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Monday, January 26, 2015

Magnum Hunter Cuts Way Back on Spending, Will Drill No New Utica Shale Wells This Year

From Reuters:
Oil and natural gas producer Magnum Hunter Resources Corp said on a conference call on Friday it has cut all capital spending amidst plunging commodity prices, expecting prices to remain low for at least the next year. 
The small exploration company focused on natural gas production in the Marcellus and Utica Shales, had scheduled the call with investors with one day's notice to assuage concerns about its future as its shares have plunged 81 percent in the past year amid sinking natural gas prices. 
"Rumors of our death have been greatly exaggerated," Chief Executive Gary Evans told investors. 
Magnum's board plans to meet on Monday to discuss 2015 budget plans. At most, the company will spend $100 million this year, Evans said.

"When you're in a death spiral of prices in this business, you're crazy to be spending money," Evans said. "We're not spending any money right now."
Click here to read that whole article.

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Stone Energy Not Planning Any Utica Shale Drilling For 2015

From a Stone Energy press release:
2015 Capital Expenditure Budget 
Stone's Board of Directors has authorized a 2015 capital expenditure budget of $450 million, which assumes planned sales of minority working interests in certain targeted assets. The budget also excludes acquisitions and capitalized SG&A and interest. The budget is allocated approximately 75% to Deep Water/Gulf Coast, 8% to Appalachia, 4% to Business Development and 13% to Abandonment expenditures. The capital budget and allocation of capital across the various areas is subject to change based on several factors, including commodity pricing, liquidity, permitting times, rig availability, regulatory, non-operator decisions and the sales of working interests in certain targeted assets. 
The Deep Water capital budget is focused on development and exploration drilling, facility installations for development work, completion operations, and seismic and lease acquisition. Stone expects to participate in drilling two non-operated exploration wells in the first quarter of 2015, drill the Cardona #6 well, and complete the Amethyst discovery well and install a flowline back to the Pompano platform. A portion of the budget is also allocated to the expected fourth quarter of 2015 arrival of the platform rig for the Pompano platform drilling program. 
The Appalachia capital budget includes securing additional core lease-hold interests and drilling several Marcellus wells in the first quarter before releasing the Marcellus drilling rig. No further Marcellus drilling is projected for the rest of the year. Late in the fourth quarter of 2015, Stone expects to receive a dual-purpose Utica/Marcellus rig for a 2016 drilling program that is capable of drilling in either shale formation. 
Capital dedicated to the GOM conventional shelf will be primarily used for recompletions, improvements to existing infrastructure and required plug and abandonment operations. For increased efficiencies, the conventional shelf and deep gas operating groups have been consolidated within the deep water operations. The remainder of the capital budget is focused on onshore business development opportunities. 
Capital expenditures for 2014 are expected to total approximately $875 million, which excludes capitalized SG&A and interest and is lower than the $895 million authorized by the Board.
Read the whole release by clicking here.

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Ohio Village Finds Itself Slightly Overwhelmed by Oil and Gas Money

This report on New Matamoras, Ohio comes from the Marietta Times:
The village saw its 2015 general fund nearly quadruple Wednesday night as officials accepted a check for more than $300,000 from Marietta-based MNW Energy LLC at the Village Council meeting. 
Mayor John Schmidt was hesitant to say how the village will spend the $307,687.25, which was received as an up-front payment for leasing the mineral rights under 72 acres owned by the village to Triad Hunter for five years. MWN facilitated the lease. 
“I’ve got committees and every committee is going to be involved in this with input to the rest of the council. We’ve made no decisions whatsoever,” said Schmidt. 
Town finances are tight. The village has only barely managed to operate in the black for the past three years, noted Schmidt. 
The $300,000 check was so large that village clerk Patty Martin sought guidance on how the village should handle the funds. 
“I called the state auditor’s office because we’ve never received this much money before. She told me we need to put this in the general fund,” explained Martin.
The original article can be viewed by clicking here.

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Why Did Chesapeake's Stock Drop in 2014?

From The Motley Fool:
Last year started off with so much promise as Chesapeake Energy Corporation (NYSE:CHK ) was about to turn the corner on its long anticipated turnaround. The company's first quarter was exceptional as its earnings beat the street and were up 97% from the first quarter of 2013. As the second quarter drew to a close its stock was up nearly 15% and was vastly outperforming the market. Unfortunately the company's positive momentum hit a brick wall when oil prices unexpectedly rolled over and crushed what had been turning out to be a great year for the company. In the end the nearly 44% crash in oil prices pushed Chesapeake Energy's stock down by more than 22% as we see on the following chart. 
CHK ChartCHK data by YCharts 
Obviously, we can point a finger at oil as being the culprit that ruined the company's year. However, on the bright side, things could have been much as the company was in a much better position to weather the storm this time energy prices went south.
Read more by clicking here.

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Harrison County Getting Help From Shale, But Still Needs More

Sales tax receipts on the rise in
Harrison County, thanks to shale
From Columbus Business First:
Harrison County is home to some of the biggest gains in Ohio sales tax receipts since the shale boom arrived. 
Before 2012, monthly receipts totaled about $100,000 a month for half of the year and $80,000 the other six months. 
Now, it's consistently around $450,000 a month 
"We have been decimated for 30 years with hardly any activity," said Harrison County Board of Commissioners Chairman Dale Norris. "We're trying to put it to use upgrading and fixing a lot of things we haven't for lack of funds. It still isn't enough." 
But it's helping. So as oil prices fall and companies take a second look at the flurry of activity that was commonplace in eastern Ohio's Utica shale play, what does that mean for local governments in areas long suffering from a lack of funds?
Continue reading by clicking here.

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Antero Resources Provides 2014 4th Quarter Operation Update




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Land-Use in Ohio’s Utica Shale Industry…Now and in the Future

Carrollton, Ohio: As Ohio’s shale gas boom continues, landowers and elected officials are beginning to see many rural landscapes change as drill pads, pipelines, compressor stations and processing plants are built.  This “land-use” change toward more industrialized rather than agricultural activities can impact communities in many ways.   

Ted Auch, Ph.D, Great Lakes Program Coordinator for FracTracker has been studying land-use trends and their relationship to shale gas production numbers and will share the results at the February 5th meeting of Carroll Concerned Citizens. 

“We’ve been researching production past, present, future as it relates to resource utilization namely water, sand, and various chemicals.  Most of our focus has been on Carroll, Stark and Columbianna counties.” said Dr. Auch.

FracTracker uses advanced analytical and computer mapping tools to bring together many different data sources to spot correlations and/or trends. 

The meeting will be held at the Church of Christ – Christian Disciples beginning at 7pm and is free and open to the public.

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Friday, January 23, 2015

DEP Study Shows There is Little Potential for Radiation Exposure from Oil and Gas Development

Harrisburg – The Department of Environmental Protection (DEP) today announced the results of its TENORM Study, which analyzed the naturally occurring levels of radioactivity associated with oil and natural gas development in Pennsylvania. While the study outlines recommendations for further study, it concluded there is little potential for harm to workers or the public from radiation exposure due to oil and gas development.

“The study report is the culmination of a multi-year effort and represents what we believe to be the most comprehensive radiological study of the oil and gas industry ever conducted,” Vince Brisini, DEP Deputy Secretary for Waste, Air, Radiation and Remediation said. “While the recommendations for future actions contained in the report call for additional studies and efforts, we now have data to inform the management of natural gas resources and resultant wastes for environmental and health protection.”

In January 2013, at the direction of Gov. Tom Corbett, DEP began studying radioactivity levels in flowback waters, treatment solids and drill cuttings, as well as transportation, storage and disposal of drilling wastes. This included a study of radon levels in natural gas to ensure that public health and the environment continue to be protected.

In summary, the peer-reviewed study concluded that:

  • There is little potential for additional radon exposure to the public due to the use of natural gas extracted from geologic formations located in Pennsylvania.
  • There is little or limited potential for radiation exposure to the public and workers from the development, completion, production, transmission, processing, storage, and end use of natural gas. There are, however, potential radiological environmental impacts from fluids if spilled. Radium should be added to the Pennsylvania spill protocol to ensure cleanups are adequately characterized. There are also site-specific circumstances and situations where the use of personal protective equipment by workers or other controls should be evaluated.
  • There is little potential for radiation exposure to workers and the public at facilities that treat oil and gas wastes. However, there are potential radiological environmental impacts that should be studied at all facilities in Pennsylvania that treat wastes to determine if any areas require remediation. If elevated radiological impacts are found, the development of radiological discharge limitations and spill policies should be considered.
  • There is little potential for radiation exposure to the public and workers from landfills receiving waste from the oil and gas industry. However, filter cake from facilities treating wastes could have a radiological environmental impact if spilled, and there is also a potential long-term disposal issue. TENORM disposal protocols should be reviewed to ensure the safety of long-term disposal of waste containing TENORM.
  • While limited potential was found for radiation exposure to recreationists using roads treated with brine from conventional natural gas wells, further study of radiological environmental impacts from the use of brine from the oil and gas industry for dust suppression and road stabilization should be conducted.

To read the entire report and a complete list of its observations and recommendations, visit www.dep.state.pa.us, keyword: TENORM.

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