The Daily Digger

WEEK ENDING 12/14/19 New permits issued last week:   15  (Previous week:  9 )   +6 Total horizontal permits issued:  3205  (Previous week:  3217 )    -12 Total horizontal wells drilled:  2725  (Previous week:  2740 )   -15 Total horizontal wells producing:  2422  (Previous week:  2421 )   +1 Utica rig count:  12  (Previous week:  11 )   +1

From the ODNR: COLUMBUS, Ohio  – During the third quarter of 2019, Ohio's horizontal shale wells produced 7,200,304 barrels of oil and 673,962,146 Mcf (674 billion cubic feet) of natural gas, according to the figures released today by the Ohio Department of Natural Resources (ODNR). These totals are new state records for quarterly oil and natural gas production since quarterly reporting began in 2013.   Compared to a year ago, oil production increased by 29.84% and natural gas production showed a 11.27% increase over the third quarter of 2018.                           The ODNR quarterly report lists 2,470 horizontal shale wells, 2,419 of which reported oil and natural gas production during the quarter. Of the wells reporting oil and natural gas results:   • The average amount of oil produced was 2,977 barrels. • The average amount of natural gas produced was 278,612 Mcf. • The average number of...

WEEK ENDING 12/07/19 New permits issued last week:   9  (Previous week:  10 )   -1 Total horizontal permits issued:  3217  (Previous week:  3216 )    +1 Total horizontal wells drilled:  2740  (Previous week:  2736 )   +4 Total horizontal wells producing:  2421  (Previous week:  2367 )   +54 Utica rig count:  11  (Previous week:  11 )   +-0

by Nicole Jacobs, Energy in Depth Over the weekend, the  Pittsburgh Post-Gazette  published an  article  detailing a Carnegie Mellon University study that claims to have calculated cumulative environmental and employment impacts of the shale revolution that has positively transformed Pennsylvania and surrounding states in the Marcellus and Utica Shale basins. The research focuses on finding negative consequences; however, numerous studies – including a state Department of Environmental Protection  report  covered by the  Post-Gazette  last summer – have found an abundance of environmental, economic, and public health benefits that are attributed to natural gas development. Here are just a few examples of the science and data that contradict this latest attempt to detract attention to these benefits: Energy Information Administration  data released last month found 2,823 million metric tons in U.S. CO2 emissions reductions are credited...

From Bloomberg: With moves to ban new natural gas hook-ups growing in popularity as a means of tackling climate change, the industry is fighting back. The American Gas Association , which represents distributors, is seeking to forge new alliances to counter a trend started by Berkeley -- which became the first U.S. city to require new buildings to be all electric from January -- that has spread elsewhere in California and is on the verge of going national. “We are well down that path of pulling in natural allies who can share the message that taking away options -- without understanding the implications -- is not fair to communities,” said Scott Prochazka, the new chairman of the AGA, who’s also the chief executive officer of CenterPoint Energy Inc. For more on natural gas bans, click here The AGA cited as a recent example a proposal put forward in Seattle to adopt a ban on gas in new construction. The resolution was tabled after a diverse group of restaurant owners, labor unions, re...

From WTRF: The Ohio Valley Oil and Gas Association hosted it’s annual Holiday Party Dinner Discussion and Happy Hour on Wednesday night. The event was held at Wheeling Island Resort & Casino for the second year in a row. Industry professionals had the chance to reunite with old friends, learn new tricks of the trade and expand their network. “The biggest benefit to coming to these events for our members is the networking,” said AJ Smith, President of Hull & Associates. “Getting to talk to each other, Toby Rice with EQT who is our speaker tonight and others in the industry to try to do business together and do more business for the oil and gas industry.” The natural resources of the tri-state area position this region as a leader in global energy production. Oil and gas is a thriving industry in the United States and it’s continuing to expand all around us. Click here to view the original article. 

From Bloomberg: Chevron Corp. expects to write down as much as $11 billion in the fourth quarter, more than half of it from its Appalachia natural gas assets after a slump in prices. The U.S. oil major is considering the sale of shale-gas holdings, according to a statement Tuesday. The company said separately it intends to exit its stake in the Kitimat liquefied natural gas project in Canada. And Chevron also plans to keep its 2020 capital budget at $20 billion, the third consecutive year it hasn’t boosted spending.  The company’s actions come from a chief executive officer, Mike Wirth, whose mantra has been capital discipline. Wirth earlier this year earned $1 billion for the company by walking away from a bidding war for Anadarko Petroleum Corp. San Ramon, California-based Chevron is the best performer among the five Western oil majors this year, but it has faced mounting costs at its Tengiz project in Kazakhstan. “The Appalachia writedown should be baked in, but the othe...

From the Pittsburgh Post-Gazette: Although the massive shale gas build-out in the Appalachian Basin has produced significant economic benefits, a new Carnegie Mellon University study says all the drilling, fracking and cracking isn’t worth the environmental, health and climate damage.  The study estimates air pollution from shale gas development activities in Pennsylvania, Ohio and West Virginia from 2004 to 2016 resulted in 1,200 to 4,600 premature deaths in the region, and while most of the added employment occurred in rural areas, most of the health impacts were felt in urban areas.  “It’s a rural job phenomenon with urban health impacts,” said Nicholas Muller, associate professor of economics, engineering and public policy at CMU and one of five study authors. “That’s the trade-off. How are regulators able to evaluate that trade?”  Advocacy groups on either side of the issue reacted to the study with a mix of skepticism and praise. The Marcellus Shale Coalitio...

From VORYS: On November 26, 2019, the Supreme Court of Ohio clarified that a declaratory judgment claim that an oil and gas lease terminated for lack of production is subject to the 21-year statute of limitations for recovery of title to or possession of real property in R.C. 2305.04. See Browne v. Artex Oil Co., Slip Op. No. 2019-Ohio-4809. In Browne, the lessee argued that an action like the case at bar was subject to the 15-year statute of limitations for actions upon written contracts in former R.C. 2305.06. The Court disagreed. The Court noted that the lessors were not alleging a breach of the oil and gas lease, but were simply requesting a declaration that the oil and gas lease had terminated by its terms through operation of law. This claim was was more akin to an action to quiet title than one upon a written contract, the Court found, as the lessee had no obligation to produce under the lease and the parties did not dispute the lease’s provisions. Click here to read the ...

WEEK ENDING 11/30/19 New permits issued last week:   10  (Previous week:  9 )   +1 Total horizontal permits issued:  3216  (Previous week:  3206 )    +10 Total horizontal wells drilled:  2736  (Previous week:  2734 )   +2 Total horizontal wells producing:  2367  (Previous week:  2366 )   +1 Utica rig count:  11  (Previous week:  10 )   +1

One of the selling points touted by the companies behind the NEXUS and Rover pipelines as they sought approval and community support was the amount of property tax revenue that would be generated by their operation in Ohio.  Now the companies are seeking to have the amount of taxes they pay out be drastically reduced.  From the Canton Repository: Stark County Auditor Alan Harold said the state told him last week that Rover was seeking to cut its 2019 assessment by roughly 50 percent.  In an email, spokeswoman Alexis Daniel wrote that the pipeline was a major project with many nuances and Rover is working with the state to determine an accurate valuation.  NEXUS is seeking to cut its statewide taxable value 30 percent from $1.4 billion to roughly $996 million, according to a copy of the appeal provided by spokesman Adam Parker.  NEXUS argues it needs the reduction because the $2.6 billion pipeline cost $400 million than expected and it lost market share...

FirstEnergy has been fighting an ongoing battle against those looking to introduce a referendum overturning the nuclear bailout the company was handed by Ohio lawmakers.  The company has employed dishonest fear-mongering ads , workers who physically tried to block people from signing the referendum , putting a different petition in front of people interested in signing the referendum to try and confuse them, and of course legal maneuvering (which has included doing a 180-degree turnaround from an earlier stance of refusing to call the ratepayer fees that will line the company's pockets a tax to now stating that it is a tax in order to get a favorable legal ruling). The fight continues. From RTO Insider: The Ohio Supreme Court last week rejected FirstEnergy Solutions’ attempt to block a referendum to repeal $150 million in subsidies for its two nuclear plants.  Four of the court’s seven judges dismissed FES’ lawsuit, citing a “lack of justifiable controversy.” While the...

It's been well over 4 years since we first posted about Belmont County being the site selected for a potential cracker plant.  Despite the fact that site preparation and property acquisition has been ongoing in preparation of constructing the plant, there still is no final decision.  Reports of multiple recent meetings being held about the project may perhaps provide an indication that this may change in the near future. From WTOV News: A private meeting was held in Belmont County on Tuesday regarding the proposed ethane cracker plant project. Members of PTT Global Chemical and Daelim met with state and local leaders at the site in Dilles Bottom. The meeting was held at a garage on the site, and there is no word on what took place inside. No official announcement has been made regarding the ethane cracker plant that would be built on hundreds of acres in Dilles Bottom. Read on by clicking here.  And from WHIO: Ohio's Republican governor and lieutenant gov...

WEEK ENDING 11/23/19 New permits issued last week:   9  (Previous week:  1 )   +8 Total horizontal permits issued:  3206  (Previous week:  3201 )    +5 Total horizontal wells drilled:  2734  (Previous week:  2732 )   +2 Total horizontal wells producing:  2366  (Previous week:  2361 )   +5 Utica rig count:  10  (Previous week:  13 )   -3

From a JobsOhio press release: Total investment in Ohio's resource rich shale energy sector has reached $78 billion since tracking began in 2011, according to a Cleveland State University (CSU) study.  Prepared for JobsOhio, the report represents the most recent data available and covers shale investment through the second half of 2018. Earlier in the year, IHS Markit released estimates that by 2040, the Utica and Marcellus shale region, of which Ohio is a significant part, will supply nearly half of all U.S. natural gas production.  The study from CSU's Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs, showed drilling investments were slightly down in the second half of 2018 compared to the first half, but total upstream investments were up. Total shale-related investment in Ohio for the second half of 2018, including upstream, midstream and downstream, was around $3.82 billion. Total investment from 2011-2018 totaled about $77.7 billion. Upstr...

From WXVU: The Ohio Power Siting Board Thursday approved Duke Energy's request for a natural gas pipeline in Hamilton County.  The board approved the Certificate of Environmental Compatibility and Public Need for the Central Corridor Pipeline Extension 's alternative plan.  The alternative plan proposes running the nearly 13-mile, 20-inch diameter pipeline from Blue Ash to just south of Golf Manor along a route that primarily follows Reading Road, passing through Amberley Village, Cincinnati, Evendale, Reading and Sharonville as well as Blue Ash and Golf Manor.  You can see the exact route in the diagram below. Click here to continue the article.

From Reuters: U.S. gas exploration and production company Gulfport Energy Corp ( GPOR.O ) on Monday confirmed that it would cut jobs, change its board and end its share buybacks, in a bid to reverse a slide in its stock price.  Reuters had reported the news earlier in the day, citing sources.  Gulfport shares, which fell 7.8% to $2.85 in morning trading, have lost about 67% of their market value in the last 12 months, as weak natural gas prices have eroded its profitability and forced it to slash capital investment.  Gulfport, whose production is focused primarily in the Utica Shale in Ohio and SCOOP acreage in Oklahoma, also made a new commitment to use excess cash to pay down debt, which totaled $2.1 billion as of the end of September.  The company said it would shed about 13% of its workforce. It also said that Chairman David Houston will not seek reelection to the company’s board when his term ends in 2020, with two other directors - Craig Groeschel and...

From the Times Leader: As drillers tap the natural gas reserves beneath Ohio’s easternmost counties, community leaders to the west hope to pump some of those profits into their own economies by developing ancillary industries. Ohio Rep. Adam Holmes, R-Nashport, met recently with representatives of JobsOhio and the Appalachian Partnership for Economic Growth to discuss ways that counties adjacent to the Marcellus and Utica shale region can capitalize on the activity that is taking place there. At the Zanesville meeting, Holmes said counties such as Muskingum — which lies just west of Guernsey County and within 50 miles of many parts of Noble, Monroe, Harrison and Belmont counties where much of the drilling is taking place — are ideal locations for support services related to the industry.  Holmes suggested that because of its central location less than an hour east of the state capital and along Interstate 70, Muskingum County is a suitable spot for trucking companies to set up ...

From WTOV News: There appears to be some movement at the site of the proposed ethane cracker plant. We took SkyView9 to the location Wednesday to get a better look.  You can see dirt being moved and some construction work which appears to be making way for the plant in Dilles Bottom, but there is still no confirmation of the plant from PTT Global Chemical. Click here to view the full article on WTOV's site. 

WEEK ENDING 11/09/19 New permits issued last week:   6  (Previous week:  8 )   -2 Total horizontal permits issued:  3201  (Previous week:  3192 )    +9 Total horizontal wells drilled:  2724  (Previous week:  2714 )   +10 Total horizontal wells producing:  2358  (Previous week:  2345 )   +13 Utica rig count:  13  (Previous week:  14 )   -1 WEEK ENDING 11/16/19 New permits issued last week:   1  (Previous week:  6 )   -5 Total horizontal permits issued:  3201  (Previous week:  3201 )    +-0 Total horizontal wells drilled:  2732  (Previous week:  2724 )   +8 Total horizontal wells producing:  2361  (Previous week:  2358 )   +3 Utica rig count:  13  (Previous week:  13 )   +-0

From the Times Reporter: Gulfport Energy is looking to sell some of its interests in the Utica Shale.  The company announced the plan ahead of its Friday conference call with investors to discuss third-quarter earnings.  Gulfport said proceeds from its sale of non-operated interests would offset higher-than-anticipated spending this year in the Utica. The company expected to have an agreement on the sale before the end of the year, according to a press release. Oklahoma City-based Gulfport lost $48.8 million, or 31 cents per diluted share during the quarter.  The company’s average production was equivalent to 1.5 billion cubic feet of natural gas per day. Utica wells accounted for 80 percent of production. Click here to continue the article. 

From the Pittsburgh Post-Gazette: One of Mr. Rice’s signature promises during the proxy battle was to bring EQT’s costs down to $735 per foot. For an average well being drilled next year in southwestern Pennsylvania, at 13,000 feet long, that would translate to $9,555,000. He said EQT will be below that level by the second half of next year in this area. Its West Virginia and Ohio programs have higher cost and shorter laterals.  But while company leaders told analysts on Thursday that “West Virginia will become a larger part of EQT’s story going forward,” the Ohio assets that Mr. Rice personally negotiated at a critical point in his former firm Rice Energy’s trajectory may be headed for a sale.  To pay off debt, EQT is also considering selling off holdings in central Pennsylvania and southern West Virginia.  It is also looking at selling a stake in its mineral interests, as has become more common in the industry with players like Range Resources. A deal on royalty...

From the Pittsburgh Business Times: Murray Energy, the nation’s largest privately owned coal mining company — which owns facilities in West Virginia and Ohio — filed for Chapter 11 bankruptcy protection Tuesday.  Murray Energy, which is based in St. Clairsville, Ohio, reported between $1 billion and $10 billion in estimated liabilities and assets between $1 billion and $10 billion in the filing in the U.S. Bankruptcy Court for Southern Ohio. Its top 10 unsecured creditors have $126.9 million in claims, according to the bankruptcy filing.  Murray Energy founder Robert Murray, one of the strongest voices in the coal industry, will move from CEO to chairman. Robert D. Moore has been named president and CEO of Murray Energy and Murray Energy Corp . Click here to read more. 

From the Washington Times: House Democrats blocked Tuesday consideration of a resolution in support of hydraulic fracturing as Republicans sought to protect the U.S. energy boom from Democratic presidential candidates seeking to ban fracking nationwide  The resolution, sponsored by Rep. Rob Bishop, Utah Republican, affirmed that states should “maintain primacy for the regulation of hydraulic fracturing for oil and natural gas production on State and private lands,” and that no president should impose a moratorium without congressional approval.  “In recent weeks, many of the Democratic candidates for president have pledged to ban hydraulic fracturing in the United States, a campaign promise straight out of the keep-it-in-the-ground playbook,” said Rep. Debbie Lesko, Arizona Republican, in a floor speech.  Sens. Kamala Harris, Bernard Sanders and Elizabeth Warren , all 2020 Democratic presidential hopfeuls, have called for a nationwide ban on fracking, an extracti...

From Forbes: A number of Democratic candidates have endorsed a fracking ban, recently including Elizabeth Warren, and as Bob McNally said , this would “vaporize the oil and gas boom in the United States.” In this piece, I will try to quantify the impact of a fracking ban on the U.S. natural gas supply, and the concomitant economic effects.  Of course, there is some skepticism that she would actually do that if elected, and suspicion that the suggestion is nothing more than an attempt to appeal to the more liberal Democratic primary voters. Given that Democrats from Barack Obama to Jerry Brown have not opposed (regulated) fracking, and the pertinent fact that politicians often make promises they don’t intend to keep, (shocking I know), I would lean towards that myself.  My belief is strengthened by the nature of the arguments in favor of a fracking ban. Yes, it’s done by big oil (I mean BIG OIL), except many of the companies are much smaller. Yes, it’s a novel method, ex...

From The Columbus Dispatch: Thousands of acres of land the state of Ohio has agreed to purchase from American Electric Power for recreation and conservation does not include the subsurface rights. AEP is holding onto those rights for potential future drilling for oil and natural gas.  The state’s planned $47 million purchase of more than 31,000 acres of land in eastern Ohio for recreation and conservation does not include the subsurface rights, and some of it likely will be the site of fracking activities, The Dispatch has learned.  Ohio Gov. Mike DeWine — flanked by outdoorsmen and members of the General Assembly — announced the land purchase in eastern Ohio from American Electric Power a few weeks ago . The move was applauded by conservationists because the land, formerly used by the utility for strip mining, would be used by the Ohio Department of Natural Resources for recreation and conservation and designated as a state park.  However, a draft of the purchase...

From Kallanish Energy: President Trump Wednesday celebrated a love-in in the Appalachian Basin.  The president delivered a 64-minute salute to shale drilling and the U.S. energy industry at the 9th annual Shale Insight conference in Pittsburgh. Kallanish Energy was in attendance.  “You are the No. 1 producer of oil and natural gas on the planet Earth, No. 1 by far,” he said. “America is a winner, a winner, a winner, a winner. We’re not being laughed at anymore.”  Shale drilling has reshaped the American economy and Americans are benefitting from lower heating bills and more jobs, Trump said.  ‘I like energy people’  “I like energy people,” he said. He addressed an audience of roughly 5,200 persons at the David Lawrence Convention Center, including nearly 1,480 conference attendees and those involved in staging the conference.  The conference was staged by the Marcellus Shale Coalition, the Ohio Oil and Gas Association and the West Virginia Oi...

WEEK ENDING 10/26/19 New permits issued last week:   8  (Previous week:  10 )   -2 Total horizontal permits issued:  3192  (Previous week:  3187 )    +5 Total horizontal wells drilled:  2714  (Previous week:  2708 )   +6 Total horizontal wells producing:  2345  (Previous week:  2340 )   +5 Utica rig count:  14  (Previous week:  13 )   +1 WEEK ENDING 11/02/19 New permits issued last week:   6  (Previous week:  8 )   -2 Total horizontal permits issued:  3198  (Previous week:  3192 )    +6 Total horizontal wells drilled:  2719  (Previous week:  2714 )   +5 Total horizontal wells producing:  2355  (Previous week:  2345 )   +10 Utica rig count:  14  (Previous week:  14 )   +-0

From Cleveland.com: A federal judge has rejected a last-ditch plea by opponents of Ohio’s new nuclear bailout law to be granted 38 additional days to collect petition signatures for a referendum overturning it.  Instead, U.S. District Court Judge Edmund A. Sargus asked the Ohio Supreme Court for its opinion on whether to grant more time, on the grounds that the legal questions involved the Ohio Constitution, not the U.S. Constitution.  “The court has jurisdiction to decide cases and controversies arising only under federal law,” the judge wrote in an opinion issued Wednesday night. “As the parties agree, this court does not have jurisdiction over any claim that the secretary of state or the Ohio General Assembly has violated the referendum provisions of the Ohio Constitution.”  Sargus sent four “certified questions” to the state Supreme Court, including whether anti-HB6 activists should be credited with more time to collect signatures.  Under state law, re...

WEEK ENDING 10/19/19 New permits issued last week:   10  (Previous week:  0 )   +10 Total horizontal permits issued:  3187  (Previous week:  3177 )    +10 Total horizontal wells drilled:  2708  (Previous week:  2708 )   +-0 Total horizontal wells producing:  2340  (Previous week:  2340 )   +-0 Utica rig count:  13  (Previous week:  13 )   +-0

From The Review: The lawsuit concerns leases landowners signed with Ohio Buckeye Energy or Chesapeake Energy from 2010 through 2012. Ohio Buckeye Energy later became part of Chesapeake.  Last October, Encino Acquisition Partners bought Chesapeake’s Utica holdings in Ohio for $2 billion. EAP is a partnership between the Canada Pension Plan Investment Board and Encino Energy, a private oil and gas company based in Houston.  EAP’s purchase included 900,000 acres and approximately 900 wells, with related equipment and property. Encino Energy’s Utica office is in Louisville.  Royalty dispute After the purchase, the Encino defendants began to significantly underpay royalties to landowners, according to the lawsuit.  William G. Williams, an attorney for the landowners, said his clients initially couldn’t wait for Encino to take over because Chesapeake had been making large deductions from their royalties, a practice that is the subject of another lawsuit.  ...