Marcellus & Utica Shale Story Links: Tue, Jul 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 | Chesapeake Energy | CONSOL Energy | Energy Companies | EQT Corp | Hancock County | Pennsylvania | Range Resources Corp | Rex Energy | Upper Devonian Shale | West Virginia
5th Upper Devonian Driller + Maps of Best UD Spots to Drill
It seems as if “out of the blue” the Upper Devonian Shale (UD) has popped up on the radar screen–quite suddenly and in quite a big way. The Upper Devonian is located a few hundred feet above the Marcellus Shale layer in the northeastern U.S. Over the past few weeks, MDN has highlighted stories of drillers expanding their UD drilling programs–including CONSOL, Rex Energy, Range Resources and EQT Corporation (see EQT 4th Driller to Target Upper Devonian Shale Layer). Courtesy of a sharp MDN reader, we can add a fifth UD driller to the list: Chesapeake Energy. Todd Sigler reports that Chesapeake has drilled an Upper Devonian well in Hancock County, WV and has several Upper Devonian permits in extreme western Beaver County, PA.Todd also pointed us to two excellent drilling presentations about the UD, one from Range Resources and one from Rex Energy, which we’ve embedded below. The Range presentation includes a good backgrounder on the UD and a great series of maps showing where the best places to drill in the UD can be found–currently–based on our knowledge and experience so far. The Range presentation also discusses how Range (and others) are adopting a “stacked play” strategy of drilling the Upper Devonian, Marcellus and Utica layers–all in the same well bore. How cool is that?!
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More Interesting Facts about the Upper Devonian Shale
Some more interesting facts are coming to light about the new shale kid on the block: the Upper Devonian Shale. A recent AP article says Upper Devonian (UD) wells are a lot cheaper to drill than Marcellus and Utica wells because they are closer to the surface. And, surprise! UD wells are usually fracked using hydrogen, not water and chemicals–at least UD wells drilled in West Virginia. That is a revelation.
Will we now start to see more UD wells drilled in the northeast? That will depend on the commodity price of natural gas, because UD wells typically yield dry gas (methane) and not wet gas (with liquids and/or oil)–at least so far. If the price is right to make dry gas drilling profitable, you can expect to see the UD getting more attention…
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Ohio Drillers Not So Excited About Upper Devonian Shale
It seems some drillers have become excited about the Upper Devonian Shale in southwestern Pennsylvania and West Virginia (see today’s companion story: 5th Upper Devonian Driller + Maps of Best UD Spots to Drill). However, it also seems that the UD isn’t all peaches and cream–especially for drillers in eastern Ohio. Akron Beacon Journal reporter Bob Downing reports the UD in Ohio has so far been pretty lackluster.
Surprisingly, there have already been 125 UD wells drilled in Ohio over the past two years, most of them vertical-only wells. An update on UD drilling in Ohio:
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Father of Shale Fracking George Mitchell Dies at Age 94
On Friday, the father of modern-day shale fracking and Texas billionaire oilman George Mitchell died. More than any other person, Mitchell is responsible for the current shale drilling revolution that has changed America’s (and the world’s) energy picture. It was Mitchell who kept experimenting, with his own money, on shale drilling until he finally “cracked” the secret in the Barnett Shale in Texas in the 1990s.
In 2012, Mitchell went a little wobbly and called for federal regulation of fracking, a position we heartily disagreed with (see Father of Shale Fracking George Mitchell Talks to Forbes). However, Mitchell was a giant in the industry, and we pay our respects to him and his family. This world would be a poorer place were it not for George Mitchell and his persistence in figuring out how to frack shale. So we send him on to that great gusher in the sky…
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Kathryn Klaber Stepping Down as CEO of Marcellus Shale Coalition
A surprise announcement last Friday: Kathryn (Katie) Klaber is stepping down as CEO of the Marcellus Shale Coalition (MSC). Klaber has been the driving force behind the MSC since it’s inception in 2009. She helped build the MSC into one of the world’s premier industry organizations representing shale drilling. Her presence will no doubt be missed.
The MSC announcement below does not mention what’s next for Katie, but we have some idle speculation…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA
AP Attempts to Smear Shale Drillers as Arrogant
Another AP story with anti-drilling overtones is making the rounds. This one, written by AP reporter Kevin Begos, attempts (in our opinion) to unfairly shade comments by both John Hofmeister, the former president of Shell, and Terry Engelder, Penn State geologist and the “father of the Marcellus,” as tacitly admitting that drilling has caused chemical contamination in some water supplies. They never said it, and to imply it is an outrage.
Here’s the AP article now making its way around the mainstream media echo chamber with the pretentious title, “Industry Arrogance Fueling Fracking Anger?”…
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Cameron County | Elk County | Energy Companies | Forest County | Lycoming County | Pennsylvania | Seneca Resources | Statewide PA
Seneca Resources Production Up 67%, Now 1/3 Bcf/d in Marcellus
Seneca Resources, the Marcellus Shale drilling subsidiary of National Fuel Gas Company, released their fiscal third quarter (everyone else’s second quarter) operating results today. And boy of boy, were they good results! Seneca reports their Marcellus Shale production was up 67% from the same quarter last year, due to newly drilled wells in Lycoming County, PA going online. Seneca’s total Marcellus production was 374 million cubic feet per day average–or one-third of a billion cubic feet per day. Cabot Oil & Gas and now EQT have both hit 1 Bcfe/d of production in the Marcellus (see EQT 2Q13: Welcome to the Marcellus “1 Bcf/d Club”). Seems like Seneca is well on its way to the 1 Bcfe/d milestone too.
Here’s the full report, including details for some of the newest wells they’ve drilled in Elk, Cameron and Forest counties, and details about their use of a drilling technique called reduced cluster spacing (“RCS”) design:
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Lycoming County | Pennsylvania
The Real Reason Eco Groups Bash Fracking: Fundraising
In an article published on the Enter Stage Right website, author Paul Driessen provides an eloquent defense of the many benefits–both economic and environmental–of hydraulic fracturing (i.e. fracking). The article uses the miracle of the Marcellus Shale in Williamsport, PA as a prime example (he personally visited and saw it with his own eyes).
Near the end of the article, Driessen both asks and answers and important question. If fracking is largely a good thing, and since science shows it to be safe, why do so-called “environmentalist” organizations like the Sierra Club and a plethora of “riverkeeper” clubs keep bashing it? Answer: Follow the money. It’s great for donations…
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Striking a Balance: Preserving the Surface While Drilling in WV
What happens when the mineral rights for oil and gas under a piece of land are owned by someone other than those who own the surface land itself? In West Virginia, that happens a lot–it’s a called a “split estate” and was done years ago for coal mining. Furthermore, what happens if the surface owner is the county or state government, and the land is a nature preserve, used for hunting and outdoor enthusiasts? It is a conundrum. Clearly the mineral owners have the right to access the minerals under the land, but in doing so, there’s going to be inconvenience for hunters and others using the surface land. Both sides have to work together.
The Lewis Wetzel Wildlife Management Area in Wetzel County, WV is a good example where both sides have not found a perfect solution, but it seems they have found a workable one…
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Calendar of Events for Jul 29 – Aug 11, 2013 [Free]
Below are upcoming events for this week and next.
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Marcellus & Utica Shale Story Links: Mon, Jul 29, 2013
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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EQT 2Q13: Welcome to the Marcellus “1 Bcf/d Club”
EQT has distinguished itself by becoming the second Marcellus Shale driller to join the “1 billion cubic feet per day club” in Marcellus Shale gas production. Cabot Oil & Gas was the first member (see Who’s a Member of the Marcellus “1 Bcf/d” Club?). EQT had a tremendous second quarter, as reported in their 2Q13 update issued yesterday. Marcellus production was up an astonishing 111% from 2Q12.A few more facts and figures from yesterday’s update: in 2Q13, EQT started to drill (or “spud”) 41 Marcellus wells; they completed three Utica wells with one of them going online for sales of gas; and EQT spud eight Upper Devonian wells (completing four of them), with plans to drill up to 22 UD wells this year…
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EQT 4th Driller to Target Upper Devonian Shale Layer
EQT has become the fourth Marcellus/Utica driller (that we’re aware of) to target the Upper Devonian Shale, a shale layer that sits a few hundred feet above the Marcellus Shale layer. The other three drillers are Rex Energy, Range Resources, and CONSOL Energy (see New Shale Layer Above the Marcellus Yields Positive Results). EQT already has eight Upper Devonian wells (four of them completed) with plans to drill up to 22 Upper Devonian wells this year, according to CEO David Porges on an investors call yesterday…
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PA Supreme Court to PUC: Knock Off the Zoning Reviews (for Now)
Yesterday, the Pennsylvania State Supreme Court issued a ruling quashing (stopping) the state Public Utility Commission from carrying out some of its duties as specified under PA’s 2012 Marcellus Shale Act 13 law–duties tied to Act 13’s zoning provisions. It is a small and perhaps short-lived victory for the towns who had sued the PUC asking for relief from the PUC’s reviews of their zoning laws. It is a short-lived victory for the towns because the Supreme Court is due to decide on Act 13’s zoning provisions soon, so this decision is in effect until that bigger (and final) decision is made.
That’s the news. Now, to bring you up to speed on the background of this case and what yesterday’s decision means…
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Risky Business – OH Landowner Group Wants to Lease Sans Lawyer
A Utica Shale landowner group in Muskingum County, OH with 90,000 acres available for lease has embarked on a risky venture. They want to strike a deal on behalf of their members to lease property for $5,000 per acre and 20% royalties. Certainly no problem with that–sounds like a fair deal in a “wet gas” area like Muskingum County, OH. The group is asking the Muskingum County Commissioners to not shop county land below that asking price (something that happened in neighboring Coshocton County) as that would undercut their bargaining power. We also have no problem with that–sounds like a smart strategy.
However, the landowner group wants to cut a deal with a driller without the help of attorneys. Attorneys typically take a small per-acre fee in return for their legal guidance on very complicated oil and gas drilling contract law. You can be sure the driller drawing up a lease agreement has an army of attorneys working on it–so why would you willingly disadvantage yourself by not using one too? It comes down to money…
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It seems as if “out of the blue” the Upper Devonian Shale (UD) has popped up on the radar screen–quite suddenly and in quite a big way. The Upper Devonian is located a few hundred feet above the Marcellus Shale layer in the northeastern U.S. Over the past few weeks, MDN has highlighted stories of drillers expanding their UD drilling programs–including CONSOL, Rex Energy, Range Resources and EQT Corporation (see 
EQT has distinguished itself by becoming the second Marcellus Shale driller to join the “1 billion cubic feet per day club” in Marcellus Shale gas production. Cabot Oil & Gas was the first member (see