The Daily Digger

The Ohio Department of Natural Resources has made available the latest weekly permitting update, and it was a slow week in the Utica shale. Only four new permits were issued last week.  Three of those permits went to American Energy Utica for their Krinke MTP JF 2H, 4H, and 6H wells in Jefferson County.  The remaining permit was for the Kurtz Unit 3H well in Monroe County, which is owned by Antero Resources. There have now been 1,867 permits issued for horizontal drilling in Ohio's Utica shale.  1,414 wells have been drilled, 934 are producing, and the Utica rig count rebounded just a hair (going from 26 last week to 27 this week). View the whole report below or by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

HOUSTON --(BUSINESS WIRE)--Mar. 27, 2015--  Halliburton Company (NYSE:HAL) today announced that its stockholders approved Halliburton’s proposal to issue shares of  Halliburton  common stock as contemplated by its merger agreement with  Baker Hughes Incorporated (NYSE: BHI). In addition,  Baker Hughes  today announced that its stockholders adopted the merger agreement and thereby approved the proposed combination of the two companies. Each company’s special meeting was held earlier today. Nearly 99% of the shares voted at Halliburton’s special meeting voted in favor of the proposal to issue  Halliburton  shares. Separately, more than 98% of the shares voted at Baker Hughes’ special meeting voted in favor of the transaction, representing more than 75% of all outstanding shares of  Baker Hughes . “We are extremely pleased  Halliburton  and  Baker Hughes  stockholders have shown overwhelming support by approving the pe...

Belmont County has done quite a bit of business with Rice Energy since the Utica shale boom has gotten rolling, and the county has seen the benefits. The county has entered into multiple lease agreements with Rice, with the latest one bringing Belmont $8,200 an acre plus 20% royalties. County officials are expressing their feelings about Rice Energy's presence and impact. From The Intelligencer/Wheeling News-Register: Coffland and fellow commissioner Mark Thomas recognize Rice as a company that will help the county for years to come.  “That is an impressive amount of acreage in the county, but it is not a complete surprise,” Thomas said.  “They have been very aggressive and active in seeking out leases with property owners. We wish them great success and prosperity because with their success, we will prosper.” Read more by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Seeking Alpha:   Kinder Morgan: The Sharks Have Begun to Circle   -    "Kinder Morgan (NYSE: KMI ) has stated it will increase the dividend by 16% this year and 10% each year until 2020. These projections sound good in theory. Yet, the company will need to grow EPS in order to make good on..." Gas & Oil:   Barnesville Schools to Join Utica Shale Academy   -    "The Barnesville Exempted Village School Dstrict is joining forces with a charter school to offer high school students a unique opportunity to get hands-on training in the burgeoning gas and oil industry next school year." Akron Beacon Journal:   Groups Discover Unlicensed Frack Fluid Facility in Jefferson County   -    "As the oil and gas industry lobbies lawmakers to further consolidate power in the hands of the Ohio Department of Natural Resources (ODNR), the agency has shown itself to be ill-equipped to have more oversight of..." NGI:   Drilling ...

Lois Gibbs From The Business Journal: The female activist from the Love Canal neighborhood of Niagara Falls, N.Y., stood before the Northstar 1 injection well Friday afternoon to warn residents of Youngstown about the dangers to their health open injection wells pose.  Lois Gibbs, the activist who, in the 1970s, led the Love Canal community against the Hooker Chemical Co. (since acquired by Occidental Petroleum Corp.), and the New York state and federal governments, warned Youngstown residents of the dangers of open injection wells.  What happened in her community nearly 40 years ago could happen here, she said. The board of education in Niagara Falls bought the abandoned Love Canal that Hooker Chemical had used as a dump to bury toxic waste, Hooker not knowing just how toxic it was. Nor did the school board when it paid Hooker $1 for the site to build a school. Read more of that article by clicking here. Industry site Energy in Depth had plenty to say in response...

From Gallup: The practice of hydraulic fracturing, or "fracking," has emerged as a divisive issue across the U.S., reflected in Americans' opinions about it; 40% of Americans say they favor the procedure, while 40% oppose it, and a substantial 19% do not have an opinion. This is amid the Obama administration last week announcing the first nationwide safety rules for fracking. Fracking is a process of drilling and injecting fluid into the ground at high pressures to fracture shale rocks and release natural gas inside. Developed in the 1940s, fracking became much more widespread in the late 1980s, when oil operators began drilling horizontally, using hydraulic fracturing. In the 1990s, fracking was introduced into shale formations, and it is this practice on a massive commercial scale that is employed throughout the U.S. today. Many credit fracking with contributing to the current "oil boom," which has helped dramatically ramp up the production of oil in t...

From a Chesapeake Energy press release : Chesapeake Energy Corporation (NYSE:CHK) today announced it has reduced its 2015 capital budget (including capitalized interest of $500 million) to $3.5 – $4.0 billion for 2015, which is a $500 million reduction from its previous guidance of $4.0 – $4.5 billion. Chesapeake plans to operate 25 – 35 rigs in 2015, which represents a decrease of approximately 55% from an average of 64 rigs in 2014. The company intends to spud and connect to sales approximately 520 and 650 gross operated wells, respectively, in 2015 (a decrease from 1,175 and 1,150 wells in 2014). As a result, the company is lowering its targeted 2015 production to 231 – 236 million barrels of oil equivalent, or average daily production of 635 – 645 thousand barrels of oil equivalent, which represents 1 – 3% production growth over the prior year after adjusting for 2014 asset sales.  Doug Lawler, Chesapeake’s Chief Executive Officer, said, “We entered 2015 with a strong liq...

From Midwest Energy News: Almost three weeks after Ohio’s top court struck down a town’s restrictive drilling ordinances, lawyers and local officials are predicting another round of court cases to settle how much control local governments have over oil and gas development.  The state Supreme Court ruled that the Akron-area town of Munroe Falls could not require Beck Energy Corp. to get separate drilling permits, finding that only the state can issue drilling permits. But it left open whether cities can use zoning to control where drilling happens, and whether the outright drilling bans in some towns can continue to stand.  In the weeks following the highly anticipated decision, attorneys have rushed to interpret how and when that issue will be decided. Will Ohio follow in the footsteps of New York and Pennsylvania, which have preserved some local powers over drilling; follow Colorado and Texas, which have taken a harder line; or chart a new path?  “We’ve reached...

From Bloomberg Business: Oil is unlikely to rebound to $100 any time soon because higher prices would spur more output and prolong a glut, said Mohammed al-Madi, Saudi Arabia’s OPEC governor.  Oil prices at that level “will let the high-cost producers come back again,” al-Madi said at a conference in Riyadh on Sunday. Saudi Arabia, the world’s biggest oil exporter, is pumping at a near-record level of about 10 million barrels a day, Oil Minister Ali al-Naimi said at the conference.  Brent, a global oil benchmark, fell almost 50 percent in the past year as Saudi Arabia and others in the Organization of Petroleum Exporting Countries chose to protect their market share over cutting output to boost prices. While U.S. producers have idled rigs for 15 consecutive weeks, output is still running at its highest level since at least 1983.  “Shale-oil companies are one of the high-cost producers that benefited from high oil prices,” al-Madi said. “We’re not against shale o...

From The Intelligencer/Wheeling News-Register: Citing a potential loss of "millions of dollars," Marcellus and Utica shale driller Gulfport Energy is suing the village of Barnesville for the right to draw water from the Slope Creek Reservoir for its nearby fracking operations.  Filed earlier this month in U.S. District Court for the Southern District of Ohio, Gulfport's lawsuit claims the Oklahoma City-based firm should be allowed to take water from the reservoir, located about five miles south of the village, unless the "health and safety of area residents and businesses are impaired."  "Barnesville has frustrated Gulfport's right to develop minerals under the mineral rights agreement by refusing to provide Gulfport with water in violation of Gulfport's water rights," company attorney O. Judson Scheaf states in his complaint. "Barnesville has wrongfully maintained that Gulfport's water rights are limited by the 2014 water use ...

From The Hill : The Obama administration is setting new standards for the controversial hydraulic fracturing process, the first major federal effort to crack down on the practice that has largely been behind the nation's oil and natural gas boom.  The fracking standards only apply to drilling on leased federal land and land owned by American Indian tribes, which account for less than a quarter of the country’s oil production and 17 percent of its gas. The vast majority of fracking happens off federal land, regulators said.  The long-awaited rules from the Interior Department’s Bureau of Land Management (BLM) are meant, in part, to ease public fears about a practice that involves pumping fluids miles underground to extract oil and gas from small pockets in rock.  “This rule will move our nation forward as we ensure responsible development while protecting public land resources,” Interior Secretary Sally Jewell told reporters. “That’s good for the public; it’s goo...

Is the Utica shale falling well short of the gaudy job-creation predictions made in the past? From the Akron Beacon Journal: Shale drilling never produced as many jobs in Ohio as industry groups had earlier predicted, said several speakers at a Thursday shale conference in Wheeling, W. Va., organized by the Federal Reserve Bank of Cleveland.  The number of jobs tied to drilling for natural gas and liquids in the Utica Shale in eastern Ohio is about 8,000, said Stephen Herzenberg, executive director of the Keystone Research Center in Harrisburg, Pa.  Shale drilling also created an estimated 23,000 jobs in Pennsylvania and another 6,000 jobs in West Virginia from 2005 to mid-2014, he said.  There were industry groups and studies that had predicted 200,000 new shale jobs in Ohio several years ago. Ohio State University in 2011 had predicted 20,000 new jobs.  Those numbers were way off and the number of jobs will be measured in the tens of thousands, not hu...

From a Drill Capital press release: Drill Capital LLC, an alternative asset manager focused on investments in the North American energy sector continued its expansion in the Utica shale formation with the opening of a three-story 80 room Wyndham hotel in the town of Caldwell, Ohio. The property adds to the firm's investment portfolio in the northeastern Ohio energy corridor.  Drill is also pleased to announce that it has broken ground on a third project in the Utica shale located in the town of Cadiz, Ohio. The expansion in the area follows Drill's recent entry into the Utica Shale and the successful opening of a similar sized Wyndham property located in Carrollton, Ohio during the third quarter of 2014.  Additionally, Drill will be moving forward with the next set of investment projects to be located in the Permian Shale, a major production hub in the US Lower 48. Similar to the Utica Shale portfolio, the future projects will capitalize on the demand for lodging accom...

From The Washington Post: Bank of America Corp. says the selloff isn’t over and is telling clients to brace for the possibility of sub-$2 prices for the first time in three years. Gas output will climb to an all-time high of 78.39 billion cubic feet a day this year, an increase of 50 percent over 2005, led by shale reservoirs in Pennsylvania, Louisiana and Texas, government data show.  The number of gas rigs has tumbled to the lowest level since 1993, yet supply has risen steadily because of improved techniques for extracting the fuel. Natural gas for April delivery settled at $2.92 per million British thermal units at Wednesday on the New York Mercantile Exchange, down from $4.456 a year ago. Futures were last below $2 in April 2012 and haven’t traded there for more than a handful of days since 1999.  “Production has definitely surprised,” Francisco Blanch, head of global commodity research at Bank of America in New York, said in a March 10 phone interview. “We have $...

From the Akron Beacon Journal: Experimental horizontal wells in Ohio and surrounding states show great promise as a way for drillers to tap into the much-drilled Clinton sandstone, industry representatives say.  Such wells are three times more costly than comparable vertical-only wells, but the horizontal wells are seven to eight times more productive, said Mark Lytle, CEO emeritus of Wooster-based Buckeye Oil Producing Co.  The new wells are "not monster gas wells," but his company was very surprised at the volume of natural gas that was tapped, he said.  His company has drilled a horizontal well in the Berea sandstone in West Virginia and hopes to drill one Clinton sandstone well in Ohio this year, he said Thursday at the Ohio Oil and Gas Association’s winter meeting. The three-day program attracted more than 1,000 people and it wraps up on Friday.  David Hill, the president of the OOGA, hailed Lytel and the two other panelists, Greg Mason of the Newark...

From Gas & Oil: BARNESVILLE, OH -- When the village of Barnesville announced an agreement to allow oil and gas drilling at the Slope Creek Reservoir, a number of Barnesville area residents voiced concern over the potential dangers of water contamination from hydraulic fracturing.  Slope Creek is the largest of the three Barnesville reservoirs, representing 82% of the drinking water for about 13,000 people, including Bethesda, Quaker City, and the Switzerland of Ohio Water District, which includes Somerton, Malaga, Jerusalem, and Beallsville.  Gulfport Energy has plans to place multiple well pads within 500 feet of Slope Creek Reservoir. Citing evidence of well casing and cement failures, contaminant spills, and other environmental disasters in the shale gas industry, concerned citizens asked the Village Council if the proposed well pads could be moved outside the immediate watershed of the reservoir.  While the council expressed similar concerns and agreed t...

Carrollton Ohio : Ohio House Bill 490, sponsored by Andy Thompson (R), whose district includes Carroll County, seeks to stop direct reporting of hazardous chemical inventories to state and local emergency planners and fire departments for Ohio drillers. Instead the Ohio Department of Natural Resources (ODNR) would have sole discretion over whether, and to what extent, critical chemical information will be shared with first responders and citizens living near gas and oil wells. Since 1986, the Federal Emergency Planning and Community Right-to-Know Act (EPCRA), sought to ensure that local emergency planning and firefighters be the lawful repository for emergency planning documentation for all industries. Paul Feezel, Chair of Carroll Concerned Citizens said, “Being at the center of Ohio’s shale gas boom, we thought it was really important to support our local first responders by having an educational meeting on this proposed change. After all, ODNR is not who answers when someone f...

The latest weekly permitting report from the Ohio Department of Natural Resources is now available, and the rig count continues falling even as new permits continue to be issued. 10 new permits were approved last week.  Five of those permits were for wells in Monroe County, three for Belmont County, and two for Carroll County.  The busiest operator was Antero Resources, which received four of the 10 permits. The cumulative totals continue to climb, and there have now been 1,864 horizontal drilling permits issued for Ohio's Utica shale.  An even 1,400 wells have now been drilled, and 829 are producing.  The Utica rig count continues to slide, falling to 26 this week. View the report here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Placed into sales the four-well  Powell  pad at an average 5-day sales rate per well of 9.3 MMcfe/d Completed drilling operations on four-well Renick pad in Moraine East Area STATE COLLEGE, Pa. ,  March 16, 2015  (GLOBE NEWSWIRE) --  Rex Energy Corporation  (Nasdaq:REXX) provided an operational update on the company's  Appalachian Basin  operations. Operational Update Appalachian Basin  - Legacy Butler Operated Area During the first quarter of 2015, the company placed the four-well  Powell  pad into sales. The four-well  Powell  pad was drilled with an average lateral length of 5,500 feet and completed with an average sand concentration of approximately 2,300 pounds per foot. The four-well  Powell  pad produced at an average 5-day sales rate per well of approximately 9.3 MMcfe/d. The company has also placed the two-well  Hamilton  pad into sales. The two wells on the pad were dril...

From Columbus Business First: It's been a bit of a roller-coaster ride for people like Doyle. The first few years of Utica exploration focused on acquiring large swaths of land using the best geological information companies had at that time. Then the relative performance of the area started to be known and the "core" of the play was defined along a corridor of southeastern Ohio around Belmont and Monroe counties.  "It probably migrated to the south more than some companies anticipated early on," said Doyle, executive vice president of operations for Chesapeake's northern division, "It's a fascinating process, going out there early on, testing it, learning from the rest of the industry and trying to find out how to best develop it."  After spending so much time working in the Appalachian area, what does Doyle see for the next five years in Ohio?  It's time for Utica companies to start proving themselves after years of spending big...

From the Huffington Post: Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States; the decision  of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model.  Until last fall, when the price decline gathered momentum, the oil giants were operating at full throttle, pumping out more petroleum every day. They did so, of course, in part to profit from the high prices. For most of the previous six years, Brent crude, the international benchmark f...

From Columbus Business First: This time last year, Ohio's oil and gas industry was railing against Gov. John Kasich 's proposed severance tax on drilling . They were upset, but commodity prices were high. Prices matched the general feeling of the industry.  A year later, though, the industry and its Statehouse supporters who have fought tooth-and-nail against Kasich's proposals are still lobbing grenades at the governor's proposal. Now, though, they're using the downturn to hype up criticism.  "Raising the severance tax is absolutely the wrong idea at this time," Ohio Rep. Andy Thompson , R-Marietta, told a group at the Ohio Oil and Gas Association's winter meeting Thursday. Read more here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From TheHill: In her piece, Gibbs rehashes the discredited talking points of environmental activists who reflexively oppose any oil and natural gas production.  As just one example, she claims a report from the Colorado School of Public Health “found air pollutants near fracking sites at levels sufficient to raise risks for cancer,” among other ailments, especially among pregnant women. But Gibbs failed to acknowledge that the study was swiftly condemned after its release.  Larry Wolk, director and chief medical officer at the Colorado Department of Public Health, issued a statement warning expectant mothers “not to rely on this study as an explanation of why one of their children might have had a birth defect. Many factors known to contribute to birth defects were ignored in this study.”  As is typical among anti-energy activists, Gibbs employs vague language to stoke unfounded fears. She says, “fracking fluids can be incredibly dangerous.” But anything “can be...

From RT Business: OPEC is forecasting a possible decrease in US shale oil production by the end of 2015. The number of operating drilling rigs working shale deposits is likely to fall since the price of oil has more than halved since June 2014.  The cartel questions the ability of US producers to withstand the dramatic collapse in oil prices and predicts that global oil supply will equal demand, it said in its monthly report published Monday.  “Tight crude producers are aware that typical oil wells in shale plays decline 60 percent annually, and that losses can only be recouped by drilling new wells,” says the report. “As drilling subsides due to high costs and a potentially sustained low oil price, a drop in production [in the US – Ed.] can be expected to follow, possibly by late 2015.”  Previously OPEC has been predicting US shale production would decline in 2018.  Although the total US crude production hit a record 9.4 million barrels a day last week,...

From Forbes: The Oil Bust of 2015 is making it cheaper to fill up our tanks at the gas station, but it is decimating our nation’s oil and gas workforce as companies slash spending in hopes of surviving the downturn. Just this week Talisman Energy has cut about 200 workers in Calgary, while Nexen Energy (a division of China’s Cnooc) slashed 400 jobs. On Tuesday, Quicksilver Resources filed for Chapter 11 bankruptcy protection.  I received a very thorough spreadsheet from some well placed friends in the industry; it tabulates with more precision than I’ve seen anywhere else which companies have cut jobs, and how many. You can find the full list below. The conclusion: the worldwide oil and gas industry, including oilfield services companies, parts manufacturers and steel pipe makers, has laid off at least 75,000 so far.  Considering that about 600,000 work in the U.S. oil and gas sector, this is a big hit. And it’s important to note that most of these are solid middle ...