Marcellus Drilling News

Belmont County | Energy Companies | Gulfport Energy | Lease & Royalty Payments | Ohio | Utica Shale

School in Belmont County, OH Gets $7,250/Acre from Gulfport
January 21, 2014January 21, 2014

Some 10 miles “as the crow flies” from Gulfport Energy’s super well, the Irons 1-4H (pumping out 30 million cubic feet of natural gas per day) sits the small community of Shadyside and the Shadyside Local School District. The school has just leased 20 acres to Gulfport for drilling under (not on), which may seem like not much. However, when you’re getting $7,250 per acre as a signing bonus, and 20% royalties on anything produced, the school’s 20 acres is way more than “not much.”

Shadyside School’s lease with Gulfport will net them an initial check for $145,000–just for the signing bonus. Gulfport is signing up the neighbors around Shadyside too. Will the school’s property be drilled under this year? Maybe! Gulfport is spending $630 million to drill 95 new Utica wells–many of them in Belmont County, OH where Shadyside is located and where Gulfport has had huge success already…
Read More “School in Belmont County, OH Gets $7,250/Acre from Gulfport”
Chevron | Energy Companies | Statewide WV | West Virginia

Chevron’s Marcellus Drilling Picks Up Steam in WV, PA
January 21, 2014January 21, 2014

With 700,000 net acres in the Marcellus Shale and 600,000 net acres in the Utica Shale, Chevron is one of the largest acreage holders in the northeast. Although Chevron has been actively drilling in Pennsylvania, their drilling in Ohio and West Virginia, up to now, has been all but non-existent. Is that about to change, at least in WV? According to an article published today out of Wheeling, WV, Chevron’s drilling activity in WV is due to pick up in 2014…
Read More “Chevron’s Marcellus Drilling Picks Up Steam in WV, PA”
Air Quality | Allegheny County | CONSOL Energy | Energy Companies | Industrywide Issues | Pennsylvania | Research

Allegheny County Health Dept to Monitor Air Near PIT Airport
January 21, 2014January 21, 2014

Here’s a good idea that everyone can embrace: Measure air quality both before and after drilling near a local drill site. In this case, it’s not just any drill site–it’s the 9,000 acres surrounding the Pittsburgh Airport where CONSOL Energy is now ramping up to drill 47 Marcellus Shale wells on 6 well pads and install 17 miles of gathering pipelines (see CONSOL Energy Reveals Drilling Plan for Pittsburgh Airport). The Allegheny County Health Department announced they will conduct an air quality study at the airport before and after drilling.

What will they find? (It’s always fun to speculate!) We suspect…not much. Oh, there may be a temporary increase in some undesirable pollutants in the air from truck traffic (if they use diesel, increasingly natgas trucks are being used). However, since CONSOL will use electric motors to do all of the drilling and fracking at the airport property, most of the air pollution problems that come from drilling will be nonexistent (see CONSOL to Use Electric Motors for Drilling at Pittsburgh Airport). MDN will keep an eye on this interesting story. Here’s the article that talks about the Health Department’s plan to monitor air quality near the airport:
Read More “Allegheny County Health Dept to Monitor Air Near PIT Airport”
Economic Impact | Hydraulic Fracturing | Industrywide Issues | Pipelines | Processing Plants | Research

Deloitte’s View: 2014 Spending Shifts from Upstream to Midstream
January 21, 2014January 21, 2014

From time to time it’s helpful to zoom out to the “40,000-foot view” of the oil and gas industry, because understanding the bigger picture helps us understand the smaller picture that MDN concentrates on–the Marcellus and Utica Shale. One of the better analysts of the bigger picture (in our humble opinion) is consulting powerhouse Deloitte. John England, Deloitte’s U.S. Oil & Gas leader, recently posted a 40,000-foot view of what’s happening in the oil and gas sector in the U.S.–and where he believes it’s headed in 2014.

England, quoting the Oil & Gas Journal, says E&P (exploration and production) spending in the U.S. was $354.8 billion in 2013. However, spending on the midstream–the pipelines and processing plants that get all of that production to market–was only $46.4 billion in 2013 (although that’s up 360% from the $12.8 billion spent on midstream in 2012). England says as we head into 2014, look for investments to continue shifting from the upstream sector (E&P) to the midstream sector–to infrastructure like pipelines and processing plants, refinery operations, and petrochemical facilities. MDN concurs. Just reference our massive list of 111 midstream/infrastructure projects underway or planned in the Marcellus/Utica (see MDN’s 2013 Databook Vol 2 Finds Staggering $40B in NE Midstream Projects). Here’s England’s take on where we’ve been, and where we’re headed in 2014…
Read More “Deloitte’s View: 2014 Spending Shifts from Upstream to Midstream”
Crime | Industrywide Issues | Pennsylvania | Statewide PA | Washington County

Warning: Marcellus Welders in PA Targets of Copper/Tool Theft
January 21, 2014January 21, 2014

Welders in the Marcellus Shale should be on the lookout–especially in western PA. There’s been a recent rash of thefts of welder’s tools and supplies–particularly copper welding cable. The thieves are bold–really bold. Sometimes a welding truck is targeted for theft while the guys are inside a restaurant having lunch!

Here’s the sad, and maddening, story:
Read More “Warning: Marcellus Welders in PA Targets of Copper/Tool Theft”
Hydraulic Fracturing | Industrywide Issues | Litigation

New ShalePlay App for iPhones Released by Energy Law Firm
January 21, 2014January 21, 2014

Bracewell & Giuliani LLP announced last week it has launched a new ShalePlay app for iPhones and other iOS devices (like your iPad), and a version is coming soon for Android devices. MDN was intrigued so we downloaded the free app. What did we find?…
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Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Jan 21, 2014
January 21, 2014January 21, 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, Jan 21, 2014”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

“Enviro” Groups: Keep Acid Mine Drainage So Drillers Can’t Use It
January 20, 2014January 20, 2014

Get this: Environmentalists (like those at PennEnvironment) hate fossil fuels from shale drilling so much, they would rather have millions of gallons of acid mine drainage pour into creeks and rivers in PA every day rather than let shale drillers use that drainage as a fracking fluid–thereby freeing up fresh water sources and solving one of the state’s most pernicious long-term pollution problems. Anti-drillers can’t stand the idea that drillers might, in any way, be perceived as helping the environment. Talk about selfish pigs.

The residents in PA should be outraged at the 35 groups listed below, including PennEnvironment, that sent a letter last Thursday to political leaders asking them to abandon support for one of the best ideas to roll around in generations–cleaning up acid mine drainage by using it as a fracking fluid…
Read More ““Enviro” Groups: Keep Acid Mine Drainage So Drillers Can’t Use It”
Beaver County | Braskem | Energy Companies | Energy Services | Ethane | Industrywide Issues | Odebrecht | Pennsylvania | Processing Plants | Shell | West Virginia | Wood County

WV Cracker Plant has Already Purchased Land for Future Site
January 20, 2014January 20, 2014

In November, WV Gov. Earl Ray Tomblin announced he finally had him a cracker (see WV Announces Brazilian Company to Build Ethane Cracker Complex). By Dec. 31, Odebrecht, the company that will build the ethane cracker, had purchased the future site for their proposed plant in Wood County, WV through a holding company–for $10.9 million. A chemical plant currently located on the site employing 130 people will close in 2015. But have no fear–when the cracker plant is built, it will (for a time) employ 10,000 people to build it. It’s a massive undertaking that will ultimately lead to an estimated $7 billion economic injection just for the state of West Virginia. Talk about an economic revolution!

Compare WV’s proposed cracker to the Pennsylvania proposed cracker plant. Shell announced their intention to build a PA cracker plant in June 2011. How long did it take Shell to purchase the property on which they plan to build their cracker plant? They still haven’t purchased it. Let’s see: under 2 months to purchase the property for the WV cracker, still no purchase after 2 1/2 years for the PA cracker. Which one do you think is serious about building, and which one will get built first?…
Read More “WV Cracker Plant has Already Purchased Land for Future Site”
Allegheny County | Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania

Heinz Spent $3.3M in 2013 on Anti-Drilling Research/Activities
January 20, 2014January 20, 2014

It now becomes crystal-clear (as if there were ever any doubt) about why the Heinz Endowments, under the direction of Teresa Heinz Kerry, fired its president Bobby Vagt and a couple of other senior members of the Endowments team: Heinz herself is through and through anti-drilling. Attempting to spread a thin veneer of euphemistic language, the Heinz Endowments admits that last year they provided $3.3 million of their considerable warchest to support anti-drilling organizations and causes. Oh, they don’t call it that, but that’s exactly what it is: Every single “cause” they funded took aim at shale drilling–to stop it, not make it better. With people like the Heinz’s there is no attempting a reasoned, considered “how can we improve this” approach. Instead, it’s a “how do we eliminate these evil, nasty drillers–eradicate them from the face of the earth” approach.

Some of the recipients of Teresa’s largess last year include anti-drilling “studies” at Ivy League schools like Yale, Harvard and Cornell, and anti-drilling “activities” at non-profits like FracTracker Alliance. Contrast that with the tiny bit of money Vagt tried to spend to help create the very strict (too strict in our opinion) Center for Sustainable Shale Development–an alliance between drillers and environmental groups–getting both sides to the table and to agree. That one made mamma Teresa really mad, so Bobby had to go bye bye. We can’t have any talk of a “third way” and cooperation in shale exploration. It’s “no way” for the Heinz clan when it comes to shale…
Read More “Heinz Spent $3.3M in 2013 on Anti-Drilling Research/Activities”
Energy Services | Ethane | Industrywide Issues | NOVA Chemicals | Pipelines | Processing Plants | Sunoco Logistics

Why Wait for a Cracker to be Built? Canadian Plant Cracking Now
January 20, 2014January 20, 2014

Although both WV and PA are in a race to build the northeast’s first ethane cracker plant, such a plant will not be operational for at least another 4-5 years–if all goes well. The problem is, what do you do with all of the ethane being produced now in the Marcellus and Utica Shale? Ethane is a valuable commodity that can be sold for a lot more than regular methane (or “dry gas”)–unless there’s no way to get it to a cracker. Then ethane becomes a waste product and actually costs money. The three ways to deal with ethane in the northeast right now are: (1) blend it with methane and other hydrocarbons, (2) flare it, i.e. burn it off, or (3) ship it out of the northeast via pipeline to a cracker plant. Option #3 is, of course, the preferred option for drillers–and an option that is now, as of a few months ago, a reality.

Although ethane has been flowing through the Mariner West pipeline (owned and operated by Sunoco Logistics) to the Corunna cracker plant in Sarnia, Ontario, Canada for the past few months, it has only been fully operational for a short time. Last Thursday, officials at the Corunna plant held a ceremony to commemorate full operation of receiving and processing Marcellus and Utica Shale ethane at the plant…
Read More “Why Wait for a Cracker to be Built? Canadian Plant Cracking Now”
Commodity Price | Industrywide Issues | Research

IHS Research Predicts Gas Price will Stay at $4-$5/Mcf Until 2035
January 20, 2014January 20, 2014

An interesting new report is out from IHS. Researchers with IHS predict that the price of natural gas, because of the flood of new shale gas coming into the market, will stay somewhere between $4-$5 per thousand cubic feet (Mcf) at the benchmark Henry Hub for the long-term–like until 2035, at least.

The report, titled “Fueling the Future with Natural Gas: Bringing It Home” (25-page executive summary embedded below) says shale gas can be profitably produced at $4/Mcf or less. One of many conclusions from their research: “…the North American natural gas resource base can accommodate significant increases in demand without requiring a significantly higher price to elicit new supply.” Translation: A LOT more shale drilling just ahead, even with relatively “low” prices. Here’s another fascinating conclusion from the study…
Read More “IHS Research Predicts Gas Price will Stay at $4-$5/Mcf Until 2035”
Belmont County | Energy Companies | Lease & Royalty Payments | Ohio | Rice Energy | XTO

Belmont County School Gets Huge Checks from Utica Leases
January 20, 2014January 21, 2014

A local school district in Belmont County, OH–Union Local Schools–is reaping huge rewards from leasing land for Utica Shale drilling. Union Local Schools has already received a lease signing bonus check for $519,750, and a second check is on the way for $112,000–and that’s before a penny of royalties are paid (19% for one lease agreement, 20% for a second lease agreement).

Here’s the low-down…
Read More “Belmont County School Gets Huge Checks from Utica Leases”
Carrizo Oil & Gas | Energy Companies | Guernsey County | Ohio | Utica Shale

Carrizo Releases IP Numbers for Guernsey County, OH Utica Well
January 20, 2014January 20, 2014

Last week Carrizo Oil & Gas released a brief update on the initial production for their newest Utica Shale well, the Rector 1H in Guernsey County, OH. In addition, Carrizo said they plan to move a drilling rig into the OH Utica in early 2Q14 and keep it there through the balance of the year.

According to NaturalGasIntel.com, Carrizo’s acreage position is the smallest of the “major” drillers in the Utica with just 14,500 acres leased. Here’s Carrizo’s initial production (IP) numbers for the Rector 1H and their comments about their Utica drilling program:
Read More “Carrizo Releases IP Numbers for Guernsey County, OH Utica Well”
Energy Services | Industrywide Issues | Ohio | Pipelines | Portage County | Sunoco Logistics

Sunoco Logistics Answers NGL Pipeline Concerns in Portage, OH
January 20, 2014January 20, 2014

Sunoco Logistics personnel were treated last week to a variety of silly concerns about an NGL pipeline they’re proposing through Portage County, OH–concerns like people keeling over dead because of undetected leaks in the buried pipeline and mass contamination of water aquifers. The anti-drillers are so good at distributing lies and distortions it’s no wonder average folks are concerned. You’d think a pipeline was the equivalent of an environmental holocaust.

Even though pipelines are the safest form of transportation in existence, people turned out last week and packed the local county commissioner’s office to express their unfounded concerns. Here’s how it went:
Read More “Sunoco Logistics Answers NGL Pipeline Concerns in Portage, OH”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Maryland | Statewide MD

Article Falsely Implies Driller Interested in S Maryland Drilling
January 20, 2014January 20, 2014

A highly misleading headline (and article) running in an AOL-based “local” Patch publication trumpets, “Energy Company Eyeing Gas Basin that Runs Under Southern Maryland.” The “deck” or smaller headline under it goes on to reinforce this misconception by saying, “A gas basin underneath five counties in Southern Maryland is drawing a Texas-based energy company’s attention.” Both statements are, in a way true. However, the impression they leave–that a Texas driller is actively looking to lease land in southern MD for shale drilling, is 100% false. Hence another propaganda campaign is born by another anti-drilling “reporter.”

This particular falsehood is aimed at whipping up Marylanders against common sense regulations that would allow shale drilling in the Marcellus–which is only found under parts of two MD counties in extreme western Maryland’s panhandle area–Garrett and Allegany counties. Landowners in that area have been stymied almost as along as landowners in New York State–locked in an ongoing moratorium while politicians dither and preen. MDN has already told you about the shale basin mentioned in this new Patch story which drillers want to tap–in Virginia (see Fracking Finally on the Way in Virginia? Maybe Yes, Maybe No). The same basin underlying parts of VA, called the Taylorsville, underlies a few counties in southern MD too. But not one driller has mentioned leasing any land in anti-drilling MD. Quite the opposite–they’re staying away from Maryland like it’s radioactive…
Read More “Article Falsely Implies Driller Interested in S Maryland Drilling”