Shell Warns of Coming LNG Shortage in Mid-2020s
Shell released a new report yesterday predicting an LNG shortage in the mid-2020s. Why aren’t new export plants being built?
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Other Energy Stories of Interest: Tue, Feb 27, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading.
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Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pipelines | Regulation | Statewide OH | Tuscarawas County
Ohio EPA Embarrassingly Wrong Again in Charge Against Rover Pipe
Craig Butler, executive director of Ohio EPA (OEPA), has struck out again by making another false charge against Rover Pipeline…
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Analyst Predicts M-U Production “Flatlines” at 31 Bcf/d in 2019
Month after month MDN reports the Marcellus/Utica region breaks new natgas production records. Is there any end in sight? Maybe…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Regulation | Statewide PA
FERC Tolling Order Counters Big Green Attempt to Stop PennEast
FERC once again had had to employ a “tolling order” to beat back efforts to stop an important pipeline project…
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PA DEP “Streamlines” Stream Crossing Permit Used by Pipelines
The Pennsylvania DEP is launching revamped forms drillers and pipeliners fill out for stream crossing permit requests…
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Neighbors of Exploded XTO Well in Belmont, OH Finally Return Home
Nearly 100 neighbors living close to an XTO well in Ohio that recently exploded have finally returned home, to stay…
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Regulatory Delays Push Atlantic Coast Pipeline Costs 30% Higher
Delays from regulatory agencies have caused Atlantic Coast Pipeline’s costs to skyrocket by as much as 30%…
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Is “Cube Development” the Next Big Thing in Shale Drilling?
Shale drilling is about to take a gigantic leap forward with a new “3 dimensional” technique called cube development…
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Univ. of Delaware Pioneers New Way to Estimate Shale Gas Deposits
University of Delaware researchers have discovered a new way to estimate how much natural gas is sitting in shale deposits…
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Calendar of Marcellus/Utica Events for Feb 26 – May 25
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events…
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Other Energy Stories of Interest: Mon, Feb 26, 2018
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading…
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Energy Transfer: Rover & ME2 Pipelines Both Online by End 2Q18
Earlier this week Energy Transfer Partners (ET), one of the country’s largest midstream (pipeline) companies, released an update covering fourth quarter and full year 2017 results. As part of that update, the muckety-mucks from ET held an analyst conference call (yesterday). On that call they not only discussed what happened in 2017, but what is happening and will happen in 2018. ET, in case you didn’t know, is builder of both the monster Rover Pipeline project (from PA, WV and eastern OH through OH and into Michigan), as well as the Mariner East 2 (ME2) pipeline (NGL pipeline from eastern OH across the entire length of PA to the Marcus Hook facility near Philadelphia). We learned some important information from yesterday’s update. While the good news for both the Rover and ME2 is that they will both soon be fully operational, the truth is, both are delayed from their originally intended “in-service” dates. In the case of Rover, the new news delivered on yesterday’s conference call is that full operation of the entire length of Rover Pipeline, which will be capable of flowing up to 3.25 billion cubic feet per day (Bcf/d) of natural gas along its entire length, won’t happen until sometime in the second quarter 2018–that is, by the end of June. This is the first time ET has admitted full operation of the Rover pipeline will not be ready by end of March. However, to put this news in perspective, much of the pipeline is already done and currently flowing 2 Bcf/d–even as you read this. As for ME2, following an already-admitted delay until end of 2Q18, ET yesterday said it is keeping their estimate that the pipeline will be up and running by end of June, even though the project just came through a one-month construction shut down imposed by the PA Dept. of Environmental Protection. After ET (i.e. Sunoco Logistics Partners) paid a $12.6 million ransom (“fine”), the DEP relented and allowed it to restart construction. The one-month construction hiatus has not, according to officials, delayed the in-service date for ME2. Cool! Below is ET’s 4Q & full 2017 update. First up are ET comments about Rover and ME2…
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Cabot: 2018 “Inflection Year” with 1.5 Bcf/d of New Demand Coming
Cabot Oil & Gas, one of the biggest and best drillers in the Marcellus Shale, released its fourth quarter and full year 2017 update today. Cabot continues to be the low cost leader. Cabot’s cost to find and develop shale gas in northeastern PA is an amazingly low $0.22 per thousand cubic feet (Mcf). Breakeven price for Cabot in the Marcellus in 2017 was ~$1.05/Mcf, meaning any sales above that amount is profit. Cabot sold its gas for an average of $2.31/Mcf in 2017, a 36% increase over 2016. You can see why they’re profitable, even with low gas prices in NEPA. Cabot produced 685.3 billion cubic feet equivalent (or 1.9 Bcfe/d) in 2017. Most of that came from a single county, Susquehanna County, PA. Like many shale companies, Cabot lost money in 2016 ($417 million), but they turned it around last year by making a $100 million profit. Cabot has now drilled in NEPA for the past 10 years. Have they run out of places to drill? Nope. Looking at a chart in Cabot’s most recent slide deck, they still have around 3,000 locations left where they can drill on existing leased acreage. At the end of last year Cabot owned 561 producing Marcellus wells. There’s plenty more to come! In this update Cabot indicates that 2018 will be “an inflection year” for the company. Why? Several large projects will come online in PA this year that will sop up a considerable amount of Cabot’s gas: (1) Moxie Freedom Power Plant, (2) Lackawanna Energy Center Power Plant, and (3) Atlantic Sunrise Pipeline. You can likely add a fourth to the list–the startup of the PennEast Pipeline. Take all of those together, and Cabot will get new demand to sell an additional 1.5 Bcf/d of gas they don’t sell now. In other words, Cabot will just about have to double their production to meet the new demand–which they are quite capable of doing. All eyes are on Cabot in 2018 as they hit an inflection point…
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Chesapeake Stock Soars w/Update; More Marcellus Wells in 2018
Yesterday the country’s second largest natural gas producer, Chesapeake Energy, issued its fourth quarter and full year 2017 update. Chessy CEO Doug Lawler began his comments during an analyst phone call this way: “2017 was another foundational year for Chesapeake as we continued to transform all aspects of our company.” Even though Chesapeake sold a number of assets and reduced headcount in 2017, production still rose 3% for the year. Lawler said he expects production to rise another 3% in 2018, even with a planned $2-$3 billion in sales of even more assets (what’s left to sell?). Lawler also said the company will reduce spending 12% this year. The news of production increases on the way using less money sent the company’s stock price soaring 22 higher%. But all is not peaches and cream. The company is still saddled with almost $10 billion worth of debt, which tends to remove the oxygen from a company’s lungs. Still, the Chesapeake doggedly soldiers on. Disappointingly, nothing was said during the conference call about either the Marcellus or the Utica. There’s only two brief references to our region in the official update–even though the Marcellus and Utica combined provided the lion’s share of Chesapeake’s production in 4Q17 (50% of all their production came from the M-U). Chessy says they will drill 55 wells in the Marcellus in 2018 (more than the 43 drilled in 2017), and they will drill 40 wells in the Utica in 2018 (less than the 67 wells drilled in 2017). Below is the full update, the latest slide deck, and a good overview of yesterday’s news from Reuters…
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Hilcorp’s Billionaire Founder Steps Down from CEO Role
Jeff Hildebrand Hilcorp is a major driller founded in 1989 by Jeff Hildebrand. It is one of the largest privately-held (stock not publicly traded) oil and natural gas exploration and production companies in the U.S. Hilcorp is the largest oil producer in Louisiana. Headquartered in Houston, TX, Hilcorp has over 1,825 employees in multiple operating areas including the Gulf Coast of Texas and Louisiana, Wyoming, New Mexico, Alaska, and (yes) in the Marcellus/Utica. While they don’t have a huge presence here in the northeast, Hilcorp does actively drill shale wells in Lawrence County, PA and Columbiana County, OH. In fact, of the 58 operating shale wells in Lawrence County, Hilcorp owns all but 10 of them (see Lawrence County, PA O&G Production “Inching Upward Again”). Hilcorp has, until now, been captained by its founder Jeff Hildebrand, called an “oil baron” by Bloomberg back in 2015 when Hildebrand, among other big oil guys, backed a loser in the presidential campaign–Jeb Bush (see Big Oil & Gas Money Flows to Jeb Bush Campaign, Disappointingly). Hildebrand, the 209th richest person in the world, has just stepped down as CEO of Hilcorp. The new CEO is Greg Lalicker–a petroleum engineer who joined the company in 2006. But don’t worry. Hildebrand will continue on as executive chairman of the company and remain “heavily involved”…
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