The Daily Digger

From the Akron Beacon Journal: An Akron woman and two farms in Columbiana County have sued subsidiaries of Chesapeake Energy Corp. for allegedly cheating hundreds of landowners out of more than $30 million in royalties.  The proposed class-action suit accuses Chesapeake Operating of improperly deducting costs from royalty payments and of violating lease agreements with landowners by selling oil and gas at below-market prices.  The suit against Chesapeake Operating was filed Monday in Columbiana County Common Pleas Court.  The plaintiffs in the suit include Evelyn Frances Young of West Akron, a trustee of the Robert Milton Young Trust.  Robert M. Young, 81, a retired legal counsel for the International Chemical Workers Union in Akron for 30 years, died in 2007.  The Youngs had leased gas and mineral rights on 166 acres in Carroll County for drilling. The initial lease was with Anschutz Exploration Corp. It was later taken over by Chesapeake.  ...

From Business Journal Daily: Critical infrastructure improvements, a growing portfolio of commercial ventures such as the TownCenter project in the city of Columbiana, and the potential to lure new industry attracted by low-cost energy, a highly skilled workforce and tax incentives, are helping to guide development in Columbiana County over the next five years.  That’s the consensus of development specialists throughout the region as they put private and public dollars to work to expand the county’s commercial and industrial footprint.  Over the last five years, Columbiana County has witnessed a surge in development buoyed by oil and gas exploration in the Utica shale. Utica East Ohio’s Kensington cryogenic plant in Hanover Township, for example, alone boasted a nearly $1 billion investment in the area.  And, more recently, energy giant Chesapeake Energy Corp. has started to renew existing oil and gas leasehold agreements with landowners, preserving the company’s ...

Source: JT Long of The Energy Report   (10/27/15) http://www.theenergyreport.com/pub/na/u-s-globals-frank-holmes-and-brian-hicks-the-one-essential-to-transform-your-resources-portfolio-patience For investors willing to take a long-term view on their resource portfolios, this could be the best of times, says U.S. Global Investors CEO and Chief Investment Officer Frank Holmes. If you add patience to your portfolio management strategy, holding discounted oil and gas and metals mining stocks is one way to leverage the price equilibrium that will come when China's growth hits the market. In this interview with The Energy Report , Fund Manager Brian Hicks shares the names of the juniors farther up the food chain that he is adding to the fund. The Energy Report: Brian, in your last interview with The Energy Report in May, you were watching the price of West Texas Intermediate crude as compared to the average of the past six major bottoms. What is the cha...

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From the Akron Beacon Journal: A new Ohio-Michigan coalition of businesses, trade groups and labor unions is trying to show a federal agency that there is widespread public support for natural gas pipelines.  The group, called the Coalition for the Expansion of Pipeline Infrastructure, includes the Ohio Chamber of Commerce, the Ohio Manufacturers Association, the Ohio Chemistry and Technology Council, the Ohio State Grange and the Ohio Hotel and Lodging Association.  Its formation comes at a time when two major pipelines to carry natural gas from Ohio’s Utica Shale to Michigan are seeking approval from the Federal Energy Regulatory Commission.  The $4.2 billion Rover Pipeline and the $2 billion Nexus Pipeline would cross northern Ohio. Locally, the Rover Pipeline would cross southern Stark and Wayne counties. The Nexus Pipeline would cross northern Stark, southern Summit and Medina counties. Continue reading about this article by clicking right here.   Visit...

From Bloomberg: Natural gas futures tumbled to the lowest since April 2012 as traders reacted to near-record inventories and mild weather that’s pushing back the start of winter demand for the heating fuel.  The eastern U.S. may be warmer than usual from Nov. 1 to Nov. 10, according to Commodity Weather Group. Stockpiles totaled 3.81 trillion cubic feet Oct. 16, 4.5 percent above the five-year average, according to a government report . Bank of America Merrill Lynch analysts lowered their year-end price target.  “The pressure is on here with the lack of weather and the storage situation,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. “It’s really gotten the attention of a lot of investors suddenly just how oversupplied we are.” Natural gas for November delivery fell 22.4 cents, or 9.8 percent, to settle at $2.062 per million British thermal units on the New York Mercantile Exchange, the lowest since April 26, 2012. Futures touc...

From StateImpact Pennsylvania: Environmental lawyers say they may have to craft new legal strategies to effectively challenge interstate pipeline construction decisions by the Federal Energy Regulatory Commission. Activists continue to accuse FERC of acting as a rubber stamp when it comes to approving pipeline projects. They argue the agency does not do an adequate environmental review that includes regional and indirect impacts associated with natural gas production, and the cumulative effect of thousands of miles of new pipelines. FERC denies this, repeatedly saying their environmental reviews are rigorous and any impacts from natural gas production are not the result of pipeline construction.  Either way, some environmental attorneys say the deck is stacked against them when challenging FERC’s decisions. Although the federal Natural Gas Act requires the agency to issue a decision on appeals within 30 days, FERC can extend the deadline indefinitely by issuing what is called a...

From Phys.org: As debate roils over EPA regulations proposed this month limiting the release of the potent greenhouse gas methane during fracking operations, a new University of Vermont study funded by the National Science Foundation shows that abandoned oil and gas wells near fracking sites can be conduits for methane escape not currently being measured.  The study, to be published in Water Resources Research on October 20, demonstrates that fractures in surrounding rock produced by the hydraulic fracturing process are able to connect to preexisting, abandoned oil and gas wells , common in fracking areas, which can provide a pathway to the surface for methane.  A recent paper published in the Proceedings of the National Academy of Science showed that methane release measured at abandoned wells near fracking sites can be significant but did not investigate how the process occurs.  "The debate over the new EPA rules needs to take into account the system that fracki...

The Ohio Department of Natural Resources has made available the latest weekly permitting update, which covers the week ending Saturday, October 24. Like the previous few weeks, the latest report shows a lot of activity.  23 new permits were issued last week for horizontal drilling in Ohio's Utica shale.  14 of those 23 permits were for wells in Belmont County.  Five of those 14 went to Ascent Resources, four were for Gulfport Energy, three for XTO Energy, and two for Rice Drilling.  The remaining nine permits on the report were all issued to Antero Resources.  Five of those were for Noble County and four for Monroe County. Despite the total number of permits listed being 23, the cumulative total of permits issued increased by only 19.  That brings the new total for permits to 2,066.  1,624 wells have been drilled, 1,026 are producing, and the Utica rig count is at 24. View the report in its entirety below. Connect with us on Facebook and Twi...

From The Christian Science Monitor: October has been billed as a pivotal month in which indebted shale companies would see their credit lines cut, precipitating a faster consolidation in the industry that would sow the seeds of a rebound.  But banks appear to be taking a more lenient approach than expected. A new Jeffries report says that only $450 million in borrowing bases have been cut, across more than 20 companies. That amounts to just 2 percent of available credit lines, much lower than the 15 percent reduction expected by analysts. In other words, banks are allowing drillers to continue to borrow, which could delay the inevitable balancing needed in the market.  The possibility of a wave of bankruptcies could be put on hold, after banks have been “surprisingly gentle,” as Jeffries put it in their report.  That doesn’t necessarily mean that indebted shale companies can right the ship. It may just delay the adjustment for oil markets. “It looks generally to...

From the Akron Beacon Journal: The Portage County Board of Health on Tuesday voted to seek a moratorium on new injection wells.  The request will go to the Ohio Deoartment of Natural Resources that oversees such wells.  The Portage health board becomes the first county health department in Ohio to declare injection wells a threat to human health and the environment.  County commissioners in Portage, Ashtabula, Trumbull and Athens have called for a moratorium on new injectrion wells. Read more by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From the Pittsburgh Business Times: "Given this potential for lower long term gas prices, we do not think it prudent to invest much money in wells whose all-in, after tax returns exceed our investment hurdle rates by only a relatively small amount," said David L. Porges , EQT's chairman, president, and CEO during an earnings call Thursday. "As a result, we are suspending drilling in those areas such as central Pennsylvania and our Upper Devonian play that are outside that core."  EQT owns acreage as far south as central West Virginia and as far east as northeastern Pennsylvania near Scranton, but the core of its drilling operations has focused on southwestern Pennsylvania in Greene, Washington, and Westmoreland counties. That core will become even more focused to the Utica , a shale layer below the Marcellus.  "There have been fewer than 10 wells drilled and completed in the deep Utica around our acreage, so it is still too early to say that the play...

From Forbes: Barring an oil price snapback, 2016 will be a year of restructurings, asset sales, and more layoffs. As Schlumberger CEO Paal Kibsgaard said on recent call with investors: “The likely recovery in our activity levels now seems to be a 2017 event.”  So what are laid off workers to think? Is there any hope of finding a new job in this environment?  There are some bright spots, says Steve Morse of Russell Reynolds Associates. The “downstream” or refining sector has been booming, benefitting from access to cheap oil. “It’s the opposite of the upstream,” says Morse. “We are helping clients in the downstream attract functional talent” that in recent years had been attracted to the more glamorous upstream companies.  And there’s also still plenty of opportunities for talented younger executives. “The companies we work with recall the 1980s” when oil prices collapsed and “the majors stopped hiring at the university level for eight years,” says Morse. And they ...

From Inside Climate News: While opponents wait for the Obama administration’s carbon regulations to become official before suing to block them, state environmental agencies have been busy studying compliance options.  The Clean Power Plan, which requires states to reduce carbon dioxide emissions from power plants 32 percent by 2030, is intended to help slow climate change resulting from the burning of fossil fuels. The plan has been the target of legal challenges and legislative campaigns since it was proposed in 2014 and finalized in August.  At least 14 states, including many in coal country, are gearing up to pursue litigation once the rule is finally published in the Federal Register, the official record of government regulations, which will likely happen tomorrow . Although the administration argues the Clean Power Plan will create economic opportunity—one study by economists predicted it will create a quarter of a million jobs — and speed up the transition to a cl...

From CNBC : Continued demand growth and falling production should help to end a protracted slump in energy prices in 2016, Hess CEO John Hess said Thursday. "Nothing cures a low price like a low price. The seeds have been planted for a slow recovery in oil prices," he told CNBC's "Squawk Box." "It takes about two years for the market to rebalance, and we're in the first year of that two-year period."  Hess noted that global investment in exploration and production has fallen from $700 billion last year to $550 billion this year. With U.S. crude prices having slid to about $45 per barrel again, he said investment will sink even further in 2016. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From a Baker Hughes press release: Revenue for the quarter was $3.8 billion, down 39% compared to the third quarter of 2014. Compared to the prior quarter, revenue declined$182 million or 5%.  On a GAAP basis, net loss attributable to Baker Hughes for the third quarter was $159 million or $0.36 per diluted share.  Adjusted EBITDA (a non-GAAP measure) for the third quarter of 2015 was $522 million, an increase of $63 million or 14% sequentially, and a decrease of $666 million or 56% compared to the third quarter of 2014.  Adjusted net loss (a non-GAAP measure) for the third quarter of 2015 was $22 million or $0.05 per diluted share. Adjusted net loss for the third quarter excludes $191 million before-tax or $137 million after-tax ($0.31per diluted share) in adjustments. The adjustments include restructuring charges of $98 million before-tax or $70 million after-tax ($0.16 per diluted share) and $93 million before-tax or $67 million after-tax ($0.15per diluted share...

From NGI: Chesapeake Energy Corp. has been fined more than $2.1 million by the U.S. Department of Interior for repeatedly underreporting natural gas production volumes in Oklahoma.  Interior's Office of Natural Resources Revenue (ONRR) said Monday that Chesapeake had failed to comply with an October 2011 order that found "repeated, systemic errors" in monthly reporting of gas produced and sold from more than 100 leases on land owned by tribes and individual Native Americans. ONRR had ordered Chesapeake to restructure its monthly reporting system as part of a review to correct any unreported/misreported volumes.  "While the company assured ONRR it had corrected the reports, follow-up checks still found additional errors," said Interior's Paul A. Mussenden, deputy assistant secretary for natural resources revenue management. "Correct royalty reports, especially on American Indian leases, are essential for ONRR to ensure all royalties are paid, to pr...

From Bloomberg: Halliburton Co. cut another 2,000 jobs in the past month as the worst oil market slump in decades saps demand for work at the world’s largest provider of fracking services.  The Houston-based company said the first quarter of next year may represent the lowest point for its North American profit margin as customers start fresh with new spending budgets for 2016 and tap Halliburton’s pressure-pumping expertise to start new wells. The comments came after the company reported a third-quarter loss of $54 million.  "The pumping business in North American is clearly the most stressed segment of the market today, but it’s also the market we know the best," President Jeff Miller told analysts and investors Monday on a conference call. "This is the segment that we expect to rebound the most sharply." Oil has swung between a bear and a bull market in North America this year as the drilling rig count slid. Explorers have cut more than $100 billion from gl...

From Bloomberg: Hess Corp., the oil and gas explorer that’s aggressively shed assets in recent years, is seeking buyers for its holdings in the Utica Shale basin, people with knowledge of the matter said. The New York-based explorer is working with Goldman Sachs Group Inc. to solicit bids for the assets, which could fetch as much as $500 million, said the people, who asked not to be identified because the matter is private.  Goldman Sachs recently started sending teasers out to potential buyers, describing the assets up for grabs, one of the people said. Hess is selling its 50 percent stake in a joint venture in the region that it created in 2011 with Consol Energy Inc., the people said.  Representatives for Hess and Goldman Sachs declined to comment. Click here to read more. Hess has already sold 74,000 of the 95,000 acres it had acquired in the Utica shale, which doesn't include the 65,000 acre joint venture with Consol referenced in this article.  But now it...

The Ohio Department of Natural Resources has released the latest weekly update for permitting in the state's Utica shale formation. Following the trend of the past few weeks, permitting activity numbers were up.  21 permits are listed on the report.  Further following the trend of the past few weeks, many of the permits listed are ones that have been re-issued and already were listed on previous reports from the ODNR.  In total there have been 72 permits listed on the last three weekly permitting updates, but the cumulative number of wells permitted has increased by only 30 over that time frame. Of the 21 permits lasted on the latest report, 13 are for Belmont County.  Three of the permits are in Carroll County, three in Monroe County, and the remaining two were issued for Noble County. The cumulative total of wells permitted increased by just six since last week, rising to 2,047.  The number of wells drilled now sits at 1,614, and the producing well count...

From Gas & Oil: This time last year, Ohio had 42 drilling rigs operating in the state targeting the Utica/Point Pleasant formation. Today, more than half of them have been idled or simply moved to other states. Falling commodity prices have caused significant turmoil in the oil and gas industry in Ohio and across the United States. The question foremost on many people’s minds would be “What does this mean for the Utica?” It’s a great question given the fact that this is still a relatively new play and producers haven’t really hit the development phase yet. The good news is, we are not alone. Across the United States alone, more than a thousand rigs have been laid down since this time last year. The reason is simple, OPEC has decided to wage an economic war on the U.S. domestic oil and gas industry. Commodity prices for oil, natural gas and natural gas liquids have dropped considerably which is great for the consumer, but for those in the industry it has created some serious...

From the Youngstown Vindicator: The Mahoning County Democratic Party today announced that it has endorsed a "No" vote on the Youngstown city charter amendment banning fracking. The vote was unanimous.  “The members of the executive committee were unanimous in opposition to amending the charter banning fracking. The group knows full well this is a total waste of the taxpayers' precious funds,” chairman David Betras stated after the vote. He urged all city residents to vote “no” on this "job-killing amendment." Read the whole article by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From NGI: Schlumberger Ltd., the world's largest oilfield services operator and industry bellwether, delivered somber third quarter results, with CEO Paal Kibsgaard warning that the worst isn’t over.  During a lengthy conference call Friday morning, Kibsgaard said the fourth quarter now "looks challenging and visibility had actually dropped in the past month or two...We also expect rig activity in North America land to be down in the fourth quarter because of the financial stress on many of our customers there, and we expect very limited year-end sales of product, software and multiclient…”  The first quarter actually looks like it’s going to be worse than the last three months of this year.  Schlumberger's macro view "has not changed in terms of a tightening supply and demand balance and an expected improvement in oil prices," but "we have to factor in that the likely recovery in our activity levels now seems to be a 2017 event." Click here t...

From Crain's Cleveland Business: Prices are down and have been for a while, drillers have dramatically slowed the rate at which they're drilling in Ohio and many energy companies invested in the Utica Shale have cut costs and laid off employees.  But Ohio still has a great chance to not only continue to cash in on the Utica shale's natural gas, but also to capitalize on its ethane by building an ethylene processing and plastics industry around the shale play, says a national expert on the petrochemical industry.  Tom Gellrich, a noted expert on ethane and the related chemical industry gave that upbeat message to an audience of about 150 people at the Utica III conference, held by the Canton Regional Chamber of Commerce on Oct. 13 at Kent State University's Stark County campus.  Gellrich is one of the best experts to hear from when it comes to the ramifications of Ohio's ethane, said David Kaminski, vice president for public policy and energy for the Canton C...

From The Intelligencer/Wheeling News-Register: Any displaced coal miners or power plant workers who worked in Ohio may be eligible for retraining to work in the Marcellus and Utica shale industry, thanks to a $ 2 million grant from the Obama administration. Even as the administration's Clean Power Plan, Mercury and Air Toxics Standards, and Stream Protection Rule continue threatening coal industry jobs, the $ 2 million grant to the Ohio Department of Job and Family Services will allow out-of-work coal miners to receive new training to work in the oil and natural gas industry.  The cumulative $ 14.5 million worth of grants totals what the administration calls a "down payment" on a proposed $ 10 billion stimulus plan for areas impacted by coal industry related job losses. The funding is part of the administration's Partnership for Opportunity and Workforce and Economic Revitalization Initiative. Read more by clicking here. Connect with us on Facebook and Twitte...

From Business Journal Daily: As he stood beneath a 15-ton crane on the manufacturing floor of BOC Water Hydraulics, it became obvious why Republican presidential candidate Sen. Marco Rubio had chosen Salem to unveil his energy policy.  The future of American energy, he said, lies with oil and natural gas, not solar and wind power. And areas like Columbiana County where shale drilling is happening – coupled with companies like BOC manufacturing parts for those projects – is where innovation and economic boosts will come from, he said.  Before a standing-room-only crowd of nearly 250, Rubio laid out the three priorities for his energy policy: minimize bureaucracy, maximize private innovation and optimize the available energy resources.  “The $100 billion of natural gas and the $550 billion of oil beneath our feet are doing more to help the people of Ohio and doing no good pent up in shale rock,” Rubio said. “Yet Barack Obama and Hillary Clinton are arguing that it’s...

by Katie Brown, Energy in Depth The same research team that appealed to anti-fracking activists  Josh Fox ,  Mark Ruffalo  and  Yoko Ono  after their work was rejected by the National Institutes of Health for not being “ good enough to be funded ” has just published a  new study  proclaiming that exposure to endocrine disrupting chemicals (EDCs) in fracking fluid causes low sperm count in mice. Before we get into the numerous flaws (and absurdities) of the study, it’s worth noting that the supervising researcher, Susan Nagel, has not exactly kept her anti-fracking bias under the radar. In addition to  tweeting  at the most prominent anti-fracking celebrities asking them to fund her work, she also recently  appeared alongside  Sandra Steingraber, co-founder of New Yorkers Against Fracking (who,   according to that group , “is a central voice in the fight against fracking”) for an interview proclaiming the “dangers” of frack...