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Friday, October 31, 2014

New Natural Gas Processing Complex Opening Soon in Monroe County

From Columbus Business First:
The Berne processing complex in Monroe County, which has the capacity to hold three plants each processing 200 million cubic feet per day of natural gas, is almost ready to open. 
The first 200 million-capacity plant will open in November, said Casey Nikoloric, spokeswoman for Blue Racer Midstream LLC, the company that runs the Monroe County project. Construction of the second unit has started and should be in-service in April. 
Berne should be a boon to the chronically underdeveloped infrastructure in the Utica shale region. A new transmission line for the project was completed this week, according to a filing the company made to state regulators. Dallas-based Blue Racer had asked regulators for an expedited review of its plan to build the 138-kilovolt electrical transmission line in May and regulators approved the 2,000-foot line a month later.
Read the rest of this article by clicking right here.

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Marietta Continues to Take Its Time Considering Lease of City Property

From Shale Play:
The single bid received by the city to lease mineral rights on two pieces of Marietta property was reviewed by members of council late last month during a meeting of council's lands, buildings and parks and finance committees. 
The bid, submitted by MNW Energy LLC, would give the city the option to earn more than $183,000 - $4,750 an acre - by leasing rights at Goose Run and at Gunlock Park between Lowe's and Wal-Mart. The city would also earn a 17.5 percent royalty on any earnings made over the five-year lease term, said city safety-service director Jonathan Hupp. 
City Councilman Steve Thomas, D-3rd ward, said he is supportive of leasing the rights. 
"I'm good with it. We need the money. And it's not going to be disturbing the ground," said Thomas. 
Read the rest of the article by clicking here.

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Study Finds Economic Benefits From Energy Industry Are Increasing

From RigZone:
The economic benefits to the United States from the energy industry have more than doubled in just the past ten years, even after accounting for inflation, according to a new study by The Perryman Group. The growth in the industry is worth about $1.2 trillion in gross product each year, the study noted, adding that the growth in the oil and gas industry since the economic recession has been “dramatic.” In fact, since the start of the economic recovery, the energy industry has contributed about 30 percent of the total job growth for the nation, Dr. Ray Perryman, president and CEO of The Perryman Group, said. 
While it is generally recognized that a thriving oil and gas sector helps to create new jobs within and outside of the energy sector, it is less well-recognized just how important the industry is to overall employment. However, the study shows just how large a role the energy industry plays in the number of new jobs in the country. 
When the multiplier effect was added to the number of jobs directly generated by upstream activity in the industry, there were 9.3 million jobs – or 7 percent of the overall economy – generated in the United States, according to The Perryman Group study. That is about 7 percent of the overall economy. 
Crude oil production levels are as high as they were in the late 1980s, and they are still climbing. U.S. production was nearly 2.4 billion barrels in 2012, and climbed to 2.7 billion in 2013. By the end of 2014, the United States is likely to be the world’s largest crude oil producer, Perryman said. 
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New Study: Ethane Production Could Support 3 Large Cracker Plants in Appalachian Region

From Gas & Oil:
A new study conducted by Cleveland State University indicates enough ethane is estimated to be produced to support three large cracker plants in the Appalachian Region — and, just as importantly, current plans for plant construction specifically target Ohio, Pennsylvania and West Virginia. The information was brought forward during a Utica Summit II, held in mid-October at Stark State College, in Canton. 
Ethane cracker plants would be a tremendous boon to the area in terms of further manufacturing development. An ethane cracker facility creates ethylene, a compound used in the manufacture of plastic. Some estimates predict between 400 to 600 jobs in each cracker plant, with another 2,000 plus in indirect jobs and more than 8,000 additional jobs in the ripple effect that would follow with downstream manufacturers who rely on ethane and other products that will be created at the plants. 
Huge economic benefits to the Appalachian Basin region were projected when the plans for a cracker plant to be built by Odenbrecht/Brazkem across the River in Parkersburg, West Virginia, were released. So, one can only imagine the impact the smaller cracker plant now planned for possible construction by Appalachian Resins Inc. in Salem Township, located in Monroe County, Ohio, will have on the state and the region. There is another large facility slated to be built in Pittsburgh, Pa., by Shell Oil Company, which would round things out by placing a large cracker plant in each of the three states that are part of Marcellus and Utica natural gas production, Ohio, Pennsylvania and West Virginia.
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Why Did Chesapeake Agree to Sell Off a Huge Chunk of Marcellus and Utica Shale Assets?

From Market Realist:
Chesapeake Energy (CHK) is on track with its “asset-divestment agenda.” On October 16, Chesapeake announced the sale of a large portion of its oil and gas assets in the Marcellus and Utica shales to Southwestern Energy (SWN).
CHK key operating areasEnlarge GraphThe image above shows Chesapeake’s operational footprint in the Marcellus and Utica regions. Read more about Chesapeake’s operations and recent quarterly performance at “A key overview of Chesapeake and its second quarter 2014 earnings.” 
The price tag 
SWN will buy the Marcellus and Utica assets for ~$5.38. The transaction is believed to be Southwestern’s largest deal. Later in this series, we’ll discuss what the deal means for SWN. 
Chesapeake wanted to achieve $4 billion in spending cash by the end of the year. It planned to get the money through asset divestments. 
We’ll discuss why Chesapeake wants to achieve this goal later in this series.
Read more of this series by clicking here.
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Wednesday, October 29, 2014

Slow Week Moves Utica Shale to 1,567 Total Permits Issued in Ohio

The Ohio Department of Natural Resources has made the latest weekly permitting update available.  It wasn't a very busy week.

Only 7 new permits were issued last week.  Jefferson County was the focal point, with 3 new permits.  That brings the total number issued there to 46.  2 permits were issued for drilling in Carroll County, and 1 permit each for Belmont and Tuscarawas counties.

With these 7 new permits, there are now 1,567 total permits that have been issued in Ohio for Utica shale drilling.  1,141 wells have been drilled and 607 are producing.  The Utica rig count is 44.

View the whole report by clicking here.

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Monday, October 27, 2014

Rex Energy Provides Third Quarter Production Results, Increases Full Year 2014 Production Guidance, Updates 2015 Hedge Position and Announces Date of Third Quarter Earnings Release

  • Third quarter production of 169.7 MMcfe/d exceeds high end of company guidance by 3%; represents a 32% sequential increase in average daily production over the second quarter of 2014 and 72% over the second quarter of 2013
  • Average daily production from oil, condensate and NGLs (including ethane) reached a record level of 10.4 MBoe/d, a 61% increase over the second quarter of 2014
  • Record oil and condensate production of 3.3 Mboe/d, a 20% increase over the second quarter of 2014
  • Full year 2014 production guidance increased by 2% at the midpoint of the guidance range 
STATE COLLEGE, Pa., Oct. 20, 2014 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) today provided its preliminary third quarter 2014 production results, increased its full year 2014 production guidance and announced the date of its third quarter 2014 earnings release and conference call.

Production Update

Third quarter 2014 production volumes were 169.7 MMcfe/d, an increase of 72% over the third quarter of 2013 and 32% over the second quarter of 2014, consisting of 107.0 MMcf/d of natural gas and 10.4 Mboe/d of oil, condensate and NGLs (including 2.6 Mboe/d of ethane). Oil, condensate and NGLs (including ethane) accounted for 37% of net production during the third quarter and increased 61% sequentially over the second quarter of 2014. Production from oil and condensate reached a record level of 3.3 Mboe/d, an increase of 20% over the second quarter to 2014. Third quarter 2014 production of 169.7 MMcfe/d exceeded the high end of the company's production guidance range of 159.0 - 165.0 MMcfe/d by 3%.

"We are extremely pleased with our production results for the third quarter," said Tom Stabley, Chief Executive Officer of Rex Energy. "In just 18 months, we have more than doubled the company's average daily production while nearly tripling the company's liquids production. We believe our rapid growth in production over the last year and a half further demonstrates the quality of both our asset base and our technical team."

Fourth Quarter 2014 and Full Year 2014 Production Guidance

Rex Energy is providing its initial production guidance for the fourth quarter of 2014 and increasing its previously issued production guidance for the full year 2014. The company expects fourth quarter production volumes to range from 179.0 MMcfe/d - 185.0 MMcfe/d, representing a sequential increase of 7% at the midpoint of guidance over the third quarter and a 65% year-over-year increase at the midpoint of guidance. In addition, the company is increasing its full year 2014 production guidance by 3.0 MMcfe/d at the midpoint to 150.0 MMcfe/d - 152.0 MMcfe/d from its previously announced guidance of 146.0 MMcfe/d - 150.0 MMcfe/d. The increase in full year production guidance is due to strong production results from the company's existing producing properties.

In addition, the company continues to expect its full year 2014 average realized natural gas price, including the effects of basis hedges, to be approximately $0.60 - $0.80 below the Henry Hub natural gas index price.

2015 Hedging Update

Consistent with its historical practice, the company continues to add to its hedging position at prices that generate strong rates of return in order provide additional certainty regarding its expected cash flows. For 2015, the company now has approximately 49% of its current natural gas production hedged at a weighted average floor price of $4.15. The company has also hedged approximately 43% of its current oil production for the first half of 2015 at a weighted average floor price of $90.88. Finally, the company has recently entered into agreements to lock in approximately 60% of its expected natural gas production previously sold under Dominion South Point pricing for 2015 at a weighted average price of $0.82 below the Henry Hub natural gas index price.

Third Quarter Earnings Release

The company plans to release third quarter 2014 financial and operational results on Tuesday, November 4, 2014 after market close. Management will host a live conference call and webcast on Wednesday, November 5, 2014 at 10 a.m. ET to review third quarter financial results and operational highlights. Reference material for the conference call and webcast will be posted to the company's website prior to the call.

All financial results included in the earnings release or discussed on the conference call and webcast will remain subject to our independent auditor's review. The telephone number to access the conference call is (866) 437-1772. The conference call will also be available for replay through the company's website at www.rexenergy.com under the Investor Relations tab. The replay of the event and reference materials will be available on the company's website through December 4, 2014.

About Rex Energy Corporation

University of Cincinnati Research Takes Unique Approach to Look at Fracking's Effect on Groundwater

From WaterWorld:
A new research project at the University of Cincinnati (UC) is taking a groundbreaking approach to monitoring groundwater resources near hydraulic fracturing (fracking) sites in the state of Ohio. Conducted by Claire Botner, a UC graduate student in geology, the research is part of UC Groundwater Research of Ohio (GRO), a collaborative research project based out of the university to examine the effects of fracking on groundwater in the Utica Shale region of the eastern part of the state.

First launched in Carroll County in 2012, the GRO team of researchers is examining methane levels and origins of methane in private wells and springs before, during and after the onset of fracking. The team travels to the region to take water samples four times a year. Amy Townsend-Small, the lead researcher for GRO and a UC assistant professor of geology, said the UC study is unique in comparison with studies on water wells in other shale-rich areas of the U.S. where fracking is taking place -- such as the Marcellus Shale region of Pennsylvania. 
Townsend-Small explained that water samples finding natural gas-derived methane in wells near Pennsylvania fracking sites were taken only after fracking had occurred, so methane levels in those wells were not documented prior to or during fracking in Pennsylvania. The Ohio samples are being analyzed by UC researchers for concentrations of methane as well as other hydrocarbons and salt, which are pulled up in the fracking water mixture from the shales. The shales are ancient ocean sediments.
To read more, including the results of testing to this point, click here.

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