Marcellus Drilling News

Industrywide Issues | Jobs

Handy New Webpage for Locating Marcellus Industry Jobs
December 30, 2013December 30, 2013

The Marcellus Shale Coalition is perhaps the premier organization of its kind–made up of drillers and associated supply chain companies from huge multi-national corporations down to local businesses with a handful of employees. Recently the MSC introduced a new webpage that at first glance may seem rather unremarkable–but to MDN it’s a big deal. Some smart person at the MSC said, “Hey, why don’t we list our member companies on a webpage, and link the company name to the jobs/career info on their respective websites?” Simple! And brilliant.

The MSC did just that, and result will save people who are looking for a job in the Marcellus Shale hours of time in their job search. Here’s the location of the MSC’s new “Find a Job” page, along with our analysis of what it is, and what it isn’t…
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Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Dec 30, 2013
December 30, 2013December 30, 2013

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Beaver County | Energy Companies | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell to Begin Demolition at PA Ethane Cracker Site Early 2014
December 27, 2013December 27, 2013

In June 2011 Shell announced to the world that they would build a “world-scale” ethane cracker plant in the northeast (see Shell Commits to Building a Billion Dollar Chemical Plant in the Marcellus Region of U.S.). After looking around and being heavily courted by West Virginia, Ohio, and Pennsylvania, Shell finally chose a location northwest of Pittsburgh–in Beaver County, PA–in March 2012 (see Shell Announces Location of Ethane Cracker Plant). At the time a spokesperson said the final decision about whether or not to proceed was years away (see Shell’s Cracker Plant Actually “Years Away”?). She wasn’t kidding.

Fast forward two years later and it’s been a real roller coaster ride as to whether or not Shell would proceed–especially in light of recent comments by Shell’s retiring CEO Pete Voser that the company would not be able to build all three of its previously announced big projects, which includes the PA ethane cracker (see Rumor Mill: PA Ethane Cracker Plant on Shell Chopping Block?). But several recent things have happened to indicate the PA cracker plant project is alive and well, including the announcement yesterday that Shell has extended their option to purchase the proposed plant site in PA and intends to start demolishing existing buildings on the site in early 2014…
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Axiall | Energy Services | Ethane | Industrywide Issues | Processing Plants

Axiall Announces New Cracker Plant for LA, Fed by NE Ethane
December 27, 2013December 27, 2013

Georgia Gulf, now a huge chemical manufacturer, was founded in 1985 in Atlanta, GA. The company purchased the commodity chemicals business of PPG in early 2013 and renamed the combined company Axiall Corporation. In buying the PPG properties, Axiall inherited a large chemical plant operation in Natrium (Marshall County), WV–in the heart of the Marcellus/Utica.

Axiall announced last week they plan to build a $3 billion ethane cracker plant. However, they aren’t building it in the northeast near their chemical plant operations. Instead, Axiall plans to build their new cracker plant in Louisiana where they already have three other “major manufacturing facilities.” The new cracker, if built (all companies are careful to couch their language on that point) will no doubt be fed by Marcellus and Utica Shale ethane and (possibly) ethane from other plays. The new plant will not be online until 2018 at the earliest…
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Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

Fitch Ratings Says PA Court Decision Translates to Less Production
December 27, 2013December 27, 2013

Elections–and court cases–have consequences. You tax something more, you get less of it. You regulate something more, you get less of it. When there’s less of something, prices for it go up. Fitch Ratings–one of the largest and most prestigious rating agencies in the world–has just weighed in on the ruling by the PA Supreme Court that throws out portions of the Act 13 drilling law (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). According to Fitch, more local regulation of PA’s oil and gas drilling will result in less production. You don’t normally think of Fitch as being in the oil and gas production prediction game–that’s more the purview of the Energy Information Administration (EIA). However, Fitch says the recent PA ruling will almost certainly mean less production coming out of PA–a sobering observation.

Fitch’s opinion counts because investors make decisions based on it. Less gas, higher prices. It also means less tax money will flow to municipalities. Pretty simple economics and Fitch is just stating the obvious. Here’s what Fitch said earlier this week about the PA court decision…
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Hydraulic Fracturing | Industrywide Issues | Monroe County (NY) | New York | Public Opinion | Regulation

Rochester Poll: Cuomo Wrong to Delay, Begin Fracking Now
December 27, 2013December 27, 2013

Unscientific opinion survey? To be sure. But the results from a recent Rochester (NY) Business Journal poll that asks the question of whether or not Gov. Andrew Cuomo should continue to delay a decision on fracking is enlightening. Some 540 RBJ readers participated in the web-based snap poll that asked two questions about fracking. It will be no surprise to you that the vast majority of RBJ readers believe Cuomo should make a decision now–and that the decision should be to allow fracking to commence.

Most people who read the RBJ are small business people–entrepreneurs and managers and people who make things happen. In other words, they are producers–the opposite of the government-dependent leeches we tend to turn out in NY in large numbers. Producers are clear-headed–they know how to evaluate information and come to a logical conclusion. And the conclusion reached in “liberal” Rochester is this: fracking is safe, it’s time to start. Get off the pot Cuomo! Here’s the details from the RBJ snap poll:
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Energy Companies | Hilcorp Energy | Lawrence County | Pennsylvania

A Look Back (& Forward) at Marcellus Drilling in Lawrence County
December 27, 2013December 27, 2013

As part of a year-end story review, the Elwood City Ledger (Lawrence County, PA) looks at how one of the smallest counties in the Marcellus Shale region has become a late-bloomer with a dozen new wells drilled in 2013. We hadn’t heard much about drilling in Lawrence County until recently. The news has all been about Hilcorp, and if our most recent story about Hilcorp is any indication, drilling in Lawrence will at least double, maybe triple in 2014 (see Hilcorp Goes Hogwild in Lawrence County – 11 Pads on the Way).

Here’s the “year in review” article from the Ledger that covers Marcellus drilling in Lawrence County, a year which (sadly) included a resolution passed by the Elwood City Council calling for a severance tax on shale drilling:
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Indiana County | Pennsylvania

Fire Destroys Building at Marcellus Driller in Indiana County, PA
December 27, 2013December 27, 2013

A sad story to report. A fire at the headquarters of Marcellus drilling company Northeast Energy in Indiana County, PA destroyed their vehicle maintenance garage on Christmas Eve–a $2 million loss. Fortunately no one was injured in the blaze. The company has other buildings at the site that were not affected and so business will continue.

The details we know about the fire and its possible cause:
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Energy Services | GreenHunter Resources | Industrywide Issues | Marshall County | Ohio County | Wastewater | West Virginia

Check-in on GreenHunter’s Wheeling Frack Wastewater Plant
December 27, 2013December 27, 2013

Spandex outfits on. Check. Capes flapping in the breeze. Check. Homemade protest signs created. Check. The so-called Wheeling Water Warriors are ready for more protests against the eeeve-ill, nasty frack wastewater company–GreenHunter. Yes saracasm. Yes we believe the “Water Warriors” are nothing more than fossil-fuel haters stoked by irrational fears that carbon (the very substance they’re made from) is actually a pollutant and that burning it will mean the end of our existence. Boggles the mind. But there you go.

It’s time to check in for an update on GreenHunter’s project to build a frack wastewater recycling facility in Wheeling, WV, and on GreenHunter’s future plans to ship frack wastewater via barge down the Ohio River when the Coast Guard gets around to issuing the “go ahead” signal. It’s also time to check in on the half dozen or so people who continue to grab headlines using the misleading name Wheeling Water Warriors…
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Industrywide Issues | Landfills | Statewide WV | West Virginia

WV Anti-Drillers Continue to Harp on Drill Cuttings in Landfills
December 27, 2013December 27, 2013

Anti-drillers in West Virginia continue to beat the drums about drill cuttings (leftover rock, dirt and mud from shale drilling) being disposed of in landfills. The claim they make is that the state “quietly” carved out a “loophole” earlier this year that allows untold mountains of radioactive dirt to be dumped willy-nilly in the nearest landfill and as a result we’ll all be glowing in the dark any day now. Of course it’s bupkis, but it makes for great headlines.

Here’s the latest “keep the radioactive dirt issue alive” story from the AP, from a few weeks ago:
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Economic Impact | Industrywide Issues

US Spending $150B+ to Drill New Oil & Gas Wells Each Year
December 27, 2013December 27, 2013

The American Petroleum Institute has a pretty good handle on just how much money is spent each year on drilling new oil and gas wells. According to a recently released report for last year (takes a long time to compile these numbers, apparently), there were 46,736 oil and natural gas wells drilled in 2012. We don’t know the breakdown of conventional (vertical only) vs. unconventional (shale) wells drilled, but we suspect the vast majority drilled were conventional, even though shale is all the rage these days. It’s far cheaper to drill a conventional well than an unconventional well.

Speaking of cost, it took an estimated $153.7 billion (that’s with a “b”) to drill those 46.7K wells. Yikes! Shale drilling, according to the API, represented about one-third of those costs (again, that doesn’t mean it was 1/3 of the total wells drilled because drilling economics for conventional/unconventional are vastly different). We have the API press release below, which we found interesting. But here’s what you won’t read in that press release, something we heard at the recent Platts Global Energy Outlook Forum a few weeks ago…
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Air Quality | Industrywide Issues | Regulation

Chu to the Rescue: Former DOE Sec Profits from Regs He Made
December 27, 2013December 27, 2013

Let’s see, ascend to a powerful, important position in Washington, DC–one where you have your hands on the levers of power. Pull those levers to put in place some of the most onerous regulations imaginable that will make companies pay out the nose to (unbelievably) “capture carbon” so the carbon doesn’t escape, like a fugitive criminal, into the atmosphere. Then create low interest loans and outright government grants to companies to create the technology that companies will need to meet the strict new standards. Oh, and after you help create those new rules and the programs to fund the technology, leave that position and go to work for a tech company that happens to provide a solution to meet the new regulations you just created. All very cozy, don’t you think? That’s what former Sec. of the Dept. of Energy Steven Chu has done.

Canadian carbon capture company Inventys Thermal Technologies announced last week that Chu will join their board for undisclosed boatloads of money and stock options to “advise them” in their quest to dominate the carbon capture market, playing off fears of global warming and strict government regulations that will require companies to do something to (unbelievably) capture carbon. The only word we can think of that’s appropriate is: “incestuous”…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Dec 27, 2013
December 27, 2013December 27, 2013

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: Fri, Dec 27, 2013”
Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

OH Amish Flip Royalty Rights for Tax-Free Lump Sum Payment
December 24, 2013December 24, 2013

We may have just found a good reason to become Amish. The Columbus Dispatch has an article today about how some (many?) in Ohio’s Amish community are “flipping” their royalty rights–selling future potential royalty payments for a lump sum now–and leaving Ohio for greener pastures in PA or NY–in areas where shale gas drilling is either nonexistent or far less active than it is in the white hot eastern OH area.

The reason to become Amish before you flip your royalty payments? Apparently there’s an arcane section in our beloved tax code that allows the Amish to sell their royalty rights TAX FREE (if they relocate). The Amish get to keep 100% of the proceeds. To which we say: Pass the shoo-fly pie–we’re goin’ Amish!…
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Energy Companies | Energy Services | Gulfport Energy | Industrywide Issues | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Statewide OH | Utica Shale

Summit Midstream Buys Gulfport’s Interest in Ohio Gathering
December 24, 2013December 24, 2013

Summit Midstream, until recently, has had midstream operations (pipelines, processing plants) in other major North American shale plays–but they are actively moving into the Marcellus and Utica Shale. In June MDN reported that Summit Midstream had purchased the Mountaineer Midstream gathering system from MarkWest Energy for $210 million in WV (see MarkWest Sells Doddridge County, WV Pipeline System to Raise Cash). On Friday, Summit purchased a significant joint venture share in the Ohio (Utica Shale) Gathering system for an undisclosed sum (although NGI’s Shale Daily is reporting the deal is worth $190 million). We have the Summit press release below, but it’s heavy and dense with joint venture this and partnership within partnership that.

Here’s the MDN simplified view of the deal…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Monroe County | Ohio | Utica Shale

Magnum Hunter’s 3 Ormet Wells in Monroe County – Okay Results
December 24, 2013December 24, 2013

Some interesting production numbers from three wells drilled by Triad Hunter, the drilling subsidiary of Magnum Hunter, on property owned by the now bankrupt Ormet Corp, a huge aluminum smelter plant. The wells are in Monroe County, OH, the home of the (so far) most productive Utica Shale well in the state–the Yontz well drilled by Antero Resources (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d).

Monroe County is south of Belmont County and in what is now believed to be the sweet spot of the sweet spot in Utica Shale drilling–which includes Belmont, Harrison, Guernsey, Noble and Monroe counties. The production numbers for the three Magnum Hunter wells are, well, not all that impressive when compared to the Antero well and other wells in the southeastern OH area. Production for the MH three wells range from 2.7 to 5.1 million cubic feet per day of natural gas. However, the three wells together produce an average 1,788 barrels of condensate, which is impressive, because condensate sells for (a lot) more money than methane…
Read More “Magnum Hunter’s 3 Ormet Wells in Monroe County – Okay Results”