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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.

Rex Energy
Rex Energy Corporation ("Rex Energy") (Nasdaq: REXX) announced the acquisition of approximately 208,000 gross (207,000 net) acres in the company's Butler Operated Area.  Rex Energy has entered into a definitive purchase agreement with SWEPI, LP, an affiliate of Royal Dutch Shell, plc ("Shell") to acquire a 100% interest in approximately 208,000 gross (207,000 net) acres prospective for the Marcellus, Upper Devonian/Burkett and Utica Shales in Pennsylvania and Ohio for approximately $120 million in cash, subject to customary closing adjustments.  The transaction is expected to close in September 2014.  The assets to be acquired are located in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in Pennsylvania and Columbiana and Mahoning counties in Ohio.  The additional acreage, combined with recent leasing, will bring Rex Energy's position in its Butler Operated Area to approximately 298,000 gross acres. 

EnLink Midstream Announces New 45-mile Condensate Pipeline in Ohio River Valley; Adds Compression and Stabilization Facilities 

ENLK

The EnLink Midstream companies, EnLink Midstream Partners, LP (NYSE: ENLK) and EnLink Midstream, LLC (NYSE: ENLC), announced plans to construct a new 45-mile, eight inch condensate pipeline and six natural gas compression and condensate stabilization facilities that will service major producer customers in the Utica Shale, including Eclipse Resources.  The total investment for the expansion project is over $250 million, roughly doubling the capital EnLink Midstream has invested in the Ohio River Valley to more than $500 million.  The Partnership will also build and operate six natural gas compression and condensate stabilization facilities in Noble, Belmont, and Guernsey counties.  Upon completion, the facilities will have a combined capacity of approximately 560 million cubic feet per day (MMcf/d) of natural gas compression and approximately 41,500 bpd of condensate stabilization.  The Partnership expects the first two compression and condensate stabilization facilities to be operational in the second half of 2014 and the remaining four facilities to be operational by the end of 2015.

PDC Energy

PDC Energy, Inc. (Nasdaq: PDCE) announced that through a series of transactions, the PDC recently added approximately 13,000 net acres, subject to confirmation of title, in the liquid-rich windows of the Utica Shale play in southeast Ohio.  The newly acquired acreage closely offsets PDC's existing acreage in southern Utica including the PDC's recently drilled Palmer unit acreage in eastern Morgan County as well as leasehold in northern Washington County.  The cost for the additional acreage is approximately $35 million which the PDC expects to be funded within its existing 2014 capital budget of approximately $647 million.  PDC's total acreage position in the Utica Shale with the additional acreage increases from approximately 54,000 to 67,000 net acres.  Total gross horizontal well inventory is projected to increase from approximately 300 to 350 locations.  PDC's acreage position in southern Utica is substantially contiguous in the wet-gas and condensate windows and provides for increased drilling, operational and midstream synergies. 

Columbus Business First

Hess Corp. (NYSE: HES) plans to sell its retail gasoline business, which is prominent along the East Coast, by the end of the year, and transition into a pure exploration and production company.  The company has 43,000 acres in the Utica's wet-gas window in a joint venture with Consol (NYSE: CNX).  Hess said the venture drilled 10 wells in the quarter and has drilled 52 wells since it began two years ago.  It plans to drill up to 35 wells this year.

Carrizo Oil & Gas, Inc. Announces Record Oil Production, Total Production, Revenue, and Adjusted EBITDA for the Second Quarter 2014 and Raises 2014 Oil Production Growth Target to 57%

Carrizo

Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) announced the Company's financial results for the second quarter of 2014 and provided an operational update, which included the following highlights: In the Utica Shale, Carrizo's condensate production during the quarter averaged approximately 116 Bbls/d.  The Company's first well, the Rector 1H in Guernsey County, Ohio, produced for only about a month during the quarter before being shut-in for pressure build-up tests.  During this time, the well produced at a gross rate of approximately 440 Bbls/d of condensate on a restricted choke. Carrizo has a 95% working interest in the Rector 1H well.  Carrizo received the spudder rig for its Utica Shale program late in the second quarter, and is currently drilling the top hole on the third well of its 2014 drilling program.  The Company expects to receive the larger rig later this month, which will initially move to the Brown 1H, located in northern Guernsey County, to drill the horizontal section.  Carrizo is the operator of the Brown 1H well, and holds a 50% working interest in it.  Carrizo currently plans to keep the spudder and larger rig active for the remainder of the year, which should allow it to drill 7 gross (5 net) operated Utica Shale wells during 2014.  Carrizo continues to expand its position in the condensate window of the Utica Shale play through bolt-on acquisitions.  The Company's acreage position in the play now stands at approximately 26,300 net acres.  The additional bolt-on acreage is located primarily in Guernsey County.

Rex Energy

Rex Energy Corporation (Nasdaq: REXX) announced its second quarter 2014 operational and financial results.  Second quarter 2014 production volumes were 128.8 MMcfe/d, an increase of 50% over the second quarter of 2013 and 5% over the first quarter of 2014, consisting of 89.8 MMcf/d of natural gas and 6.5 Mboe/d of oil and NGLs (including ethane).  Oil and NGLs (including ethane) accounted for 30% of net production during the second quarter and increased by 5% over the first quarter of 2014.  In the Warrior South Prospect [Guernsey, Noble and Belmont Counties], the company is currently drilling the third well of the six-well J. Hall pad, located in Guernsey County, OH.  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 or in early 2015.

Chesapeake Energy Corporation Reports Financial and Operational Results for the 2014 Second Quarter

Chesapeake Energy

Chesapeake Energy Corporation (NYSE: CHK) reported financial and operational results for the 2014 second quarter.  Utica Shale net production (a combination of Ohio, Pennsylvania and West Virginia production) averaged approximately 67,000 boe per day (125,000 gross operated boe per day) during the 2014 second quarter, an increase of 373% year over year and 34% sequentially.  Approximately 10% of the company's Utica production during the 2014 second quarter was oil, 30% was NGL and 60% was natural gas.  During the 2014 second quarter, Chesapeake operated an average of eight rigs and connected 48 gross wells to sales in the Utica, compared to an average of nine operated rigs and 47 gross wells connected to sales during the 2014 first quarter.  The average peak production rate of the 48 wells that commenced first production in the Utica during the 2014 second quarter was approximately 1,200 boe per day.  As of June 30, 2014, the company had 210 wells awaiting pipeline connection or in various stages of completion in the Utica.  In June 2014, the third phase of the Kensington gas processing plant, located in Columbiana County, Ohio, was placed into service.  This incremental capacity will enable the company to connect more Utica wells to sales during the 2014 second half and begin to reduce its inventory of nonproducing wells to a more normalized working level. A copy of the accompanying presentation may be viewed here, including an outline of the oil window of the Ohio Utica Shale that Chesapeake is seeking to 'unlock.'

Gulfport Energy Corporation Reports Second Quarter 2014 Results

Gulfport Energy Corporation

Gulfport Energy Corporation (Nasdaq: GPOR) reported financial and operational results for the second quarter of 2014 and provided an update on its 2014 activities.  For the second quarter of 2014, net production was 709,484 barrels of oil, 8,972,137 thousand cubic feet ("MCF") of natural gas and 9,538,843 gallons of natural gas liquids ("NGL"), or 2,431,955 BOE. Net production for the second quarter of 2014 by region was 1,930,139 BOE in the Utica Shale, 483,910 BOE in Southern Louisiana and an aggregate of 17,906 BOE in the Bakken, Niobrara and other areas.  In the Utica Shale, Gulfport spud 24 gross (16.5 net) wells during the second quarter of 2014.  At present, Gulfport has seven horizontal rigs drilling in the play.  In the wet gas window of the play, Gulfport brought online eight wells during the second quarter.  Initial seven-day sales rates from the wells, assuming full ethane recovery, averaged approximately 2,392 BOEPD with 42% liquids.  The wells in the wet gas window were drilled with an average perforated lateral length of 7,925 feet and completed with 32 frac stages.  In the condensate window of the play, Gulfport brought online two wells during the second quarter.  Initial seven-day sales rates from the wells, assuming full ethane recovery, averaged approximately 955 BOEPD with 68% liquids.  The wells in the condensate window were drilled with an average perforated lateral length of 8,298 feet and completed with 33 frac stages.  To secure the movement of Gulfport's Utica Shale production out of the basin, the Company has most recently executed binding agreements with ET Rover Pipeline, LLC, a subsidiary of Energy Transfer, to transport 100,000 MMBtu/day for a term of 15 years on the ET Rover pipeline project beginning in late 2016.  This firm transportation arrangement will provide Gulfport the flexibility to move natural gas to the Dawn, Ontario and Gulf Coast markets.  Since May 2014, Gulfport has increased its acreage position in the play, adding approximately 4,500 net acres, bringing the Company's total acreage position to approximately 184,500 gross (183,500 net) acres under lease in the Utica Shale.  A copy of the accompanying presentation may be viewed here.

PDC Energy Announces 2014 Second Quarter Results with Production Growth of 64% to 29,700 Boe per Day

PDC Energy

PDC Energy, Inc. (Nasdaq: PDCE) reported its 2014 second quarter financial and operating results from continuing operations, including the following highlights:  Increased production 64% to 29,700 barrels of oil equivalent per day ("Boe/d"); Increased crude oil and natural gas liquids ("NGLs") production 66% to 16,350 Boe/d. and Increased crude oil, natural gas and NGLs sales by 81% to $140 million.  With the addition of the fifth Wattenberg drilling rig and the second Utica rig, we anticipate solid production growth in the second half of 2014 and 2015.  We expect to fully fund our 2014 capital expenditures of $647 million from cash flow, cash on hand at the beginning of the year and proceeds from the sale of our Marcellus joint venture interests.  A copy of the accompanying presentation may be viewed here.

Shale Play

Increased truck traffic and commercial vehicles not adhering to traffic laws were the main topics of discussion Monday during the monthly oil and gas safety meeting in Harrison County.  Ohio State Highway Patrol District 7 Commander Capt. Corey Davies issued a warning to all drivers working in and traveling through the area that law enforcement will be increasing their efforts to control the increasing commercial truck traffic violations in eastern Ohio.

Antero Resources Corporation
Antero Resources Corporation (NYSE: AR) released its second quarter 2014 financial results.  Antero reported net daily gas equivalent production averaged 891 MMcfe/d, a 94% increase over the prior year quarter and included net daily liquids production of 20,237 Bbl/d, a 387% increase over the prior year quarter.  On June 26, 2014, Antero began moving its Utica natural gas production into the newly completed Seneca Lateral, allowing the Company access to its firm transportation on Rockies Express Pipeline ("REX").  This development allowed Antero to shift its Utica natural gas production realizations from Tetco M2 pricing to Chicago index pricing, realizing an approximate $1.50 per MMBtu price improvement.  With access to REX for the second half of 2014, Antero expects to sell approximately 65% of its gas during this period at currently more favorable indices, including TCO, Nymex and Chicago, and the remainder of its gas at Dominion South and Tetco M2.  In the Utica, Antero has five rigs drilling in liquids rich areas and forecasts that wells to be completed during the second half of 2014 will have an average Btu content greater than 1205.  A copy of the accompanying presentation may be viewed here.

Crain's Cleveland Business

According to the Ohio Department of Natural Resources, which permits, regulates and tracks all drilling activity in Ohio, 1,024 shale wells had been drilled in the state as of Aug. 2.  That includes 997 wells in the Utica shale and another 27 drilled into the Marcellus shale.

Philly.com

Another European firm has signed a deal to buy Marcellus Shale gas liquids, advancing plans to build a second Pennsylvania pipeline to supply an export terminal in Marcus Hook.  The Austrian petrochemical company Borealis said Thursday it had signed a 10-year contract to buy ethane produced from the Marcellus and Utica Shale formations.  The liquid, a raw material in plastics production, would be piped across Pennsylvania and loaded onto ships bound for Sweden at a Sunoco Logistics Partners terminal in Marcus Hook.  The new agreement would go into effect in 2016, when Sunoco Logistics anticipates its second Mariner East pipeline would begin service.

MarkWest Energy Partners Announces Major Expansion Projects and Reports Record Financial and Operational Results for Second Quarter 2014

MarkWest

MarkWest Energy Partners, L.P. (NYSE: MWE) reported operational results for the Second Quarter 2014.  MWE placed into service five major infrastructure projects, consisting of two processing plants with 320 MMcf/d of capacity in the Marcellus Shale, a 200 MMcf/d processing plant in the Utica Shale, 20,000 Bbl/d of ethane and heavier fractionation in the Marcellus Shale, and a 40,000 Bbl/d de-ethanization facility in the Utica Shale.  "We are excited to announce major capacity expansions and record financial and operational performance for the second quarter of 2014," stated Frank Semple, Chairman, President, and Chief Executive Officer. "The completion of five major infrastructure projects in the Marcellus and Utica Shales over the past three months has provided our producer customers the ability to continue expanding their rich-gas development programs.  Due to their ongoing success, we expect overall system volumes to continue to rapidly expand and provide us with unique opportunities to significantly grow cash flow and achieve future distribution growth targets."  A copy of the accompanying presentation may be viewed here.

Regency, American Energy form partnership in Ohio's Utica Shale

Pittsburgh Post-Gazette

Dallas-based midstream company Regency Energy Partners is partnering with American Energy-Midstream on a pipeline project in the Utica Shale.   In addition, Regency and a drilling arm of American Energy called American Energy- Utica (AEU), also struck a deal for natural gas gathering in eastern Ohio, Regency announced Thursday.  Total project costs are expected to be about $500 million, with Regency contributing 75 percent and America Energy-Midstream contributing the rest. "We are excited about the strong growth potential of the Utica Shale, and this project will be a main takeaway option for Utica development, providing interconnectivity with major interstate pipelines in 2015," said Art Cantrell, senior vice president of Regency's eastern region, in a statement.  "We are also pleased to partner with AEU, who has a very strong, accomplished management team with a demonstrated track record of success and has committed significant volumes to this project."  The project will include construction of a 52-mile, 36-inch gathering trunkline that will be able to deliver up to 2.1 billion cubic feet (Bcf/d) to two interstate pipelines: the Rockies Express Pipeline and Texas Eastern Transmission on the southern end of the line.

Seeking Alpha
Rice Energy Inc. (NYSE: RICE) announced that it is pursuing the formation of a midstream master limited partnership (MLP) and intends to confidentially submit a draft Registration Statement on Form S-1 to the U.S. Securities and Exchange Commission for an initial public offering (IPO) of common units of the MLP.  The offering is expected to be completed in the first half of 2015. 

Canton Repository
EV Energy Partners and EnerVest plan to drill a well in Tuscarawas County in October to explore their acreage in the Utica Shale's volatile-oil window, an area that includes Stark County.  The well will be drilled in the middle portion of Tuscarawas County and will test new fracking techniques, building on results from Chesapeake's Parker well, which is in the county's Perry Township. The oil window, in the western part of the Utica, has been tougher for drillers to develop than other parts of the play.  "EVEP and EnerVest have an extremely large position in Tusc. and Stark counties and we need to go ahead and get this tested and more fully develop it and then ultimately to sell it," EVEP's Executive Chairman John B. Walker said during a conference call Monday with analysts.