The Daily Digger

by Jackie Stewart, Energy in Depth It’s all hands on deck to spread the word that when it comes to jobs, Ohio is hiring — and it’s largely due to the fact that the gross state product is approaching $100 billion thanks largely to shale investments,  according to JobsOhio . The upward trajectory of shale-related employment comes as no surprise, considering the latest federal government  data  show oil and gas activities led to the strongest statewide economic gains in 2017. This reality has led to headlines in Ohio reporting that  hundreds of jobs are currently available  in the Appalachian region. In response and in preparation for the surge in available jobs, the Ohio Oil and Gas Energy Education Program (OOGEEP) recently unveiled a series of 28 modern career videos highlighting more than 75 in-demand jobs associated with shale development. The goal? To address the supply and demand issues created by the surge of “in-demand” jobs which require well trained ...

From the Weirton Daily Times: James W. Wilson, Utica operations area lead for Hess Corp., with a Steubenville presence at 4525 Sunset Blvd., was the May 8 guest speaker at the Steubenville Kiwanis Club’s noon luncheon meeting held at the YWCA of Steubenville. Wilson, who was introduced by Kiwanian George Pugh, May program chair, is a native of North Dakota who has spent most of his career with a small independent oil company engaged in the drilling of small exploration projects and the acquisition of existing producing properties mostly in North Dakota, Montana, Wyoming and Utah. He has been with Hess Corp. since 2010 and recently transferred to Ohio to manage Ohio operations.  Hess is a Fortune 500 company, Wilson explained, with safety as its No. 1 priority; the environment as No. 2; and production as No. 3.  “In production we make about in the mid 300,000 barrels of oil equivalent a day throughout the world,” Williams said. “We are an international company. We’ve got ...

New permits issued last week:   1   (Previous week:  10 )  -9 Total horizontal permits issued:  2830   (Previous week:  2830 )  +-0 Total horizontal wells drilled:  2348  (Previous week:  2346 )  +2 Total horizontal wells producing:  1898  (Previous week:  1890 )  +8 Utica rig count:  20  (Previous week:  21 )   -1 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From the Pittsburgh Post-Gazette: After months of trying to find another way, Rex Energy Corp. is filing for bankruptcy.  The State College-based oil and gas company whose major holdings are leases and shale wells in Butler County, disclosed in its quarterly report with the Securities & Exchange Commission that it could not come to an agreement with its lenders after missing a debt payment in late April.  Rex said it would be seeking protection under Chapter 11 of the bankruptcy code imminently.  As of the end of last year, the company had 105 full-time employees. Only 17 of them work in the field as Rex uses independent contractors and consultants to do a lot of the drilling, fracking and associated work.  Founded in 2007, Rex has been shedding assets and looking for capital for some time now. Last year, it sold a substantial portion of its Ohio acreage to Antero Resources Corp. Earlier this year, it sold its interest in wells in Westmoreland, Centre a...

From Kallanish Energy: The shale industry has invested $63.9 billion in Ohio as of mid-2017, according to a JobsOhio official.  That private sector investment in the Utica Shale in eastern Ohio started in 2011, Dana A. Saucier Jr., senior managing director, Energy and Chemicals, Food & Agribusiness,said in an interview in Smart Business.  The $63.9 billion total includes upstream, midstream and downstream investments, Kallanish Energy reports.  To date, Ohio has permitted 2,830 Utica wells, of which 2,346 have been drilled and 1,890 are producing.  “Those looking to invest in Ohio’s shale opportunity have confidence in the state and the business environment it fosters,” he said. “The prevailing sentiment is that it’s an attractive place to deploy capital.”  Pipelines to move natural gas to market have brought “an uptick in additional investment in the last 12 months of around $10 billion,” he said. Read more by clicking here. Connect with us o...

New permits issued last week:   10   (Previous week:  7 )  +3 Total horizontal permits issued:  2830   (Previous week:  2820 )  +10 Total horizontal wells drilled:  2346  (Previous week:  2338 )  +8 Total horizontal wells producing:  1890  (Previous week:  1890 )  +-0 Utica rig count:  21  (Previous week:  22 )   -1 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Reuters: U.S. shale production is expected to rise by about 145,000 barrels per day to a record 7.18 million bpd in June, the U.S. Energy Information Administration said on Monday.  A majority of the increase is expected to come from the Permian basin, the biggest U.S. oil patch, where output is expected to climb 78,000 bpd to a fresh record of 3.28 million bpd, the EIA said in its monthly drilling productivity report here #tabs-summary-2.  Soaring Permian crude production has already outpaced pipeline takeaway capacity, depressing prices in the region and leaving traders scrambling for alternatives to get crude to market. Bakken output is expected to rise 20,000 bpd to 1.24 million bpd, the highest since June 2015, while Eagle Ford production is set to rise 33,000 bpd to 1.39 million bpd, the highest since February 2016.  Production in the United States has surged thanks to the shale boom, helping send U.S. crude futures’ discount to international benchmark ...

From The Intelligencer: To ensure the ground can support a $10 billion ethane cracker, officials are testing the soil at the former R.E. Burger plant along the Ohio River in Belmont County. Nearly two years ago, the 854-foot-tall smoke stack at the site fell to the ground after an organized sequence of explosions. Last summer, officials with Thailand-based PTT Global Chemical paid $13 million to acquire this property.  “This is part of our ongoing feasibility and engineering work, including permit-related activities required through our contractors and consultants,” said PTT spokesman Dan Williamson.  Early this month, PTT paid another $17.5 million to acquire the Ohio-West Virginia Excavating property, which is to the south and west of the Burger site. By combining the areas, the company controls about 500 acres for possibly building the ethane cracker.  Williamson, however, said this acquisition should not be considered confirmation of a final investment decisio...

From Seeking Alpha: While Chesapeake is showing some decent financial results, allowing it to use the proceeds from asset sales to pay down debt, the hole it is in may be too deep.  Its massive exposure to shale gas acreage remains a big impediment given that there are few signs of natural gas prices improving going forward.  By the time natural gas prices will improve, it will be because Chesapeake as well as other shale drillers will run out of prime natural gas drilling sites. After many years of deep losses incurred on its operations, specifically during the years when oil prices plunged, Chesapeake ( CHK ) is finally putting in some decent operating results, with the  Q1  net operating profit at $268 million, on revenue of $2.5 billion, it is a decent profit margin of almost 11%. This is in part thanks to higher oil prices, but also to a large extent due to drilling consolidation in the more profitable acreage within its asset portfolio, which ...

From Seeking Alpha's transcript of a 1st-quarter earnings call with Energy Transfer Partners: Now for an update on our other projects, and starting with Rover. As a reminder, Phase 1A was placed into service on August 31, 2017. And Phase 1B was placed into service on December 15 of 2017, allowing Rover to transport up to 1.7 Bcf per day.  And last week, as I mentioned, we received approval from FERC to place additional Phase 2 facilities into service. This approval allows for the full commercial operational capability of the Market Zone North Segment, inclusive of delivery into Vector [pipeline] for delivery to end users throughout Michigan and the Dawn gas hub. These latest approvals by FERC allow for approximately 75% of Rover capacity to be in service.  Construction of the full project is nearing completion. All HDD crossings have been completed. And we are progressing with final hydrostatic testing and tie-in work to achieve mechanical completion and expect to ask FE...

by Jackie Stewart, Energy in Depth Ohio Democratic gubernatorial candidate Dennis Kucinich made no bones about his  desire to ban fracking  in the Buckeye State during his campaign,  telling reporters  in January that “if elected Ohio governor, he’d use the office’s power to end the drilling technique known as hydraulic fracturing, or fracking” and that “it’s his goal to end all kinds of oil and gas drilling in Ohio.” The results of Tuesday night’s primary election speak volumes as to how Ohio citizens felt about Kucinich’s extreme “Keep It In the Ground” agenda. Kucinich not only lost, but lost big, falling by more than 40 percentage points to Democratic primary winner Richard Cordray, as the following New York Times graphic shows.   Source: New York Times Not only did Kucinich fail to win a single county, he also (quite predictably) faired particularly poorly in major Utica Shale counties. Kucinich managed to get no better than 24 percent of...

From Seeking Alpha's transcript of a 1st-quarter earnings call with Gulfport Energy: Turning to completions in the Utica Shale, we began the year very active, running two completion crews throughout the quarter and completing over half of our total planned stage count for 2018. During the first quarter, we averaged 6.3 stages per day and completed 737 stages in total, which includes 18 wells completed and 10 wells in progress at the end of the quarter, all of which Gulfport holds effectively 100% working interest. This robust level of activity weights a heavy number of turn-in-lines to the second and third quarters for the 2018 program. Despite several weather challenges and effectively zero turn-in-lines during the quarter, production came in at 1.03 Bcf equivalent per day, a decrease of only 1% from the fourth quarter of 2017. Again demonstrating not only the strength of our field operations, but also highlighting the quality rock we have in the Utica.  The Utica has becom...

Press release: The US Environmental Protection Agency (EPA) wants to know if wastewater produced during oil and gas production could be treated and discharged into lakes and rivers, rather than disposed of underground. EPA said today will take a "holistic look" at the regulation and management of wastewater from conventional oil and gas production and from hydraulic fracturing. Among the ideas the agency is considering is whether there is support for regulations to allow "broader discharge" into surface water. Oil and gas production generates large volumes of wastewater, often with high levels of salt and metal. The industry disposes of most of its wastewater through injection wells into underground aquifers. But EPA said it has becoming evident there are limits in how much wastewater can be disposed of in that manner in some areas. Oklahoma has restricted underground disposal because of concerns of links to earthquakes. And there have been concerns about disp...

From the Sentinel-Tribune: A citizen’s concerns about how the Nexus pipeline would be monitored prompted discussion at Monday’s Bowling Green City Council meeting.  During the lobby visitation portion of the meeting, resident Brad Holmes requested a more official proclamation from council or other city officials regarding plans to monitor the Nexus pipeline project. “It think it would be remiss to not address those concerns,” he said, because Nexus “is reality, it’s happening.” The $2 billion Nexus project, which would run near the city’s water treatment plant, brought out concerns that the proximity of the project to the Bowling Green fault and the city’s water intake on the Maumee River could pose risks such as seismic activity or water contamination. The issue was a major topic of discussion and debate throughout 2017, and was an impetus for a charter amendment initiative which, though it ultimately failed at the ballot box in November, spurred a legal case that went all the...

From Seeking Alpha's transcript of Eclipse Resources' 1st-quarter earnings call: Our team has also recently completed the drilling of the company's first Utica Shale well in Pennsylvania in our Flat Castle project area. This well has a total metric depth of 25,017 feet with a horizontal lateral extension of 13,900 feet. We drilled it on time and on cost. And we continue to be excited by the potential we see in the Flat Castle area. We look forward to bringing this initial well online late in the third quarter of 2018. As we have discussed in our recent Analyst Day event, the company made the strategic decision to reorder our drill schedule and focus on the condensate portion of our acreage. This decision has allowed us to take advantage of the improvement in the near-term oil pricing while, additionally, allowing us to achieve increased commodity product diversification. For the first quarter of 2018, all 5 of the wells that we turned to sales were condensate-rich wells. ...

From The Suburbanite: As construction continues to progress on the NEXUS pipeline, safety is seemingly on everyone’s mind.  Residents have spoken at several Green City Council meetings asking for officials to hold a town hall to discuss the pipeline. Those residents got their request when the city brought in several experts to speak about pipeline safety and what residents should expect.  The town hall, held at Queen of Heaven Parish Life Center, provided information from several speakers and those in attendance had the opportunity to submit questions to be answered.  Green Mayor Gerard Neugebauer said some people in the city may not have accepted the pipeline, but he asked those in attendance to put aside their differences.  “This meeting is about education,” Neugebauer said. “Safety as I see it is about being educated.”  The main speaker during the meeting was Executive Director of the National Pipeline Safety Trust Carl Weimer. The trust is an org...

From Business Journal Daily: The investment numbers are unlike any the region has witnessed in decades – more than $4.6 billion scattered across four counties in or around the Mahoning Valley where new, nimble and efficient electrical power plants are either in operation, under construction or under consideration.  It’s a signature of where growth in new energy will develop in America and what it will look like. This section of northeastern Ohio and western Pennsylvania – with its abundance of natural gas from the Utica and Marcellus shales – has emerged as the fulcrum for the industry’s future.  As older, less efficient power plants are retired or shut down, they’re being replaced with smaller, more cost-efficient combined-cycle plants that use natural gas and steam – not coal or nuclear power – to generate electricity for homes and businesses. “What’s happening in the industry right now is equivalent to the automobile replacing the horse and buggy,” says Bill Siderewic...

From Business Journal Daily: U.S. Rep. Tim Ryan called Monday for increased transparency in hydraulic fracturing.  Ryan, D-13 Ohio, last week signed on a co-sponsor of the Fracturing Responsibility and Awareness of Chemicals, or FRAC, Act. The legislation, introduced by U.S. Rep Diana DeGette, D-1 Colorado, has 61 cosponsors, all Democrats. The bill would establish “common sense safeguards” to protect groundwater from risks associated with hydraulic fracturing, or fracking, a technique used in oil and gas extraction. If approved, it would require disclosure of the chemicals used in fracking fluids and would remove the oil and gas industry’s exemption from the Safe Drinking Water Act. “There’s no denying that there are immense climate-related benefits and economic benefits associated with the transition to natural gas, particularly here in Ohio. Even still, we must be vigilant ensuring that such benefits do not come at the expense of the health and wellness of our communities,...

From The Intelligencer: PTT Global Chemical officially controls about 500 acres for building the Belmont County ethane cracker, as a deed filed this week shows the Thailand-based firm paid about $17.5 million to acquire the Ohio-West Virginia Excavating property, a parcel of about 350 acres. Last summer, the company paid more than $13 million to purchase the former R.E. Burger power plant property, a parcel of about 150 acres, from FirstEnergy Corp. The $30.5 million in land deals are in addition to the $150 million officials said they spent so far on engineering and design work for the proposed petrochemical plant.  Still, the $180.5 million seems somewhat minuscule compared to the potential overall price tag, which officials said could now go as high as $10 billion.  “This is yet another milestone for the project,” said PTT spokesman Dan Williamson on Wednesday. “It is clearly a positive step that shows the company continues to make progress.”  Williamson, howev...

Press release: Energy Transfer Partners, L.P.  (NYSE: ETP) announced today that  Rover Pipeline, LLC  received approval from the  Federal Energy Regulatory Commission  (FERC) to place additional Phase 2 facilities into service. Last week, FERC granted Rover permission to place a segment of Phase 2, which included  Mainline Compressor Station  3 located in  Crawford County, Ohio , and a section of the line between  Mainline Compressor Station  2, in  Wayne County, Ohio , and  Mainline Compressor Station  3, in service for additional throughput opportunity. The approval from FERC granted today allows for the full commercial operation capability of the Market Zone North Segment. Phase 1 of the project was also placed into service in segments, with the first portion going into service  August 31, 2017 , and the remaining segment of Phase 1 going into service in December of 2017. Since  December 2017 , Rover ha...

From Reuters: Chesapeake Energy Corp’s ( CHK.N ) quarterly profit exceeded analysts’ estimates on Wednesday, as it produced more oil and natural gas at higher prices while continuing to lower costs, pulling shares in the company around 3 percent higher.  Chesapeake’s production rose nearly 5 percent to 554,000 barrels of oil equivalent per day (boepd), while its number of gross wells supplying to the market dropped 25 percent.  The Oklahoma-based company’s average realized oil price rose 10 percent to $56.89 per barrel in the quarter, while its natural gas price rose nearly 16 percent. That was in line with the trend among U.S. producers this quarter, who have all benefited from a roughly one-third rise in prices of U.S. light crude CLc1 compared to a year ago. But the company also said a 4 percent fall in how much it pays to gather, process and transport its oil and natural gas had led to a reduction in overall costs per barrel on a combined basis. Read the whole artic...

New permits issued last week:   7   (Previous week:  6 )  +1 Total horizontal permits issued:  2820   (Previous week:  2815 )  +5 Total horizontal wells drilled:  2338  (Previous week:  2333 )  +5 Total horizontal wells producing:  1890  (Previous week:  1888 )  +2 Utica rig count:  22  (Previous week:  24 )   -2 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

by Jackie Stewart, Energy in Depth The first ever and  award winning  Utica Shale study to examine the root source of methane (CH4) linked to fracking has finally been published in a scientific journal. The long awaited multi-year University of Cincinnati (UC) groundwater study that found no impacts from fracking was finally published this week in the peer-reviewed journal  Environmental Monitoring Assessment  – more than two years after researchers  first announced  its findings. The study was also blessed by the Ohio Environmental Council in 2014 as their  recipient  for the “Science and Community Award.” Notably, the study’s topline conclusions echo comments made by the report’s lead researcher and a master thesis that was uncovered by EID two years ago, stating: “We found  no relationship  between CH4 concentration or source in groundwater and proximity to active gas well sites.” “… our data  do not indicate any intrus...