Marcellus Drilling News

Energy Companies | Southwestern Energy

Southwestern Energy 2Q12 Update IDs Cost to Produce Shale Gas
August 3, 2012August 3, 2012

Southwestern Energy released its second quarter earnings and operations update yesterday. The company lost $488 million dollars largely because of the low cost of natural gas. Interestingly, they report that their “all-in cash operating costs” for drilling shale gas wells averages $1.20 per 1,000 cubic feet equivalent (or Mcfe). One Mcfe is equivalent to one MMBtu, or “one million Btus”—the unit of measurement used to sell natural gas. The going price for natural gas on the NYMEX as of this morning is $2.90 MMBtu (or $2.90 Mcfe). Theoretically, Southwestern produces the gas for $1.20 per unit, and can sell it for $2.90 per unit (leaving hedging out of the equation). A bit simplistic, but useful nonetheless.

We learn from the update that so far Southwestern has drilled 120 wells in the Marcellus, 41 of which are currently producing. The holdup on many of the ones not producing? Lack of gathering pipelines—a recurring theme in a number of company quarterly updates for 2Q12.

Read More “Southwestern Energy 2Q12 Update IDs Cost to Produce Shale Gas”
Commodity Price | Industrywide Issues

U.S. NatGas Prices Go Up, Except for the Marcellus
August 3, 2012August 3, 2012

Natural Gas Intelligence (NGI) reports the price of natural gas in the U.S. made impressive gains last month—all except for the price of Marcellus Shale natural gas, that is. According to a press release announcing the results of “bidweek,” the once a month pricing the industry uses to set prices that many buyers and sellers of natural use for the coming month, infrastructure constraints (lack of pipelines) in the Marcellus are pushing prices lower as gas supplies bottleneck in the region. More supply sitting around, lower prices. Simple economics.

Below is the press release from NGI talking about the latest price news. Near the bottom is a link to a video where you’ll find the voice of a certain MDN blogger interviewing price expert Pat Rau. Give it a watch/listen.

Read More “U.S. NatGas Prices Go Up, Except for the Marcellus”
Chesapeake Energy | Economic Impact | Energy Companies | Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

AP Questions OH Gov’s Mathematical Skills on Utica Shale
August 3, 2012August 3, 2012

Ohio Gov. John Kasich has stated that an energy company executive told him (in 2010) that they would eventually recover $1 trillion worth of oil and gas from Ohio’s Utica Shale. Kasich has repeated that remark many times since then—using it as a justification for his plan to increase severance taxes in the state to spread some of that wealth around to all Ohioans.

The Associated Press takes aim at the $1 trillion claim (and at Kasich) with a new story saying Kasich and the unnamed energy exec are way off base:

Read More “AP Questions OH Gov’s Mathematical Skills on Utica Shale”
Energy Companies | Gordy Oil | Monroe County | West Virginia

Gordy Oil Abandons Monroe County, WV (For Now)
August 3, 2012August 3, 2012

Over a year ago, MDN pointed out a unique spirit of cooperation and partnership between Monroe County, WV and driller Gordy Oil (see this MDN story). It is the story of a driller being responsive to local concerns about a special underground geologic formation called a karst, a system of underground system of caves and streams. Local residents were concerned drilling may foul the water table in the area, and Gordy spent time listening and making adjustments to their plans.

Unfortunately, the opposition has continued, and Gordy Oil is now nowhere to be found in Monroe County. Is it because of the low price of oil? Or because of the drumbeat of opposition?

Read More “Gordy Oil Abandons Monroe County, WV (For Now)”
Industrywide Issues | New York | Ohio | Pennsylvania | Regulation | Statewide NY | Statewide OH | Statewide PA | Statewide WV | West Virginia

OH River Valley Commission Names Pro-Drilling Chairman
August 3, 2012August 3, 2012

The Ohio River Valley Water Sanitation Commission (ORSANCO), established in 1948 to control and abate pollution in the Ohio River Basin, has elected a pro-drilling attorney as their new chairman. Kenneth Komoroski from Pittsburgh, PA assumed his new position on July 1, although the press release was not issued until August 1. Komorski was appointed to the Commission in 2003 by then President George W. Bush.

ORSANCO is an interstate commission representing eight states and the federal government. Member states include: Illinois, Indiana, Kentucky, New York, Ohio, Pennsylvania, Virginia, and West Virginia. While ORSANCO does not have the same broad powers as the Susquehanna River Basin Commission or Delaware River Basin Commission to issue permits and control shale gas drilling, some of their regulatory power does impact the drilling industry, especially on matters of drilling wastewater disposal.

Read More “OH River Valley Commission Names Pro-Drilling Chairman”
Beaver County | Energy Companies | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Gov. Corbett Goes to Beaver County to Talk Cracker Plants
August 3, 2012August 3, 2012

Pennsylvania Gov. Tom Corbett went to Monaca in Beaver County, PA yesterday to talk about a planned ethane cracker plant that Shell says it wants to build there. He was joined by a number of officials—bipartisan in makeup. Corbett’s message? “We’re not there yet.” He said that although a great deal has been done, more will need to be done before Shell pulls the trigger and builds the plant.

The press release from the governor’s office talking about his trip to Monaca:

Read More “PA Gov. Corbett Goes to Beaver County to Talk Cracker Plants”
Alcoa | Economic Impact | Energy Companies | Energy Services | Industrywide Issues | Pennsylvania | Pennsylvania General Energy | Statewide PA

Alcoa Enters Marcellus Drilling – Supplies Drill Pipe to PGE
August 3, 2012August 3, 2012

Alcoa (once upon a time known as the Aluminum Company of America), the world’s third largest producer of aluminum, is getting into the shale drilling industry by producing special pipe for gas drilling in the Marcellus Shale. Yesterday Alcoa announced a contract to provide driller Pennsylvania General Energy (PGE) with aluminum alloy drill pipe.

From the Aloca press release:

Read More “Alcoa Enters Marcellus Drilling – Supplies Drill Pipe to PGE”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Aug 3, 2012
August 3, 2012August 3, 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: Fri, Aug 3, 2012”
Hydraulic Fracturing | Industrywide Issues | New York | Pipelines | Statewide NY

Does Marcellus Shale Gas have Cancer-Causing Radon?
August 2, 2012August 2, 2012

MDN has previously written about anti-drillers who try to use the scare tactic that “there’s radon in Marcellus gas” and the radon is going to cause lots of new cases of lung cancer in New York City (see this MDN story). No one in the mainstream press is picking up on this latest anti-drilling meme, so the same groups have issued a new press release hoping to keep the issue alive (see their press release below).

In a nutshell, they argue that Marcellus Shale gas is extracted in areas of the northeast where there’s lots of naturally occurring radon, and because the gas gets to market so quickly (Pennsylvania Marcellus gas fields are “right next door” to NYC), the radon has no chance to naturally dissipate. When radon hits the air, it dissipates and becomes harmless. Radon has a half life of 3.5 days—breaking down and becoming harmless at that point. The concern, apparently, is that the gas will get to market and used in under 3.5 days.

Read More “Does Marcellus Shale Gas have Cancer-Causing Radon?”
Broome County | Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY | Tompkins County

NY Anti-Drillers Target Cuomo Big Money Supporters
August 2, 2012August 2, 2012

Anti-drilling groups from the Southern Tier of New York State sent a letter to the top 1,000 big money contributors to Gov. Andrew Cuomo yesterday asking them to pressure Cuomo to ban fracking in the state. The letter was a joint effort of New York Residents Against Drilling (NYRAD), Walter Hang from Toxics Targeting, and the Mayor of Binghamton, Matt Ryan.

Read More “NY Anti-Drillers Target Cuomo Big Money Supporters”
Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | Transco | Williams

Williams Plans Marcellus Expansion of Transco Leidy Pipeline
August 2, 2012August 2, 2012

As the pace of drilling continues (but slows) in the Marcellus, the next major phase of work begins: completing wells and getting all that shale gas to market. That’s why pipelines, compressor stations and processing plants are important. Williams Partners, one of the largest pipeline operators in the country, announced yesterday they plan to expand their existing Transco Leidy Line in northern PA to accommodate new demands for shipping Marcellus Shale gas.

They expect to make a pre-filing with the Federal Energy Regulatory Commission (FERC) in early 2013, and hope to have the expansion complete by late 2015.

Read More “Williams Plans Marcellus Expansion of Transco Leidy Pipeline”
Energy Services | Industrywide Issues | Pipelines | Transco

Transco Northeast Pipeline Extension Gets Boost from FERC
August 2, 2012August 2, 2012

Transcontinental Gas Pipeline Company (or “Transco”) received a significant boost from the Federal Energy Regulatory Commission (FERC) yesterday. FERC issued a “finding” that Transco’s proposed pipeline extension in the northeast, called the Northeast Supply Link Project, does not pose a threat to the environment. The finding clears the way for full FERC approval of the project.

The project will run new pipeline and expand existing pipeline from Transco’s Leidy Line in Pennsylvania and New Jersey to existing delivery points in Pennsylvania, New Jersey, and New York City, brining with it new quantities of Marcellus Shale gas to metropolitan population centers in the northeast, including New Jersey and New York City. The FERC finding means the project will likely now receive a green light to move forward. FERC is the federal agency charged with evaluating and approving new pipeline projects in the U.S.

Read More “Transco Northeast Pipeline Extension Gets Boost from FERC”
Energy Companies | WPX Energy

WPX Energy 2Q12 Results – Marcellus Production Up 21%
August 2, 2012August 2, 2012

WPX Energy, the former upstream drilling arm of Williams spun out into its own company last year, has just reported their second quarter financial and operating results. WPX reports second quarter gas production from the Marcellus Shale is up 21% from the first quarter and continues to rise, although many of their drilled wells in the Marcellus are currently not producing because they’re waiting to be hooked up to pipelines.

Read More “WPX Energy 2Q12 Results – Marcellus Production Up 21%”
Energy Companies | PDC Mountaineer

PDC Energy 2Q12 Results – Drilling in Marcellus & Utica
August 2, 2012August 2, 2012

Drilling company PDC Energy has released its second quarter operating and financial results. The company reports completing three wells in the Marcellus in West Virginia during the first half of this year, as well as two Utica Shale wells in Ohio. They are now drilling their first Guernsey County, OH Utica well.

Read More “PDC Energy 2Q12 Results – Drilling in Marcellus & Utica”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Aug 2, 2012
August 2, 2012August 2, 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: Thu, Aug 2, 2012”
Energy Companies | Hydraulic Fracturing | Industrywide Issues | Lenape Resources | Litigation | Livingston County | New York | Regulation

NY Driller Threatens DEC with Lawsuit over Town Bans
August 1, 2012August 1, 2012

In the misguided attempt to ban hydraulic fracturing in New York, one town took their ban vote too far. MDN reported about the bone-headed vote by the Town of Avon (Livingston County, NY) on June 28 to ban drilling activity in the town with a broadly worded zoning ordinance (see this MDN story).

A local driller with wells in Avon, Lenape Resources, warned Avon that the broad language they intended to use in their zoning ordinance would cause Lenape to shut down 16 existing conventional (vertical-only) gas wells they operate in the town along with a gas pipeline. Avon town board members didn’t listen and passed the new ordinance. Lenape president John Holko promptly shut down all of his wells in the town, ending free gas for some local residents, and low cost gas for the town itself. A really dumb move on the part of Avon.

There is a new development in this ongoing situation.

Read More “NY Driller Threatens DEC with Lawsuit over Town Bans”