The Daily Digger

From Columbus Business First: Magnum Hunter Resources Corp. is selling almost $41 million in undeveloped Utica shale acreage.  The oil and gas company, which has 210,000 acres of land under lease in eastern Ohio and West Virginia, said Tuesday it’s selling its interests in 5,210 acres in Tyler County, West Virginia, which borders the Ohio River.  Houston-based Magnum Hunter (NYSE:MHR) said the land was not in its long-term drilling plans. Many of the leases in the acreage are set to expire soon, CEO Gary Evans said in a statement. Read more by clicking here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Source: JT Long of  The Energy Report   (5/26/15) http://www.theenergyreport.com/pub/na/u-s-globals-brian-hicks-shares-his-summer-plans-for-creating-the-ultimate-resource-fund You may want to rethink those tickets to Hawaii, and instead spend the summer basking in the opportunities developing in three different sectors of the oil market. In this interview with  The Energy Report , U.S. Global Resources Fund Manager Brian Hicks shares the names of the juniors that could benefit from the current volatility. Plus, he reveals the dramatic shift he made in the fund this year that allows him to get paid to wait for the market to catch fire. The Energy Report:  Summer means driving season, which is good news for oil and gas prices. U.S. Global Investors recently published an article that says Americans are driving and flying more than ever. Will energy investors who "sell in May and go away" kick themselves later, when they look at the stock charts for the...

The Ohio Department of Natural Resources has released the latest weekly Utica shale permitting update, and activity was higher than it has been in quite some time. 16 new permits were issued last week.  Guernsey County led the way, with 6 of those permits.  It was followed by Harrison County (5), Monroe County (4), and Belmont County (1).  11 of the 16 permits were issued to American Energy Utica. This latest flurry of permitting activity pushes the cumulative total to 1,917, with 1,494 wells drilled and 897 producing.  The Utica rig count increased by 1 from the previous week, to 26. View the report below.  Remember, you can also view the latest report and several other reports by using The Daily Digger mobile app (click here for more information). Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Seeking Alpha: The startling news from Chesapeake Energy (NYSE: CHK ) is that the company actually raised 2015 production guidance to 640 to 650 mboe per day. The company forecasts up to 3% production growth over the adjusted 2014 numbers. No matter what the energy exploration firm achieves this year, the one major goal has to be lower production. If the market won't pay higher prices for oil and specifically natural gas, the company shouldn't produce more of the product. It appears a simple supply and demand equation that Chesapeake Energy struggles to understand.  Besides, the company is awash with debt and domestically the country is awash with energy supplies so Chesapeake has no incentive to increase production no matter what it does. Ironically though, the primarily natural gas production firm appears incapable of completely pulling back the reigns.  Previous research focused on this inability to cut production and consequently the stock continues sitting n...

From Oilprice.com: A lot of people have got very excited as the price of WTI has bounced back from the lows reached a few months ago. If oil fails to break and hold above $62 this time around, however, their enthusiasm could well be misplaced, as the fundamental factors that caused the price decline in the first instance are still in place.  That, combined with the technical importance of this challenge of the resistance, makes a drop back below $50 look more likely than a continued rally. When short-term technical indicators and long-term fundamentals both suggest a move in the same direction, as is the case here, investors are well advised to pay attention.  In the short term, as the above 3 month chart clearly shows, the $62 resistance level that we are approaching again has enormous significance. Most traders will tell you that the third attempt at a support or resistance level is the most important, and the reason for that is also clear on the chart. The first tim...

From Shale Play: A decision on whether American Water Management Services Inc. will be permitted to resume operations of its deep-injection well on state Route 169 is expected when the Ohio Oil and Gas Commission reconvenes in June.  Linda Osterman, commission director and hearing officer, said May 14 that the commission is expected to have a decision when it meets June 11, if not sooner.  The commission has been considering testimony from an appeal hearing during which AWMS, a subsidiary of Avalon Holdings Inc. of Howland, asked for a state order that shut down the well to be lifted. You can read more by clicking here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Columbus Business First: MAC Worldwide Inc. wants to hear from multiple folks who quickly came into money by leasing land to oil and gas companies for a show called Suddenly Rich. The show, which has been picked up by a major cable network that prominently features reality TV programming, is not just about fracking families. It’ll feature vignettes of other people who have hit unexpected windfalls – think winning the McDonald’s Monopoly game or finding a Picasso in grandpa’s attic. “Fracking is a controversial issue across the country,” he told me. “We’re not going to talk anything about the fracking. That’s their quick little one-liner. Cool – let’s learn how it affected you."  James Holden , the head casting producer for the show, said the show’s aim is to be aspirational.  Confidentiality is a top priority if a landowner is, justifiably, worried about sketchy people knowing of their money, Holden said. Filming begins June 22. It requires a three-day commitment an...

From The Intelligencer/Wheeling News-Register: With potential local profits flowing to either the Gulf Coast or Canada, the head of the Ohio Oil and Gas Association hopes at least one cracker plant opens in the Marcellus and Utica shale region.  "Currently, it is more of a waste than an asset," Shawn Bennett, senior vice president of the association, said of ethane, one of the natural gas liquids prevalent in wet shale gas. "We are in need of an ethane cracker in this region to help us gain value. That would help increase demand, which would help us get more drilling going again."  Next year, officials with Thailand-based PTT Global Chemical and Tokyo's Marubeni Corp. are scheduled to decide whether they will build a $5 billion ethane cracker complex that would likely include the 130-acre R.E. Burger plant site and some surrounding property, south of Shadyside. FirstEnergy Corp. still owns the coal-fired power plant that it can still use on a reserve bas...

From Shale Play: The Utica Shale Academy is preparing to graduate its first class on May 28, adding some newly minted prospects to the oil and gas workforce.  Members of the USA Board of Directors met on May 8 in the Southern Local School District to finalize details for the event. A dinner and graduation ceremony are slated in the Southern Local High School gym beginning at 6 p.m. with commencement to follow at 7 p.m.  Brian Logue of Express Energy will be the speaker and nearly a dozen prospective alumni and their families will join USA officials, academy board members, and representatives of the Jefferson County Educational Service Center, the latter which is sponsoring the community conversion school.  The board approved the list of the newest alumni during the meeting and President Dr. Charles Joyce expressed his pride in the students' achievement.  "We have a list of 11 solid graduates. That is really terrific," Joyce said. Read more by clicking he...

From Oilprice.com: The plunge in oil prices has a lot of the investment community heavily divided  between those who see opportunity in US unconventional oil producers and those that see fracking as an unprofitable way to produce oil.  Interestingly though, very few people are levying similar criticisms against natural gas producers. David Einhorn, whose tirade against Pioneer Natural Resources made headlines recently , excoriated the business of fracking. But Einhorn explicitly exempted natural gas producers from his attack, instead referring to natural gas producers as low cost leaders.  That is because shale gas producers have been here before . Natural gas prices plummeted years ago and the industry has become used to surviving in a low-price environment. There is an enormous amount of demand around the world for natural gas and the US is producing far more cheaply than anyone else. US natural gas has historically traded at between one and one-half the energ...

From Moody's: The 12-month default rate forecast for Oil and Gas companies rated B2 or below in the Exploration and Production (E&P) sector is estimated to more than double in the year ahead, Moody's Investors Service said in a new report. Moody's default-forecasting model estimates that the one-year portfolio-average baseline default rate for these companies will increase from 2.7% to 7.4%. "With a gradual recovery in energy prices, the weaker oil & gas issuers are at a much greater risk of default," said Moody's Senior Vice President David Keisman. "The companies on the lower end of spec-grade ratings are the ones that should be most worried." As of May 1, 2015, the oil and gas sector comprised 15% of companies rated B3 or lower -- the largest share for any sector included on this list of ratings across US corporate sectors, Moody's Associate Analyst Julia Chursin states in the report, "Oil and Gas: The Bad, Ugly and Good....

From E&E: Most of the U.S. oil industry is reeling. Big Shale is reloading.  As the top dogs of the shale oil industry reported earnings last week, they said they will plan to mix ambition with austerity. This year they want to chop well costs 15 to 20 percent, while raising productivity in the rock. They're already preparing game plans to raise oil output later this year, if prices justify it.  The crash in oil prices, nearly 60 percent at its March nadir, was supposed to cut off U.S. shale at the knees. Instead, it might just be putting the industry's biggest players through a financial boot camp.  "I think that's ultimately probably a good thing for the industry, and I think it probably does emerge a bit more healthy than it was prior to the downturn," said Mark Hanson, an energy analyst with Morningstar.  "I think the implication longer term is you likely see probably more cost-competitiveness," he said. "And I think that probabl...

From Bloomberg: At the height of the U.S. energy boom, Texas landowner John Baen received about $100,000 a month in royalty payments from companies producing oil and natural gas on his property.  Now the checks are much smaller, and when he opens his mailbox each day, he’s afraid he’ll find yet another bankruptcy notice. So far, four of the producers sending him checks have caved in to rising debts as oil prices slumped, seeking court protection from their creditors.  “I feel like crying because I know I’m going to get another 10 notices,” said Baen, 67, who owns 10,000 acres of land and mineral rights on other property. A rebound in oil prices that bottomed near $44 a barrel in March has provided some relief to stronger companies that have been able to compensate with cost cuts and more efficient operations. For many smaller, cash-strapped producers, current prices of almost $60 still aren’t enough to make ends meet compared to the $100-plus prices seen during the bo...

From Gas & Oil: The Noble County Chamber of Commerce and Tourism Bureau, Caldwell, once again voted to oppose the governor’s severance tax proposal on the shale oil and gas industry in Ohio during the monthly Board of Director’s meeting.  In a statement from the Chamber and Tourism Bureau, Jill McCartney, president of Chamber, said, “The board recognizes that Utica Shale development is in its infancy in Ohio and that it will take several years to determine the full economic opportunity in the shale formation. Ohio has been a business-friendly state and should continue to encourage gas and oil production, and not build barriers that would jeopardize that growth in this industry or any other industry.  “The Appalachian region has experienced slow growth and high unemployment for many years. Drilling in the Utica Shale play could result in economic growth that has not been seen in decades. “There are over 30 shale developments in the United States and many more ove...

From Columbus Business First: PDC Energy Inc. (NASDAQ: PDCE) suspended its Ohio oil and gas drilling operations in December because it saw better economics in the shale field closer to its Denver home.  Now, based on positive results from the wells it already drilled in the Utica shale play, PDC could bring back a rig sooner than expected. The company told analysts this month that its Dynamite well pad in southeastern Guernsey County is outperforming cost and production projections. “The Dynamite continues to, I think, surprise us,” said Scott Reasoner , PDC’s senior vice president of operations.  The company has high hopes for another wellpad north of the Dynamite pad that is set to start production. Continue reading by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Source: Tom Armistead of  The Energy Report   (5/19/15) http://www.theenergyreport.com/pub/na/now-is-the-time-to-own-the-oil-gas-leaders-keith-schaefer U.S. shale oil producers have responded to the oil price collapse so quickly, and with such discipline, that they've shown they are able to turn production on and off as if with a light switch. As Keith Schaefer tells  The Energy Report ,  that means it's time to be nimble, and to keep small positions until oil finds a stable new price level. The Energy Report:   Keith, the first U.S. grassroots refinery in nearly 40 years just began operation in North Dakota. Is the growth in U.S. oil production going to catalyze refinery construction? Keith Schaefer:  I'm going to say no. U.S. production has peaked and we're doing just fine, so I don't see any great need for more refineries right now. There was talk a couple of years ago, particularly in 2012–2013, that with unbridled shale oil ...

Market Realist:   Utica Shale Gas Production Races Ahead in April   -    "According to the U.S. Energy Information Administration (or EIA), the Utica Shale in eastern Ohio has become one of the fastest growing gas-producing regions in the United States. In its Drilling Productivity Report (or DPR) released on May 11, 2015, the EIA estimates that in April, Utica Shale gas production reached 2.38..." Shale Play:   Drillers still taking water from Ohio Creeks   -    "XTO Energy stopped drawing frack water from McMahon Creek in Belmont County in December, but the company is one of several Utica and Marcellus shale drillers once again pulling from streams across Ohio for..." The Daily Caller:   Two Graphs Show Exactly Why Saudi Arabia Wants To Crush Fracking   -    "There’s an oil price war going on, and OPEC thinks it can win by not cutting production and pricing out companies producing oil from U.S. shale formations. And ...

From Reuters: Thailand's PTT Global Chemical PCL said it aims to sign in the second half of 2015 a deal with Japan's Marubeni Corp and a new partner to jointly invest in a $5.7 billion petrochemical complex in the United States. Thailand's largest petrochemical maker will hold a more than 51 percent stake in the project, Patiparn Sukorndhaman, executive vice president for finance told reporters. PTT is seeking a third partner to jointly invest in the project in addition to Marubeni, Sukorndhaman added.  "Marubeni specialises in trading business. Having Marubeni as a partner will help us to penetrate the North America market," Patiparn said, adding PTT is looking to select one of five potential partners that are interested in the project.  The stakes that would be held by Marubeni and any third partner are still under negotiation. PTT Global, petrochemical flagship of state oil and gas company PTT PCL, has selected Ohio as the site of a one-million-tonne ol...

From The Review: The Utica Shale Academy (USA) is expanding, and beginning this fall high school aged students will be able to enroll at a satellite location within the Columbiana School District. The Columbiana Board of Education approved the satellite location following a presentation by USA director Eric Sampson this week.  Superintendent Don Mook said hosting the academy within the high school building will open up the door for students in the northern part of the county who may not have been able or willing to drive to the Southern Local location.  Formed last year, the academy functions as an open enrollment charter school within the Southern Local High School through an agreement with the Jefferson County Educational Service Center (ESC), and students in grades 9 through 12 can earn certifications through the academy for careers in the oil and gas industry.  Academy students also fulfill their high school graduation requirements through the courses, which...

From Shale Play: The current state of two Franklin Township roads along with an oil and gas company's refusal to cooperate has prompted trustees to sever its road use maintenance agreement.  Trustees voted during a recent meeting to terminate its RUMA with Chesapeake Energy after the oil company opted not to take responsibility to repair Acker Road and Nature Road, saying the roads are the township's responsibility.  The RUMA, which was worth $60,000, states that Chesapeake is responsible for maintenance of the roads as the company conducts drilling activity and is to keep them in "as good" or "better" condition.  In a voice message received by trustee Mike Lutz, a representative from Chesapeake said the company has ended drilling and is now in "production mode." As a result, the company is not responsible to repair the roads. The representative also said a letter in writing would be needed in the event the township were to end the RUMA. ...

Permitting activity continued to be slow and steady last week, according to the latest weekly report from the Ohio Department of Natural Resources. 5 new permits were issued during the week ending May 16.  2 of those permits were for Rex Energy wells in Carroll County, 2 were for Chesapeake Energy wells in Harrison County, and 1 went to XTO Energy for a well in Belmont County. While this was still a somewhat slow week for permitting, it was enough to push the Utica shale over another milestone number.  There are now 1,902 permits issued for horizontal drilling in Ohio's Utica shale.  Further, 1,484 wells have been drilled and 896 are now producing.  The Utica rig count continues to sag, standing at 25. View the full report below or in The Daily Digger mobile app . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

THE DIGGER AND THE AKRON RUBBERDUCKS WANT TO TAKE YOU OUT TO THE BALLGAME! We are glad to be able to offer to our readers a special opportunity this month to win 4 free tickets to any 2015 Akron RubberDucks regular season game ! *  Along with the tickets, the winner will also receive $25.00 to spend at the game! There is no purchase necessary to be eligible for this prize.  All you need to do is stop in at Guess Motors , which is located at 457 Steubenville Road in Carrollton, Ohio, and sign up for the drawing using the form provided.  The drawing will be held on May 25, so get your entries in by the end of the day on May 24! Again, no purchase is necessary.  Just go to Guess Motors and sign up, and you could win! * = subject to availability. Full contest rules available at signup location. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Shale Play: Traffic along Ohio 644 and 39 was closed for nearly five hours April 23 after a truck leaked shale oil throughout Carroll and Columbiana counties.  According to Salineville police, an undetermined amount of gallons were spilled Wednesday morning as a portion of a drilling rig hauled by Michael Ayers, owned by Mid-East Truck and Tractor Service of East Canton, was being moved from an oil drilling site on state Route 164 to another on Amsterdam Road in Scio in Harrison County owned by Chesapeake Energy.  "The brunt of (the spill) was in Salineville and Mechanicstown," Salineville Police Chief Andy Straley said. "The whole spill was about 26 or 27 miles."  Straley said the material that leaked was a mineral-based synthetic, a non-hazardous drilling oil compound. Read more by clicking here.  Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

GreenHunter facility in Ohio From a GreenHunter press release: GRAPEVINE, Texas ,  May 15, 2015  (GLOBE NEWSWIRE) --  GreenHunter Resources, Inc.   (NYSE:GRH) (NYSE:GRH.PRC) ,  a diversified water resource, waste management, environmental services, and hydrocarbon marketing company specializing in the unconventional oil and natural gas shale resource plays within the  Appalachian Basin , announced today financial and operating results for the three months ended  March 31, 2015 .   First Quarter Financial and Operational Highlights The Company substantially improved operating margins related to water disposal (disposal revenue less disposal expense as a percent of revenue) from  32%  in the first quarter of 2014 to  42%  in the first quarter of 2015.   The Company substantially improved operating margins related to internal trucking (internal trucking revenue less internal trucking expense as a percent of revenu...