The Daily Digger

From Oil & Gas Law Report: An agreement to enter into an oil and gas lease is an enforceable contract in Ohio Landowner enters into an agreement to sign an oil and gas lease, finds outs there may be a better deal elsewhere and tries to get out of the first deal. A federal court in Ohio says, “No, a deal is a deal.”  Bruzzese v. Chesapeake Exploration, LLC , U.S. District Court for the Southern District of Ohio, Eastern Division (Feb. 13, 2014). Background A group of landowners in eastern Ohio had engaged attorneys to negotiate oil and gas leases on their collective behalves. They signed an Agreement to Accept Lease Offer from Chesapeake Exploration, LLC. About 75 members of the group later sued Chesapeake Exploration, LLC, claiming that the agreement was unenforceable. Chesapeake settled with all the landowners except Stephen and Elizabeth Albery. The Alberys had printed out the agreement, filled in blanks, signed it and emailed it to the group attorneys on July 16...

From the Press & Sun-Bulletin: Pennsylvania’s highest court said Friday it would not revisit its decision striking down a state law that took zoning decisions about natural gas drilling out of the hands of local governments.  The state Supreme Court denied a request by Gov. Tom Corbett’s administration to vacate its decision and send it back to a lower court for a new round of briefs and fact-finding process.  Instead, five justices left in place the Dec. 19 ruling that new industry-friendly rules violated the state constitution. The sixth, Justice Thomas Saylor, said he would have granted the request for reconsideration made by the Department of Environmental Protection and the Public Utility Commission. Read the whole article here. This decision leaves the possibility open that much more of Act 13 could be shelved, including impact fees that were benefiting communities and stiffened environmental protections that were included as part of the plan. Connect w...

CARROLLTON, OHIO: Linda Yeager, District Administrator of the Carroll Soil and Water Conservation District will be sharing information about the 4R Tomorrow program at the Carroll Concerned Citizens meeting on Thursday March 6. This program promotes nutrient stewardship, water management and backyard conservation to protect water quality in local communities and across Ohio. Watershed Specialist, Josh Britton hired by Carroll and Harrison Soil and Water Conservation District will be introduced and talk about the upcoming plans for the Atwood, Leesville, Tappen and Clendening watersheds. The meeting is being held at the Church of Christ 353 Moody Ave. Carrollton, OH beginning at 7pm and is free and open to the public. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

The latest weekly permitting update from the Ohio Department of Natural Resources shows the Utica shale is close to reaching a couple more milestone numbers. There were 14 new permits issued last week.  Harrison County was the focal point, with 7 of the permits for wells there.  Of the rest, 2 were Carroll County, 2 for Columbiana County, and 1 each in Belmont, Guernsey, and Monroe counties. With this latest activity, there have now been 1099 permits issued for Utica shale drilling.  747 wells have been drilled, and the number of wells producing climbed to 384.  The Utica rig count is still 40. View the report here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From the Akron Beacon Journal: Ohio’s Utica shale is likely to get a “dramatic ramp-up” in 2014 and may get an even-bigger boost if technologies can be developed to tap its crude oil in the future, said the head of the Ohio Oil and Gas Association.  The Utica shale in eight eastern Ohio counties is an “attractive play” for natural gas and liquids, although efforts to find its crude oil have not been successful, said Tom Stewart, chief executive officer and executive vice president of the statewide trade group.  The Ohio Department of Natural Resources is estimating that 1,180 Utica shale wells will be drilled in Ohio in 2014, he said Thursday at Crain’s Cleveland Business Shale Summit 2014.  At present, Ohio has approved 1,093 Utica shale wells, of which 737 have been drilled and 367 are in production as of Feb. 15.  The number of drilling rigs in Ohio is likely to jump from 40 at present to 60 early next year, based on surveys he has conducted, said Davi...

From Forbes: Meet Rex Tillerson, the CEO of oil and gas superstar ExxonMobil Corporation—the largest natural gas producer in these United States of America—and a newly emerging giant in the world of exquisite hypocrisy. A key and critical function of Mr. Tillerson’s day job is to do all he can to protect and nurture the process of hydraulic fracturing—aka ‘fracking’—so that his company can continue to rack in billions via the production and sale of natural gas. Indeed, so committed is Rex to the process of fracking that he has  loudly lashed out  at those who criticize and seek to regulate hydraulic fracturing, suggesting that such efforts are a very bad idea, indeed.  According to Tillerson, “This type of dysfunctional regulation is holding back the American economic recovery, growth, and global competitiveness.” Thus, according to Rex Tillerson, nobody should have much of a reason to be disturbed or concerned when ExxonMobil comes knocking on your door to d...

Energy Tomorrow:   Embrace Opportunity, Stop Delaying Keystone XL  -   It’s hard to look at the delays that have kept the Keystone XL pipeline on the drawing board for more than five years and not think about the countless American workers – in construction, fabrication, supply, transport and other sectors – who would... Columbus Business First:   Exxon CEO fighting water tower near his house out of fracking concerns  -  The CEO of Exxon Mobil Corp. is joining opponents of a proposed water tower who fear it could lead to fracking-related... Greene County Messenger:   Liens could be obstacles for gas leaseholders  -   In October, Garry Miller tried to refinance his home. The only problem? There was a $500 million lien, or line of credit, showing up on his property deed.  “I went to remortgage my house to... Akron Beacon Journal:   Stewart envisions major boost in Ohio's Utica shale in 2014  -   Ohio’s Utica sh...

From The Columbus Dispatch: Less than three years after signing legislation opening up Ohio state parks and forests to fracking, Gov. John Kasich now opposes the controversial horizontal drilling for oil and gas on public lands. “At this point, the governor doesn’t support fracking in state parks,” Kasich spokesman Rob Nichols told  The Dispatch . “We reserve the right to revisit that, but it’s not what he wants to do right now, and that’s been his position for the past year and a half.” Word of Kasich’s reversal came the same day Democratic lawmakers called for an investigation of a marketing plan to promote fracking on state lands that was put together a year and a half ago by the Ohio Department of Natural Resources, which regulates oil and gas drilling. Read the entire article here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Rex Energy 2013 results featured good & bad news From the Canton Repository: Rex Energy’s production volume increased 38 percent last year and the company grew its proven reserves by a similar rate, but the State College, Pa.-based drilller ended the year and the fourth quarter with negative cash flow. The company’s fourth quarter production hit 110.4 million cubic feet of natural gas equivalent per day, an increase of 12 percent over the third quarter and up 49 percent year over year.  The yearly production rate was 92.7 million cubic feet equivalent per day, with oil and natural gas liquids accounting for 31 percent of net production, a liquids increase of 59 percent over 2012. Click here to read the rest of the article.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Cleveland.com: Ohio's Utica Shale play is in its infancy, and its future, though promising, is uncertain, a nationally recognized oil and gas industry analyst told a crowd attending Crain's Shale Summit 2014 on Thursday.   "The Utica is doing well. It has a lot of promise," Houston-based  analyst G. Allen Brooks  told several hundred attending the conference.   "The biggest problem is that we don't have a lot of knowledge about this formation and how well it will be producing as we go forward," he said.   His sobering assessment followed more optimistic remarks earlier in the day from Tom Stewart, executive vice president of the Ohio Oil and Gas Association. Predicting that nearly 1,200 wells will be drilled in 2014 -- adding to the 661 drilled last year -- Stewart said job growth in the eight eastern counties where development is occurring has jumped by 56 percent over the past year. Read the entire article here.  Connect with ...

The Marietta Times:   Fracking views  -   Marietta City Council members heard from folks on both sides of the oil and gas horizontal hydraulic fracturing (fracking) debate during a special public meeting of council's lands, buildings and parks committee... The Chillicothe Gazette:   County hears details on proposed pipeline project -  An underground natural gas liquids pipeline is expected to run through a small portion of Ross County as part of a 1,100-mile project involving four other states... Business Journal Daily:   Frackfree gathers enough signatures for 3rd vote - The Youngstown Community Bill of Rights Committee reports its members have surpassed their goal of collecting enough signatures on petitions to add a charter amendment to the May municipal ballot. The signatures will now go... Observer-Reporter:   Chevron's solution: "Let them eat pizza" -  Legend has it Marie Antoinette, when told during one of France’s famines that pe...

by Shawn Bennett, Energy in Depth Companies investing and developing the Utica Shale continue to expand operational allocations as production ramps up.  While 2013 was known as the year of the midstream, companies are now focused on developing this promising resource as some of the midstream constraints are removed.  Announcements by companies like Chesapeake, Hess, XTO and Antero all suggest that 2014 is going to be a big year for the Utica Shale. Chesapeake Energy  is the clear leader in the Utica with over 50 percent of the permitted sites in the Utica.  Fifteen percent of its 2014 budget focused on the development of the Utica Shale, and they are excited to see production increases in the new year.  In a recent earnings call, CEO Doug Lawler  noted : “We see a very strong ramp in the production in Utica in 2014 as infrastructure and compression processing comes available to us, and we’re very excited.” This excitement is not confined to Chesa...

The Ohio Department of Natural Resources has released the weekly permitting update for last week, and activity picked up considerably from the previous report. While only 3 new permits were issued in the week of February 2-February 8, 17 new permits were issued last week.  Leading the way was Belmont County, where 8 new permits were issued to Gulfport Energy.  Next up was Harrison County, with 6 permits.  Rounding out the activity were Monroe County, with 2 permits, and Carroll County, with one. That brings the permit total to within striking distance of 1,100, with 1,093.  The number of wells drilled is 737.  The Utica rig count remained at 40. The other big news is the number of producing wells, though, which jumped from 310 on the previous report to 367 on this latest one, which means that the number wells producing has nearly tripled since early September.  The midstream infrastructure improvements are really beginning to make a difference. R...

From The Athens News: With the Athens County Board of Elections slated to certify spring primary ballot petitions on Tuesday, county Prosecutor Keller Blackburn is poised to recommend that an anti-fracking measure be approved for the November election.   The group behind the measure, the Athens Bill of Rights Committee, has  sent a letter to the elections board  and Blackburn through its attorney requesting the measure be approved for a vote on May 6.   This was after Blackburn was informed by the elections board office, and subsequently notified the group, that Ohio Revised Code stipulates that ordinance petitions must be put before voters only on a general election ballot.   Blackburn reaffirmed his position Friday, saying that he has not received any authoritative legal argument from the group for making an exception to put the question on the primary ballot instead.   "I asked (the BORC's attorney) for any authority at all that they...

Average daily production from oil and NGLs reached a record level of 5.7 MBoe/d, a 7% increase over the third quarter of 2013 Fourth quarter adjusted EBITDAX reached  $40.7 million , the highest level in company history Increased proved reserves at  December 31, 2013  by 37% over  December 31, 2012 ;  Appalachian Basin  drill-bit F&D of  $0.70 /Mcfe for 2013 Baillie Trust  pad continues to perform well; 30-day sales rate of 5.1 MMcfe/d per well from four vertically offset stacked laterals Currently drilling the three-well Schilling pad, with an estimated lateral length of ~ 5,800 feet, the longest average lateral length of any combination of wells drilled in the Butler Operated Area Drilling final well of six-well Grunder pad in Warrior North Prospect; nine wells in the Warrior North Prospect to be placed into sales in second quarter of 2014 Exited 2013 with approximately 79,000 gross acres in the Butler Operated Area STATE COLLEG...

From Cleveland.com: GATES MILLS, Ohio — Gates Mills Mayor  Shawn Riley  wants property owners to form  a real estate trust  to control the location of controversial  hydraulic fracturing  sites if they are built in the village.   The mayor said experts tell him horizontal drilling wells that facilitate fracking, a process used to extract natural gas, will be built in the Cleveland area in about 10-12 years, and he wants to begin preparing now.   Horizontal wells require at least 200 acres and a fleet of trucks to operate. Fluids and chemicals are injected through the wells 8,000-10,000 feet into the ground at high pressure. Once the fluid reaches shale, it travels horizontally through the rock, releasing natural gas from the cracks. Read the whole article here (although it should be noted that it misses on a few facts, such as that "horizontal wells require at least 200 acres" thing... as MDN points out , that number should be 20)....

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The latest weekly permitting report from the Ohio Department of Natural Resources shows a slow week of activity in new permitting, but the number of wells drilled and producing continues to grow. Only 3 new permits were issued in the week of February 2-February 8.  2 were issued for Carroll County wells and 1 for Harrison County. That brings the cumulative permit total to 1077.  735 wells have been drilled and 310 wells are producing.  The Utica rig count is 40. View the report here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

OOGA thought they had a deal From the Youngstown Vindicator: Tom Stewart, president of the Ohio Oil and Gas Association, which represents drillers throughout the state, took exception to the substitute bill that would raise the top tax rate on the net value of natural gas produced from horizontally fractured wells from 2 percent to 2.25 percent.  But the most significant change, he said, was a provision that would enforce that rate after two years of production, instead of five.  “That’s a huge issue,” he said in an interview.  The shorter window would give producers less time to recover the cost of drilling and overburden them with tax obligations, he said.  “On average, five years probably gives level playing ground across the state of Ohio,” Stewart said. A two-year window before the higher rate kicks in “is not reality.”  The initial severance tax bill, introduced in December and sponsored by House Speaker Pro Tempore Matt Huffman of Lima, R-...

Activists are up in arms over abandoned Ohio Department of Natural Resources plan to work with drillers on countering their fracking claims From The Columbus Dispatch: The Ohio Department of Natural Resources, the agency assigned to regulate oil-and-gas drilling in Ohio, developed a wide-ranging public-relations campaign in August 2012 to sell Ohioans on fracking in some state parks and forests. It was never officially implemented. The 10-page memo recognized that the public-relations initiative “could blur public perception of ODNR’s regulatory role in oil and gas,” which would require “precise messaging and coordination” to counteract. The memo also warned about the need to overcome “zealous resistance by environmental-activist opponents who are skilled propagandists.” Opponents of hydraulic fracturing would “attempt to create public panic” about possible health risks, brand the policies of Gov. John Kasich as “ dangerous and radical,” and “attempt to legally and physicall...

First, the report from The Weather Channel: Fracking The Eagle Ford Shale: Big Oil And Bad Air On The Texas Prairie from Weather Films on Vimeo . And then, the response from Energy in Depth, which accuses the report of working backwards from the conclusion that oil and gas operations in the Eagle Ford shale are running roughshod over the health of residents with little to no regulation to slow them down, and stating those conclusions despite an utter lack of any real evidence: A new investigative report by  InsideClimate News  and the Center for Public Integrity – promoted and produced by the  Weather Channel  – concludes that shale development in south Texas is “ releasing a toxic soup of chemicals into the air ,” which the researchers describe as “a bust for local residents who fear for their health.” But shaky research underlying the report raises serious questions about the validity of those claims, including the use of widely discredited literature pr...