Utica Journal Discoveries Banner

Advertisement Only

Visit Our Website    Our Oil and Gas Practice

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A. presents

Utica Journal Discoveries - An Electronic Oil and Gas Newsletter

With offices located in the heart of the Utica Shale play in

Canton, Akron, Alliance, New Philadelphia & Sugarcreek, Ohio

                                       Editors Gregory W. Watts, Esq. and Ryan W. Reaves, Esq.

 

 

Attorney William Williams to present at the Institute for Energy Law's 5th Law of Shale Plays Conference

Institute for Energy Law
Attorney William Williams the chairman of KWGD's Oil, Gas & Mineral Law Section, will be among the faculty at IEL's 5th Law of Shale Plays Conference to be held September 4-5, 2014 in Pittsburgh, Pennsylvania.  Bill will join panelists to present "This Year's Hot Issues in Leasing."  More information on the conference, including the full schedule, may be accessed here

 

Ohio Supreme Court accepts certified questions in Corban v. Chesapeake

KWGD.com
The Ohio Supreme Court has accepted certification of state law questions from the United States District Court for the Southern District of Ohio, Eastern Division in the case of Hans Michael Corban v. Chesapeake Exploration, L.L.C., et al.  The Court will address the following:  "Does the 2006 version or the 1989 version of the ODMA apply to claims asserted after 2006 alleging that the rights to oil, gas, and other minerals automatically vested in the surface land holder prior to the 2006 amendments as a result of abandonment?" and "Is the payment of a delay rental during the primary term of an oil and gas lease a title transaction and 'savings event' under the ODMA?"  
 
 

Fifth District Court of Appeals schedules Oral Argument in Wendt v. Dickerson

KWGD.com
The Fifth District Court of Appeals has scheduled the Oral Argument for August 21, 2014 at 10:00 a.m. in the case of Christopher Wendt, et al. v. Dickerson, et al., Case Number 2014AP010003.  In Wendt, the Fifth District will address an appeal from a ruling by the Tuscarawas County Court of Common Pleas that held the Ohio Dormant Mineral Act, in effect as of March 22, 1989, vested the mineral estate with the current surface owner.  Additional information about the decision by the Trial Court, and a copy of the Trial Court's opinion may be found here.
 

Rex Energy Provides Update on Operations and Second Quarter Production

Rex Energy
Rex Energy Corporation (Nasdaq: REXX) provided an update on both its Appalachian Basin operations as well as its second quarter 2014 production.  In the Warrior North Prospect [Carroll County, Ohio], Rex completed drilling and completion operations on the six-well Grunder pad and expects the wells to be placed into service in the third quarter of 2014.  The six wells were drilled with an average lateral length of approximately 4,800 feet and completed with an average of 24 completion stages.  In addition, the company tested 500 foot spacing between laterals on one of the six wells.  The remaining wells were drilled with approximately 600 feet between the laterals.  In the Warrior South Prospect [Guernsey, Noble and Belmont Counties, Ohio], Rex is currently drilling the second well of the six-well J. Hall pad, located in Guernsey County, Ohio.  The six-wells on the J. Hall pad are expected to be drilled with an average lateral length of approximately 5,400 feet and are testing approximately 650 foot spacing between the laterals on the pad.  The six-well J. Hall pad is expected to be completed in the fourth quarter of 2014 and placed into sales near the end of 2014. 

 

U.S. Fish and Wildlife Service announces a 6-Month Extension of Final Determination on the Proposed Endangered Status for the Northern Long-Eared Bat

U.S. Fish and Wildlife Service
The U.S. Fish and Wildlife Service, announced a 6-month extension of the final determination of whether to list the northern long-eared bat (Myotis septentrionalis) as endangered.  "We also reopen the comment period on the proposed rule to list the species.  We are taking this action based on substantial disagreement regarding the sufficiency or accuracy of the available data relevant to our determination regarding the proposed listing, making it
necessary to solicit additional information by reopening the comment period for 60 days.  Comments previously submitted need not be resubmitted as they are already incorporated into the public record and will be fully considered in the final rule.  We will publish a listing determination on or before April 2, 2015." 

 

Overview: Utica Shale production growth in 2014

Market Realist
Market Realist has assembled a 7-part series on the Utica Shale development, focusing on the production reported in 2014.  The series includes a fairly comprehensive assembly of most major operators' holdings in the Utica Shale, and a synopsis of some operators' 1Q2014 earnings reports and accompanying conference calls. 

 

U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia

Bloomberg
The U.S. will remain the world's biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation's economic recovery, Bank of America Corp. said.  U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter, the bank said in a report.  The country became the world's largest natural gas producer in 2010.  The International Energy Agency said in June that the U.S. was the biggest producer of oil and natural gas liquids.

 

Ohio's new hot spot for Utica shale dominated by Gulfport Energy

Columbus Business First
Ohio's top natural-gas wells have shifted to Belmont County during the first three months of the year - and Oklahoma City-based Gulfport Energy Corp. (NASDAQ: GPOR) has all but one of those top wells.  In the last three months of 2013, the eastern Ohio county housed three of the top 10 gas wells in the state.  During the first quarter of 2014, though, that number jumped to eight, according to new Ohio Department of Natural Resources data.  Monroe County, just south of Belmont, drops from housing five of the top 10 at the end of last year to two.  The bright side for Monroe County: those two were the highest-producing in the state.  The southern migration fits what those in the Ohio oil and gas industry have said for months: Original hotspots like Carroll County are still active, but drillers are finding success as they move down the state's eastern border.

 

Chesapeake: NGLs To Deliver Long-Term Growth

Seeking Alpha
Chesapeake Energy (NYSE: CHK) delivered a 55% increase in the production of natural gas liquids (NGLs), bringing the total production to 7.6 million barrels.  The growth is primarily driven by strong production in the Marcellus and Utica regions.  The NGL operation expanded at a faster pace than the company's oil or gas production.  Given the higher production from its Mid-Continent, Eagle Ford and Utica shales, the company expects NGL to account for 13% of the company's total output.  The lack of infrastructure was the biggest problem in the Utica shale.  However, with the commencement of shipments on pipelines, such as the ATEX pipeline that provides access to the Gulf, the company now has the ability to transport much-needed capacity from the shale.  Consequently, Chesapeake's production from the Utica shale has also increased by approximately 422% compared to last year.  Moreover, the natural gas liquids production has accounted for roughly 30% of its Utica volumes. 

 

Major Pipeline to Build Three Pipelines in Appalachian Basin

North American Oil and Gas Pipelines

Michigan-based Major Pipeline LLC plans to construct and put into operation three pipelines in southern Pennsylvania and northern West Virginia by the end of 2015.  The pipelines will transport brine, fresh water and natural gas liquid (NGL) condensates to support operations in the Marcellus and Utica Shale plays.  The project, deemed the Eridanus Pipeline System, will be comprised of approximately 105 miles of pipeline, handling up to 11.3 million gallons of water and condensates per day.  The three pipelines will be a 16-in. fresh water pipeline, a 12-in. brine pipeline and a 6-in. NGL condensate pipeline.  Major Pipeline plans to start the construction phase of the project in the first quarter of 2015.

  

Harrison County Oil and Gas Industry Traffic Spurs Concern

Shale Play

"There are lots of trucks on county and township roads," Sheriff Ronald J. Myers. said.  "When we catch a truck where we don't think they should be traveling, we have no way to identify that vehicle or to check if they have a RUMA for the road they are traveling.  In addition to the county highways we patrol there are 15 townships and 468 township roads in the county.  So we thought it was necessary to come up with a way to identify trucks and keep track of which companies are permitted and which roads they are permitted to use."  Myers presented a sticker placard system which must be displayed on all the oil and gas vehicles.  This sticker will indicate which roads are permitted and for what time of the year.  There are two stickers which have been proposed, one for the county roads and one for townships.  The sticker will be marked for specific routes or townships and also display an expiration date.  The county sticker will be white while the township sticker would be red.

 

Bernstein pessimistic on storage, calls for $4.40-$5/Mcf in US gas prices

Platts

US natural gas prices will range between $4.40 and $5/Mcf for the second half of this year, Bernstein Research analyst Bob Brackett said, as gas storage levels struggle to top 3.5 Tcf.  Brackett called for an average price of $4.75/Mcf for this year, $4.50/Mcf in 2015 and then stretching to $5/Mcf by 2017.  For this year, Bernstein said that despite multiple triple-digit injections over the past two months, the gas market faces tightness and will not reach last year's 3.6 Tcf mark.  "Despite the fastest eight weeks of filling in history, we are still slightly behind track to reach minimum fill levels by mid-November," Brackett said of his contrarian views, noting that forward strip prices are only in the mid-$4/Mcf range.

 

Magnum Hunter Resources Reports Mid-Year 2014 Proved Reserves of 79.8 MMBoe

Magnum Hunter

Magnum Hunter Resources Corporation (NYSE: MHR) announced an increase of 7.7 MMBoe or a 10.7% improvement in the quantity of the Company's estimated total proved oil and natural gas reserves at June 30, 2014, compared with total proved reserves just six months ago at December 31, 2013.  At year-end 2013, the Company had booked proved reserves of only one Utica Shale well. At June 30, 2014, the Company was successful at booking proved developed non-producing reserves of one additional Utica Shale well and also booked proved undeveloped reserves of two Utica Shale wells.  The Company expects to significantly increase proved reserves in the Utica Shale, where it presently owns over 118,000 net leasehold acres, during the remainder of 2014 as a result of "pad" drilling and further delineation of its leasehold acreage position in this region.  At June 30, 2014, the Appalachian Basin (including properties in the Marcellus Shale and Utica Shale in West Virginia and Ohio and properties in Kentucky) accounted for approximately 80% of Magnum Hunter's total proved reserves volumes, the Williston Basin in North Dakota accounted for approximately 19% and other legacy assets accounted for the remaining 1%. A copy of the investor presentation released in conjunction with the update may be viewed here

 

Number of oil and gas rigs up in Ohio, nation

Cleveland.com
Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural gas in the U.S. rose by one to 1,875.  Of the major oil- and gas-producing states, Alaska, Kansas, Louisiana, Pennsylvania and Texas gained two rigs each.  North Dakota, Ohio and Wyoming each gained a rig.

  

CONSOL Energy Announces Operations Update

Consol Energy

CONSOL Energy Inc. (NYSE: CNX) is provided an operations update for the quarter ended June 30, 2014.  CONSOL's much anticipated 3-well NBL19 pad in northern Noble County, OH, had initial production rates exceeding 23 MMcfe per day, per lateral, with controlled pressure drawdown.  "The E&P division continues to achieve production targets while focusing on improving operational efficiencies," commented Nicholas J. DeIuliis, President and Chief Executive Officer.  "CONSOL is improving cycle times from SPUD to turning a well in-line with improvements in both drilling and completion efficiencies.  Specifically, we are reducing the number of days to drill wells and time to move a horizontal rig, as well as increasing stages completed per day.  These improvements will not only help compress cycle times but will also result in growing our gas production even more efficiently."  In the Utica core, surrounding Noble County, OH, CONSOL expects to turn in line 2 - 3 pads, or 8 - 13 laterals, during the coming quarter.