Marcellus Drilling News

Pennsylvania | Susquehanna County

Putting a Face to PA’s Bountiful Natural Gas Production
February 19, 2014February 19, 2014

MDN brought you the latest good news with respect to Pennsylvania’s production numbers today (see our companion story “PA Gas Production #s Released”). We ran across an article that puts a face to those numbers. Really, at the end of the day, what do those numbers mean for landowners? Is it like hitting the lottery with bags of money sitting around? Here’s the story of a farming family in Harford Township (Susquehanna County), PA. They just happen to have three of the top 5 producing wells in the entire state for the second half of 2013 sitting on their land.

We were struck by the integrity and character of these folks. Although they obviously have a fair bit of money pouring in from royalties, it’s “not enough to make them rich”–not yet anyway. They still farm and are humble people at heart. Salt of the earth types…
Read More “Putting a Face to PA’s Bountiful Natural Gas Production”
Anti-Drilling/Fossil Fuel | Cuyahoga County | Hydraulic Fracturing | Industrywide Issues | Mahoning County | Ohio | Regulation | Statewide OH

2 OH Anti-Drilling Dems Miffed at Being Fingered in ODNR Memo
February 19, 2014February 19, 2014

Yesterday MDN told you about the Ohio Dept. of Natural Resources’ innovative strategy to deal with the issue of drilling under (not on) a state forest and two state parks. Frankly, the came up with a brilliant public relations plan (see ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan). But they decided in the end not to pursue the plan, knowing about the loud (and foul) mouthed opposition they would face. Listed by name in the list of dunderheads who oppose shale drilling in the state were none other than OH Rep. Robert Hagan, Democrat from Youngstown, and OH Rep. Nickie Antonio, Democrat from Lakewood (notice a trend here?). The two have called on the Speaker of the Ohio House to launch an investigation into what they creatively call “Frackgate”. It will never happen, but that’s not the point.

We’d say Representatives Hagan and Antonio are up to their necks in…fracking waste. But then that would be unkind, wouldn’t it? So we’ll just say this is “more of the same” and gives the anti-drilling Hagan and Antonio an excuse to (once again) trot out the same old tired lies they’ve told a thousand times before. Here’s 1001…
Read More “2 OH Anti-Drilling Dems Miffed at Being Fingered in ODNR Memo”
Anti-Drilling/Fossil Fuel | Athens County | Crime | Industrywide Issues | Ohio | Wastewater

Break the Law in OH, Get an Award – Anti-Drilling Nuttery on Display
February 19, 2014February 19, 2014

Here’s a life lesson for the kiddies: Start an “organic” farm, and when you don’t get a lot of business because your prices are twice those of everyone else, become a shrill anti-driller and claim Mother Earth is getting poisoned by evil fracking (gets you noticed). Then, take “direct action” against those nasty drillers, which is a euphemism for break the law. And when you’re done, receive an award for it! That’s the brief story of Gilbert (Kip) Rondy, co-owner of Green Edge Gardens in Amesville, OH.

Rondy is one of the so-called “Athens 8” arrested for illegally blocking access to an injection well site near Athens, OH. To reward his illegal behavior, the Ohio Ecological Food and Farm Association is bestowing on him their Stewardship Award. How nice. We wonder, how would Rondy like it if a group a pro-drillers showed up and blocked access to his organic farm for oh, say a week or so? Would that be worthy of an award too?…
Read More “Break the Law in OH, Get an Award – Anti-Drilling Nuttery on Display”
Access Midstream Partners | Energy Services

Access Midstream Has a Good Year: Revenue Up 80% for 2013
February 19, 2014February 19, 2014

Access Midstream, a pipeline and processing plant company with operations in the Marcellus and Utica Shale, announced financial results for 2013 yesterday. Access had a very good year with revenue (EBITDA) up over 100% for the fourth quarter of 2013, and up over 80% for the entire year.

Here’s the top level numbers from the Access announcement yesterday:
Read More “Access Midstream Has a Good Year: Revenue Up 80% for 2013”
ConocoPhillips | Energy Companies | WPX Energy

The Big Picture: Why Some Drillers Avoid Natgas Drilling, for Now
February 19, 2014February 19, 2014

Last week MDN brought you the news that WPX Energy will not be drilling any new Marcellus wells in 2014–and likely beyond (see WPX Gives MDN an Update on Their 2014 Marcellus Plans). WPX is focusing their attention on oil and wet gas shale plays. They’re not the only ones.

A Reuters story running in the Canadian National Post highlights comments by ConocoPhillips, a huge oil and gas driller, saying the company is staying away from natural gas for the time being (at least the next few years) because of the low price environment. According to Conoco’s CFO Jeff Sheets, they want to see the Henry Hub price for natgas at $5 per MMBtu for at least two years before they’ll even consider returning to natgas drilling…
Read More “The Big Picture: Why Some Drillers Avoid Natgas Drilling, for Now”
Anti-Drilling/Fossil Fuel | Belmont County | Hydraulic Fracturing | Industrywide Issues | Monroe County | Noble County | Ohio | Public Opinion | Regulation | Statewide OH | Utica Shale | Violence

ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan
February 18, 2014February 18, 2014

In August of 2012 staffers at the Ohio Dept. of Natural Resources (ODNR) made a boo-boo. They put into writing (in the form of a 13-page memo, embedded below) a draft plan to promote Utica Shale drilling under (not on) Sunfish Creek State Forest (in Monroe County), under (not on) Barkcamp State Park (in Belmont County), and under (not on) Wolf Run State Park (Noble County). The memo begins by saying there will be a communications problem to solve: “An initiative to proactively open state park and forest land to horizontal drilling/hydraulic fracturing will be met with zealous resistance by environmental activist opponents, who are skilled propagandists. Neutral parties in particular — such as ordinary citizens concerned about their families’ health — will be vulnerable to messaging by opponents that the initiative represents dangerous and radical state policy by Gov. Kasich.” (emphasis original) The memo states later on that, “Anti-fracking activists will attempt to legally and physically disrupt or halt the drilling projects, including staging dangerous protests on state lands. (This will require sustained legal countermeasures and crisis readiness by ODNR.)”

May we translate? Groups like the Sierra Club lie to people about the drilling issue–and they sometimes engage in bullying (and violent) behavior. Of course the Sierra Club liars are just a bit miffed at being called out as liars and bullies–by no less than a state agency charged with regulating oil and gas. So they are on the offensive. The first thing the Sierra Club and similar groups will do (are doing) is to get their buddies in the slavishly devoted mainstream media to pick up their “ODNR are scumbags” meme and run with it. The second thing is they will use the ODNR memo in fundraising letters, which is really what the shale drilling issue is for them–a big, fat fundraiser…
Read More “ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan”
Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OOGA Actually Surprised at Double-cross in Severance Tax Deal
February 18, 2014February 18, 2014

This one is really kind of funny. The Ohio Oil & Gas Association (OOGA) made nicey nice with Ohio’s Republicans in Name Only (RINOs), and supported a small, modest, ever-so-tiny severance tax increase (that we lambasted here: OOGA Caves, Endorses New Higher Tax on OH Utica Shale).

Even before the ink was dry and before the proposed law is brought up for a vote, those same slimy RINO politicians have done a double-cross and raised the tax rate in the bill. And OOGA is actually surprised! We hate to say we told you so (but we did)…
Read More “OOGA Actually Surprised at Double-cross in Severance Tax Deal”
Clearfield County | Industrywide Issues | Pennsylvania | Regulation | Wastewater

New Wastewater Injection Well Approved in Clearfield County, PA
February 18, 2014February 18, 2014

The federal Environmental Protection Agency has approved a new injection well in Clearfield County, PA. Windfall Oil and Gas received the permit allowing them to build an injection well in Brady Township that will pump wastewater from oil and gas drilling, including shale drilling, some 7,300 feet down for permanent disposal. (Self-serving advertisement: For a complete list of existing PA injection wells used by Marcellus drillers, see the just-published Marcellus and Utica Shale Databook, Volume 3.)

Clearfield County is located roughly in the center of the state, so it’s a good location for both northeastern and southwestern shale drillers. Here’s the details about this newest injection well coming to PA:
Read More “New Wastewater Injection Well Approved in Clearfield County, PA”
Chesapeake Energy | Elexco Land Services | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Do PA Drillers have Law on Their Side in Royalty Debate?
February 18, 2014February 18, 2014

A sharp MDN reader, John S., emailed MDN to remind us of how PA landowners ended up in the quagmire they are now in with regard to royalties with drillers (like Chesapeake) deducting post-production expenses from what they pay to landowners. We had forgotten about the Kilmer v ElexCo Land Services case from March 2010 in which the PA Supreme Court ruled that drillers could indeed deduct certain post-production expenses without violating the law that says landowners must be paid a 12.5% minimum royalty (see Breaking News: PA Supreme Court Rules Against Landowner Seeking to Invalidate Lease).

PA Gov. Tom Corbett wrote a letter to Doug “the ax” Lawler at Chesapeake telling him the company’s royalty calculations were unfair at best, and perhaps illegal. Doug just has to point to the 2010 PA Supreme Court case. Here’s more information about the 2010 case and what the decision means, and doesn’t mean:
Read More “Do PA Drillers have Law on Their Side in Royalty Debate?”
Energy Companies | EQT Corp | Industrywide Issues | Reserves (Proved and Unproved) | Utica Shale

EQT 2013 Year in Review: Proved Reserves Up 38% from 2012
February 18, 2014February 18, 2014

EQT became the latest driller to announce huge volumes of proved reserves in the Marcellus and northeast shale plays–8.3 trillion cubic feet equivalent, to be exact. That’s up 2.3 Tcfe (or 38%) from just a year ago. Total proved, probable and possible (3P) reserves by end of 2013 stood at 36.4 Tcfe, an increase of 10.5 Tcfe, or 40%, over the 2012. They also doubled net income during 4Q13 over 4Q12. Clearly this is a company on the grow–particularly in the Marcellus.

Here’s a look back at EQT’s stellar 2013, by the numbers…
Read More “EQT 2013 Year in Review: Proved Reserves Up 38% from 2012”
Energy Companies | Equinor/Statoil

Marcellus Gas Production for Norwegian Statoil Now 660 Mmcf/d
February 18, 2014February 18, 2014

A semi-retired engineer who dabbles with investing wrote an interesting article appearing yesterday on the Seeking Alpha investor’s website about Statoil, a Norwegian multinational oil and gas company. One of the “short-term catalysts” mentioned in the article is Statoil’s investment and activity in the Marcellus and Utica Shale. We found his quick-take (and charts) on Statoil’s northeast activity an interesting and useful update on what the company is doing here in our neck of the woods. The Marcellus/Utica is growing in size and importance for Statoil.

Here’s a quick update on Statoil’s activity in the northeast:
Read More “Marcellus Gas Production for Norwegian Statoil Now 660 Mmcf/d”
Accidents | Energy Services | Industrywide Issues | Pipelines | Public Opinion | Williams

KY Natgas Pipeline Explosion Used to Fight Bluegrass NGL Pipeline
February 18, 2014February 18, 2014

Last Thursday a section of the Columbia Gulf Transmission Line 200 30-inch natural gas pipeline exploded in rural northern Kentucky (Adair County). These kinds of things unfortunately do happen from time to time. Two people were slightly injured (treated and released). Two nearby houses were destroyed. Emergency shut-off procedures worked. The cause is still not known and nearly a week later the story has all but disappeared from the news.

Although an accident and tragedy, the real damage (potentially) is for the Bluegrass NGL pipeline that Williams is trying to build through Kentucky. The Bluegrass is already facing stiff opposition, as we’ve written about a number of times (see Bluegrass NGL Pipeline Hits Brick Wall in the Bluegrass State). Williams felt it necessary to invoke eminent domain because of the problems they’ve faced in Kentucky, a decision that’s still tied up in court (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). Those opposed to drilling and the Bluegrass pipeline will no doubt shamelessly use the Columbia pipeline explosion as fuel for their cause…
Read More “KY Natgas Pipeline Explosion Used to Fight Bluegrass NGL Pipeline”
Ethane | Exporting | Industrywide Issues | Pipelines | Processing Plants

The Complex Issue of Ethane – Pipelines, Cracker Plants & Exports
February 18, 2014February 18, 2014

Ethane–a natural gas liquid (NGL)–is bountiful in parts of the Marcellus and Utica Shale. So bountiful, it’s causing problems. Until very recently, ethane was considered a waste product. You either had to burn it (increasingly hard to do because of regulations), or blend it with methane. It has been a cost center when in fact ethane is normally a profit center–something that makes drillers money. But you can only make money on it if you can get it to market.

Enter several ethane-specific, and coming soon, NGL pipelines that can carry ethane (and other NGLs) to the Gulf Coast, Canada or Philadelphia for processing and sale. The problem is, if you don’t have a long-term contract on one of those pipelines, you’re hosed. Your competitors are making money on ethane while you’re still spending money on it. That, in a nutshell, is why two regional ethane cracker plants are so desperately needed (Shell’s cracker plant in Beaver County, PA and Odebrecht’s cracker in Parkersburg, WV). The Pittsburgh Tribune-Review took an in-depth look at “the ethane issue” last Friday. It’s a good article providing us with insights into the complex issue of what drillers can/should/are doing with ethane:
Read More “The Complex Issue of Ethane – Pipelines, Cracker Plants & Exports”
Anti-Drilling/Fossil Fuel | Cuyahoga County | Industrywide Issues | Lease & Royalty Payments | Ohio | Utica Shale

Cleveland Suburb’s Socialist Model for Restricting Utica Drilling
February 18, 2014February 18, 2014

Is Utica Shale drilling on the way to the Cleveland, OH area? It is if you listen to the mayor of the Cleveland uppity suburb of Gates Mills. Mayor Shawn Reilly wants landowners in Gates Mills to lock themselves into restrictive land trust deals–you know, to “manage” all that nasty, evil drilling if/when it gets there–in an estimated 10-12 years. This is not your typical landowner coalition being suggested. The good mayor wants landowners to sign over their mineral rights (via deed) to a “trust” managed by people appointed by the village (copy of the proposal embedded below). MDN’s advice to landowners in Gates Mills–run! Absolutely do not assign your mineral rights to a socialist organization that will not have your best interests at heart.

Here’s an article full of errors–like it takes 200 acres for a horizontal drill pad, when it actually takes about 20 acres…
Read More “Cleveland Suburb’s Socialist Model for Restricting Utica Drilling”
About MDN | Energy Companies | Rice Energy

MDN Quoted in Bloomberg News Article on Dan Rice & Rice Energy
February 18, 2014February 18, 2014

You may think by reading MDN for any length of time that it’s primary writer, Jim Willis, is a bit of a braggart–a show-off–given that he writes exactly what he thinks, even when he knows it may not be popular or what a majority of others think. He doesn’t do it purposely to be controversial, and Lord knows he doesn’t seek the limelight or attention. Jim simply wants to get the truth out about shale drilling in the northeast and combat the untruth he perceives is rampant on the vital issue of Marcellus and Utica drilling. He likes to think of himself as a humble guy (don’t laugh!). So he feels a bit uncomfortable bringing you this news, but figures if he doesn’t share it, no one else will.

Last Monday, Feb. 10, Jim was called by Bloomberg News reporter Brendan Coffey to ask about MDN’s articles and knowledge on Rice Energy and Dan Rice III. Jim happily accommodated Mr. Coffey and chatted with him for about 20 minutes. Mr. Coffey mentioned that he may quote MDN in the article. Whereupon Jim pretty much forgot about it. But then last Thursday, Feb. 13, Coffey’s article turned up on the Bloomberg wire and low and behold, MDN (and Jim) were mentioned pretty high up in the article. Here is that article:
Read More “MDN Quoted in Bloomberg News Article on Dan Rice & Rice Energy”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Feb 18, 2014
February 18, 2014February 18, 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: Tue, Feb 18, 2014”