Marcellus Drilling News

Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter’s Proved Reserves Jump 23% Thanks to the Marcellus
January 16, 2014

Magnum Hunter Resources published numbers yesterday for their total proved reserves (how much recoverable oil and gas they have in the ground) for 2013–sort of a scorecard for how they ended the year. They report that total proved oil and natural gas reserves increased by 23% in 2013. Magnum Hunter CEO Gary Evans says the increase was primarily due to their Marcellus Shale drilling program. He said he expects 2014 to be another banner year for the company because of the Marcellus, and because of their drilling program just getting started in the Utica Shale. The company owns 97,000 acres of leases in the Utica and that program is just getting off the ground, so they expect to really pump up proved reserves in the Utica in 2014.

Here’s the full statement from Magnum Hunter. Lots of numbers–don’t go cross-eyed reading it. The interesting stuff is further down the statement…
Read More “Magnum Hunter’s Proved Reserves Jump 23% Thanks to the Marcellus”
Energy Services | Kinder Morgan

Kinder Morgan’s 4Q13 Update for Marcellus/Utica, Condensed
January 16, 2014January 16, 2014

Kinder Morgan, a $110 billion company with 11,000 employees, is the largest midstream (pipeline and processing plant) company in North America. As you might imagine, their vast operations include pipelines and plants in all of the major shale plays, including the Marcellus and Utica. Yesterday KM issued their fourth quarter 2013 update, which is extensive. Really long, like you may turn another year older by the time you finish reading it! So we “took one for the team” and scanned through it to bring you all of the references to either the Marcellus or Utica, which we’ve extracted and list below (saving you a lot of time).

KM’s update for the northeast centers on its $500 million Northeast Upgrade Project for the Tennessee Gas Pipeline, new pipelines they plan to build, including the UTOPIA NGL pipeline, and on their joint venture deals with MarkWest. Here’s the greatly condensed version of the KM update relevant for the Marcellus/Utica:
Read More “Kinder Morgan’s 4Q13 Update for Marcellus/Utica, Condensed”
Belmont County | Butler County | Carroll County | Energy Companies | Guernsey County | Noble County | Ohio | Pennsylvania | Rex Energy

Rex Energy 4Q13: Several Marcellus Experiments Paying Off
January 16, 2014January 16, 2014

The “little” driller in the Marcellus, Rex Energy, posted impressive gains in production for the fourth quarter of 2013. According to their 4Q13 update issued yesterday, Rex’s production, nearly all of which comes from the Marcellus and Utica Shale region, was 110 million cubic feet per day–a 12% increase over 2012. Of keen interest to investors is that 31% of net production for 4Q13 was oil and natural gas liquids (NGLs). The company gets a lot more money for those products than just plain “dry gas” methane.

Rex has operations in western PA and eastern OH. Of interest to MDN is that Rex is testing a strategy of drilling both the Marcellus and the shallower Upper Devonian layers in a single well, apparently with good success. They’re also experimenting with spacing wells closer together–at 600 feet apart instead of the traditional 750 feet. Rex is innovating, and reaping the rewards. Here’s their full 4Q13 update:
Read More “Rex Energy 4Q13: Several Marcellus Experiments Paying Off”
Energy Companies | Olympus/Huntley & Huntley | Pennsylvania | Range Resources Corp | Westmoreland County

Murrysville Park Lease to be Discussed at Meeting
January 16, 2014January 16, 2014

Last June MDN told you that Huntley & Huntley, a small conventional gas driller, had leased land surrounding the Murrysville Community Park in Westmoreland County, PA. At that time Huntley made overtures to Murrysville officials about leasing the land under the park for drilling from neighboring properties they already have under lease (see Conventional Driller Eyes Marcellus Under Murrysville, PA Park). Since that time MDN has learned that Huntley often works with and for Range Resources. Although it’s not clear if Range is the client in this case, we suspect that is the case.

Next Wednesday, Murrysville Council will take up a proposal from Huntley & Huntley (Range?) at their regularly scheduled public meeting. Both council members and Huntley want the public to attend and hear more about Huntley’s (Range’s?) plan, “in the interests of good communication.” Should be interesting…
Read More “Murrysville Park Lease to be Discussed at Meeting”
Alternative Energy | BP | Crude Oil | Economic Impact | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Research

BP’s Annual Energy Outlook Through 2035 – Fool’s Errand?
January 16, 2014January 16, 2014

Yesterday BP, a huge driller with a sizable acreage position in the Utica Shale (84,000 leased acres), issued its annual BP Energy Outlook 2035 (full copy embedded below). The 96-page report sets out BP’s view of the most likely developments in global energy markets to 2035, based on up-to-date analyses. BP experts expect global energy demand to rise 41% from now until 2035 with 95% of that growth coming from “emerging economies.” According to BP, gas as a source of energy is growing fastest among the fossil fuels and by 2035 gas is expected to be at parity with coal–each providing about 27% of power needs in 2035. BP says shale gas will make up 68% of U.S. gas production by 2035.

Of course, all of this speculation is fun to read, but frankly is just so much folly. MDN editor Jim Willis heard Charif Souki, CEO of Cheniere Energy address the predictions game at the Platts Global Energy Forum in New York City last December (see Energy Industry Leaders Gather at Platts Forum in NYC). At that forum, Souki said any kind of prediction beyond 2-3 years in the rapidly changing energy industry is meaningless. He said if you go back 20 years and look at those predictions about today, none of them predicted shale and how the industry would change so dramatically. We concur with Souki–making these kinds of predictions is a fool’s errand. Still, it’s fun to read and muse about what might be…
Read More “BP’s Annual Energy Outlook Through 2035 – Fool’s Errand?”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Ohio | Research | Statewide OH | Utica Shale

Quarterly OH Utica Shale Report from CSU: Huge Economic Impact
January 16, 2014January 16, 2014

Each quarter, researchers at Cleveland State University publish the Ohio Utica Shale Gas Monitor, a report that looks at the economic impacts of Utica and Marcellus Shale drilling in Ohio. The latest report was issued a few weeks ago and MDN has just now been able to locate a copy to share with you (full copy of the 39-page report embedded below). What does the report tell us? The number of counties with “strong” shale activity has gone to eight from 15, and the number of counties with “moderate” shale drilling activity has gone to five from 30. That’s a head-turner! The “strong” counties, in addition to producing methane (or dry gas), are also producing “commercial amounts” of natural gas liquids (wet gas).

Here’s a good overview of the report as provided by NortheastPA.com:
Read More “Quarterly OH Utica Shale Report from CSU: Huge Economic Impact”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Regulation

Out of Control EPA Exposed, Indicted by their Own Emails
January 16, 2014January 16, 2014

The Washington Free Beacon is reporting that through Freedom of Information requests, a link has been exposed between the federal Environmental Protection Agency and national so-called environmental groups. Emails show close coordination of “messaging” (i.e. propaganda campaigns). The emails also show, in MDN’s opinion, how these environmental groups and the federal government itself is manipulating rank and file citizens–shaping and influencing their opinion to get them to do the bidding of the elitists who run those organizations. What the evidence shows is that truth is a casualty and coordination of propaganda reigns supreme inside the Barack Obama/Gina McCarthy EPA.

We certainly hope Congress initiates hearings to get to the bottom of these unethical and likely illegal activities–and put a stop to it…
Read More “Out of Control EPA Exposed, Indicted by their Own Emails”
Energy Services | Industrywide Issues | Ion GX Technology | Pennsylvania | Seismic Testing | Westmoreland County

Tesla Thumper Trucks Arrive in Murrysville, PA This Month
January 16, 2014January 16, 2014

Seismic testing thumper trucks will arrive in Murrysville (Westmoreland County), PA at the end of this month, according to Murrysville Chief Administrator Jim Morrison. MDN told you in December that Murrysville residents were being approached by ION Geophysical to allow testing on their land for $5 per acres–Starbucks coffee money essentially (see Thumper Trucks Coming to Murrysville – Make a (Very) Few Bucks?).

According to MDN’s December story, the seismic testing would be performed by ION and begin in February. The testing that starts later this month, in January, is from Tesla Exploration–a different company. What’s not clear to MDN is whether or not Tesla is doing their testing on behalf of ION, or in addition to ION. Maybe a sharp MDN reader with knowledge of the situation can elucidate? At any rate, one thing is for sure–seismic testing is coming to Murrysville, and soon…
Read More “Tesla Thumper Trucks Arrive in Murrysville, PA This Month”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Jan 16, 2014
January 16, 2014January 16, 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, Jan 16, 2014”
Delaware County | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

NY Judge Tosses Out Sidney Moratorium Law for Procedural Issues
January 15, 2014January 15, 2014

It was a good day for New York landowners and pro-drillers yesterday. MDN told you on Monday that we had confirmed a decision had been made in the lawsuit brought by landowners in Delaware County against the Town of Sidney, NY for passing a moratorium on fracking (see Breaking: NY Court Decisions in Binghamton & Sidney Cases). We knew there had been a decision by Supreme Court Judge John F. Lambert–we just didn’t know what the decision was.

MDN received a copy of the decision yesterday (full copy embedded below) and it’s good news for landowners. The moratorium law was ruled “invalid”–but not because it was a moratorium. The law was tossed out because of the way it was enacted–for procedural issues. In fact, Judge Lambert was careful in his decision to point out that, “…the court has not addressed the moratorium issue.” So although this was a good decision and a reason to be happy, it wasn’t a jump-up-and-down-let’s-celebrate decision that seals of the fate of fracking moratoriums in NY. It occupies the middle ground on the happy face scale for us…
Read More “NY Judge Tosses Out Sidney Moratorium Law for Procedural Issues”
Broome County | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

Binghamton’s New Mayor Fesses Up to Withdrawing Moratorium Appeal
January 15, 2014January 15, 2014

Yesterday MDN told you the great news that the City of Binghamton had withdrawn its appeal of a court decision overturning the moratorium passed by an all-Democrat City Council and mayor at the eleventh hour in 2011 (see Breaking: NY Court Decisions in Binghamton & Sidney Cases). As we said yesterday, the interesting aspect of the Binghamton development is the timing–coming so close to a new mayor taking office. We said it sure looks like new Republican Mayor Rich David played an important role in the decision to withdraw the appeal. We were right.

MDN contacted the mayor’s office and we were told he’s traveling at the moment and would respond upon his return. However, a few hours later his office issued the following statement in which Mayor David lays out the timeline and his role in ending the long, drawn-out process. David came down on the side of landowners and pro-drillers–so three cheers for Mayor David! Here’s the statement issued by his office midday yesterday:
Read More “Binghamton’s New Mayor Fesses Up to Withdrawing Moratorium Appeal”
Accidents | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Jay-Bee Oil & Gas | Tyler County | West Virginia

Frack Tank Explosion in Tyler County Shuts Down Jay-Bee Pad
January 15, 2014January 15, 2014

Try as we might, sometimes an important news story slips by our otherwise keen eye on the Marcellus and Utica. Case in point: On Jan. 2 there was a rare accident at a shale drilling site in Tyler County, WV, a drill site operated by WV-based Jay-Bee Oil & Gas. A flow-back tank on the drill pad exploded, injuring a worker at the site and causing the spill of a “black sludge” onto a neighboring field. The West Virginia Dept. of Environmental Protection (DEP) shut down the Lisby drill pad operation, which is located along Big Run Road, roughly 6 miles southeast of Middlebourne, WV, and issued Jay-Bee a citation over the incident.

Jay-Bee was supposed to have provided a report to the DEP by yesterday outlining what happened and why. The DEP is also requiring Jay-Bee to provide a best management practices plan for flow-back tank systems at all of its operations in WV. In other words, Jay-Bee is now on the hot seat and needs to prove to the DEP that they can operate safely. Here’s what we can so far find about the accident, including the WVDEP’s statement about it…
Read More “Frack Tank Explosion in Tyler County Shuts Down Jay-Bee Pad”
Allegheny County | Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation

Bobby Vagt Leaves Heinz, Will Become Chairman of Rice Energy
January 15, 2014January 15, 2014

Looks like Bobby Vagt, current and soon to be former president of the Heinz Endowments, will get the last laugh. Vagt, you may recall, announced his “retirement” as president of the Heinz Endowments in October of last year. It has never been confirmed, but there’s plenty of anecdotal evidence to suggest mommie dearest Teresa Heinz Kerry bounced him out for his participation in helping to form the Center for Sustainable Shale Development (see Bobby Vagt Out as Pres of Heinz Endowments – Fracking Connection?). Momma Teresa never gave Bobby permission to get that cozy with the drilling industry, and that, dear friends, was a no-no for Bobby.

So Bobby is taking off. And where is he going? To become chairman of the board at Rice Energy, once they complete their IPO (see Rice Energy Launches IPO, Hopes to Raise $840M). Bobby is already a wealthy man, but helping to steer the direction of Rice Energy will no doubt make him a lot wealthier. Which is amusing to MDN. You see, Bobby is making his money the old-fashioned way–he’s earning it. Momma Teresa made her money the liberal way–she married it. Here’s the story about Bobby saying bye-bye to Teresa and heading off to (much) greener pastures…
Read More “Bobby Vagt Leaves Heinz, Will Become Chairman of Rice Energy”
Crosstex Energy | Devon Energy | Energy Companies | Energy Services | EnLink Midstream | Industrywide Issues | Pipelines | Processing Plants

Crosstex Energy Gets a Name Change, Merger with Devon Proceeds
January 15, 2014January 15, 2014

In October, Devon Energy (a major shale driller in several plays with midstream assets) and Crosstex Energy (a sizable midstream company) announced they will merge their midstream operations into a new company (see Devon Energy & Crosstex Energy Form New Midstream Company in JV). Both companies have major operations in the Marcellus/Utica. At the time of the announcement the new company was unnamed. No longer. Yesterday Devon and Crosstex announced that Crosstex would change its name to the name of the newly combined venture (which is majority owned by Devon). The new name is EnLink Midstream. Barry Davis, CEO of Crosstex will become (or remain) CEO of EnLink.

May we net-net this? Essentially Devon has purchased Crosstex and turned it into a semi-autonomous subsidiary, keeping the Crosstex management team in place. Here’s the statement issued yesterday with details of the legal structure for the new company, which on paper will be two companies for investment purposes–an LLC and an LP (master limited partnership)…
Read More “Crosstex Energy Gets a Name Change, Merger with Devon Proceeds”
Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Washington County

Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation
January 15, 2014January 15, 2014

Starting last August, Range Resources has been in a battle with the board of supervisors for Mt. Pleasant Township in Washington County, PA. The issue, the bone of contention, has been four water impoundments–three of which are for fresh water, essentially ponds (see Range Resources Argues with Mt Pleasant over Water Impoundment). The impoundments were originally used to drill nearby Marcellus Shale wells, several years ago. Since then, Range has continued using them, but now uses them to drill wells that are not nearby, in Mt. Pleasant Township. And the supervisors object.

In December it appeared there was a sliver of good news when the township said Range could proceed with converting one of the impoundments to an above ground enclosed tank impoundment for recycled waste water, subject to certain terms and conditions (see Range Strikes Deal with Mt Pleasant for 1 of 4 Water Impoundments). It now seems that was a bit too optimistic. On Monday the Mt. Pleasant Zoning Hearing Board (different group of people from the board of supervisors) voted unanimously to uphold notices of violation issued by the township’s zoning officer against the four Range impoundments, so here we go again…
Read More “Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation”
Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

Reminder: Ben Franklin Shale Gas Contest Deadline is Feb 1
January 15, 2014January 15, 2014

MDN previously told you about the Ben Franklin Shale Gas Innovation and Commercialization Center’s $100,000 contest (see 2014 Ben Franklin Shale Gas Contest – $100K in Cash Prizes!). A gentle reminder that the Institute’s deadline to apply to receive one of four $25K prizes for an up-and-coming innovator is quickly approaching–February 1st. Here’s more details from the Institute:
Read More “Reminder: Ben Franklin Shale Gas Contest Deadline is Feb 1”