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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.

 

 

Seventh District Court of Appeals Reaffirms That a Severed Royalty Interest is Subject to Ohio's Marketable Title Act 

KWGD.com
In Covert v. Koontz, the Seventh District Court of Appeals reaffirmed its holding in Pollock v. Mooney which found a severed royalty interest was personal property, but nevertheless was subject to Ohio's Marketable Title Act, as found in O.R.C. �� 5301.47 - 5301.56 ("MTA").  At issue was a reservation of "the one-half royalty in oil & gas" contained within a deed recorded in 1903.  More discussion may be found here.

  

Rex Energy Provides Update on Core Operations, Production, Hedging, and Liquidity

Rex Energy Corporation
Rex Energy Corporation (Nasdaq: REXX) provided an operational update on the company's Appalachian Basin operations and announced fourth quarter 2014 and full year 2014 production volumes and price realizations.  The six-well J. Hall pad, located in Guernsey County, Ohio, was placed into sales at an average 24-hour sales rate per well (excluding downtime) of 2,365 boe/d (43% NGLs, 36% gas, 21% condensate) assuming full ethane recovery and an average natural gas shrink of 18%.  The six wells produced with an average casing pressure of 3,383 psi during the 24-hour sales period on an average 20/64 inch choke.  The six-wells on the pad were drilled to an average lateral length of approximately 4,900 feet and tested 600 foot spacing between the laterals on the pad.  The wells were completed with an average of 32 frac stages and sand concentrations exceeding 2,000 pounds per foot, which is the highest sand concentrations pumped in the Warrior South Prospect to date. Based on composition analysis, the produced gas averaged 1,302 BTU.
  

Amid Price Drop, U.S. to Lead in Oil

Shale Play

Plunging oil prices have hurt American companies in the short run, but increased U.S. production means that the country is on the path to become a global leader in oil production, the head of the U.S. oil and gas industry's top lobbying arm said.  Falling oil prices have empowered the United States and weakened OPEC and Russia, said Jack Gerard, the CEO of the American Petroleum Institute.  The result is that increased U.S. production in North Dakota and elsewhere has "fundamentally reordered the world's energy markets," he said.  "The price today has some impacts ... but longer term you will see the demand for our product continue to grow," he said.  "I can't predict the price. But what it clearly shows is what we're doing in the United States has implications for the global market and the U.S. market."

 

Antero Resources Announces 2015 Capital Budget and Guidance

Antero Resources
Antero Resources Corporation (NYSE: AR) announced its 2015 capital budget and guidance.  Antero reported its initial capital budget for 2015 is $1.8 billion, a 41% reduction from the 2014 capital budget of $3.05 billion; its drilling and completion budget for 2015 is $1.6 billion, a 33% reduction from the 2014 capital budget of $2.4 billion; its plan to operate an average of 14 drilling rigs between the Marcellus and Utica Shale plays in 2015, down from 21 at year-end 2014; and a plan to complete 130 horizontal Marcellus and Utica wells in 2015, down from 179 in 2014.  Approximately 60% of the drilling and completion budget is allocated to the Marcellus Shale and the remaining 40% is allocated to the Utica Shale.  During 2015, Antero plans to operate an average of nine drilling rigs in the Marcellus Shale in West Virginia and five drilling rigs in the Utica Shale in Ohio.  The Company expects to complete approximately 80 horizontal wells in the Marcellus Shale and 50 horizontal wells in the Utica Shale.  In 2015, Antero plans to continue consolidating acreage in the core of the southwestern Marcellus rich gas play and the core of the Utica rich gas play in southern Ohio.  However, given the current commodity price environment, Antero has reduced its 2015 land budget by $300 million, or 67%, to $150 million for 2015.  Consistent with historical practices, the Company does not budget for acquisitions. 

 

Hess Corporation Announces 2015 Capital and Exploratory Budget

Hess Corporation
Hess Corporation (NYSE: HES) announced a 2015 capital and exploratory budget of $4.7 billion, a 16 percent reduction from its 2014 actual spend of $5.6 billion.   Of this, $2.1 billion (45 percent) is budgeted for unconventional shale resources, $1.2 billion (26 percent) for production, $1.0 billion (21 percent) for developments and $0.4 billion (8 percent) for exploration.  "In the Utica, we plan to spend $290 million compared with approximately $500 million last year, as we transition to early development at a measured pace in this price environment and as infrastructure builds out.  Over 2015 our joint venture with CONSOL intends to execute a two rig program focused in the core of the wet gas window and bring 25-30 new wells online, compared with four rigs and 39 new wells in 2014" Greg Hill, President and COO, stated.  

 

Carrizo Oil & Gas Announces Analyst Conference Highlights

Carrizo Oil & Gas
Carrizo Oil & Gas, Inc.'s (Nasdaq: CRZO) senior management is hosting an analyst conference to provide an update on the company's current operations and future plans.  In the Utica Shale, Carrizo's second well, the Brown 1H in Guernsey County, was brought online January 15, 2015. From January 16 through January 21, the well averaged 502 Bbl/d of condensate and 1.1 MMcf/d of rich natural gas on a 16/64" choke.  Carrizo is encouraged by the early results from the Brown 1H well, which was an updip test of the company's acreage on the western side of its position.  Carrizo is the operator of the Brown 1H well, and holds a 50% working interest in it.

 

Rex Energy Announces 2014 Proved Reserves Increased 57% to 1.3 Tcfe
Rex Energy Corporation
Rex Energy Corporation (Nasdaq: REXX) announced its total estimated proved oil, NGL and natural gas reserves as of December 31, 2014.  Rex Energy reported proved oil and natural gas reserves as of December 31, 2014 of 1,337 Bcfe, an increase of approximately 487.0 Bcfe, or 57% from total proved reserves reported at year-end 2013.  Proved developed reserves were 586.7 Bcfe at year-end 2014, as compared to 356.5 Bcfe at year-end 2013, a 65% increase.  In addition, the company's PV-10 (a non-GAAP measure of estimated future cash flows, excluding income taxes, discounted at 10%) increased approximately $536.6 million, or 80% to $1.2 billion, from year-end 2013 PV-10 of $668.7 million, of which the Warrior prospects in Ohio (located in Carroll and Guernsey Counties) represents $230 million.  

 

Gulfport Energy Corporation Provides Operational Update

Gulfport Energy Corporation
Gulfport Energy Corporation (Nasdaq: GPOR) announces the Company's 2014 exit rate and provides an operational update.  On December 31, 2014, Gulfport recorded daily net production of approximately 68,000 barrels of oil equivalent per day ("BOEPD"), consisting of approximately 73% natural gas and 27% oil and natural gas liquids.  For the fourth quarter 2014, Gulfport currently estimates that net production was approximately 5.5 million barrels of oil equivalent.  In the Utica Shale, Gulfport brought online twenty-two gross wells during the fourth quarter of 2014.  Of these twenty-two wells, six wells were located within the condensate window of the play, twelve wells were located within the wet gas window and four wells were located within the dry gas window of the play.  At present, Gulfport has six horizontal rigs drilling in the play.