KWGD
In Lutz v. Chesapeake Appalachia, the U.S. District Court for the Northern District of Ohio certified the following question to the Ohio Supreme Court:  "Does Ohio follow the 'at the well' rule (which permits the deduction of post-production costs) or does it follow some version of the 'marketable product' rule (which limits the deduction of post-production costs under certain circumstances)?"  In Lutz the plaintiff-lessors seek to certify a class against the lessee alleging underpayment of royalties from natural gas production resulting from post-production costs deducted from royalty payments, including the cost of gathering gas, processing, compression and transportation costs.  At issue is whether Chesapeake may deduct the costs and, if so, how such costs are to be calculated.  Read more analysis here. 
 

KWGD Attorneys Scott M. Zurakowski & Gregory W. Watts to Speak at the Energy & Mineral Law Foundation's 36th Annual Institute
KWGD
Directors Scott Zurakowski and Gregory W. Watts will be featured speakers at the Energy and Mineral Law Foundation's (EMLF) 36th Annual Institute on June 21-23 taking place at the Amelia Island Plantation, Amelia Island, Florida.  Each year, the institute brings together a wide range of industry professionals throughout the oil and gas industry fostering education on laws and the regulation of energy, mineral and natural resources. More information on EMLF's 36th Annual Institute can be found here or on their website www.emlf.org.  More information regarding the upcoming presentation may be found here. 
 

Seventh District Court of Appeals Affirms Lessee's Ability to Unilaterally "Extend" Oil & Gas Lease On The Same Terms
KWGD
In Kenney vs. Chesapeake, the Seventh District Court of Appeals affirmed a holding by the Columbiana Court of Common Pleas finding an "extend or renew under similar terms a like lease" provision in an oil and gas lease grants the lessee two options: (i) to extend the lease on the same terms as the existing lease, or (ii) renegotiate for a renewal "like lease" on similar terms. The Court reasoned that "extend" and "renew" are distinct terms under Ohio law.  Read more analysis here. 

Ohio Supreme Court Accepts Taylor v. Crosby

KWGD

The Ohio Supreme Court has accepted another appeal involving Ohio's Dormant Mineral Act, O.R.C. � 5301.56: Taylor v. Crosby, 2014-1886. Taylor concerns the look back period for the 1989 version of the Ohio Dormant Mineral Act (i.e., 'fixed' vs. 'rolling').  The Ohio Supreme Court, sua sponte, will hold Taylor pending the outcome in Walker v. Shondrick-Nau, a case involving Ohio's Dormant Mineral Act previously accepted by the Ohio Supreme Court for review.  Read more analysis here.

Baker Hughes Announces Suspension of the Well Count

Baker Hughes 

Baker Hughes Incorporated (NYSE: BHI) announced that it has suspended the quarterly publication of the U.S. onshore well count.  In response to the recent market downturn and internal initiatives to reduce costs, the company has prioritized its resources to support the ongoing publication of the weekly North America and monthly International rig counts, which continue to provide a timely and relevant snapshot of evolving market conditions.

Rover Pipeline updates route maps, launches new website
ohio.com
Rover Pipeline, LLC has provided updated maps detailing the proposed route of the Rover Pipeline to local libraries and government offices in the counties through which the route is proposed.  The maps were submitted as part of the project's filing on February 23, 2015 with the Federal Regulatory Commission (FERC).

Williams Partners Ups Stake In Utica Shale Region
Investors.com
Williams Partners (NYSE: WPZ) is raising its interest in the eastern Ohio Utica shale region.  The Tulsa, Okla.-based natural gas firm said Monday that it has agreed to buy EV Energy Partners' (NASDAQ: EVEP) 21% stake in Utica East Ohio Midstream for $575 million.  That increases Williams Partners' stake in the natural-gas midstream business, through its subsidiary Utica Gas Services, from 49% to 70%. 

Energy companies explore lower shales for greater yields of gas, liquids
Triblive
Low natural gas prices that have companies balancing spending cuts with promises of ramped-up production are driving some new development in the Utica and Point Pleasant shale, where deeper wells can yield more gas and liquids.  "It's relatively early days in the Utica so I think companies are still trying to figure out the optimal drilling and production and fracturing techniques, but I think you'll continue to see increasing production rates and ultimate recovery rates from these wells," said Dave Yoxtheimer, a researcher at Penn State University's Marcellus Center for Outreach and Research.  "Certainly, even in a low commodity price environment, you can still, in essence, make up the difference by just the sheer volume of gas you're producing," Yoxtheimer said.

Marcellus and Utica shale: New permit spike in Monroe and Noble counties

Farm and Dairy

The Ohio Department of Natural Resources issued 43 new permits in February, up from 32 new permits in January.  The largest increase in new permitting activity took place in Monroe County.
Monroe County experienced an 11-permit hike, from six in January to a state-leading 17 new permits in February.  The majority of the new permits were issued to Antero Resources Corporation on properties in Seneca and Franklin townships. Six of the new permits were issued on properties in Switzerland Township, five to CNX Gas Company and one to XTO Energy.  New permitting in Noble County centered in Marion Township, where all nine of the county's new permits were issued. As in Monroe County to the east, the new permits in Noble County were issued to CNX and Antero and all had commenced drilling activity.

Chesapeake Utilities Corporation Completes Merger With Gatherco, Inc.
Prnewswire

Chesapeake Utilities Corporation (NYSE: CPK) announced completion of the merger of Gatherco, Inc. ("Gatherco") into Aspire Energy of Ohio, LLC, Chesapeake Utilities' newest wholly-owned subsidiary.  The transaction had an aggregate value of approximately $59.2 million.  Gatherco, located in Orrville, Ohio, was established in 1997 when it acquired Columbia Gas Transmission's natural gas gathering assets in Ohio.  Gatherco has operations in 40 counties throughout the state. Gatherco's assets include 16 gathering systems and over 2,000 miles of pipelines and right-of-way in central and eastern Ohio.

PDC Energy Closes Common Stock Offering

PDC Energy, Inc.
PDC Energy, Inc. (Nasdaq: PDCE) announced that it has closed its previously announced underwritten public offering of 4,002,000 shares.  The net proceeds from the offering were approximately $203 million after deducting underwriters' compensation (but before estimated expenses).  Goldman, Sachs & Co. and J.P. Morgan Securities LLC acted as the sole underwriters of the offering.

Rex Energy Provides Operational Update
Rex Energy
Rex Energy Corporation (Nasdaq: REXX) provided an operational update on the company's Appalachian Basin operations.  Appalachian Basin - Warrior North Prospect, Carroll County, Ohio:  As previously announced, the company's first quarter 2015 production had been constrained, in part because of involuntary production curtailments in the Warrior North Prospect due to downtime at the Blue Racer compressor station.  The issue at the Blue Racer compressor station has been resolved and the company does not anticipate future production to be constrained in the Warrior North Prospect.
 

Hinto Energy, Inc. Develops Proprietary Technology to Increase Oil Production and Reserves

CNN Money

Hinto Energy, Inc. (OTCQB: HENI), engaged in the exploration, acquisition, and development of oil and gas properties, with producing wells in Ohio, Utah and Montana, today announced the Company has been developing a new proprietary technology that will enhance production and increase reserves of both newly drilled and existing oil and gas wells. The technology is engineered to drill multiple very short radius lateral bore holes from a vertical well that extend out to a maximum of 300 feet, although there is significant support documenting enhanced well productivity with laterals as short as 10 feet.

Chesapeake Energy testing waterless fracking at Ohio well

Columbus Business First

Chesapeake Energy Corp. is partnering with GasFrac Energy Services Inc. to test waterless fracking at one of its Ohio oil wells.  The most-active driller in the Utica shale play is in the early stages of the test on a Tuscarawas County well, the company confirmed.  "One of our partners (EV Energy Partners) attempted to use the technology," said Chris Doyle, executive vice president of operations for Chesapeake's northern division.  "We're using that technology and we want to test that out and see if it could drive additional value."  Doyle cautioned that the test is in the very early stages, so it's unclear yet if it's something the company would use going forward.

Judge shoots down Broadview Heights ban on future oil and gas wells

Cleveland.com

Two oil and natural gas firms can drill new wells in Broadview Heights, a judge has ruled, effectively overturning the city's voter-approved ban on future wells.  In a March 11 ruling, Cuyahoga County Common Pleas Judge Michael K. Astrab said that Bass Energy Co. Inc. of Fairlawn and Ohio Valley Energy of Austintown - and other oil and gas companies - can drill new wells in Broadview Heights.  Bass and Ohio Valley sued Broadview Heights in July, challenging the city's Community Bill of Rights, a charter amendment that includes a ban on future oil and gas wells.  Voters approved the bill of rights in November 2012.  Bass and Ohio Valley, in their lawsuit, said the state of Ohio, not Broadview Heights, has sole authority to permit or deny drilling and to regulate wells.  Judge Astrab, in his nine-page ruling last week, agreed.  He said state law gives the Ohio Department of Natural Resources "sole and exclusive authority'" to permit, locate, space and regulate oil and gas wells.

Eclipse Resources
Eclipse Resources Corporation (NYSE: ECR) announced proved reserves at December 31, 2014 were 355.8 Bcfe, a 353% increase compared to proved reserves at December 31, 2013, in each case assuming ethane rejection.  Year-end 2014 proved reserves were 72% operated by the Company, 39% proved developed producing, and 72% natural gas.  SEC prices for reserves were calculated as of December 31, 2014 on a weighted average Appalachian index basis and were $94.99 per Bbl for oil and $4.35 per MMBtu for natural gas.  Using SEC prices, which are not indicative of current forward prices, the pre-tax present value discounted at 10% of the December 31, 2014 proved reserves was $509.4 million, a 228% increase over year-end 2013.

Chesapeake Energy Corporation Updates Its 2015 Operating Plan in Response to Low Commodity Price Environment

Chesapeake Energy Corporation

Chesapeake Energy Corporation (NYSE: CHK) announced it has reduced its 2015 capital budget (including capitalized interest of $500 million) to $3.5 - $4.0 billion for 2015, which is a $500 million reduction from its previous guidance of $4.0 - $4.5 billion.  Chesapeake plans to operate 25 - 35 rigs in 2015, which represents a decrease of approximately 55% from an average of 64 rigs in 2014.  The company intends to spud and connect to sales approximately 520 and 650 gross operated wells, respectively, in 2015 (a decrease from 1,175 and 1,150 wells in 2014).  As a result, the company is lowering its targeted 2015 production to 231 - 236 million barrels of oil equivalent, or average daily production of 635 - 645 thousand barrels of oil equivalent, which represents 1 - 3% production growth over the prior year after adjusting for 2014 asset sales.  Doug Lawler, Chesapeake's Chief Executive Officer, said, "We entered 2015 with a strong liquidity position and we intend to manage it prudently.  In response to continued weak commodity prices, we are further reducing capital expenditures and associated drilling activity.  As a result, we now forecast ending 2015 with approximately $6 billion in combined cash and borrowing capacity under our credit facility. With this budget revision we anticipate being free cash flow neutral by the end of 2015."