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Wednesday, August 24, 2016

Utica Rig Count at 14 as 5 New Permits Are Issued Last Week

The latest permitting update from the Ohio Department of Natural Resources show that five new permits were issued across four different counties last week.  Two were for wells in Jefferson County, while Belmont, Guernsey and Monroe each saw one new permit.

The cumulative totals now stand at 2217 wells permitted, 1776 drilled, and 1390 producing.  The Utica rig count is at 14.

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Tuesday, August 23, 2016

OPEC on Course For Output Freeze, Former Chief Says

From Fuel Fix:
OPEC is on course to strike an output-freeze deal with fellow oil producers in Algiers next month because its biggest members are already pumping flat-out, the group’s former president said. 
While a similar initiative failed in April, an agreement can now be reached as Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, Chakib Khelil said in a Bloomberg Television interview. Khelil steered OPEC in 2008, the last time it implemented an output cut, which was announced in Algeria in December of that year. In a separate interview, former Qatari Energy Minister Abdullah bin Hamad al-Attiyah was convinced there is a need for an accord. 
“All the conditions are set for an agreement,” Khelil said from Washington. “Probably this is the time because most of the big countries like Russia, Iran, Iraq and Saudi Arabia are reaching their top production level. They have gained all the market share they could gain.”
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Monday, August 22, 2016

The Buy Signal for Oil Is In

Source: Jack Chan  (8/20/16)

Technical analyst Jack Chan documents a major new buy signal for oil stocks and ETFs that will enable investors to hold for the long term.

$OSX has confirmed a new major buy signal, which can last for months and years.

Speculation has now confirmed a pullback bottom; expect new recovery highs in coming weeks and months.

The bottoming process continues with a breakout imminent.

For the OIH, the upside price target is 55.

For the XLE, the upside price target is 95.

For the, the upside price target is 20.

Subscribers were advised to diversify into USD beginning in 2011, as the loonie topped. The Canadian dollar is now a buy, and investors can scale in for the long term.


With a new major buy signal in place and the cycle having bottomed, investors can cost average in on oil stocks and/or ETFs, and hold for the long term.

Jack Chan is the editor of simply profits at, established in 2006. Jack bought his first mining stock, Hoko exploration in 1979, and has been active in the markets for the past thirty seven years. Technical analysis has helped him filtering out the noise and focusing on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the US dollar bottom in 2011.

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1) Statement and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
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Charts courtesy of Jack Chan

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Analysts: Oil Industry is on a Bumpy Road to Recovery

From NGI:
While it seems the natural gas and oil industry is convinced that the worst is over and markets are on their way to a comeback, the only certainty is that the road to recovery is going to be a long, bumpy one. 
“The main reason natural gas producers, in particular, think the market has hit a bottom is that all the reduction in rig activity is finally catching up to the market,” said NGI’s Patrick Rau, director of strategy and research. 
High-grading, drilling longer laterals and reducing the drilled but uncompleted (DUC) inventory will only go so far. Eventually, the impact from the severe decline in drilling will become evident, especially when so many of the rigs that have been laid down are horizontal, Rau said. 
“Horizontal wells tend to have hyperbolic decline, meaning so much production occurs in the first few years of the well. If you don't keep drilling those, the industry misses out on that initial surge of production, which is starting to be reflected in production numbers,” he said.
The whole article can be read by clicking here.

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Methane "Hot Spot" Linked to Natural Gas Leaks by NASA

From EcoWatch:
The National Aeronautics and Space Administration (NASA) released a new study Monday examining what caused a methane "hot spot" to form in New Mexico. This new study of methane emissions generated by the oil and gas industry in the state's San Juan Basin is a major step forward in understanding the causes of New Mexico's methane "hot spot." It follows up on a 2014 satellite-based study that initially found the "hot spot" and sought to identify its specific causes. 
The NASA study found that roughly 50 percent of basin-wide methane emissions come from more than 250 very large polluters that were detected by intensive NASA aerial surveys and ground crews. According to the authors, this finding confirms researchers' earlier speculation that most of the basin's methane emissions are related to natural gas extraction and coal mining. 
But this is only half of the story as the study did not determine the source of the remaining 50 percent of emissions. Given the more than 20,000 (mainly older) gas wells, myriad storage tanks, thousands of miles of pipelines and several gas processing plants in the area, NASA's finding that the oil and gas industry is primarily responsible for the "hot spot" is not surprising. In fact, the researchers found only one large source of methane not related to oil and gas operations: venting from the San Juan coal mine. This discovery renders attempts to point the finger at other potential emissions sources, like coal outcrops and landfills, definitively refuted.
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Stark State College to Receive Over $500,000 From State for Shale Education

From Crain's Cleveland:
There is still some life in the shale gas boom down in Canton — at least for Stark State College. 
The school, which has been training workers for the oil and gas industry for several years and opened a well-site training center in 2014, has received $506,483 in state education funds to provide its “ShaleNET” education and training to students at Eastern Gateway Community College and Hocking College. 
“The Ohio Department of Higher Education selected the ShaleNET Share project for funding because it meets Gov. John Kasich’s higher education strategy of promoting educational excellence and economic efficiency and stabilizing or reducing student tuition rates at colleges and universities,” Stark State said in a news release.
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Saturday, August 20, 2016

Analyst Lists Chesapeake Energy as Top Company on List of Those Dominating the Utica Shale

From The Motley Fool:
The late Chesapeake Energy (NYSE:CHK) co-founder and CEO Aubrey McClendon once said that the Utica shale would be the "biggest thing economically to hit Ohio, since maybe the plow." While it has not turned out to be that big, it is the second largest shale-gas play in the country by production. That is remarkable, considering that Chesapeake didn't drill the first well in the Utica until 2011. 
The Utica shale 101 
While Ohio is the center of the Utica drilling boom, the shale itself underlies not just eastern Ohio, but also most of West Virginia and Pennsylvania, as well as parts of New York, Virginia, and Maryland: 
Given the sheer size of the resource, McClendon once called the Utica a "half-trillion dollar" opportunity for Ohio. While it might never hit that level of economic output, it has fueled remarkable growth in the state's oil and gas production. Last year alone, oil production was up 99.9% to 22 million barrels, while the state's natural gas output surged 110% to 452.9 million cubic feet.  
Due to the energy market downturn, Ohio's production will not grow that rapidly in 2016. However, the Utica shale boom is far from over, because there's still a tremendous amount of oil and gas trapped within its rocks. Several producers are working to extract those hydrocarbons, though five companies stand above the rest as the dominant players in the Utica.
Read the whole article by clicking here.

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Thursday, August 18, 2016

Science Advisors Uphold EPA’s Topline Conclusion of “No Widespread, Systemic Impacts”

by Katie Brown, Energy in Depth

At long last, the Hydraulic Fracturing Panel of the Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) has released its final recommendations on EPA’s landmark groundwater study, and anti-fracking activists hoping for a damning report on EPA’s primary conclusion are likely to be disappointed.
The panel does not ask EPA to modify or eliminate its topline finding of “no widespread, systemic impacts” to groundwater from fracking – it asks EPA to provide more details or a “quantitative analysis” of how the agency came to that conclusion. From the recommendations,
“EPA should provide quantitative analysis that supports its conclusion that hydraulic fracturing has not led to widespread, systemic impacts on drinking water resources. Twentysix of the 30 members of the SAB Panel concluded that the statement also requires clarification and additional explanation…” (emphasis added)
Here are the most important things to know as you read through the recommendations:
Fact #1: Quantitative analyses have clearly shown no widespread, systemic impacts
Studies that have looked at the numbers of well failures or water impacts that have occurred as oil and natural gas has skyrocketed across the country have shown that these instances are exceedingly rare.
In fact, the Pennsylvania Department of Environmental Protection (DEP) has just released its2015 Oil and Gas Annual Reportwhich found zero confirmed cases of stray gas migration into water resources in 2015.  Those numbers are even more impressive when you consider that Pennsylvania produced a record 4.6 trillion cubic feet of natural gas in 2015 alone, which is nearly five times what it produced in 2011. Not only that, but DEP more than doubled its well site inspections from over 14,650 in 2009 to more than 34,600 in 2015.
The latest data show negligible impacts, but even before states implemented new well casing regulations, the number of well integrity failures (which doesn’t necessarily mean water was impacted) comes out to only a fraction of one percent of all wells drilled in a given state.
In January 2014, the Associated Press completed an investigation using Pa. DEP data, which found a well failure rate in Pennsylvania of only about one-third of one percent (0.33 percent) of all the oil and natural gas wells drilled in the state from 2005 to 2013.
In 2011, the Ground Water Protection Council looked at more than 34,000 wells drilled in Ohio from 1983 to 2007 and more than 187,000 wells drilled in Texas between 1993 and 2008.  The GWPC found a well failure rate of just 0.03 percent in Ohio and only about 0.01 percent in Texas.
In other words, quantitative studies have shown that impacts are not widespread or systemic.
Fact #2: Several panel members expressed strong support for an opinion that EPA’s topline finding is “accurate, unambiguous”
As EID has noted before, the SAB recommendations include an opinion authored by panel member Walt Hufford, who is joined by three other panel colleagues: Dr. Stephen W. Almond, Dr. Shari Dunn-Norman, and John V. Fontana. The dissenting opinion clearly states,
“The statement by the EPA in the draft Assessment Report issued in June, 2015 is clear, unambiguous, concise, and does not need to be changed or modified….The major conclusion by EPA in their June 2015 draft Assessment Report stating “no widespread, systemic impacts on drinking water resources in the Unites States” is accurate, unambiguous, and supportable with the facts EPA has reviewed.”
During one of the teleconferences to discuss the recommendations, several members of the SABvoiced their support for the dissenting opinion and for EPA’s topline finding. As Dr. Shari Dunn-Norman explained,
“I’ve been giving this a lot of thought […] of Walt’s opinion and I would like to support his opinion completely…in my experience we did massive hydraulic fracturing back in the 1970s and 1980s and we just didn’t see major problems.  And if there were really some very big issues with this, we would probably have seen them by now.”
Dr. Stephen W. Almond agreed noting,
“I want to just join in with Shari. I don’t want to sound like we’re singing kumbaya but I’ve fractured all over the world been on literally thousands of frack jobs and I have to agree that I don’t see any widespread risk of any of the areas […]I’d just have to agree with that number one statement that Shari gave just from experience fracturing all over the world and not to say there’s not some cases that may need to be investigated like Dimock and Pavillion, etc., but overall I don’t see a widespread systemic issue here.”
During one of the teleconferences, Dr. Stephen Randtke and Dean Malouta said that they were considering joining the dissenting opinion. Although neither ended up doing so, Randtke said during the teleconference that he agrees with EPA’s topline finding as it stands in the draft groundwater report:
“As I said back in October when you read this entire three paragraph introduction on page ES-6 on the major findings I have really no trouble with it. And so I’m sympathetic to Walt’s statement […] I agree with kind of the whole statement as EPA has stated it. I think it’s a very good one.”  (emphasis added)
Fact #3: Study after study has come to EPA’s same conclusion that impacts are not widespread or systemic  
EPA’s findings are right in line with what scientists have repeatedly concluded in peer-reviewed research. Studies by the University of CincinnatiU.S. Department of Energy, the U.S. Geological Survey, the Government Accountability Office, the Groundwater Protection CouncilCalifornia Council on Science and Technology, and the Wyoming Department of Environmental Quality, as well as studies by numerous universities, such as MITUniversity of Texas at Austin,  and Yale (just to name a few) have come to exactly the same conclusion.
Not once, in at least four drafts of recommendations, has the SAB Panel pointed to any evidence that would contradict EPA’s topline finding of “no widespread, systemic impacts” to drinking water resources. Without that evidence, SAB can only conclude that EPA’s topline finding is sound.

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