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Shell exits Pinedale, Haynesville gas plays, adds acreage in Marcellus, Utica shales

Royal Dutch Shell on Thursday said it plans to exit the Pinedale and Haynesville dry gas plays while adding acreage in the Marcellus and Utica shales in Pennsylvania, continuing its strategy of divesting large US natural gas assets in some plays, while adding assets in other plays to its portfolio. Shell announced two separate transactions in a statement Thursday. In one deal with Ultra Petroleum, Shell will acquire 155,000 net acres in the Marcellus and Utica shales in Pennsylvania and receive a cash payment of $925 million from Ultra in exchange for 100% of Shell’s Pinedale Anticline field assets in western Wyoming, including producing leases and associated gathering and processing contracts. In a separate agreement with Dallas-based Vine Oil & Gas and its partner Blackstone, Shell agreed to sell 100% of its Haynesville assets in northern Louisiana — including gas-producing properties and associated field facilities and infrastructure — for […]

Posted On : Published By : Tom Whipple
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Putin’s Pipeline Bypassing Ukraine Is at Risk Amid Conflict

Vladimir Putin ’s dream of a new pipeline to deliver Russian natural gas to the European Union without passing through Ukraine is fading amid escalating tit-for-tat economic sanctions. The $46 billion South Stream project, spearheaded by OAO Gazprom, is on hold and will probably remain in limbo for years as Russia continues to foment armed conflict in eastern Ukraine and the EU retaliates with bans, Eurasia Group said. That means the war-torn country will remain a key transit point for about half of Gazprom’s shipments to Europe, according to the New York-based risk research group. The EU previously had mixed positions on South Stream. With Russian troops massing near the Ukraine border, the bloc now has little choice but to stand united in opposition. “There’s no way Europe is going to put South Stream negotiations back on the table now, given the larger geopolitical context of the Ukraine crisis,” […]

Posted On : Published By : Tom Whipple
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Russia sees EU gas production waning

A report Wednesday from Russia’s National Energy Security Fund finds gas production from EU member states declines 43 percent over the next 12 years when compared with 2013 levels. The research note finds the reduction in gas production is equivalent to the total annual consumption rate of Italy. It says the EU currently is able to meet only 35 percent of its domestic demand for gas and has few export partners outside Russia. A report from Eurostat, the EU statistics office, finds more than 40 percent of the region’s production of energy came from the combined contribution from renewable energy resources and coal. The share of natural gas in the energy mix of the 28 member states was 16.8 percent, while crude oil accounted for the rest. Eurostat said Russian exports of natural gas to EU members declined from 45.2 percent to 29.5 percent between 2002-10, but this trend […]

Posted On : Published By : Tom Whipple
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Ohio's Utica Region now included in EIA's monthly Drilling Productivity Report

The Utica Region in eastern Ohio, one of the fastest growing natural gas production areas in the United States, has been added to the Drilling Productivity Report (DPR). Total natural gas production in the Utica Region, which includes production from the Utica and Point Pleasant formations as well as legacy production from conventional reservoirs, has increased from 155 million cubic feet per day (MMcf/d) in January 2012 to an estimated 1.3 billion cubic feet per day (Bcf/d) in September 2014. Utica formation drilling activity has been primarily focused in eastern Ohio since mid-2012, although the geologic formation extends into Maryland, New York, Pennsylvania, and West Virginia. Some producers are successfully targeting the Utica formation in northern West Virginia, but these wells fall within the existing DPR Marcellus Region. The DPR analyzes all drilling and production within geographic areas in order to capture total production volumes supplied to the market […]

Posted On : Published By : Tom Whipple
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Ohio’s Utica Region now included in EIA’s monthly Drilling Productivity Report

The Utica Region in eastern Ohio, one of the fastest growing natural gas production areas in the United States, has been added to the Drilling Productivity Report (DPR). Total natural gas production in the Utica Region, which includes production from the Utica and Point Pleasant formations as well as legacy production from conventional reservoirs, has increased from 155 million cubic feet per day (MMcf/d) in January 2012 to an estimated 1.3 billion cubic feet per day (Bcf/d) in September 2014. Utica formation drilling activity has been primarily focused in eastern Ohio since mid-2012, although the geologic formation extends into Maryland, New York, Pennsylvania, and West Virginia. Some producers are successfully targeting the Utica formation in northern West Virginia, but these wells fall within the existing DPR Marcellus Region. The DPR analyzes all drilling and production within geographic areas in order to capture total production volumes supplied to the market […]

Posted On : Published By : Tom Whipple
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Production growth, mild weather lower forecast for gas prices: US EIA

Strong growth in natural gas production coupled with mild weather this summer has sped the pace of gas injections into storage and helped lower gas prices, a US Energy Information Administration official said Tuesday. "Natural gas storage injections continue on pace for a record refill of 2.6 trillion cubic feet by the end of October," EIA Administrator Adam Sieminski said in a statement. These factors, he said, have prompted the agency to raise "its forecast for onshore marketed natural gas production this year and in 2015, and [lower] its natural gas price outlook." EIA said in its Short Term Energy Outlook, released Tuesday, that gas marketed production is expected to grow by an annual rate of 5.3% in 2014 and 2.1% in 2015. The agency increased its third-quarter gas marketed production estimate 1.3 Bcf/d to 74.54 Bcf/d, and raised its Q4 estimate 1.7 Bcf/d to 75.18 Bcf/d. EIA’s forecast […]

Posted On : Published By : Tom Whipple
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Before the fear of war, fear of fracking in Ukraine

SLOVYANSK, Ukraine — A hot July day, and the neighbors and children of a half-ruined five-story building on Bulvarnaya Avenue gathered around a bench for a long discussion of their daily fears. Locals seemed to have consensus on who’s at war: the U.S. and Russia over control of Ukraine, they all agreed. But even now, three months past the day the first shell fell on Slovyansk, they still had trouble comprehending why their green, sleepy hometown still was trapped in this conflict. Residents of the bombed building remembered how in April, local and Russian-assigned rebel commanders chose to set up the capital for their forces in this town. shale, Donbass, Ukraine The people of the Donbass, the country’s gritty industrial region in the east, were not naive. They realized that gas pipelines crossing the border with Russia and the shale gas fields near Slovyansk — with a potential reserve […]

Posted On : Published By : Tom Whipple
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Study highlights Pennsylvania’s shale gas development boom

The rapid shale gas development in Pennsylvania’s Marcellus shale formation has presented both challenges and opportunities to local governments and communities. In particular, concerns that local governments might be entering a “boom and bust” cycle—similar to previous resource extraction experiences in Pennsylvania’s history—are on the rise. A recent study, Getting the Boom Without the Bust: Guiding Southwestern Pennsylvania Through Shale Gas Development , released by the Environmental Law Institute (ELI) and Washington & Jefferson College’s Center for Energy Policy & Management confirms that the gas boom in Pennsylvania is still under way, and explores best practices that communities can implement to better protect themselves against a bust experience. Boom cycle Heightened industrial activity at the beginning of a resource extraction development usually induces an influx of workers into hosting communities, placing strains on the local government’s ability to provide public services, including healthcare and public […]

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Chesapeake Energy Profit Slides as Costs, Revenue Rise

Chesapeake Energy Corp. said its second-quarter earnings fell 67%, dragged down by a loss on the repurchase of debt securities related to a refinancing. The company, however, raised its midpoint of 2014 production outlook by 10,000 barrels of oil equivalent per day and posted a bigger-than-expected increase in revenue. Chief Executive Doug Lawler said Chesapeake plans to connect 35% more wells in the second half of the year compared with the first six months. "As our pace of well connections accelerates, we expect our production growth trajectory will increase accordingly," he said. The company also completed its spinoff of its oil and natural-gas business, now known as Seventy Seven Energy Inc., on June 30. The division—which as a part of Chesapeake offered drilling, hydraulic fracturing and rig relocation, among other services—pulled in about $2.2 billion in revenue last year. In conjunction with the spinoff, Chesapeake removed $1.1 billion of […]

Posted On : Published By : Tom Whipple
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Range Resources Faces Fine Over Pennsylvania Fracking Wastewater Leak

Oil and gas producer Range Resources did not properly monitor leaks from a wastewater containment pond in Pennsylvania and the state has begun enforcement action that could lead to a fine, state officials said on Wednesday. A leak was detected earlier this year at the Yeager impoundment in Amwell Township in Washington County, in southwestern Pennsylvania, according to the Notice of Violation issued by the state Department of Environmental Protection on July 24. The pond contains a briny mixture of fluids, including drilling water that returns to the surface after fracking, the process that involves pumping chemical-laced water and sand underground to fracture rock to release oil or gas, said Range Resources spokesman Matt Pitzarella. "During its operation of the (pond), flow was often detected in the leak detection zone, but Range did not satisfy the permit’s weekly chlorides testing requirements," the notice […]

Posted On : Published By : Tom Whipple