Marcellus Drilling News

Energy Companies | Seneca Resources

Seneca 1Q13: Marcellus Production Up, Marcellus Profits Down
February 8, 2013February 8, 2013

National Fuel Gas Company released their earnings and operations update yesterday for what is their first quarter fiscal year 2013 (but would be fourth quarter 2012 for everyone else)—covering October through December 2012. National Fuel Gas’ exploration and production division is known as Seneca Resources—a major driller in the Marcellus Shale. NFG aka Seneca reports that production in the Marcellus region increased 48% over the same period a year earlier. Seneca continues to operate three drilling rigs in the Marcellus. Even though the company turned in a profit overall, Marcellus earnings were down $1.2 million for the quarter because of the low commodity price of natural gas.

Here’s the update form NFG/Seneca:

Read More “Seneca 1Q13: Marcellus Production Up, Marcellus Profits Down”
CONSOL Energy | Energy Companies

CONSOL 2012 Wrap-Up: Added Nearly 1 Tcf of New Reserves
February 8, 2013February 8, 2013

CONSOL Energy delivered an update on 2012 Marcellus Shale drilling activity yesterday—an update full of useful and interesting factoids. Among them: Due to extensions and discoveries, CONSOL added nearly 1 trillion cubic feet of natural gas to its proven reserves in 2012; they spent $440.7 million on drilling and completion in 2012; and their “drill bit finding and development cost” is 46 cents per thousand cubic feet (Mcf) of gas—among the lowest in the industry.

CONSOL continues to transition from being one of the country’s largest coal producers to one of the country’s major shale energy producers. Just a few weeks ago CONSOL announced their plans for 2013 (see CONSOL Energy’s 2013 Plan: Spend Lots on Marcellus & Utica Shale). Below is the 2012 shale drilling wrap-up CONSOL issued yesterday, which includes numbers for the average daily output from their wells in 2012, and the average cost to drill a well:

Read More “CONSOL 2012 Wrap-Up: Added Nearly 1 Tcf of New Reserves”
Energy Companies | Noble Energy

Noble Energy 2012 Wrap-Up: Marcellus Production, Profits Go Up
February 8, 2013February 8, 2013

Houston-based Noble Energy, one of the big drillers in the Marcellus Shale, turned a tidy profit of $1 billion in 2012 according to their year-end financial report issued yesterday. That’s double what they earned in 2011 ($453 million). They also report Marcellus Shale production was up 19% in the 4Q12 from 3Q12—to a new high of 121 million cubic feet per day (MMcfe/d). Noble has a joint venture with CONSOL Energy in the Marcellus and the JV produced 280 MMcfe/d in 2012 (see Who’s a Member of the Marcellus “1 Bcf/d” Club?).

Noble operated three drilling rigs in the Marcellus during 2012. Here’s the year-in-review update issued yesterday:

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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Feb 8, 2013
February 8, 2013February 8, 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, Feb 8, 2013”
Beck Energy | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Ohio | Regulation | Summit County

OH Appeals Court Strikes Down Home Rule for Drilling
February 7, 2013February 7, 2013

In 2012, Beck Energy Corp. got a permit from the OH Dept. of Natural Resources (ODNR) to drill on property located in the City of Munroe Falls (Summit County), OH. Beck started drilling and the city slapped a Stop Work Order on them and took them to court, saying Beck was not in compliance with a number of local ordinances and necessary permits. The local trial court supported Munroe Falls’ position and ruled in their favor.

Beck appealed the trial court decision to the Ohio Court of Appeals (Ninth District) and in a decision handed down yesterday, the appellate court sided with Beck and against so-called “home rule” when it comes to oil and gas drilling. The Ninth District instructed the lower court to reverse its opinion. This decision (full copy embedded below) has major consequences for both Utica Shale drillers and municipalities throughout the state…

Read More “OH Appeals Court Strikes Down Home Rule for Drilling”
Crime | Industrywide Issues | Mahoning County | Ohio | Wastewater

OH Company Dumps 50K Gal of Fracking Wastewater in Storm Drain
February 7, 2013February 7, 2013

The Youngstown Vindicator is reporting that a Youngstown company, Hardrock Excavating, intentionally dumped 40,000-50,000 gallons of fracking wastewater down a storm drain and eventually ended up in the Mahoning River.

To say people are “outraged” doesn’t even begin to capture the emotion over this incident:

Read More “OH Company Dumps 50K Gal of Fracking Wastewater in Storm Drain”
Antero Resources | Belmont County | Energy Companies | Lease & Royalty Payments | Ohio

Antero Offers Barnesville, OH Residents $5,700/Acre 20% Royalties
February 7, 2013February 7, 2013

Normally drillers eschew drilling under cities or villages as a practical matter. Where do you put a drilling rig? What about traffic clogging up local streets? What if you can’t get everyone (or almost everyone) to sign? And why work to sign several hundred leases for a one square mile drilling unit with all of the deed research, negotiations, etc. that come with it, when you can sign leases with three or four people (farmers with lots of acreage) in a single unit?

The prospect of dealing with hundreds of landowners is not stopping Antero Resources (see Antero Resources Goes “All In” on Marcellus/Utica) from offering the residents of Barnesville (Belmont County), OH the same deal they struck last year to lease village-owned land: $5,700 per acre as a signing bonus, and 20% royalties on production.

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Hydraulic Fracturing | Industrywide Issues | Regulation

Obama Picks REI CEO to Head Dept. of Interior
February 7, 2013February 7, 2013

President Obama has picked Sally Jewell, a “conservation advocate” and the CEO of outdoor retailer Recreational Equipment Inc. (REI) to be his next secretary for the Dept. of Interior, filling the post that Ken Salazar is vacating. The DOI and its Bureau of Land Management have developed new rules for hydraulic fracturing on federal lands that Obama “hopes” may serve as a “template” for fracking on private land (see Feds ‘Hope’ States will Use BLM Rules for ALL Fracking). The new BLM rules generated a lot of controversy in 2012 and Salazar and the DOI backed off implementing them until a rewrite is completed.

Jewell, if confirmed, will enter the battle over hydraulic fracturing and whether or not the federal government has a role to play in it (MDN and the U.S. Constitution says the feds don’t have a role). The extremist environmental organization Sierra Club likes Jewell, which is a huge red flag. However, she did once work for Mobil Oil (now Exxon Mobil)—for a few years just out of college.

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Anti-Drilling/Fossil Fuel | Earthquakes | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY’s Anti-Drillers Attempt Smear of Geologists Consulting for DEC
February 7, 2013February 7, 2013

How does one convey the lunacy of the anti-drilling position in New York State? Latest example: The NY Dept. of Environment Conservation (DEC) has hired two geologists as consultants to evaluate earthquake risks associated with fracking (yes we know, there is no earthquake risk, but humor us for a bit). In a coordinated attack, anti-drillers say that because the two geologists have also done consulting assignments for nasty, evil drilling companies, they’re tainted. Damaged goods. Shills and tools of the drilling industry. Not to be trusted. Even though they’ve also done consulting work for environmentalist (anti-drilling) organizations. Doesn’t matter.

Such is how far anti-drillers have sunk in their campaign of smears and lies to try and prevent the miracle of hydraulic fracturing—which is already being done in NY in vertical conventional wells and has been for decades—from happening in the state for horizontal shale wells too.

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Huntingdon County (PA) | Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Supply Chain

Small Business Startup to Furnish PA Drillers with Act 9 Signs
February 7, 2013February 7, 2013

MDN loves small business—we would argue they are the backbone of job creation in this country. Score another victory for a small business that picked up on a supply chain opportunity—an opportunity to provide a product or service to the shale drilling industry. In February 2012, the Pennsylvania legislature passed a new law called Act 9. Similar to Act 13, Act 9 deals with regulating Marcellus and Utica Shale drilling in PA. Act 9’s purpose? Make well pad drill sites safer. Part of Act 9 requires drillers to post new signage with safety information at the entrance of each drill site (example below).

Enter a new small business: Unconventional Well Pad Signs. Located near Altoona, PA, Unconventional Well Pad Signs is a division of another company—HomeWaters Retreats. HomeWaters, which provides vacation retreats and camps, is a business completely unrelated to manufacturing or any of the types of businesses you normally associate with providing products and services to the drilling industry. Gotta love small business entrepreneurs…

Read More “Small Business Startup to Furnish PA Drillers with Act 9 Signs”
Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH | Tennessee Gas Pipeline | Utica Shale

TGP Seeks to Convert Pipeline into Utica Wet Gas Gathering Line
February 7, 2013February 7, 2013

The Tennessee Gas Pipeline Co. recent made a filing with the Federal Energy Regulatory Commission (FERC) declaring its intention to convert an existing “lean gas” pipeline in the Ohio Utica Shale into a gathering pipeline to move wet gas from the Utica to market. TGP is getting a lot of pushback from existing pipeline customers that would be affected by the change:

Read More “TGP Seeks to Convert Pipeline into Utica Wet Gas Gathering Line”
Lackawanna County | Luzerne County | Pennsylvania

Scranton Newspaper Owner Buys Businesses Serving the Marcellus
February 7, 2013February 7, 2013

A very brief mention in a Scranton-area newspaper announces that the newspaper’s owner, Elk Lake Capital, has just purchased two companies that supply services to the Marcellus Shale drilling industry (gasp):

Read More “Scranton Newspaper Owner Buys Businesses Serving the Marcellus”
Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy Dumps Piceance to Concentrate on Ohio Utica
February 7, 2013February 7, 2013

PDC Energy, formerly known as Petroleum Development Corp., announced Tuesday they are selling off “non-core” assets in the Piceance Basin (northwestern Colorado) and assets they own in northeastern Colorado for $200 million so they can invest the money in wet gas drilling in the Ohio Utica and Niobrara Shale plays.

PDC’s announcement from Tuesday:

Read More “PDC Energy Dumps Piceance to Concentrate on Ohio Utica”
Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

Details of OH Gov. Kasich’s Utica Shale Severance Tax Hike
February 6, 2013February 6, 2013

Ohio Gov. John Kasich released his budget for fiscal years 2014 & 2015 yesterday, and along with it, he resurrected the same plan he first introduced a year ago to increase severance tax on oil and gas production in the Utica Shale (see Details on Ohio Gov. Kasich’s New Tax on Shale Drilling). The plan in a nutshell: Hike the severance tax on Utica Shale drilling, then spread the new-found wealth around to buy votes to get re-elected.

Here’s a summary of the coming changes (and make no mistake, the plan will pass this time):

Read More “Details of OH Gov. Kasich’s Utica Shale Severance Tax Hike”
Energy Services | Harrison County | Industrywide Issues | MarkWest Energy | Monroe County | Ohio | Pipelines | Processing Plants | Statewide OH

Cash Runs Low – MarkWest Floats $150M Loan in Utica Midstream JV
February 6, 2013February 6, 2013

At the end of 2011, MarkWest Energy and The Energy & Minerals Group (EMG) announced that MarkWest was buying out EMG’s share in a 3-year-old joint venture deal in the wet gas portion of the Marcellus Shale called MarkWest Liberty Midstream. EMG owned a 49% stake in that JV (see MarkWest Pays $1.8B to Buy Out JV Partner in Liberty Midstream). At the time of the buyout, the two companies announced they would form a new JV to build midstream infrastructure in the Utica Shale starting in 2012.

The new Utica JV (called MarkWest Utica EMG) ramped up in early 2012 as the pair set out to duplicate their success in building out the Marcellus in the fledgling Utica. The strategy? “Creating a large network of processing complexes connected through an extensive NGL gathering system,” which they immediately began to do by beginning construction on two new processing complexes in Harrison and Monroe counties in Ohio (see MarkWest to Expand/Build NGL Plants on New Agreements). Just one tiny problem: the Utica JV is now running short on cash…

Read More “Cash Runs Low – MarkWest Floats $150M Loan in Utica Midstream JV”
Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

NY Drillers: “Optimistic” DEC will Meet Feb 13 Fracking Deadline
February 6, 2013February 6, 2013

Landowners in New York State wait with bated breath for next Wednesday, Feb. 13 (one week from today), to see if the Dept. of Environmental Conservation publishes a final version of new fracking regulations. If the DEC misses the deadline next Wednesday, the new rules will almost certainly not be released on Feb. 27, which is the final deadline to release those rules or… or the process restarts. More public comments. More posturing by environmental extremists. More everything. If the deadline next Wednesday is missed, all bets are off on whether New York will ever see fracking in our opinion.

What does “the industry” think? Perhaps the best barometer of what drillers are thinking comes from Brad Gill, the executive director of the Independent Oil & Gas Association of New York (IOGA of NY). He was in Albany yesterday to meet with lawmakers. Here’s what he said:

Read More “NY Drillers: “Optimistic” DEC will Meet Feb 13 Fracking Deadline”