Ohio School District Signs Lease w/Encino, $4K/Acre +18% Royalty
It’s rare these days to come across information about the terms of a lease deal. Back in the day, when leasing was still going strong and there were a number of landowner coalitions, we would learn of lease terms and share them here on MDN. When we hear of lease terms nowadays, it’s almost always a deal between a municipality or governmental entity and a driller, forcing the information to be made public. We have one such deal to share today. Earlier this week, the East Guernsey Local School District Board of Education (in Lore City, Guernsey County, Ohio) voted to approve an oil/gas lease with Encino Energy.
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It’s been a while since we’ve updated rig count numbers–mainly because the most reliable source we can find about basin numbers comes from S&P Global Commodity Insights (based on Enverus rig data), and S&P has not provided an update for a few months. This week they did update the number, and they are interesting. According to S&P’s analysis, based on Enverus data, the Haynesville Shale in northern Louisiana and eastern Texas (the main competitor to the Marcellus/Utica) is showing 81 active drilling rigs. That is an astonishing number, up some 37% over the same time last year. The current active rig count in the M-U, according to S&P, is 47 (with 33 rigs operating in the Marcellus and 14 in the Utica). The Haynesville is running 1.7 rigs for every 1 rig in the M-U. This is the worst imbalance we’ve seen to date.
The best gifts we give to each other during this holiday season are intangible: Time spent with family and friends, a kind word, attending a church service. But hey, toys and gadgets and gear are a close second! 🙂 Have you ever stopped to ponder what Christmas morning without fossil energy would look like? We’ll tell you what it would look like–men and women wearing animal skins sitting around a wood or dung fire in a cave. There would be no gifts. Just about every (physical, tangible) gift you either give or get this holiday season will have plastic as part of it, and plastic comes from oil and gas. No fossil fuels, no gifts. The Pennsylvania Independent Oil & Gas Association (PIOGA) has put together a holiday gift guide to remind you of the importance of oil and gas this holiday season.
Last week (Dec. 12-18), the number of permits issued to drill new shale wells in the Marcellus/Utica bumped up nicely to 32, up from the prior week’s 20. Both Pennsylvania and Ohio issued 16 new shale permits each. West Virginia got skunked and issued none.
We wish you a Merry Christmas…and a Happy New Year! MDN will take off (i.e. no new stories posted) between Dec. 26th and Jan. 2nd in observance of the holiday season. Don’t worry, we’ll still keep an eye on the news, and if anything earth-shattering happens, we’ll post about it. However, our intent is to take a break from writing for an entire week. We will see you again on Tuesday, January 3rd.
MARCELLUS/UTICA REGION: CNX, UPMC to work together on health care training program; OTHER U.S. REGIONS: Blue hydrogen, blue ammonia, and now blue methanol; Oil, gas jobs see continued growth in November; NATIONAL: The top energy stories of 2022; Winter storm walloping the US threatens to disrupt LNG exports; US natural gas output drops as winter storm disrupts production.
Another twist in the effort to overturn a bill passed earlier this year by the West Virginia legislature, Senate Bill (SB) 694, which finally brings forced pooling for shale wells to the Mountain States after eight years of trying (see 
We’ve extensively covered the issue of Big Banks and Big Investment Firms turning against and refusing to fund fossil energy companies. Financial institutions are routinely hounded by radicalized leftists to deny funding to oil and gas companies, and sadly, many banks and investment firms have caved to the pressure. The attorneys general and state treasurers in “red” states are fighting back by pulling state business (and pension funds) from said companies, like BlackRock (see 
Kevin Sunday, director of government affairs with the Pennsylvania Chamber of Business and Industry, recently published an op-ed in the Pittsburgh Post-Gazette pointing out how the mighty Shell ethane cracker plant in Beaver County, PA, is the result of business and government (bipartisan government) working together. He makes the case that we need more of this type of thing, especially with many new faces coming to Harrisburg in January. We frankly wonder if hoping for bipartisan cooperation on fossil energy projects in the current political climate is just spitting in the wind.
According to an article by Reuters, U.S. and Canadian natural gas output “could hit growing pains in 2023.” U.S. and Canadian natural gas production is expected to hit new all-time record highs in 2023. However, growth in production is slowing, and likely to hit a ceiling in 2023. Why? Lack of pipelines that can shuttle molecules from places like the Marcellus/Utica to the Gulf Coast, where petrochemical plants and LNG export facilities can use all of the gas they can get. We could produce more here in the M-U–a LOT more. But we can’t, because we have no way to transport the extra production.
The great energy savior many on the left (and the right) are pushing is hydrogen. Never mind that hydrogen is extremely explosive (far more so than natural gas). And never mind that hydrogen is leaky (far more than natural gas because it’s lighter). Hydrogen’s chief advantage is that when it burns, it does not create carbon dioxide–the stuff you breathe out with every breath your take. Some utility companies have conducted small experiments to blend in 5-10% of hydrogen with natural gas to see how it goes. Will stoves and furnaces work OK with hydrogen blended? The Brits aren’t bothering with an incremental approach. They have selected and will FORCE some 2,000 homes in northwest England to convert to 100% hydrogen. No frittering around with half-measures and blending. People in the target village are using terms like “guinea pigs” and “lab rats” to describe their forced conversion to hydrogen.