Marcellus Drilling News

Industrywide Issues | Ohio | Statewide OH | Wealth Management

Caution: Royalty Buyers Coming Out of the Woodwork in Ohio
October 16, 2012October 16, 2012

A tale of caution for landowners in Ohio and in other areas where landowners have recently signed leases to allow drilling for shale gas. One landowner in Ohio reports being called by a Texas company looking to buy his royalty rights. The landowner already signed a lease and got his signing bonus. The company in question wants to now purchase the man’s future royalty payments—at a discount of course.

This is similar to companies buying other structured settlements—like someone who successfully sues for damages from an accident, but the payments are made over the course of several years. Or someone who wins a state lottery that has a payout over 25 years. Companies will offer to pay you less than what you would make over the course of time, but you get a lump sum payment now, up front.

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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

List of PA Impact Fee Disbursements by County/Town
October 16, 2012October 16, 2012

The checks divvying up $204 million raised by Pennsylvania in a new tax, called an “impact fee” on shale gas drilling, will be mailed out within 10 days. Why is the so-called impact fee a tax and not really a fee? Because 40% of the “fee” goes to communities where there is no drilling! Taking from one to give to another who didn’t earn it is a tax, and a 40% tax was the political price to be paid in order to get new drilling legislation passed. Politicians in places like Philadelphia had both hands out and would not vote in favor of the Act 13 law unless those palms were greased. It’s sleazy, but it’s politics in PA.

A full and detailed list of counties and townships and their share of the impact “fee” revenue is embedded below. Philly made out better than most drilling communities:

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Carrizo Oil & Gas | Crawford County | Energy Companies | Halcon Resources | Mercer County | Ohio | Pennsylvania | Statewide OH | Trumbull County

Mystery Buyer of Carrizo’s Northern Utica Acreage Revealed
October 16, 2012October 17, 2012

Yesterday MDN reported that Carrizo Oil & Gas had sold off it’s interest in lease acreage in Ohio’s northern Utica Shale region for $43 million (see this MDN story). Carrizo did not identify the buyer, but the enterprising Youngstown Business Journal did.

Here’s who it is:

Read More “Mystery Buyer of Carrizo’s Northern Utica Acreage Revealed”
Accidents | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Changes Notification Policy on Methane Contamination
October 16, 2012October 16, 2012

The Pennsylvania Dept. of Environmental Protection (DEP) made a policy change in September that’s just now coming to light—and creating a bit of controversy. In the case of suspected methane contamination of water wells near drilling sites, it was standard policy to let the local field office make a determination as to whether or not water test results show possible methane contamination, and whether or not a letter should go out to landowners in the affected area.

The new policy is that someone in Harrisburg at DEP HQ will make the judgment call on sending letters to landowners.

Read More “PA DEP Changes Notification Policy on Methane Contamination”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Oct 16, 2012
October 16, 2012October 16, 2012

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, Oct 16, 2012”
Ohio | Statewide OH

Where are the ‘Sweet Spots’ in Ohio’s Utica Shale?
October 15, 2012October 15, 2012

According to a professor of geology at Youngstown State University, the Mahoning Valley, the area around Youngstown in northeastern Ohio, is one of the “sweet spots” for natural gas drilling in Ohio. Is that statement accurate? MDN wondered, so we decided to analyze the latest numbers from the Ohio Dept. of Natural Resources (ODNR). Our analysis, along with a a couple of maps, is embedded below.

First, the statement from the Youngstown professor:

Read More “Where are the ‘Sweet Spots’ in Ohio’s Utica Shale?”
Coterra Energy (Cabot O&G) | Energy Companies | Ohio | Statewide OH

Carrizo Exits Northern Utica Shale, Retains Southern Acreage
October 15, 2012October 17, 2012

Carrizo Oil & Gas announced today it has sold its interest in the northern portion of the Utica Shale play—in Mercer and Crawford counties in Pennsylvania and Trumbull County in Ohio—for $43 million in cash (see the map below). Carrizo’s press release does not identify who purchased the lease interest in the northern Utica. Carrizo also does not say how many net acres are represented in the sale, although an MDN story from Oct. 2011 says the initial deal Carrizo signed included 15,000 acres (see this MDN story).

Carrizo has not, however, completely exited the Utica Shale. Far from it. They retain an interest in an additional 26,000 acres in the southern part of the Utica Shale play—in Guernsey County, Ohio. Looks like Carrizo has decided which part of the Ohio Utica Shale is their “sweet spot.” From the Carrizo press release:

Read More “Carrizo Exits Northern Utica Shale, Retains Southern Acreage”
Hydraulic Fracturing | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Surprising Data on Rig Counts for Dry vs Wet Gas Drilling
October 15, 2012October 15, 2012

Seeking Alpha blogger Richard Zeits, whom we’ve highlighted before on MDN, is back with a new analysis of the latest Baker Hughes rig count. You need rigs to drill the holes—so the rig count is a good indicator of whether new drilling is going up, down or staying constant.

In Zeits’ extensive analysis (well worth your time to read and digest), he draws some conclusions about wet gas (natural gas liquids) versus dry gas (methane only) drilling as evidenced by the Baker Hughes numbers. His conclusions may surprise you, as it did us:

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Erie County (NY) | Hydraulic Fracturing | Industrywide Issues | New York | Research

UB Defends Shale Institute & Study in Response to SUNY Board
October 15, 2012October 15, 2012

An update on the witch hunt at University at Buffalo (UB). You may recall that UB had the temerity, the gall, to establish a Shale Resources and Society Institute (SRSI) in April of this year. When said institute turned out its first report in May, which detailed how environmental problems caused by Marcellus Shale gas drilling in Pennsylvania were isolated, mostly minor and on the decline, the anti-drillers just about came off the rails. It was an all-hands-on-deck, we-must-obliterate-the-credibility-of-the-report-and-the-people-who-wrote-it campaign. And so the witch hunt began (see this MDN story).

Read More “UB Defends Shale Institute & Study in Response to SUNY Board”
CONSOL Energy | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Mahoning County | Ohio

Illegal Protest Blocks Well Site Near Youngstown, OH
October 15, 2012October 15, 2012

Anti-drilling protesters illegally blocked access to a horizontal shale gas well being drilled in Jackson Township in Mahoning County, Ohio (near Youngstown) on Sunday. The protest went on for five hours, but for some reason the police didn’t seem to think arresting and removing the protesters was a good idea.

The law-breakers, from the group Fracfree Mahoning Valley and Frackfree America, disappointingly included a lawyer and a reverend:

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Columbiana County | Lease & Royalty Payments | Ohio

Latest Bonus/Royalty Numbers Mentioned in Columbiana County
October 15, 2012October 15, 2012

Leetonia Shale LLC is a for-profit company hoping to band residents together into a coalition in the Leetonia and Washingtonville, Ohio area to collectively lease their land to a drilling company. Terry May, president of Leetonia Shale, estimates there’s about 1,400 acres of smaller parcels left in the area that are currently not leased for drilling.

May held a meeting over the weekend at Leetonia High School to update area residents on progress and to attract more people to the coalition. Among the people attending was Franklin Square resident Don Shepard, who had this to say about the latest numbers being mentioned by May for signing bonuses and royalties in that part of Columbiana County:

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CONSOL Energy | Energy Companies

CONSOL 3Q12 Update: Earnings, NatGas Production Both Down
October 15, 2012October 15, 2012

Here come the parade of third quarter operational and earnings updates from drilling companies. CONSOL is one of the first out of the gate. The company overall took a hit on earnings in the third quarter, largely because of their coal operations. However, their natural gas production was also down a bit from the third quarter of 2011: 39.5 billion cubic feet for 3Q12 vs. 40.4 billion cubic feet for 3Q11.

During 3Q12 CONSOL reports drilling 12 new Marcellus wells, completing 12 Marcellus wells, with 22 wells going online. Also during 3Q12 CONSOL drilled 4 new Utica wells, 2 were completed and 1 Utica well went online. Here’s the full details from the CONSOL press release:

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About MDN | Calendar

Calendar of Events for Oct 15-28, 2012 [Free]
October 15, 2012October 15, 2012

Below are upcoming events for this week and next.

Read More “Calendar of Events for Oct 15-28, 2012 [Free]”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Oct 15, 2012
October 15, 2012October 15, 2012

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: Mon, Oct 15, 2012”
Alternative Energy | Energy Services | GreenHunter Resources | Industrywide Issues

Sale of CA Wind Farm Benefits/Enables Shale Fracking
October 12, 2012October 12, 2012

This story is an amusement for MDN, one of those deliciously ironic tales that’s sure to tick off the greenies. And that’s precisely why we bring it to you.

This is the story of how the sale of a wind farm in California will benefit shale gas drilling in the Marcellus, Utica and other shale plays.

Read More “Sale of CA Wind Farm Benefits/Enables Shale Fracking”
Lease & Royalty Payments | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Lease Bonus Payments for Marcellus & Utica Reach New Highs
October 12, 2012October 12, 2012

Because the sale price of domestically produced oil and natural gas has gone down over the past year, royalties for landowners have gone down as well. However, the bonus payments landowners receive when signing a new lease agreement have gone up—way up in the Marcellus and Utica Shale.

A newly released survey (embedded below) from Farmers National Co., a real estate management company for property owners, shows a dramatic increase for bonus deals in West Virginia (up 1.75 times), in Pennsylvania (more than doubling, up 2.3 times), but most dramatically, in Ohio (up nearly 13 times from a year ago). The largest reported lease signing bonus in Ohio for 3Q12 was a whopping $8,200 per acre.

Read More “Lease Bonus Payments for Marcellus & Utica Reach New Highs”