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    Gastar Marcellus Operations Update – 19 Wells by Year’s End

    Gastar Exploration, a Houston-based driller with operations in the Marcellus recently released its third quarter report. By the end of this year, Gastar says it will have nine Marcellus wells in full production and online with another 10 wells drilled and awaiting completion. Weather damage to a pipeline caused a decrease in output for two wells for about a month (end of September to end of October). Details of Gastar’s Marcellus operations in West Virginia and Pennsylvania follow:

    Read More “Gastar Marcellus Operations Update – 19 Wells by Year’s End”

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    WV Officials Angry with Chesapeake Over Ethane Pipeline Deal

    gas pipeline constructionState officials in West Virginia are angry with Chesapeake Energy over the announcement that Chesapeake has signed a deal to ship ethane out of the Marcellus region via pipeline to the Gulf Coast for processing. A quick petrochemical lesson: Some of what comes out of the ground when drilling for natural gas is the chemical compound ethane—especially found in “wet gas” areas of the Marcellus like West Virginia. Ethane can be processed into ethylene, which is the raw material used to make plastics.

    West Virginia and Pennsylvania have been heavily courting Shell and at least one other unnamed company to build a “cracker plant” to process the ethane (crack it) into ethylene. Building a cracker plant in the region would attract thousands of jobs and billions of initial investment, and billions in revenue from associated plastics industries that would sprout up around the plant. It’s like winning the biggest imaginable lottery jackpot when it comes to jobs, money and tax revenue.

    Read More “WV Officials Angry with Chesapeake Over Ethane Pipeline Deal”

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    NY DEC Panel Quietly Considers New Shale Gas Drilling Tax

    The New York State Department of Environmental Conservation, while holding up a release of new drilling regulations, has “quietly” begun considering different taxation scenarios for when and if shale gas drilling actually begins. Last month, the DEC sent 7 of the 18 members of the Hydraulic Fracturing Advisory Panel three separate charts with scenarios for taxing shale gas production. The members receiving the charts sit on a subcommittee charged with figuring out a way to pay for additional staff and resources that would be needed by the DEC and other state agencies once drilling begins.

    Bear in mind under existing New York State law there is already an ad valorem tax (property tax) that will yield a lot of money from shale gas production, but all of that money stays in the local community, going to the town, county and school districts. The DEC Advisory Committee is tasked with figuring out how to grab a piece of the drilling revenue pie in order to fund their own expansion as they ramp up to handle the demands of new drilling activity.

    Read More “NY DEC Panel Quietly Considers New Shale Gas Drilling Tax”

  • How to Subscribe to MDN’s Daily News Feed – And Why

    A brief pause for some shameless promotion of the Marcellus Drilling News (MDN) website.

    MDN’s Value Proposition for YOU

    Just what is MDN and why would you want to follow the MDN website on a regular basis? MDN editor Jim Willis scours the available news about the Marcellus and Utica Shales each day Monday to Friday and culls from the stack the items that likely would be of most interest to landowners and to those with an interest in the shale gas drilling industry. Jim spends several hours early each morning sifting through all of the available news so you don’t have to, identifying the things you’ll want to know about to stay informed about this very important issue. All you have to do is scan and spend a few minutes reading the stories that catch your eye to stay up to date. The value for you? Jim spends his time each morning sifting, filtering and condensing so you don’t have to. Hey, Jim just saved you two hours a day!

    How Do You Get MDN Delivered Automatically?

    Just how can you easily get notified of new MDN stories each day? Not everyone “consumes” news the same way. Some like to bookmark and visit a website. Others want a quick email. And others prefer it as part of a social media stream, like Twitter or Facebook. MDN has all of those options covered—so you can quickly and easily stay up to date on the topic of Marcellus and Utica Shale drilling. Select the way that works for you:

    • Bookmark. You can bookmark or “favorite” the MDN home page in your web browser: //marcellusdrilling.com. But of course, you then have to remember to go and check it manually each day!
    • Email. Did you know that MDN has a daily email alert? Just sign up here: //marcellusdrilling.com/email-alert/. Each day at 9 am Eastern time, an alert is emailed with the headlines and first few sentences for new each story, letting you click the headline to read the full story online.
    • RSS. If you’re into RSS feed readers and tracking your news that way, just feed this address into your feed reader: //feeds.feedburner.com/MarcellusDrillingNews. If you don’t know what RSS and feed readers are all about, don’t worry! There’s plenty of other ways to keep track of MDN headlines.
    • Twitter. If you have a Twitter account, follow: //twitter.com/MarcellusDN.
    • Facebook. If you would like MDN stories to appear on your Facebook wall (only you will see it, not your friends), just “Like” the MDN Facebook page here: //www.facebook.com/MarcellusDrilling

    Advertise Your Message 100K Times a Month!

    If you work for or own a business with an interest in reaching a large audience very interested in the issue of shale gas drilling, please consider sponsoring an advertisement on MDN. You can download the MDN media kit with full details about our readers, and your opportunities to reach them via MDN. You don’t even have to register to download the media kit! Just go to: //marcellusdrilling.com/about/advertising/. Download the PDF to learn how you can you show your ad more than 100,000 times a month on the MDN website.

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    Companies Target OH Landowners to Buy Royalty Rights

    A few weeks ago, MDN called attention to a new trend in the Marcellus and Utica Shale region—companies who want to buy landowners’ rights to future royalties (see this MDN story). It seems to be happening mostly in Ohio at the moment. These companies are offering to purchase a landowner’s potential future royalties for gas wells drilled on their property, paying them an up-front, one-time payment now. Think of those commercials you’ve heard where companies offer to pay lottery winners a lump sum now for the future long-term payouts, or settlements from a lawsuit with payments that stretch over years. That’s essentially what these companies are doing for landowners with leases in the Marcellus and Utica Shales.

    Read More “Companies Target OH Landowners to Buy Royalty Rights”

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    Chesapeake Creates Hands-On Rig Training Center in Bradford PA

    Chesapeake Oilfield Services has just launched a hands-on training program at its Eastern Housing Center and Training Facility in Athens Township (Bradford County), PA. They’ve installed a working drilling rig at the facility to give new hires real-world, hands-on training. The primary aim of the facility is to teach new workers safe work habits while learning how to handle rig equipment. In addition to the rig, a water transfer system has also been installed to teach workers how to safely and efficiently deliver water from its source to the drilling site, especially in sub-freezing temperature.

    Read More “Chesapeake Creates Hands-On Rig Training Center in Bradford PA”

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    MDN Weekly Update – Nov 6, 2011: Should PA Tax Gas Drilling?

    poll resultsAfter an initial rush of voting where it seemed MDN readers would not support the concept that it’s time to litigate for landowners’ rights in New York, the tide turned later in the week and a clear majority of NY landowners (and those who support them) have said it’s now time to sue the DEC to stop the delay tactics. It seems most people think three and a half years is enough time. The DEC’s draft rules are “good enough” and it’s now time to adopt them and move forward with drilling, according to MDN readers and last week’s poll.

    Is it time for NY landowners to sue the DEC to allow fracking?

    Yes (57%, 182 Votes)
    No (43%, 136 Votes)

    Total Voters: 318

    What kind of fee/tax should PA assess on Marcellus wells, if any?

    Pennsylvania lawmakers are close to completing new legislation that will strengthen rules for drilling in the Marcellus and Utica Shales, and assess a new “impact fee” on drilling. Gov. Tom Corbett, in just his first year in office, has remained steadfast against a severance tax on drilling because, as everyone knows, the money will disappear into the state’s budget hole to be used however politicians want to use it—mostly rewarding political friends with largesse and buying votes. Instead, Gov. Corbett’s advisory commission has recommended the state adopt an “impact fee,” which is a polite way of saying a tax. But most of this fee/tax will stay local, in the community where the well is drilled, to help with things like roads and first responders and police—things that start costing more when drillers show up. Seems a good solution to MDN.

    The proposed plan that most likely will get adopted is that drillers will pay $40,000 the first year a well is drilled, $30,000 the second year, $20,000 the third year and then $10,000 per year in years 4-10, for a total fee of $160,000 per well drilled.

    But many people who support a severance tax in PA point to other states like Texas and Wyoming and Alaska and say if oil and gas drilling is booming there and they can have a severance tax (that contributes a lot of money to the state budget), why shouldn’t PA? It’s a fair question. Those who support drilling in PA will say that Marcellus drilling is doing so well in the state precisely because there isn’t a tax on drilling—that drilling in PA is pulling drilling away from those other states because doing business in PA is more economically advantageous.

    MDN wants to know what you think. Should PA adopt an impact fee? Or a severance tax? Or perhaps stick with no fees or taxes on drilling at all? Head on over to the right side of any page and cast your vote.

    Below are the most recent “top 5” lists and the calendar of Marcellus related events for the next two weeks.

    Happy reading,
    Jim Willis, Editor

    Read More “MDN Weekly Update – Nov 6, 2011: Should PA Tax Gas Drilling?”

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    EPA Releases Plan to Study Fracking, Jumps the Gun

    false startYesterday, the federal Environmental Protection Agency (EPA) finally released its plan with specifics for how it will conduct research into the question of whether or not hydraulic fracturing contaminates, or otherwise negatively impacts, drinking water supplies. A copy of the 190-page plan is embedded below.

    The first (preliminary) results from the study are due in 2012, but a final report is not due until 2014. In order to meet those deadlines, the EPA has already begun collecting field data and water samples. The problem is, that data was collected before the the plan itself was completed—before the rules for how the data collection should be done were established. Industry groups rightly have asked EPA Administrator Lisa Jackson how data collection for the study can begin before the methodology, the “how we will do this” part of the study was complete. It immediately calls into question the veracity of the data itself.

    The EPA has “jumped the gun” by starting before the methodology was released. GIGO—garbage in, garbage out.

    Read More “EPA Releases Plan to Study Fracking, Jumps the Gun”

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    Mystery Company Invests $2.14B in Chesapeake Utica Shale JV

    The Utica Shale in eastern Ohio, and Chesapeake Energy’s discovery that it contains oil and wet gas in addition to methane, is paying off big-time for the company. Yesterday, Chesapeake announced a major cash infusion from a new joint venture with a mystery/unnamed “international major energy company” to the tune of $2.14 billion. Some $640 million of that will be paid when the deal officially closes, and the balance of $1.5 billion will be paid by the end of 2014.

    A third company in the joint venture is EnerVest. The joint venture values the land leased by Chesapeake and EnerVest at $15,000 per net acre. The previous highest deal for Utica Shale leases was Hess—for $8,000 per net acre. The overall deal between Chesapeake, EnerVest and the unnamed company is a bit complicated (see the press release below), but the gist of the matter is that Chesapeake will get enough money to fully fund their Utica Shale drilling program in Ohio, and the overall value of the joint venture means Chesapeake will eventually receive $3.4 billion.

    Read More “Mystery Company Invests $2.14B in Chesapeake Utica Shale JV”

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    Broome County NY Landowners Receive Money to Stay in Lease

    At least one energy firm has voted with its pocketbook that drilling will come, eventually, to New York State. Inflection Energy has just paid landowners in the Town of Maine (Broome County), NY $1,000 per acre to not bail out of the previous deal they signed.

    In 2010, Inflection signed a deal that Maine landowners would receive a $6,000 per acre signing bonus over eight years plus 20 percent royalties. The initial payment was $1,000 per acre, the rest due after New York starts issuing permits for drilling. Problem is, those permits have not been issued and under the terms of the deal, landowners would have the right to vacate their leases and find a better deal later. So to keep them in the deal until permits are finally forthcoming, Inflection paid an additional $1,000 per acre (one-time payout) stipulating the landowners will not cancel their leases.

    Read More “Broome County NY Landowners Receive Money to Stay in Lease”

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    Chesapeake First Customer for Ethane Pipeline to Gulf Coast

    Looks like Enterprise Products’ plan to build an ethane pipeline from the Marcellus and Utica Shales to the Gulf Coast (see this MDN story) is already paying off. Chesapeake Energy is the first company to commit to using the pipeline, which is due to be completed and in service by 2014.

    Read More “Chesapeake First Customer for Ethane Pipeline to Gulf Coast”

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    Sunoco Looking to Invest in Marcellus & Utica Midstream

    Sunoco is getting out of the refinery business by July of next year and is instead looking to expand its investment in midstream businesses, including pipelines, terminals and storage, in addition to its retail outlets. Sunoco is particularly interested in opportunities in the Marcellus and Utica Shales.

    Read More “Sunoco Looking to Invest in Marcellus & Utica Midstream”

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    Charleston WV Shows Community Support for Cracker Plant

    Residents of Charleston, WV want large energy companies looking to locate an ethane cracker plant in the Marcellus region to know that residents of Charleston want it and welcome it with open arms. An online letter-writing campaign has been launched to show community support for the project, which is estimated to bring more than 12,000 new jobs and some $7 billion in economic activity to the region where it’s built.

    Read More “Charleston WV Shows Community Support for Cracker Plant”