drilling is a more recent development–the combination of fracking and horizontal drilling. Shale drilling has been around commercially for 15-20 years, and yes, it was first pioneered and developed by George Mitchell in the Barnett Shale of Texas. However, drillers in Texas and other locations are now learning from innovations coming from the Marcellus and Utica Shale. The country and indeed the world now looks to how companies like Cabot Oil & Gas are able to economically drill for gas in a low-price environment. The innovation that started in the northeast “once upon a time” some 150 years ago has finally returned to its birthplace in the northeast, and the northeast is showing the world how to do it better, faster, and safer than ever before…
Read More “Birthplace of Fracking (NE USA) Once Again Leads O&G Innovation”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Mar 26, 2014
March 26, 2014March 26, 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: Wed, Mar 26, 2014”
About MDN | MDN Sponsor | Meetings

Oil & Gas Awards – List of Winners, Bang-up Time!
March 25, 2014March 25, 2014

Last week MDN editor Jim Willis (that’s me) had the pleasure of participating in the Northeast Oil & Gas Awards, including the “Conference for Excellence,” in Pittsburgh. Below is the list of winners for the 25 categories of competition. Many of the names you will recognize, some you may not. I will list the winners in due course. But first, a bit about my personal journey in participating in this star-studded and impressive event.

The CEO for the Oil & Gas Awards, Daniel Creasey, contacted me four months ago to see if MDN would consider becoming a media partner for the Northeast event. For those outside of the publishing world, such deals typically include a barter arrangement where a publication promotes an event in return for publicity as a media sponsor–listings in conference materials and on the conference website. The first thing I noticed was, Daniel and the Oil & Gas Awards company are British! Which is a plus for me, because I have worked for and with Brits most of my adult career (I am a confirmed Anglophile). Daniel and I “hit it off” and we both decided perhaps more than the usual media partner deal would be beneficial…
Read More “Oil & Gas Awards – List of Winners, Bang-up Time!”
Crime | Industrywide Issues | Litigation | Mahoning County | Ohio | Wastewater

Ben Lupo Admits Guilt in OH Frack Wastewater Dumping, Prison Next?
March 25, 2014March 25, 2014

Last week MDN speculated that Ben Lupo, the business owner of a trucking company who instructed an employee to repeatedly dump frack wastewater down a drain that emptied into the Mahoning River near Youngstown, OH, would change his plea from not guilty to guilty (see Youngstown Wastewater Dumping Case Nears End, Lupo to Plead Guilty?).

Indeed, Lupo did change his plea yesterday in a federal court in Cleveland…
Read More “Ben Lupo Admits Guilt in OH Frack Wastewater Dumping, Prison Next?”
Energy Companies | Halcon Resources | Ohio | Statewide OH | Utica Shale

Utica Driller Halcon Resources Up for Sale According to CEO
March 25, 2014March 25, 2014

MDN recently reported that Halcon Resources has stopped drilling on their leased land in the Utica Shale (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale). Halcon’s blunt-talking CEO, Floyd Wilson, famously said he didn’t want to drill any more underperforming (he used more colorful language) wells in the Ohio’s northern Utica and instead seemed to say the company’s focus would be further south. Then the company said nyet–no more wells drilled in 2014 in the Utica. From Wilson’s remarks yesterday at the Howard Weil energy conference in New Orleans, it appears that Halcon may not drill any more wells in the Ohio Utica…ever.

Wilson said yesterday at the investor’s conference that it is his end-game to sell Halcon to a bigger fish. Wilson started Halcon 2011. In order to sell the company, he’s working to make it more attractive to investors. Wilson knows a thing or two about building energy companies and selling them–he built up and sold Petrohawk Energy to BHP Billiton Plc in 2011 for $12.1 billion. Apparently he’s hoping to do something similar with Halcon, except this time around it’s more of a challenge. Below is a report on Wilson’s “Halcon is up for sale” remarks yesterday in New Orleans…
Read More “Utica Driller Halcon Resources Up for Sale According to CEO”
Cameron County | Elk County | Energy Companies | Lycoming County | Pennsylvania | Seneca Resources | Upper Devonian Shale

Seneca Drills First Upper Devonian Well with Impressive Results
March 25, 2014March 25, 2014

Seneca Resources, a wholly-owned subsidiary of Buffalo-based National Fuel Gas Company, reports drilling their very first Upper Devonian shale well in Lycoming County, PA. The results are impressive: a peak 24-hour production rate of 14.1 million cubic feet (MMcf) per day, and an average 8.6 MMcf per day during its first 30 days. The Upper Devonian (UD) is a number of shale layers lumped together under one umbrella name. The specific layer targeted by Seneca for their first UD well is the Geneseo rock layer.

Word of Seneca’s success in the UD comes as part of an operational update issued by National Fuel Gas yesterday. Another gem in the update: Seneca has just completed drilling a 9-well pad and is almost finished drilling a 6-well pad. Here’s the full update from Seneca with the exciting UD news…
Read More “Seneca Drills First Upper Devonian Well with Impressive Results”
Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

PA Anti-Drilling Activist Asks Court to Lift Cabot Restraining Order
March 25, 2014March 25, 2014

Vera Scroggins, a local and outside NEPA a little-known anti-driller in Susquehanna County with a potty mouth (see this video of her harassing filmmaker Phelim McAleer), had her day in a Montrose, PA court yesterday in which she and her commie-lib ACLU lawyers tried to get a restraining order lifted. Vera, according to Cabot Oil & Gas, repeatedly violated no trespassing requests from the company. She would show up at Cabot drill sites playing tour guide to obtuse politicians from New York City and on occasion even Hollywood celebrities (like Susan Sarandon), pretending the drill sites and compressor plants she showed them are somehow harming the environment. Cabot repeatedly told Vera to please stop entering roadways and drill sites as a safety precaution. She wouldn’t listen, so Cabot was forced to turn to the local Susquehanna County Court for help (see NE PA Anti-Driller Slapped with Trespassing Injunction)…
Read More “PA Anti-Drilling Activist Asks Court to Lift Cabot Restraining Order”
Chesapeake Energy | Energy Companies

Chesapeake’s 2014 Laser Focus: Liquids and Continued Fire Sales
March 25, 2014March 25, 2014

Chesapeake Energy is presenting at the 42nd Annual Howard Weil Energy Conference this week in New Orleans. As part of their presentation they released a new PowerPoint slide deck (copy embedded below). What does it show? Liquids liquids liquids. Chesapeake has its sights set on producing more liquids as it’s ticket to financial health. The presentation also reveals they will continue to shed “noncore assets and noncore affiliates.” That is, “Watch out below–more ballast coming over the side!” as Chessy will continue to dump divisions and subsidiaries in an effort to prop up the stock price and make bossman corporate raider Carl Icahn happy.

The slide deck is quite revealing and loaded with good information. We learn, for example, that Chessy is spending less than half in capital expenditures on drilling this year than they did just two years ago. First we’ll give you some of our insights and point out our favorite slides and what they reveal, then we’ll share SNL Financial’s take on the presentation. Finally, we’ve embedded the presentation itself so you can peruse it for yourself. The flavor and tone of the presentation is that Chessy is (now) fiscally disciplined and on track to turn the company around and make it profitable. Not mentioned anywhere in the presentation is the 800-pound gorilla: the lawsuits filed and investigations launched into Chesapeake’s alleged screwing of landowners out of royalty payments, which (if found true) will quickly derail all of their best-laid plans to make Icahn even more rich…
Read More “Chesapeake’s 2014 Laser Focus: Liquids and Continued Fire Sales”
Antero Resources | Eclipse Resources | Energy Companies | Energy Services | EnLink Midstream | Ohio | PDC Energy | Statewide OH | Utica Shale

Some Utica Players Tip Their Hand on Plans for Next 3-5 Years
March 25, 2014March 25, 2014

Although drillers are often mum on future plans, some drillers (and midstream companies) who participated in the recent Ohio Oil & Gas Association (OOGA) annual winter meeting earlier this month were helpfully chatty about what’s coming in the Ohio Utica over the next few years.

Tom Knox, intrepid new reporter doing a great job at the Columbus Business Journal, was on hand at the OOGA meeting and took good notes. He reports on what PDC Energy, Antero Resources, Eclipse Resources and Enlink Midstream have planned in the next 3-5 years for the Utica…
Read More “Some Utica Players Tip Their Hand on Plans for Next 3-5 Years”
CNX Resources | CONSOL Energy | Energy Companies

CONSOL Getting New CEO, Old CEO Kicked Upstairs as Exec Chairman
March 25, 2014March 25, 2014

More change on the way at CONSOL Energy. Over the past several years CONSOL has been on a mission to transform itself from one of the country’s largest coal producers to one of the country’s biggest shale exploration and production companies. And they’re succeeding. Along the way, CONSOL’s shale drilling division, CNX Gas, was guided by the very capable hand of COO Randy Albert–until he announced his retirement late last year. In January, Randy’s replacement, Tim Dugan, took the reigns at CNX (see New CNX Gas COO Tim Dugan – Marcellus & Utica Experience).

Now there’s change afoot in the top job at CNX’s parent CONSOL. J. Brett Harvey, Chairman and CEO, will become Executive Chairman of the company (they’re kicking Brett upstairs). In his place becoming CEO will be current CONSOL president Nicholas J. DeIuliis. Nick will add CEO to his business card and be put in charge of the day to day operations at the company. Nick is a youthful 45 years old, taking the reigns of a $9.3 billion company. Here’s the announcement about the coming promotions at CONSOL, from last Friday:
Read More “CONSOL Getting New CEO, Old CEO Kicked Upstairs as Exec Chairman”
eCORP Stimulation Technologies | Energy Services

ecorpStim Waterless Fracking Newsjacks UN Water & Energy Report
March 25, 2014March 25, 2014

ecorpStim, a company that has pioneered an interesting waterless fracking technology that uses non-flammable liquefied petroleum gas (propane) to replace all water and chemicals used in traditional fracking, continues their newsjacking ways. We told you last December how the company gloms onto big news stories and tries to tie themselves to the story–as if the story were about them when it isn’t (see Waterless Fracker ecorpStim (Mis)Uses Newsjacking for Attention). We hadn’t spotted any more cases and thought they had wisely decided to cool it with the newsjacking. But we were wrong.

Yesterday ecorpStim issued a new press release to call attention to themselves via a recently issued UN report on water and energy. Yes, in one sense you can say ecorpStim’s technology offers a solution to a teeny tiny portion of the water issues raised in the report. Frankly, shale drilling uses a small fraction of the water used by other forms of energy extraction and even by agriculture and golf courses! Shale drilling’s use of water in no way endangers water supplies. Look, we applaud creative “hey look at me” marketing. We like the ecorpStim technology! However, we take a dim view of useless marketing that doesn’t advance the very serious issues facing our industry. You decide which this is…
Read More “ecorpStim Waterless Fracking Newsjacks UN Water & Energy Report”
Energy Companies | Forced Pooling | Hilcorp Energy | Industrywide Issues | Lawrence County | Litigation | Pennsylvania | Regulation

Hilcorp Forced Pooling Hearing Postponed, More Landowners Added
March 24, 2014March 24, 2014

MDN previously told you about Hilcorp’s lawsuit to force some hold-out landowners in Lawrence County, PA to allow drilling under their land–a concept called forced pooling. The PA Dept. of Environmental Protection (DEP) and the PA courts treated it like a hot potato. The courts finally told the DEP that they (the DEP) would need to decide the matter. So the DEP had set aside two days this week to conduct public hearings in New Castle (see Forced Pooling Circus (ie Hearing) Coming to Lawrence County, PA).

However, the circus/hearing scheduled for this week has been postponed. No new date has been announced. The DEP and Hilcorp both wanted the delay offering the explanation that they need more time, “to provide more complete notice to potentially affected people.” Apparently some landowners haven’t yet been served notice that they will be affected–forced–to be part of a Hilcorp drilling unit, and both Hilcorp and the DEP want them to know it before the public hearing commences. Seems like the forced pooling in Lawrence issue keeps getting better and better (not)…
Read More “Hilcorp Forced Pooling Hearing Postponed, More Landowners Added”
American Water Management | Earthquakes | Energy Services | Industrywide Issues | Mahoning County | Ohio | Regulation | Trumbull County | Wastewater

OH Earthquakes May Delay Opening of New Niles Injection Well
March 24, 2014March 24, 2014

Although Niles (Trumbull County), Ohio is about 18 miles from Poland (Mahoning County), Ohio by car, it’s only about 8-9 miles “as the crow flies.” And that proximity may be a problem for a new Class II frack wastewater injection well set to open in just a few weeks in Niles. Why? Because nearby Poland is where there was a recent series of earthquakes (see # of Youngstown Earthquakes go from 2 to 11 – Fracking to Blame?).

American Water Management Services Inc. say they are about two weeks away from opening their new injection well in Niles–or could open if they get the necessary permits. The Ohio Dept. of Natural Resources (ODNR) says it’s too early to say whether or not the new injection well will be allowed to open in the next few weeks because of the ongoing earthquake investigation…
Read More “OH Earthquakes May Delay Opening of New Niles Injection Well”