Marcellus Drilling News

Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport Production & Profits Jump in 2013 Thanks to Utica Shale
February 27, 2014February 27, 2014

Gulfport Energy is one of the leading drillers in the Utica Shale, so when they issue press releases and updates, as they did yesterday, it’s news for MDN. Gulfport issued their fourth quarter and full year 2013 financial and operational update yesterday. We’re including the full thing below, which contains a fair bit of mind-numbing financial numbers (meaningful to investors and traders, not so much for the rest of us). However, sometimes you spot a few gems in all those numbers and in the narrative that accompanies them. We believe we have in this most recent update…
Read More “Gulfport Production & Profits Jump in 2013 Thanks to Utica Shale”
Energy Companies | Gulfport Energy | Ohio | Rhino Resource Partners | Statewide OH | Utica Shale

Rhino Dumps the Rest of its Utica Assets in Deal with Gulfport
February 27, 2014February 27, 2014

Oil and gas deals are sometimes complicated–more complicated than we can get our brains around. That’s our disclaimer for this bit of news. In 2012 Rhino Resource Partners, a coal company, decided to get in on some of the shale action in the Utica by investing in a joint venture with Gulfport Energy and Wexford Capital (see Rhino Resource Ups Investment in Utica Shale JV). Rhino doesn’t do any of the exploration, drilling or production. It’s just a partnership granting them a piece of the revenue action in return for investing in the operation. Somewhere along the way Rhino either got cold feet, or (more likely) the company hit a rough patch and needed money, because they sold 20% of their royalty interests in the jv (see Rhino Flips 20% of Utica Investment to Undisclosed 3rd Party). Further supporting our theory the company is cash-strapped, in September last year the company tried to sell 1.1 million of “common units” (equivalent of stock) to generate money to pay back loans (see Rhino Resources Issues 1.1M Common Units to Repay Debt).

Yesterday, as part of Gulfport’s update and also in a separate announcement from Rhino, comes word that Rhino has cut a deal with Gulfport to dump the rest of its interest in the Utica jv to Gulfport for $185 million, raising what appears to be much-needed cash for Rhino. Here’s the twin announcements:
Read More “Rhino Dumps the Rest of its Utica Assets in Deal with Gulfport”
Chesapeake Energy | Energy Companies | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | Utica Shale | West Virginia

Chesapeake 2013 & Beyond: Lack of Pipelines Still a Big Problem
February 27, 2014February 27, 2014

Yesterday Chesapeake Energy issued their fourth quarter and full year 2013 operational and financial results. Chessy’s CEO, Doug “the ax” Lawler is all proud of himself for having fired over 1,200 employees, saving the company all that money (money that goes into Carl Icahn’s bank account). Whatever. For all of our disgust with what Chesapeake has become because of Icahn and his corporate raiding practices, it’s still a very important driller in the Marcellus and Utica (as well as other plays), and will continue to be so. When they issue an update, we need to pay attention, because as Chessy goes, so goes the Marcellus and Utica, in some senses.

What does yesterday’s update show? Chessy has drilled a lot of wells in the Utica–425 so far, more than half of the 747 Utica wells drilled to date in Ohio. Of those 425, 230 are online and producing, but a huge 195 wells are still waiting to be hooked up to pipelines. Lack of infrastructure is still a big issue in the Utica and in the Marcellus. In the northern Marcellus area (northeast PA) Chesapeake has 112 wells waiting to be connected to pipelines. They’ve scaled back their drilling in NEPA somewhat over the past year. In the southern Marcellus (SWPA and WV) Chesapeake has 47 wells waiting to be connected to pipelines or otherwise completed. Here’s the operations update for both the Utica and Marcellus from Chessy’s announcement yesterday:
Read More “Chesapeake 2013 & Beyond: Lack of Pipelines Still a Big Problem”
Energy Services | MarkWest Energy

MarkWest’s Banner 2013, Plans for 2014
February 27, 2014February 27, 2014

MarkWest Energy, as we’ve noted many times before, is probably the biggest midstream company in the Marcellus and Utica Shale. It’s always a contest between MarkWest and Williams, but if we’d have to choose one, we’d say MarkWest is has more of a presence in the northeast. Yesterday the company issued their fourth quarter and full year results for 2013 (in the ongoing parade of such announcements). The company notes that with the completion of several important new processing plants they now are processing over 2.8 billion cubic feet per day (Bcf/d) of dry and wet gas throughout the Marcellus and Utica Shale region. In addition to the facilities already built, MarkWest has an eye-popping 19 additional major processing and fractionation facilities under construction in the Northeast. They are pouring billions each year into the Marcellus/Utica.

Here is MarkWest’s look back at an incredible 2013, and a look forward to some of the good things coming in 2014…
Read More “MarkWest’s Banner 2013, Plans for 2014”
Boardwalk Pipeline Partners | Energy Services | Industrywide Issues | Pipelines

Serious Concerns about Boardwalk Pipeline Partners Continue
February 27, 2014February 27, 2014

Two weeks ago MDN told you about the developing story that Boardwalk Pipeline Partners has hit a serious rough patch and their stock price was plummeting (see Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?). The situation has not improved and their stock price is down nearly 50% from where it was just a short time ago. Why do we care?

Boardwalk is in a joint venture with Williams to build the Bluegrass NGL pipeline from the Marcellus/Utica all the way to the Gulf Coast. The Bluegrass has hit trouble, ironically, in the Bluegrass state of Kentucky with anti-drillers opposing it every step of the way (see the list of MDN’s Bluegrass pipeline trouble stories here). With one of the two Bluegrass pipeline partners in financial straights, what does that mean for the pipeline project? Especially since they have competition and it’s a horse race with a Kinder Morgan/MarkWest joint venture (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Here’s the latest analysis of how, and why, Boardwalk finds itself in the position they are now in…
Read More “Serious Concerns about Boardwalk Pipeline Partners Continue”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA | Taxation

Happy Story Ends Badly Because of 7 PA Towns
February 27, 2014February 27, 2014

Who doesn’t like a county (or state) park, or a newer trend–converting old railroad beds into “rail trails”–resurfacing them for walkers, joggers, bikers and roller skaters? We sure love and use them. This story begins happily, with York County spending $100,000 to improve the Old Northern Central Railroad tracks and a portion of the York County Heritage Rail Trail that runs alongside them. Where did the money come from–taxpayers? Nope. It came from the Marcellus Shale industry, from the impact fee levied as part of the Act 13 law. In fact York County has received, so far, nearly 3/4 of a million dollars from that fund–even though there’s no active shale drilling in the county–thanks to Act 13.

But the story ends badly, because quite likely starting next year, all of that impact fee money will disappear (see PA Supreme Court Won’t Reconsider Act 13, Impact Fee Now in Doubt). There will be no more impact fee money because seven townships in PA got their knickers in a twist, insisting their own layman zoning regulations were better than a set of statewide, uniform regulations designed by geologists and experts. So the seven petulant towns sued to toss out large portions of the Act 13 law, and it now looks like the impact fee will be tossed out too….
Read More “Happy Story Ends Badly Because of 7 PA Towns”
Calfrac | Energy Services

Calfrac Talks About Marcellus & Its Importance for the Company
February 27, 2014February 27, 2014

Across the United States and indeed around the world, when it comes time to do the actual fracking of a shale well (which is a very small part of drilling a well), there are only a handful of companies that get contracted to do the work. One of those companies is Calfrac Well Services. The company’s bigwigs held an analyst phone call yesterday (most public companies do the same) to discuss fourth quarter and fiscal year 2013 results. These calls are typically done to impress and reassure investors that their money is well-invested in the company–and perhaps attract new investment. The quarterly analyst phone call dance is something they all do–a part of capitalism, the best economic system ever devised by man.

MDN sometimes brings you excerpts from these phone calls, as we are today, because we find interesting tidbits. From Calfrac, we bring you the prepared comments portion of the call that happens at the beginning. Why? Because Calfrac’s top management mentions the Marcellus Shale play–and it’s importance to Calfrac–a number of times…
Read More “Calfrac Talks About Marcellus & Its Importance for the Company”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Mass. Anti-Drillers Finally Wake Up, Begin Opposing TGP Project
February 27, 2014February 27, 2014

About a month ago MDN noted, with some shock, that townships across Massachusetts were reacting to overtures by Kinder Morgan to expand the Tennessee Gas Pipeline across the state (to bring in more abundant, cheap Marcellus Shale gas) with reasonableness and an open mind (see Reaction to TGP’s Planned Pipeline Across Massachusetts). We always thought Massachusetts residents as a whole were slightly left of Vlad Putin. But we were (happily) wrong! We observed it’s funny how a 10x price jump in natural gas had turned New Englanders into a more reasoned, considered bunch.

However, some of the nutty bugs have now come crawling out of the woodwork to oppose the pipeline because it will bring that filthy, nasty “fracked” natural gas into the state. It just took them a little longer to come out of their fugue and get organized, but now they have–at least a small handful of them…
Read More “Mass. Anti-Drillers Finally Wake Up, Begin Opposing TGP Project”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Feb 27, 2014
February 27, 2014February 27, 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, Feb 27, 2014”
American Energy Partners | Energy Companies | Ohio | Statewide OH | Utica Shale

Aubrey McClendon’s Wandering Eye: Now Loves a Second Shale Play
February 26, 2014February 26, 2014

Does Aubrey McClendon have a wandering eye? Is he a shale play philanderer? It seems to us that since Aubrey was shown to the door of his own company (Chesapeake Energy) last year by corporate raider Carl Ichan, the only word to come out of Aubrey’s mouth has been “Utica.” It’s been Utica this and Utica that. He’s now raised more than $2.9 billion (!) for Utica Shale land acquisition and drilling (see McClendon Hauls in Another $1.2B, Utica Shopping Spree Continues).

But what’s this? Another shale play–closer to home (in Oklahoma)–seems to have caught Aubrey’s fancy and he’s now engaging in a dalliance back home. He’s already raised a cool $680 million for his new shale mistress…
Read More “Aubrey McClendon’s Wandering Eye: Now Loves a Second Shale Play”
Braskem | Economic Impact | Energy Services | Ethane | Industrywide Issues | Jobs | Odebrecht | Processing Plants | Research | Statewide WV | West Virginia | Wood County

Economist Releases Report on WV Cracker Plant’s Economic Impact
February 26, 2014February 26, 2014

West Virginia’s coming ethane cracker plant continues to generate positive economic news. Yesterday the former director of West Virginia University’s Bureau of Business and Economic Research and professor emeritus at WVU, Tom Witt, released a study he conducted on behalf of Braskem America (i.e. Odebrecht, the company building the cracker). The new study details specifics for how many jobs and how much money the proposed cracker and associated petrochemical plants will generate. And it’s truly astonishing.

Here’s an overview of the economic miracle about to hit WV (and beyond)…
Read More “Economist Releases Report on WV Cracker Plant’s Economic Impact”
Accidents | Chevron | Energy Companies | Greene County (PA) | Industrywide Issues | Pennsylvania

Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped
February 26, 2014February 26, 2014

We’ve been monitoring the tragic well fire in Greene County, PA that claimed the life of one contract worker. On Sunday afternoon Chevron reports the original well to explode and catch fire, the Lanco 7H, was capped (see Greene County Chevron Well Fire: 7H Well Capped, 6H in Few Days). Chevron now reports the second well to catch fire from the first, the Lanco 6H, is also capped as of yesterday afternoon (see the announcement below). What we somehow missed in the coverage was the fallout from the fire. Last week the PA Dept. of Environmental Protection asked Chevron to suspend drilling operations at other wells in the area pending a review. Chevron responded they had already stopped drilling operations at 7 nearby wells.

Here’s the latest official announcement from Chevron (that does not mention shutting down operations on other wells), along with a story from last week about the DEP’s tete-a-tete with Chevron:
Read More “Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped”
About MDN | Allegheny County | MDN Resources | Meetings | Pennsylvania

Join MDN in Pittsburgh on March 20 at Conference for Excellence [Free]
February 26, 2014February 28, 2014

Please join me (MDN editor Jim Willis) at the Northeast Conference for Excellence on March 20, 2014 in Pittsburgh at the Westin Convention Center. The Conference for Excellence is hosted by the Oil & Gas Awards organization. I’m proud to say that I helped create this year’s conference program and I will be moderating two of the sessions–one on drilling and completions, and another on environmental health and safety. I would LOVE to see you at this event.

This is an “industry” event–by and for those who work in the oil and gas industry, particularly in the Marcellus and Utica Shale, from upstream to midstream to downstream. Your cost to attend? Zero. But, there is a catch…
Read More “Join MDN in Pittsburgh on March 20 at Conference for Excellence [Free]”
Economic Impact | Hydraulic Fracturing | Industrialization | Industrywide Issues | Jobs | Ohio | Public Opinion | Research | Statewide OH | Utica Shale

Survey Says! OU Survey of Local OH Officials on Utica’s Impacts
February 26, 2014February 26, 2014

Two days ago the Ohio University Voinovich School of Leadership and Public Affairs released the findings of its much anticipated Ohio Shale Development Community Impact Survey. During summer of 2013, the Voinovich School distributed more than 500 surveys to local elected officials across 17 counties experiencing the majority of shale activity and development in Ohio. The survey assesses the impact of shale development within 17 counties in eastern Ohio, with a focus on population, housing, public safety, infrastructure, environment, local employment, area business activity, and economic development. Some 200 of those surveys were returned and the data tabulated.

What did the survey find? Ohio’s local elected officials say Utica Shale drilling has caused an marked increase in jobs and the occupancy rate at hotels. But Utica drilling has also caused some pollution issues and a big increase in the demand for water supplies. This is a very interesting study (full copy embedded below)…
Read More “Survey Says! OU Survey of Local OH Officials on Utica’s Impacts”
Energy Companies | Range Resources Corp

Range Resources’ Laser Focus on the Marcellus Continues into 2014
February 26, 2014February 26, 2014

Range Resources, the first and one of the largest drillers in the Marcellus Shale, issued their fourth quarter 2013 and full year 2013 financial and operational update yesterday. Range has a lot of good news to report. They averaged 940 million cubic feet equivalent of natural gas production per day during the year, but as MDN noted in December last year, they have now exceeded 1 billion cubic feet per day average (see Range Resources Inducted into the Marcellus “1 Bcf/d Club”). Proved reserves were up for Range by 26%, to 8.2 trillion cubic feet. Cash flow was up 25%, to $943 million. Perhaps the only “bad news” was that profits in the fourth quarter were down by 47%, to $28.2 million, mainly because of the low commodity price of natural gas. Everything else appears to going quite well for this Marcellus powerhouse.

In 2014 Range plans to spend $1.52 billion on capital expenditures (drilling and associated costs). The vast majority of that–87%–will be spent in the Marcellus. They expect to boost production another 20-25% in 2014. The company is on a tear! Below are details of how many wells Range drilled in the Marcellus in 2013, and how many they plan to drill in 2014, along with loads of other details about their drilling operations…
Read More “Range Resources’ Laser Focus on the Marcellus Continues into 2014”
Carrizo Oil & Gas | Energy Companies

Carrizo CEO Says Transition to Focus on Oil “Now Completed”
February 26, 2014February 26, 2014

Last November MDN told you that Carrizo was de-emphasizing the Marcellus and instead focusing on more oily and wet gas plays, like the Utica (see Carrizo Down on Marcellus, Up on Utica and Other Wet/Oil Plays). In releasing their 2013 fourth quarter and full year results yesterday, Carrizo’s CEO Chip Johnson said, “We began our shift from gas to oil back in 2010, and I’m pleased to say that we’ve now completed the transition. Crude oil now accounts for more than 60% of our proved reserves, and even though we sold almost 45% of our 2012 U.S. reserve base through our Barnett Shale and other non-core divestitures, we were still able to increase our PV-10 by 44% in 2013. Oil also now accounts for the majority of our production, as we expect it to be approximately 60% of 2014 volumes.”

Does that mean Carrizo is exiting the Marcellus completely? Not according to the update. Carrizo drilled 6 Marcellus wells in 4Q13. They complain that midstream (pipeline) delays continue to “impact” their operations in the Marcellus, along with really low commodity prices. So for now they’ve pulled back. For 2014 they plan to complete the wells they’ve already drilled–24 in all, and finish up drilling 3 wells already begun. According to our trusty NGI’s Shale Play Factbook, Carrizo owns leases on 49,200 acres in the Marcellus (and 21,700 acres in the Utica). Here’s yesterday’s update which clearly details the oil/wet gas direction of the company…
Read More “Carrizo CEO Says Transition to Focus on Oil “Now Completed””