The Daily Digger

From Clevescene.com: The Federal Energy Regulatory Commission today approved the NEXUS pipeline project and its environment impact on Ohio communities. (The pipeline will also travel through Michigan to Canada; it was approved in its entirety.)  As far as Northeast Ohio is concerned, the pipeline is planned to run through fairly dense, almost suburban portions of Stark, Summit, Medina and Lorain counties. The 36-inch pipeline covers 256 miles, all told. The FERC environmental impact statement admits there will be "some adverse environmental impacts." The commission will establish an environmental compliance inspection program as the NEXUS project continues, watching for parent company Spectra Energy's compliance with environmental regulations. Read that whole article by clicking here. The NEXUS project has encountered no shortage of opposition in Ohio.  Despite court rulings on lawsuits that were filed to block NEXUS surveyors from doing their jobs in some commu...

by Seth Whitehead, Energy in Depth The International Energy Agency’s ( IEA )  2016 World Energy Outlook  was released this week, and it notes that natural gas will be one of the “clear winners” over the next 25 years, while oil demand will continue to grow and production will remain “pivotal for energy security.” These are two big reasons the report emphasizes that “ the era of fossil fuels is far from over ” and that “natural gas and oil  will continue to be a bedrock  of the global energy system for many decades to come.” In the IEA’s New Policies scenario — which the agency considers the most likely set of circumstances, because it includes existing climate policies and assumes declared policy intentions are followed through on — global demand for natural gas will grow  50 percent  by 2040. IEA predicts this will spark increased production,  two thirds  of which will come from the U.S., primarily from the Marcellus and Utica shale plays....

From CNBC: Oil prices jumped as much as 8 percent on Wednesday to a five-week high as some of the world's largest oil producers agreed to curb oil output for the first time since 2008 in a last-ditch bid to support prices.  Brent crude futures for delivery in January were up $3.67, or 7.9 percent, at $50.05 a barrel by 11:38 a.m. ET (1638 GMT), recovering from a drop of nearly 4 percent on Tuesday and on course for their biggest one-day move in nine months. Brent crude for delivery in February was up $3.63 at $50.95 a barrel.  U.S. West Texas Intermediate (WTI) crude futures rose $3.50, or 7.7 percent, to $48.73 a barrel, a one-week high. The Organization of the Petroleum Exporting Countries has agreed its first output limiting deal in eight years, OPEC said on Wednesday. Read that whole article by clicking here. Reuters shares these details: Saudi Arabia would contribute around 0.5 million bpd by reducing output to 10.06 million bpd, the source said, while Iran...

From the U.S. Energy Information Administration: A number of pipeline projects that have been approved, or are in various stages of the approval process, would increase capacity to transport natural gas from the Utica production region in Ohio to natural gas markets. Collectively, these projects could add up to 6.8 billion cubic feet per day (Bcf/d) of takeaway capacity out of the Utica region by the end of 2018.   Over the past several years,  natural gas production in the Appalachian basin from the Marcellus and Utica shales  has grown significantly. Because pipeline projects often have longer lead times than production projects, transport infrastructure for accessing natural gas demand centers and export locations in the Appalachian Basin has not kept pace with production capability. This situation has resulted in a lower price for natural gas from the Appalachian region  relative to many other natural gas trading hubs  in the United States.   Cons...

Typically the weekly Utica shale permitting report from the Ohio Department of Natural Resources reflects decreased activity during a holiday week, and last week was no exception. Only two new permits were issued last week, one for a Belmont County well site and one for a Monroe County well.  The Utica rig count fell for the first time in several weeks, dropping from 21 on the previous report to 19 on this one. The cumulative totals now stand at 2,312 wells permitted, 1,856 wells drilled, and 1,468 wells producing. Read the report below or click here to download it. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Seeking Alpha: Chesapeake Energy's (NYSE: CHK ) credit ratios continue to not improve. Put another way, Chesapeake has failed to deleverage - despite reducing net debt by dollar volume. This is also despite costly financial engineering; which has seen the junior tranches of the capital structure further primed and all but abandoned in a comprehensive usurping of enterprise collateral. In fact, despite all this, Chesapeake's credit ratios continue to deteriorate. Yes, deteriorate. They have been for several quarters now, sequentially.  That Chesapeake's credit ratios continue to deteriorate is a scary realization for those long any junior exposure - specifically, the last-in-seniority equity class. This is something I've been watching for a while now. In this note, I'll reiterate and update. First though, I should lay out some housekeeping items.  The revenue numbers in the data visuals below are NOT taken from SEC filings but from Thomson Reuters' I...

From The Detroit News: A national environmental group has filed an antitrust complaint against DTE Energy over its proposed natural gas pipeline, alleging the project will raise consumer energy prices above competitive rates.  The Sierra Club filed the complaint in response to a planned 250-mile, multi-billion dollar pipeline, partially financed by DTE and affiliate Nexus Gas Transmission, LLC. The project is slated to deliver natural gas from Ohio to Michigan, officials said in their complaint .  "DTE Electric has contracted to buy delivery of natural gas over the pipeline for use in generating electricity for resale to Michigan retail customers. When DTE Electric entered into this contract, at least six alternative sources of gas were available to transport the needed supply," officials said. "All six offered transportation services at lower rates than Nexus Nonetheless, DTE Electric contracted to buy gas from (the) proposed pipeline, despite the availability of...

From NGI: The combined value of Ohio's oil and natural gas production last year came in under $3 billion, or about $130 million less than it was in 2014, according to an annual mineral industries report released this week by the Ohio Department of Natural Resources' (ODNR) Division of Geological Survey.  Oil and natural gas production was valued at more than $3.1 billion in 2014. Despite a banner year for production, low oil and gas prices brought down the value of production in the state to about $2.97 billion last year. ODNR said that while the value of natural gas in the state last year actually increased by 2.1% from 2014, the value of oil was down by nearly 18% year/year.  The report, which provides economic information about the state's extraction industries, was changed for the 2015 reporting year. The detailed oil and gas portion of the analysis was excluded to eliminate duplicate reporting by the Division of Geological Survey and ODNR's Division of Oil ...

The latest weekly report on Utica shale permitting from the Ohio Department of Natural Resources shows activity on the increase. 13 new permits are listed on the report.  Five of those are for Belmont County wells, while Guernsey and Monroe counties each had four new wells permitted.  The rig count increased for the third straight week, going from 19 to 21. The cumulative totals are now 2,311 wells permitted, 1,851 wells drilled, and 1,468 wells producing - an increase of 36 producing wells from the previous week's report. View the latest report below or by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Reuters: U.S. shale producers are redeploying cash, rigs and workers, cautiously confident the energy sector has turned a corner after Donald Trump's election victory and OPEC's recent signal that it plans to curb production.  The downturn produced a leaner, more efficient U.S. shale industry that was forced to develop and quickly adapt new technology to compete with conventional oil supplies during a two-year period of depressed prices. "You're starting to see a little bit of light at the end of the tunnel," Ryan Lance, chief executive of ConocoPhillips, the largest independent U.S. oil producer, said in an interview last week. "We're beginning to put capital back to work, but we're being cautious."  Specifics of the deal by the Organization of the Petroleum Exporting Countries - especially what it means for each member - need to be finalized at a meeting later this month in Austria. But the tentative agreement indicated OPEC kingpin...

From Valuewalk: Carl Icahn has offloaded all his Chesapeake Energy shares and Transocean shares. This does not come as a surprise, as Icahn has been selling his stake in Chesapeake for quite some time now, reports Investopedia.  In August, he reduced his stake from 9.4% to 4.5%, citing tax planning as the reason. The billionaire investor held close to 73 million shares worth about $239 million at the end of 2015.  Icahn seems to be rebalancing his position in the energy industry, as he maintained his stake in Chenier Energy and Freeport- McMoRan, notes Investopedia. Further, he offloaded 250,000 shares in CVR Refining LP (CVRR); he had owned about 6 million shares worth roughly $113 million as of Dec. 31, 2015.  In October prior to the third quarter conference call, Chesapeake Energy revised its production guidance and stated that it cannot achieve a cash neutral position until 2018. Earnings per share for the third quarter were reported at 9 cents per share, ...

From The Daily Caller: The head of the Environmental Protection Agency (EPA) urged employees to finish out the last weeks of the Obama administration “running” to finish implementing what they can of the president’s environmental agenda.  “As I’ve mentioned to you before, we’re running — not walking — through the finish line of President Obama’s presidency,” EPA Administrator Gina McCarthy wrote in an email to staff after Republican nominee Donald Trump won Tuesday’s election.  “Thank you for taking that run with me. I’m looking forward to all the progress that still lies ahead,” McCarthy wrote, according to Politico .  Trump has promised to rollback EPA rules put out under President Barack Obama, including the agency’s signature global warming regulation, the Clean Power Plan. So, EPA and other regulatory agencies are likely to push through a slew of “midnight regulations” before Obama leaves office. Read the rest of the article by clicking here. Connect wit...

From NGI: A Chesapeake Energy Corp. subsidiary has sold 27 Utica Shale wells and 37,000 net acres in Northeast Ohio and Western Pennsylvania to Geopetro LLC, a Worthington, OH-based legacy producer. Terms of the sale were not disclosed.  Geopetro said in an announcement that the package includes 22 producing wells that averaged 24 MMcf/d during the first half of this year. One of the wells produces oil and gas from the Upper Devonian shales and the others produce primarily from the Utica. The company also acquired five drilled and completed wells that are awaiting pipeline connection.  Chesapeake Appalachia LLC sold the assets, which are located in Columbiana County, OH, and Beaver County, PA. The sale closed on Oct. 27. Read the whole article by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

by Jackie Stewart, Energy in Depth It’s been a rough road for Ohio public schools. In February the Washington Post headlined a story entitled, “ The education mess in Ohio under Gov. John Kasich ,” outlining the fact that traditional public schools, which make up 90 percent of the schools, are receiving  $515 million less state funding than they did in 2010.  As result, school districts have been forced to invoke levies on their districts asking residents to pay more property tax to make up the shortfall. But now, thanks to fracking and infrastructure projects coming online, such as the over $8 billion in pipelines and $7.8 billion in natural gas-fired power plants, local schools are about to receive  $270 million (per year) –  not from taxpayers – but from the oil and natural gas industry . Utica Shale to the Rescue According to an August 2015 report  by the progressive think tank Innovation Ohio, public schools rely almost exclusively on property taxe...

From Bloomberg: Some U.S. oil policies are likely to shift significantly when Donald Trump assumes the presidency next year. While details remain sketchy, he’s highlighted a number of areas where he differs significantly from current policy.   Relations with the Middle East and OPEC   Donald Trump has been critical of both Saudi Arabia and Iran during the campaign. He said that he was  not a "big fan"  of the Saudi government in a 2015 appearance on NBC’s "Meet the Press" and told the New York Times in March that he might  stop buying oil  from Saudi Arabia and other Arab countries unless they committed ground troops to combat Islamic State or reimbursed the U.S. for its efforts.   Trump is also opposed to the  nuclear deal  with Iran that unlocked the country’s oil exports. He said in a speech to the American Israel Public Affairs Committee in Washington in March that his “No. 1 priority is to dismantle the disastrous deal with ...

From The Blade: Waterville City Council will be asked Monday night to essentially ratify the will of its residents — or, if not that, make arrangements for it to be automatically done by a certification of votes cast for Issue 3 at Tuesday’s election.  By a resounding 60-40 percent majority, voters approved a community bill of rights that calls for the city charter to be amended in such a way that forbids more natural gas infrastructure from being built within the city limits. The article also continues later: Adam Parker, NEXUS spokesman, said the ballot initiative does not affect NEXUS’s route or timeline.  “NEXUS is a federally regulated interstate natural gas pipeline, and the Federal Energy Regulatory Commission has exclusive jurisdiction to approve the route of the project,” Mr. Parker said. “NEXUS remains on track to receive its final environmental impact statement from FERC on Nov. 30, 2016, and its FERC Certificate in the first quarter of 2017. Read the ent...

by Lily Emamian, Energy in Depth In an  interview  for the  Bulletin of the Atomic Scientists , Steven Chu, President Obama’s Secretary of Energy from 2009 to 2013, touted the environmental and energy security benefits of fracking. The Nobel laureate also easily debunked the politically motivated claims of the “Keep-It-In-The-Ground” movement. When he was asked if he had wished he had helped to tighten regulations on fracking and made it “more difficult to produce natural gas” while he was at the Department of Energy, Chu said, “Well, I have a different view on fracking actually.” Chu went on to explain that natural gas is responsible for reducing our carbon emission in the United States.  As he  put it , “And then the question is: What would you want? Fracking and new natural gas resources have enabled us to switch from coal to natural gas – which is much cleaner, and decreases carbon emissions.” Chu also signaled that he agrees with a comprehensive...

The Ohio Department of Natural Resources reported that only two new permits were issued for Utica shale drilling last week.  Despite the slow permitting week, the rig count continued to rise for the second straight week.  This time it went up by three, from 16 last week to 19 on the latest report. The cumulative total of permits for horizontal drilling in Ohio's Utica shale hit 2,300 with the two permits issued last week.  1,838 wells have been drilled, and 1,432 are producing. View the report below or by clicking here . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

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Seventy Seven Energy has released its 3rd quarter 2016 results.  Here is a portion of the company's press release: Key information related to SSE for the one month ended July 31, 2016 and two months ended September 30, 2016 is as follows: Emerged from bankruptcy on August 1, 2016, which reduced debt by $1.115 billion Net Loss of $36.5 million and $11.6 million for the two months ended September 30, 2016 and the one month ended July 31, 2016, respectively Consolidated Adjusted EBITDA of $8.5 million and $3.0 million for the two months ended September 30, 2016 and one month ended July 31, 2016, respectively 29 rigs currently operating; 22 additional rigs under contract Active rig count has more than doubled during the past six months For the two months ended September 30, 2016 and one month ended July 31, 2016, SSE reported total revenues of $79.7 million and $40.4 million, respectively, a 13% decrease compared to revenues of $138.1 million for the three months ended...

From Bloomberg: As U.S. natural gas production slows amid cost-cutting, one U.S. state is bucking the trend.  Gas output from Ohio, home to the Utica shale formation, jumped 13 percent in August even as supplies dropped across the bulk of the U.S., including the neighboring Marcellus play in Pennsylvania. Chesapeake Energy Corp., Rice Energy Inc. and Gulfport Energy Corp. drilled most of the new wells in the state, data from Bloomberg Intelligence show.  Producers are doubling down on Ohio amid speculation that gas flows from the Utica will eventually rival output from the Marcellus, America’s biggest shale reservoir. An energy price rout earlier this year strained explorers’ balance sheets, prompting drillers to refocus their efforts on regions that yield the most fuel at the lowest cost. Continue reading by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Many of our readers may already be aware that we've lost a wonderful friend.  Richard Cope (or as we affectionately referred to him, "Digger Dick") passed away peacefully at Carroll Healthcare Center yesterday with his family by his side. We know many of our advertisers and readers have known Dick for years, so we don't have to explain to them why he will be so sorely missed.  His positivity, generosity and sense of humor made him a great joy to spend time with.  And he loved interacting with people as he did sales work for us.  He continued to contact some of you about advertising from his room at the nursing facility, even renewing several ads just last week.  Even as his health was fading, you couldn't keep him down. On a personal level, my thoughts may echo those of many.  Spending time with Dick always meant I'd come away feeling better.  I'll miss our conversations - which so often ended up centering on the joy of watching Mount Union pla...

From The Blade: A proposed gas pipeline will not move forward in Waterville after voters approved a new community bill of rights that bans gas infrastructure within city limits.  Citizen group Protecting Air for Waterville collected more than 400 signatures to place the issue on the ballot after a proposed NEXUS pipeline was to cross the Maumee River in Waterville, with a compressor station built in Waterville Township.  Citizens have voiced concern over emissions, especially close to schools.  NEXUS intended to build the project in collaboration with Texas Eastern Transmission, which operates major pipeline in several states. They wanted to pump natural gas from the Utica and Marcellus shale regions in eastern Ohio and West Virginia to markets in Ohio, Michigan, and Canada. Both companies are subsidiaries of Houston-based Spectra Energy Corp. Read the article here. This ban, like others that have been passed in Ohio, will likely face a legal challenge.  ...

by Jackie Stewart, Energy in Depth Tonight, voters in the City of Youngstown soundly  rejected  an ill-advised “Community Bill of Rights” charter amendment that threatened the city from regaining its status as the economic powerhouse it once was.  The final vote tally shows the charter amendment was handily defeated, by over ten points. Community Environmental Legal Defense Fund (CELDF) and  Frack Free Mahoning  have now put this measure on the ballot six consecutive times – and taxpayers have had to foot the bill. In fact, the City of Youngstown taxpayers, prior to this most recent election, have already  spent $80,000 just to put the measure of the ballot . Given that it will cost the city at least another $15,000 (and likely a lot more due to voter turnout of a presidential year) means that the City of Youngstown taxpayers  have spent $95,000 minimum rejecting the so-called Community Bill of Rights . Thankfully after a thorough review of...

Now that Donald Trump has been elected as the next President of the United States, what is next for the energy industry? S&P Global Platts takes a look at that question in this video. You can view this video in its original location by clicking here.   Please note that we uploaded this video to YouTube to share it here because for some reason we just could not get the embed code from Platts to function correctly.  If you would like to share this video, please do so directly from Platts by visiting the link rather than sharing it from our YouTube video page, which will be removed if we can get the Platts embed to work. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From NGI: The Ohio Supreme Court has decided that landowners that challenge natural gas producers about post-production costs deducted from royalty checks will have to keep heading to trial courts to resolve the issues on a case-by-case basis.  The high court's long-awaited decision came on Wednesday after it accepted a certified question last year about whether the state follows the "at the well" rule, which allows post-production deductions, or if it follows some version of the "marketable product" rule, which limits post-production deductions, such as those for compression, dehydration and transmission.  "Under Ohio law, an oil and gas lease is a contract that is subject to the traditional rules of contract construction," the court wrote in its opinion. "Because the rights and remedies of the parties are controlled by the specific language of their lease agreement, we decline to answer the certified question."  So, any hope that th...

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After dipping to 15 a week ago, the Utica shale rig count is back up to 16 on the latest weekly permitting report from the Ohio Department of Natural Resources. There were 11 new permits listed on the report.  Every single one of them was issued to Hilcorp Energy for Columbiana County well sites.  This brings the cumulative total of permits issued to 2,298.  1,834 wells have been drilled and 1,433 are producing. The report can be viewed below or by clicking here . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog