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Apr 17, 2014

Bountiful and cheap natural gas moves Worthington Industries to expand production of cryogenic cylinders
 

Columbus-based Worthington Industries, having just acquired a majority-stake acquisition in a Turkish liquefied natural gas and cryogenics industry supplier known as Aritas in January, is "continuing its push into alternative fuels" with the launch of its new cryogenic liquid cylinder line, Columbus Business First reports. Aritas makes large cryogenic cyclinders, while Worthington's cylinders are smaller. Both are used "in industrial settings to store and transport gas, such as liquid nitrogen and oxygen, in a high-density form," which is cheaper to ship. "Bountiful and cheap natural gas is largely behind the overall move toward cryogenics," which can be used to supply natural gas to drilling rigs that aren't near any pipelines, the article said. The Columbus Dispatch reports that the company is also buying part of North Dakota-based Steffes Corp., which "makes metal tanks to store oil and salt water used by energy companies." Financial terms were not disclosed, but Steffes' tank division "has 35 employees and had $25 million in sales last year," the article said. For more, read the full Columbus Dispatch and Columbus Business First stories.
 
Posted by R. Smith in  Ohio  United States   |  Permalink

 

Apr 17, 2014

Office of the Comptroller of the Currency releases new booklet on oil and gas production lending
 

The Office of the Comptroller of the Currency (OCC) recently issued a new booklet to the Comptroller's Handbook titled "Oil and Gas Production Lending." The booklet provides guidance on oil and gas production lending, including an overview of oil and gas markets, lending structures, types of reserves, associated risks, and supervisory expectations for risk management. For more, read the full booklet and news release.
 
Posted by M. Warnock in  United States   |  Permalink

 

Apr 16, 2014

Federal court asks Ohio Supreme Court to answer two Ohio Dormant Minerals Act questions
 

The Ohio Supreme Court recently accepted two certified questions of state law from the United States District Court for the Southern District of Ohio. The district court asked the Ohio Supreme Court to resolve two state law questions impacting Chesapeake Exploration, L.L.C. v. Buell. Both questions deal with the definition of a “title transaction” under the Ohio Dormant Minerals Act (ODMA), specifically, R.C. 5301.56(B)(3)(a). The first question is whether a recorded lease of a severed mineral estate qualifies as a title transaction under the ODMA. The second question is whether the expiration of a recorded lease, together with the reversion of the rights granted under that lease, qualifies as a title transaction. The Buell case presents the district court with the issue of which party is entitled to approximately 90 acres of mineral rights located in Harrison County. The case is stayed pending a decision from the Ohio Supreme Court on these issues. For more, read the full District Court order.
 
Posted by D. Gerken in  Ohio  Oil & Gas Litigation   |  Permalink

 

Apr 16, 2014

Wastewater management company GreenHunter Resources is selling its Texas wells to focus on the Appalachian Basin
 

Texas-based GreenHunter Resources Inc., an oilfield wastewater management company, "has sold or is preparing to sell" all of its wells in Texas to "focus on the Appalachian Basin," Columbus Business First reports. A chairman for the company said that GreenHunter was unable to "get the margins or fill its wells in Texas and Oklahoma," but that it was filling up every well it puts on in the Appalachian region, the article said. For more, read the full story.
 
Posted by R. Smith in  Ohio  United States   |  Permalink

 

Apr 15, 2014

Impressive production results in Ohio's Utica shale play are pushing drillers in Pennsylvania and West Virginia to invest in multiple formations
 

Fort Worth-based Range Resources Corp. recently announced its plan to drill the first Utica shale well in Washington County, Pennsylvania, this spring, NaturalGasIntel.com reports. Advances in technology are "pushing drilling efficiencies to new heights." Coupling that with a "series of eye-opening well results" coming out of the Utica shale play is causing companies to drill the Appalachian Basin's "trifecta of three pay zones" – the Marcellus shale, the Utica shale and the Upper Devonian formation (See our March 21, 2014, blog post for more information). For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Apr 15, 2014

Industry-backed report says $641 billion investment needed in midstream infrastructure during the next two decades
 

An analysis co-sponsored by America's Natural Gas Alliance and the Interstate Natural Gas Association of America Foundation predicts that "$30 billion worth of new midstream infrastructure will be needed each year through 2035 – triple the $10 billion in average annual investments during the past decade," The Columbus Dispatch reports. The report, released by the consulting firm ICF International, said the $641 billion needed to be invested over the next two decades will include "35,000 miles of new transmission pipelines and 303,000 miles of gas-gathering lines." In addition to reducing the practice of flaring, the report predicted that these investments will create "432,000 jobs and $300 billion in tax revenue in the United States and Canada," the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Apr 15, 2014

State regulators meet to develop common procedures to monitor seismic activity tied to oil and gas development
 

State regulators from across the country met in Oklahoma City recently to discuss the development of a "set of common procedures to monitor for earthquakes, investigate their cause and draft rules and regulations to prevent them," Bloomberg reports. According to the U.S. Geological Survey, pumping wastewater underground "has been linked to a sixfold jump in quakes in the central U.S. from 2000 to 2011" (See our March 1, 2014, blog post – "Oklahoma is the latest oil and gas state to experience unusually heavy seismic activity"). For more, read the full story.
 
Posted by R. Smith in  Ohio  United States   |  Permalink

 

Apr 14, 2014

Belmont County receives a $3 million bonus payment for leasing 405 acres to Rice Energy
 

Belmont County commissioners recently received a check for $3,040,820 from Pennsylvania-based Rice Energy, The Intelligencer / Wheeling News-Register reports. The check is a bonus payment for leasing the oil and natural gas rights on just over 405 acres of county-owned land. The county leased the land for $7,500 an acre (See our Sept 30, 2013, blog post for more information). The commissioners "directed $2 million of the money to refinance past debt and borrow an additional $3 million for immediate infrastructure needs," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Apr 14, 2014

State of Oklahoma files lawsuit alleging U.S. Fish and Wildlife Service’s changes to federal endangered species categorization process could unduly disrupt oil and gas production
 

On behalf of the State of Oklahoma and the Domestic Energy Producers Alliance, Oklahoma Attorney General Scott Pruitt recently filed a lawsuit alleging that the U.S. Fish and Wildlife Service (FWS) has "attempted to circumvent the legislative and regulatory process and make fundamental changes to its (Endangered Species Act)-imposed obligations," Investors.com reports. The plaintiffs are referring to the "sue and settle" process in which the "the feds have entered into a consent agreement with the environmentalists to rush forward a judgment on an unprecedented number of species," the timelines for which the plaintiffs allege force the FWS to "make determinations without a thorough review of the science." Of particular concern to this group is the lesser prairie chicken, which the FWS is expected to soon designate as endangered. According to the plaintiffs, this designation "could disrupt drilling and exploration on hundreds of thousands of very promising oil and gas lands in this part of the country," the article said. The issue is not unique to Oklahoma; Ohioans with interests in "coal mining, electricity transmission, oil and gas drilling, and road-and-bridge improvement" have taken issue with the preliminary decision by the FWS to place the northern long-eared bat on the endangered species list (See our Dec 16, 2013, blog post for more information). For more, read the full story.
 
Posted by D. Gerken in  Ohio  United States   |  Permalink

 

Apr 13, 2014

Newly adopted Ohio EPA standards require well operators to test quarterly for fugitive emissions
 

The Ohio Environmental Protection Agency (EPA) recently adopted "new general permit air pollution control standards for oil and gas well site production operations," according to The Hannah Report. By requiring oil and gas well operators to test quarterly for "so-called fugitive emissions from leaking valves, connectors and other equipment," the modified standards are intended to "help identify natural gas leaks earlier." The standards also allow an operator to move to semi-annual checks and then annual checks if "less than two percent" of their components leak.

 
Posted by R. Smith in  Ohio   |  Permalink

 

Apr 13, 2014

OOGA elects vice president David R. Hill to succeed outgoing president Joel Rudicil
 

The Ohio Oil and Gas Association (OOGA) has elected its vice president David R. Hill to serve as president of the group for a two-year term. Hill succeeds outgoing president Joel Rudicil, The Daily Jeffersonian reports. Based in Byesville, Hill is a long-time independent oil and gas producer and geologist, and has been an OOGA member for more than 30 years. He is also currently the Ohio regional director for the Independent Petroleum Association of America (IPAA) and is past chairman of the Ohio Oil and Gas Energy Education Program (OOGEEP), the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Apr 12, 2014

State investigators raid the Trumbull County Engineer's Office over allegations of a conflict of interest with BP
 

Investigators from the Ohio Bureau of Criminal Investigation and the Ohio Ethics Commission recently raided the Trumbull County Engineer's Office to search for information related to "four allegations of misconduct" involving Engineer Randy Smith, The Vindicator reports. Court documents say the investigation centers around whether Smith "had a conflict of interest because of the $390,727 he earned from BP America" in 2011 for signing an oil and gas drilling lease for land he owns in Hartford and Fowler townships. Smith disclosed these earnings to the Ohio Ethics Commission. The conflict might exist due to his participation in writing the county's road use maintenance agreements (RUMA) for its deals with BP, the article said (See our July 10, 2013, blog post for more information). For more, read the full story.

 
Posted by M. Warnock in  Ohio   |  Permalink

 

Apr 12, 2014

Well site accident in Belmont County claims one life
 

The natural gas industry suffered its first fatality in Belmont County recently when David Zamora died after being "struck by a piece of heavy equipment," according to the Times Leader. Pennsylvania-based Rice Energy operates the well site. For more, read the full story.
 
Posted by R. Smith in  Ohio  Pennsylvania   |  Permalink

 

Apr 11, 2014

Bill to block the Bluegrass Pipeline from using eminent domain advances to the Kentucky Senate
 

The Kentucky House of Representatives recently passed H.B. 31 by a 55-to-16 vote to "prevent the controversial Bluegrass Pipeline from crossing private property against landowners' wishes," Kentucky.com reports. The proposed pipeline would connect the Marcellus and Utica shale plays to the U.S. Gulf Coast (See our March 20, 2013, blog post for more information). The joint venture behind the pipeline – Houston-based Boardwalk Pipeline Partners and Oklahoma-based Williams – "so far have secured 70 percent of the necessary Kentucky land through easement negotiations without having to invoke eminent domain, and the same is true for the entire Ohio segment of the pipeline," the article said. For more, read the full story.

 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Apr 11, 2014

Marshall County in West Virginia is now issuing permits for energy companies to set up labor camps
 

The Marshall County Health Department in West Virginia is now giving out permits to energy companies for a type of temporary housing new to the area – "labor camps" for those working in the natural gas industry, The Intelligencer / Wheeling News-Register reports. As opposed to the typical campgrounds that have been filled up with workers since the boom began, labor camps are owned by the drilling company or the well holder. They must also acquire sewage permits from the West Virginia Bureau for Public Health, the article said. For more, read the full story.
 
Posted by R. Smith in  West Virginia   |  Permalink

 

Apr 10, 2014

New report describes early production predictions for the Marcellus shale play as "embarrassingly conservative"
 

The investment information service Morningstar, Inc. recently released a report detailing how two factors lead to "embarrassingly conservative" early predictions about production in the Marcellus shale play, NaturalGasNOW.org reports. According to the report, the play has grown from just two percent of the country's domestic natural gas supply in 2007 to just under 20 percent by the end of 2013. "The major improvement in median initial production rates, from less than 3 MMcf/d in late 2011 to 5 MMcf/d by mid-2013 and the ability of these wells to sustain their high rates for a period of several months beyond initial production" are credited for the dramatically larger production rates. For more, read the full story and report.
 
Posted by R. Smith in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Apr 10, 2014

Shell and Chevron are considering midstream sales to fund their exploration and production activities
 

Oil giants Chevron Corp. of San Ramon, California, and Royal Dutch Shell of the Netherlands are considering selling off their pipelines and storage facilities to "raise cash for oil and gas exploration," Bloomberg Businessweek reports (See our March 27, 2014, blog post for more information). Although unlikely to divest all of their midstream assets, these companies are seeking to capitalize on the pipeline demand that has been created as a result of the "booming shale energy industry." The move comes for Shell after the company spent "$2 billion more than it planned on exploration and production last year." The crux of these strategies is the fact that "the returns on invested capital in midstream businesses tend to top out at 20 percent, while exploration projects can deliver 50 percent or more," the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Apr 09, 2014

Former Hardrock Excavating LLC owner pleads guilty to federal Clean Water Act violations after former employee aids the prosecution
 

After changing his earlier not guilty plea, Ben Lupo – former owner of the Youngstown-based wastewater company Hardrock Excavating LLC – recently pleaded guilty to "federal Clean Water Act violations in the dumping of thousands of gallons of fracking wastewater into a Northeast Ohio storm sewer," The Associated Press reports. Lupo changed his plea after one of his former employees received leniency in his sentencing from a U.S. District judge in exchange for aiding the prosecution in its case against Lupo (See our March 24, 2014, blog post for more information). Lupo faces "up to three years in prison, a year of supervised release and fines of up to $50,000 per day, to a maximum of $250,000," the article said. Sentencing is scheduled for June 16. For more, read the full story.
 
Posted by J. Hughes in  Ohio  Oil & Gas Litigation   |  Permalink

 

Apr 09, 2014

Hess Corp. gives a $15,000 grant to the Department of Petroleum Engineering & Geology at Marietta College
 

The Department of Petroleum Engineering & Geology at Marietta College recently received a $15,000 grant from New York-based Hess Corp., The Marietta Times reports. In addition to funding the Hess Leadership Scholarship, the grant will also "help send 46 students to the annual Society of Petroleum Engineers (SPE) Technical Conference and Exhibition in Amsterdam in October of 2014." Under the leadership of its chair Bob Chase, the department has devoted itself to preparing students for jobs in Ohio's burgeoning shale oil and gas industry (See our Dec 17, 2013, blog post for more information). For more, read the full story.
 
Posted by R. Smith in  Ohio   |  Permalink

 

Apr 08, 2014

Energy Exchange Presentation Scheduled for May 7
 

Join us for our latest Energy Exchange: Aggregation, Auctions and RTOs – Oh My!, on May 7 from 4:00 to 6:00 p.m. at Bricker & Eckler LLP’s Columbus office.

This Energy Exchange session will focus on the complex world of energy for businesses, manufacturers and even consumers.  Today, there is competition and coordination and capacity management.  But how does it work and what does it all mean for you? 

Join Kerry Stroup, manager of state government policy for PJM Interconnection, Ohio’s regional transmission organization (RTO) as he explains the world of RTOs, auctions, capacity management and aggregation are impacting our energy markets today. Providing background on the deregulation of the energy market and how it has evolved is Lisa McAlister, deputy general counsel for FERC/RTO Affairs at American Municipal Power, Inc.


There is no cost to attend, and a cocktail reception and networking will follow the presentations. For registration and contact information, please go here


 
Posted by M. Warnock in  Miscellaneous   |  Permalink

 

Apr 08, 2014

Legal review explores the application of Mechanics Lien Law in Pennsylvania to oil and gas-related projects
 

Reed Smith LLC, a global law firm with an office in Pittsburgh, recently published a detailed article exploring the application of Mechanics Lien Law in Pennsylvania to oil and gas-related projects. At issue is whether "gas wells or pipelines qualify as 'improvements' for purposes of the Lien Law, and therefore can be made the proper subject of a mechanics lien claim filing." For more, read the full story.
 
Posted by M. Warnock in  Oil & Gas Litigation  Pennsylvania   |  Permalink

 

Apr 08, 2014

Wyoming Supreme Court holds courts need to review frack fluid trade secret claims on case-by-case basis
 

The Wyoming Supreme Court recently remanded a hydraulic fracturing trade secret case back to the district court. The lower court had agreed with the Wyoming Oil and Gas Commission that it did not necessarily need to publicly disclose the ingredients that make up hydraulic fracturing fluids nor their concentrations "since they may be trade secrets that vary from company to company and can allow for competitive advantage," according to the Wyoming Business Report. The high court ruled that the district court failed to follow the Wyoming Public Records Act (WPRA), which requires the district court to "independently determine whether information must be disclosed or not, rather than to review a decision of the supervisor as an administrative decision" under the Wyoming Administrative Procedure Act. As a result, the high court stated, the district court might have to "review the disputed information on a case-by-case, record-by-record or perhaps even on an operator-by-operator basis, applying the definition of trade secrets set forth in this opinion and making particularized findings which independently explain the basis of its ruling for each," the article said. For more, read the full story.
 
Posted by D. Gerken in  Oil & Gas Litigation  United States   |  Permalink

 

Apr 07, 2014

Investigation details how Chesapeake Energy systematically underpaid royalty owners to raise money
 

A recent investigation by the nonprofit news organization ProPublica found that Oklahoma-based Chesapeake Energy Corp. survived its well-known financial woes by "slashing royalties it paid property owners to drill on their land." Lawsuits alleging as much have been filed against several different oil and gas companies in shale plays across the country, but ProPublica now estimates that Chesapeake raised nearly $5 billion doing this (See our March 4, 2014, blog post – "Oklahoma appellate court overturns decision to allow royalty payment dispute to proceed as a class action"). For more, read the full story.
 
Posted by M. Warnock in  Oil & Gas Litigation  Pennsylvania  United States  West Virginia   |  Permalink

 

Apr 07, 2014

State grants Trumbull County $100,000 for a CNG feasibility study
 

The Ohio Controlling Board recently approved a $100,000 grant for the Trumbull County engineer to undertake a "two-part feasibility study on the advantages of converting existing vehicles or purchasing new ones, as well as the potential construction of a CNG [compressed natural gas] fueling station in the county," The Vindicator reports. Participants in the study will include the Trumbull County commissioners, as well as officials from Howland and Weatherfield townships, Dominion East Ohio and Stanwade Inc. For more, read the full story.
 
Posted by R. Smith in  Ohio   |  Permalink

 

Apr 06, 2014

Antero Resources signs deal with Odebrecht to be the anchor ethane supplier for the planned ASCENT complex
 

Denver-based Antero Resources announced last week that it will provide 30,000 barrels per day of natural gas to the ASCENT (Appalachian Shale Cracker Enterprise) complex that is planned for Wood County (See our Feb 26, 2014, blog post for more information). The company signed an agreement with Odebrecht – the Brazilian company behind the project – to become the "anchor ethane supplier" for the complex, supplying "almost half of the volume required" to operate the cracker. For more, read the full news release.
 
Posted by M. Warnock in  United States  West Virginia   |  Permalink

 

Apr 05, 2014

PUCO approves NRG Energy's plan to construct a natural gas pipeline for its Avon Lake power plant
 

In order to meet new federal emission standards, NRG Energy, Inc. has created a pipeline company to supply its Avon Lake power plant in Lorain County, which is currently being converted from coal-fired to natural gas-powered, The Plain Dealer reports. The Public Utilities Commission of Ohio (PUCO) approved NRG Pipeline Co.'s plan to operate one 24-inch or 30-inch pipeline. The exact route of the pipeline "has not been selected" and will be subject to the approval of the Ohio Power Siting Board (OPSB), the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Apr 04, 2014

Triad Hunter signs RUMA with Washington County commissioners for 1.7-mile stretch
 

Houston-based Triad Hunter, LLC recently signed a road use maintenance agreement (RUMA) with the Washington County Commissioners for 1.7 miles of Aurelius Township Road 305, The Marietta Times reports. By signing the agreement, the company will no longer be required to put up a $200,000 bond before starting its well drilling project. The agreement includes pre-project improvements such as widening the road and adding gravel, the article said. For more, read the full story.
 
Posted by R. Smith in  Ohio   |  Permalink

 

Apr 03, 2014

Feds to review rail transport regulations for volatile crude oil shipments
 

As domestic oil and gas production booms and pipeline infrastructure is busy trying to catch up, energy companies have taken to transporting their products by rail. A new review from the Cincinnati Enquirer shows that "neither federal nor state regulators track" rail shipments of crude oil drilled from shale deposits, which is "more volatile than traditional crude." Several high-profile rail accidents recently have prompted the federal Pipeline and Hazardous Materials Safety Administration to state that it was "starting to look at changing its rules and was taking a closer look at oil shipments," the article said (See our Feb 11, 2014, blog post – "Three oil and gas companies fined $93,000 for improperly labeling Bakken crude transported by rail"). For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Apr 02, 2014

Texas gubernatorial candidates offer significantly different opinions on the booming oil and gas industry
 

With an election coming up in November, The Texas Tribune recently compared the oil and gas policies of the two leading gubernatorial candidates – State Sen. Wendy Davis, a Democrat, and Texas Attorney General Greg Abbot, a Republican. Even as production surges elsewhere in the United States, Texas has managed to pump "more than twice the oil it did three years ago, accounting for more than a third of all domestic production." As a Fort Worth city councilwoman and later a state legislator, Sen. Davis has helped to shape pipeline rules and a drilling ordinance, in addition to encouraging landowners to form associations and publicly criticizing certain clauses in mineral rights leases. Beyond his stint as a Texas Supreme Court justice, Abbot's oil and gas policy can be pieced together through the "barrage of lawsuits against the federal government [filed while attorney general], including more than a dozen against the Environmental Protection Agency," the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Apr 01, 2014

Bricker & Eckler releases updated chart tracking Ohio’s oil and gas-related economic development
 

The evolution of Ohio's shale boom has moved beyond the rush to lease oil and gas mineral rights and into the midstream and downstream phases that involve the storage, transportation and processing of oil, natural gas and natural gas liquids. Attorneys in Bricker & Eckler LLP’s Shale Task Force recently updated a chart that seeks to quantify the impact that the shale boom has had on economic development throughout Ohio. For more, access the chart.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Apr 01, 2014

Legal review of oil and gas activity in Ohio covers legislative, regulatory and litigation issues
 

Recently, the Ohio-based law firm of Vorys Sater Seymour and Peas LLP published a 2013 Ohio oil and gas review that covers legislative developments in Ohio relating to Sub. H.B. 59, Sub. H.B. 72 and H.B. 375, recent regulatory developments, and the rise in oil and gas litigation matters (e.g., those related to home rule, arbitration provisions, consent-to-assign requirements in oil and gas leases, notary requirements, the secondary term of an oil and gas lease, the Ohio Dormant Minerals Act, etc.). For more, read the full review.
 
Posted by M. Warnock in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 31, 2014

Marathon Petroleum Corp. might delay development at the Wellsville industrial park until the severance tax issue is resolved
 

Findlay-based Marathon Petroleum Corp. has indicated to the Columbiana County Port Authority that it might delay development of 3.6 acres at the Wellsville industrial park until the severance tax issue is resolved, the Morning Journal News reports (See our March 25, 2014, blog post for more information). Last year, the company bought the acreage, which sits adjacent to its storage tank/transfer station, from the county for $2.4 million with plans to develop a truck staging area "for handling up to 24,000 barrels of oil and natural gas bound for its terminal from drilling operations in the region." Company officials apparently told county officials that they are nervous that an "excessive" increase in the severance tax might drive some drilling companies to pull out and relocate operations to "states with lower production taxes," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 30, 2014

Gateway Royalty II LLC raises $58.5 million to buy Utica shale royalties
 

Carrollton-based Gateway Royalty II LLC has raised $58.5 million to buy oil and gas royalties from landowners within the eastern Ohio counties of Belmont, Carroll, Columbiana, Guernsey, Harrison, Monroe, Noble and Washington, Columbus Business First reports. Founded in Texas, the company encountered too much competition there, as well as land tract sizes that were "much more expansive and expensive." Gateway Royalty originally focused on the northern part of the play when it relocated to Carrollton in 2012, but this new round of investments "will move toward the south," the article said. For more, read the full story.
 
Posted by R. Smith in  Ohio  United States   |  Permalink

 

Mar 29, 2014

New company Rock Oil Holdings gets a $250 million equity commitment to buy liquids-rich acreage in Ohio and Texas
 

New York-based private equity firm Riverstone Holdings LLC has put a $250 million equity commitment into newly formed Rock Oil Holdings LLC, which will use the funds to buy acreage in "liquids-rich production areas including the Utica in Ohio and the Eagle Ford shale play and Permian basin in Texas," Columbus Business First reports. The new company will have executive offices in both Denver and Houston. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Mar 28, 2014

Magnum Hunter Resources predicts five years of heavy drilling in the Utica and Marcellus shale plays
 

Executives at Houston-based Magnum Hunter Resources Corp. are predicting "at least five years of sustained and heavily drilling in the Appalachian Basin," Natural Gas Intelligence (NGI) reports. The company focused on the Utica and Marcellus shale plays after shedding its Eagle Ford assets last year, and credits "record-setting gas storage withdrawals...developing acreage positions" and superb reservoir quality as the driving forces behind its success in the region. For more, read the full story.
 
Posted by R. Smith in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 27, 2014

Drillers are still trying to strike oil in Ohio's Utica shale play
 

Although figures from the Ohio Department of Natural Resources (ODNR) have indicated that the Utica shale play will not be as rich in oil as producers had hoped, several companies have plans in 2014 to tap into what's known as Ohio's "volatile oil window," the Akron Beacon Journal reports (See our Nov, 1, 2013, blog post – "Amount of gas that can be extracted from the Utica shale play outpaces the oil that can be recovered from the Bakken and Eagle Ford shale plays"). Houston-based EV Energy Partners plans to participate financially this year in "at least eight to 10 wells" in the volatile oil window, which covers all or parts of Athens, Coshocton, Guernsey, Hocking, Holmes, Morgan, Muskingum, Perry, Portage, Stark, Trumbull and Tuscarawas counties. Oklahoma City-based Chesapeake Energy Corp. and Texas-based Halcon Resources have already drilled two of those wells, the article said. For more, read the full story.

 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 27, 2014

Shell to cut its domestic shale spending and staff by 30 percent
 

Following "underwhelming results over the past several years," Netherlands-based Royal Dutch Shell announced recently that it intends to "cut spending and staff at its dry gas operations" in the United States by about 30 percent, The Pittsburgh Post-Gazette reports. Shell controls 900,000 acres in the Marcellus shale play with approximately 300 employees in Pennsylvania. The announcement creates uncertainty over the future of Shell's planned ethane cracker, which the company had previously announced would be built in Beaver County, Pennsylvania (See our Nov 9, 2013, blog post – "Declining earnings and a maturing shale gas refining industry might drive Shell to cancel its planned ethane “cracker” plant in Pennsylvania"). For more, read the full story.
 
Posted by M. Warnock in  Pennsylvania  United States   |  Permalink

 

Mar 26, 2014

Capstone Turbine Corp. to supply microturbines for oil and gas operations in both the Utica and Marcellus shale plays
 

The California-based Capstone Turbine Corp. announced that it has landed multiple contracts to supply microturbines for oil and gas operations in the Utica and Marcellus play regions, Power Engineering magazine reports. Through E-Finity Distributed Generation, Capstone will supply microturbines totaling about 4 MW that "reduce emissions generated from the generators and increase onsite power production." For more, read the full story.

 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 26, 2014

Ernst & Young analysis concludes the MBR's tax changes would result in "improved business tax competitiveness in Ohio"
 

The multinational professional services firm Ernst & Young recently conducted an analysis of the tax provisions that constitute Gov. John Kasich's recently introduced mid-biennium budget review (MBR) (See our March 12, 2014, blog post for more information). Commissioned by Ohio Business Roundtable, Inc., the analysis "provides estimates of the impact of the proposal on the effective tax rates paid by representative business taxpayers in selected industries." In addition, both the effective business tax rate in Ohio under current law as well as the rates included in the proposal are compared to "effective tax rates in seven competitive states." Overall, the analysis concludes that "the combination of business and individual tax changes, including the increase in the [Commercial Activity Tax] rate, in the Governor's proposal will result in improved business tax competitiveness in Ohio." For more, read the full analysis.
 
Posted by R. Smith in  Ohio   |  Permalink

 

Mar 25, 2014

Domestic shale boom could make building fertilizer plants in the U.S. more cost effective than importing fertilizer
 

Abundant domestic supply of natural gas is credited as the driving force behind the creation of the first new fertilizer production capacities in the United States in more than two decades, ShaleStuff.com reports. Producers of ammonia and urea are looking to the United States because the price of natural gas is making it more cost effective to produce fertilizers in newly built plants than it is to import them. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 25, 2014

Severance tax revenue projections from the Legislative Service Commission and the Office of Budget and Management differ significantly
 

Estimates on how much revenue Gov. John Kasich's recently introduced severance tax proposal will generate in fiscal year 2015 differ greatly between the Office of Budget and Management (OBM) and the Legislative Service Commission (LSC), according to the Gongwer Ohio Report (See our March 12, 2014, blog post – "Kasich administration introduces another new severance tax proposal as part of its second mid-biennium budget review"). The OBM estimates the governor's 2.75-percent severance tax on gross receipts from horizontal shale wells "will generate $121 million" that year, as opposed to the LSC's estimate that the measure will only produce between $29 million and $80 million in 2015. For more, read the full comparison document for H.B. 472.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 25, 2014

Shale Industry’s Impact on Your Finances Seminar on April 25
 

Bricker & Eckler LLP along with the Marietta Area Chamber of Commerce present Shale and You: How the Shale Industry can Impact Your Finances, a seminar on April 25 from 8:00 a.m. to noon at Washington State Community College.

Presentations and panel discussions will discuss general economic development as a result of the shale industry, personal finances and estate planning in the world that shale built and how to break into or work alongside the shale industry. 

There is no cost to attend. For registration and contact information, please visit the MACC website.


 
Posted by M. Warnock in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 24, 2014

Hardrock Excavating employee gets leniency during his sentencing for aiding the prosecution against owner Ben Lupo
 

Last week, a U.S. District judge sentenced a former employee of Hardrock Excavating LLC to "three years' probation and 300 hours of community service" after he pleaded guilty last August to "one count of violating the federal Clean Water Act by dumping brine and drilling mud down a storm drain" (See our Aug 29, 2013, blog post for more information). The employee faced up to three years in prison and a $250,000 fine, but the U.S. attorney "agreed to recommend favorable consideration" for the employee due to his cooperation in the prosecution of his boss, Ben Lupo, whom the employee had said ordered him to dump the wastewater. Lupo originally pleaded not guilty to the federal charge, but is scheduled for a change-of-plea hearing today, the article said. For more, read the full story.
 
Posted by D. Gerken in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 24, 2014

Hydraulic fracturing technique reaches its 65th birthday
 

The hydraulic fracturing technique was developed on March 17, 1949, when Houston-based Halliburton "first used large amounts of water to shatter the rock in two test wells," The Oklahoman reports. More than 50 years later, George Mitchell of Texas-based Mitchell Energy perfected the process for economically drilling the Barnett Shale in Texas. Following its purchase of Mitchell Energy in 2002, Oklahoma City-based Devon Energy Corp. "expanded on Mitchell's research and combined the practice with horizontal drilling," which sparked the domestic shale boom, the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 24, 2014

Recent SEC filing reveals details about Chesapeake Energy's plan to spinoff its oilfield services division
 

In a recent U.S. Securities and Exchange (SEC) filing, Oklahoma City-based Chesapeake Energy Corp. said that the proposed spinoff of its oilfield services division would be called Seventy Seven Energy and would employee 5,200 workers across the country, CantonRep.com reports (See our March 14, 2014, blog post for more information). Active in the Utica and Marcellus shale play regions, the proposed spinoff would offer "drilling, hydraulic fracturing, equipment rentals, drilling rig relocation and water transport and disposal" through the following wholly owned subsidiaries: Nomac Drilling, Great Plains Oilfield Rental, Performance Technologies, Oilfield Trucking Solutions and Hodges Trucking Solutions. For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 23, 2014

Muskingum County is receiving economic development benefits on the fringe of the Utica shale boom
 

A recent Daily Jeffersonian article explores the ways that Muskingum County, which lies just west of the heart of the Utica shale play, is still managing to benefit from some oil and gas industry developments. Although county officials refuse to focus on the industry exclusively, leaders still point to several oil and gas-related projects that are boding well for the local economy. For more, read the full story.
 
Posted by R. Smith in  Ohio   |  Permalink

 

Mar 22, 2014

Shale boom leads to the first surge in U.S. refinery construction and expansion in 30 years
 

After three decades in which not a single major new refinery was built in the United States, the domestic shale boom is leading to a surge in the planning and construction of new refineries as well as the expansion of existing ones, The New York Times reports. All told, "the planned refineries, expansions and new distillation towers that will be built over the next few years represent roughly $5 billion in investments." The article estimates that at least a dozen such projects are being planned for Kentucky, Ohio and Texas alone. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Mar 21, 2014

Magnum Hunter Resources to tap both the Utica and Marcellus shale formations from a single Monroe County well pad
 

Houston-based Magnum Hunter Resources Corp. plans to drill into both the Marcellus and the Utica shale formations from its Stalder well pad in Monroe County, Columbus Business First reports. Multi-well pads are becoming more popular due to their cost savings as well as their ability to centralize the environmental impacts of a drilling operation to a single location. Pads with wells drilling into both plays are less common in Ohio, where the shallower Marcellus shale quickly fades out west of northeastern Ohio, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 21, 2014

Report predicts demand for shale-related products and services will surpass $90 billion in 2017
 

A new research report released by Reportlinker.com forecasts that demand for shale-related products and services will "surpass $90 billion in 2017," according to The Business Journal. The report, "Shale Gas & Tight Oil: Products & Services," costs $5,200 and provides historical demand data for 2007 and 2012, as well as "forecasts for 2017 and 2022 by product, service, region and play." For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 20, 2014

OOGA research shows Ohio's oil and natural gas production both doubled from 2012 to 2013
 

Officials at the 67th winter meeting of the Ohio Oil and Gas Association (OOGA) predicted that "Ohio wells produced more than 203 billion cubic feet of gas in 2013 – more than double the 89.4 billion cubic feet produced in 2012," The Plain Dealer reports. Wells in Ohio produced about 9.7 million barrels of oil in 2013, "double the 4.9 million produced in 2012." These numbers come ahead of the Ohio Department of Natural Resources' (ODNR) quarterly production numbers for the end of 2013, which have not yet been released. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 20, 2014

Trucking costs move Ohio Soil Recycling to cancel plans to recycle shale cuttings
 

Columbus-based Ohio Soil Recycling's plan to begin recycling shale cuttings from hydraulic fracturing operations by late last year has been canceled due to the drilling companies' unwillingness to pay the associated trucking and processing costs, The Columbus Dispatch reports (See our Sept 13, 2013, blog post for more information). After finding no elevated radiation in the waste, the Ohio Environmental Protection Agency approved the company's plan in August, making it the only business in the state approved to recycle shale cuttings. According to Chris Elliott, president of Ohio Soil Recycling, "drilling companies told him that landfill costs had dropped while trucking and fuel costs had risen, preventing them from hauling tons of material to Columbus," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 19, 2014

Increased air traffic from the oil and gas industry helped push up a runway expansion project at the Cambridge Municipal Airport by more than five years
 

Due to the "rapid development of the gas and oil industry," the Federal Aviation Administration (FAA) moved up a planned expansion of the runway at the Cambridge Municipal Airport from 2022 to as early as 2016, The Daily Jeffersonian reports. The FAA and the State of Ohio use a document known as the Airport Capital Improvement Plan (ACIP) to lay out their projects over the next 10 years. Increased air traffic as a result of the shale boom was noted in an annual review of the plan, which lead to the expansion project getting bumped up. By extending the runway, the facility will be capable of accommodating business aircraft that must carry more fuel to fly further distances and which, therefore, require a longer runway to take off, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 19, 2014

West Virginia health department launches online survey tool to assess the potential impacts of Marcellus shale drilling on air quality and human health
 

As part of its ongoing research related to the oil and gas industry, the Wheeling-Ohio County Health Department in West Virginia recently released an online survey tool to collect data on the potential impact that Marcellus shale gas drilling is having on air quality and people's health, The Intelligencer / Wheeling News-Register reports. The Natural Gas Health Effects Survey is available at www.ohiocountyhealth.com. Results from the survey are expected to be released on a monthly basis and will eventually be reviewed against a monitoring project that the health department is currently undergoing in collaboration with West Virginia University, the article said. For more, read the full story.
 
Posted by M. Warnock in  West Virginia   |  Permalink

 

Mar 18, 2014

Chesapeake Energy sells its 437 compression units to Access Midstream Partners and Exterran Partners for $520 million
 

Oklahoma City-based Chesapeake Energy Corp. recently announced that it has sold its 437 midstream compression units for $520 million, Columbus Business First reports. Access Midstream Partners, also of Oklahoma City, is acquiring 103 of the units located in Ohio, Pennsylvania and West Virginia for $160 million. Houston-based Exterran Partners is acquiring the additional 334 units located in Louisiana, Oklahoma and Texas for $360 million. In the same week, the company announced its intention to sell its $2.5 billion oilfield services division (See our March 14, 2014, blog post for more information). For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 18, 2014

Columbia Gas Transmission sues Maryland landowners seeking easements for a pipeline extension project
 

West Virginia-based Columbia Gas Transmission recently filed another lawsuit against Maryland landowners, this time seeking to "invoke eminent domain to obtain temporary or permanent easements on more than 400 acres for its 21-mile pipeline extension," according to The Baltimore Sun. In the lawsuit, the company said it was able to negotiate agreements with other landowners affected by the project with the exception of the more than two dozen it listed. In January, the company "sued about 30 property owners in Baltimore and Harford counties to gain easements on roughly 76 acres" for the project. The $180 million pipeline project will extend an existing line from Owings Mills to Fallston, both in Maryland. Federal regulators approved the project last November and construction is scheduled to begin in June, the article said. For more, read the full story.
 
Posted by D. Gerken in  Oil & Gas Litigation  United States   |  Permalink

 

Mar 18, 2014

Gulfport Energy acquires 8,200 Utica acres from Rhino Resource Partners for $185 million
 

Oklahoma City-based Gulfport Energy Corp. recently acquired 8,200 Utica acres from Kentucky-based Rhino Resource Partners LP for $185 million, Columbus Business First reports. Second only to Chesapeake Energy Corp., Gulfport has the second-highest number of horizontal well drilling permits in Ohio. With about 165,000 total Utica acres leased, the company has said that it has not had to restrict its drilling plans as a result of infrastructure needs, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Mar 17, 2014

Mayor in Noble County calls on ODOT to bypass small town roads when mapping travel routes for superloads
 

Caldwell (Noble County) Mayor David Evans has asked the Ohio Department of Transportation (ODOT) to stop routing "superloads" carrying major oil and gas equipment through his town, The Daily Jeffersonian reports. The request comes after one such superload traveling Route 821 damaged property recently. ODOT official Mike Moreland told the mayor he would investigate, but warned that there might be a delay in implementing a new policy due to the fact that these permits are issued two weeks in advance, the article said. These superloads require significant planning on the part of the affected towns, including warning local residence in advance about delays (See our March 1, 2014, blog post – "Williams Energy's Oak Grove facility in West Virginia just received its first de-ethanizer"). For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 17, 2014

ODNR revokes Everflow Eastern Partners' drilling permit and mandatory pooling order citing false information about its lease of city property
 

The Ohio Department of Natural Resources (ODNR) recently revoked a drilling permit as well as a mandatory pooling order granted to Canfield-based Everflow Eastern Partners in December "because the oil and gas driller gave false information about its lease to city property," CantonRep.com reports. This marks the first time the ODNR has revoked a mandatory pooling order due to a company providing false information with regard to its leases. The company said in a sworn statement to the state's Oil and Gas Technical Advisory Board that it had "leased 44.73 acres of [the] proposed 45.52-acre unit" for its planned Susko Unit No. 1 vertical well. An investigation prompted by a resident's complaint revealed that the Massillon City Council in Stark County had not yet voted on a proposal to lease 10.65 acres to the company, which Everflow had included in its total figure, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 17, 2014

St. Clairsville receives no bids for its 193 mineral acres
 

City leaders in Belmont County's St. Clairsville did not receive a single bid on their recent request for proposal (RFP) to lease some city-owned property for oil and gas drilling, The Intelligencer / Wheeling News-Register reports. The city wants $7,300 for each of its 195 mineral acres, as well as 20 percent of royalties and a provision forbidding post-production cost deductions. Mayor Robert Vincenzo said that although some companies have expressed interest, none were willing to "reveal what they want to bid," the article said. Now that the proposal has been bid out, as required by state law, Vincenzo said the city can begin talking to those interested companies. In addition to forbidding "drillers from impacting any surface property within the city," the city's proposal calls for drillers to "avoid using kerosene, xylene, toluene, benzene and formaldehyde in their operations," and asks drilling companies to "limit noise, vibration, odors, lights and truck traffic," the article. For more, read the full story.

 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 16, 2014

Village of East Palestine council members disagree on whether land ownership creates a conflict of interest for pursuing a group oil and gas lease on behalf of the village
 

Village council members in East Palestine (Columbiana County) are at odds over whether the city council broke state law when it authorized the village manager to "gather input from residents and seek out oil and gas companies that may be interested in leasing property" at a recent meeting, the Morning Journal News reports. Arguing that Councilman Don Elzer would disproportionately benefit from a group leasing proposal because of his larger property holdings, Councilman Alan Cohen cited Ohio Revised Code 102.03 sections D and E, which forbid a public official or employee from using or authorizing "the use of the authority or influence of their office or employment to secure anything of value or the promise or offer of anything of value." Cohen said that ORC 102.03 forbids Elzer from seeking out oil and gas companies "since he will also personally benefit from the leasing," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 15, 2014

State of Ohio ramps up its orphan well plugging program
 

The State of Ohio aims to increase the number of orphan wells it plugs from between 40 and 50 to 75 per year, The Plain Dealer reports. The plugging program was established formally in 1977 and has plugged more than 1,000 wells to date. At a cost to plug of approximately $20,000 to $25,000 per well, the state had in the past "relied solely on the proceeds from the severance tax paid by gas and oil producers." The Kasich administration "has allocated an additional $1.5 million per year" for the program and state officials are calling on residents and landowners to help grow the current list it has of 400 abandoned wells to plug and 200 to investigate, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 14, 2014

Chesapeake Energy considers selling or spinning off its oilfield services unit
 

As part of its ongoing effort to cut capital spending and pursue further asset sales due to an almost $1 billion funding gap in 2014, Oklahoma City-based Chesapeake Energy Corp. is considering the sale or spinoff of its oilfield services unit to existing shareholders, Bloomberg reports (See our Oct 16, 2013, blog post for more information). Chesapeake Oilfield Operating LLC had about $2.2 billion worth of sales in 2013 and currently "owns or leases 115 rigs, owns nine hydraulic fracturing fleets, rents equipment for oil fields and operates 260 rig-relocation trucks, as well as cranes and forklifts." The business would be valued at about $2.7 billion, the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 14, 2014

ODNR halts operations at seven Hilcorp Energy wells following two earthquakes in Mahoning County
 

The Ohio Department of Natural Resources (ODNR) has ordered Houston-based Hilcorp Energy to suspend operations at seven wells in Mahoning County's Poland Township following two small earthquakes near one of the wells while it was undergoing hydraulic fracturing, The New York Times reports. "The quakes, of magnitude 2.6 an 3.0, caused no damage or injuries but were felt in nearby towns."  Poland Township is located just 15 miles southeast of Youngstown, which is where an injection well was "permanently shut down in 2012 after it was linked to a series of quakes that began three years ago" (See our July 11, 2012, blog post – "Gov. Kasich signs executive order regulating deep injection wells"). For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 13, 2014

The Ohio Supreme Court accepts Dormant Minerals Act appeal in Dodd v. Croskey
 

On March 12, 2014, the Ohio Supreme Court accepted an appeal of the Seventh District Court of Appeals’ decision in Dodd v. Croskey.  The Court will not be addressing the self-executing language of the 1989 version of the statute, nor examining what constitutes a title transaction. Rather, the Court will consider the effect of a preservation affidavit/notice timely recorded by the severed mineral interest owner in accordance with 5301.56(H)(1), but only after the surface owner has provided notice of intent to abandon. The Harrison County Common Pleas Court determined that such an affidavit was sufficient to preserve the severed mineral interest, and the Seventh District Court of Appeals affirmed that decision. For more, read the Memorandum in Support of Jurisdiction and the Acceptance of Appeal.

 
Posted by R. Smith in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 12, 2014

Kasich administration introduces another new severance tax proposal as part of its second mid-biennium budget review
 

Yesterday, Ohio Gov. John Kasich's administration introduced another new severance tax proposal as part of its mid-biennium budget review (MBR). Introduced in the Ohio House of Representatives as H.B. 472, the proposal seeks to: (i) reduce (and for certain periods of time eliminate) the severance tax rate on persons extracting oil and natural gas by means other than horizontal wells (e.g. conventional wells); (ii) impose a new, higher severance tax on oil and natural gas produced through horizontal wells based on true “gross receipts” received at the first point of sale without any accounting for post-production costs or expenses; and (iii) divide the proceeds from the severance tax among the Ohio Department of Natural Resources (ODNR), local governments and the income tax reduction fund. Gov. Kasich first proposed a severance tax as part of his first MBR in 2012, but it was quickly removed by House Republicans (See our March 21, 2012, blog post for more information). For more, read this Bricker & Eckler bulletin, which summarizes this latest severance tax proposal.
 
Posted by M. Warnock in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 11, 2014

Academic researchers from Oregon State and Cincinnati are studying the impact of hydraulic fracturing on air quality
 

As part of a collaboration with the University of Cincinnati, researchers from Oregon State University recently installed 23 boxes throughout Carroll County that will "help determine what impact hydraulic fracturing might have on the area's air quality," CantonRep.com reports. The three-pound, metal boxes contain "a piece of material made of silicon and polyethylene that can absorb chemicals in the air like a sponge." The boxes are what's known as "passive samplers" because they require no power or maintenance to function. Results from this initial run will be known in three to six months, then the researchers will return to monitor the same areas after drilling operations begin, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Mar 10, 2014

Feds release first tool to map producing oil and natural gas wells across the U.S.
 

The U.S. Energy Information Administration (EIA) recently released an interactive tool that it describes as the first of its kind to map producing natural gas and oil wells across the country, Columbus Business First reports. The tool, developed in collaboration with Texas-based Drilling Info, Inc., also provides "locations and information on power plants, pipelines, shale plays and anything else related to energy." For more, read the full story and access the U.S. Energy Mapping System.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 10, 2014

New study examines the potential environmental impacts of shale gas and wind development across the entire Marcellus shale play
 

A recent study published in the journal PLOS ONE touts itself as "the first one to examine the potential environmental impacts of shale gas and wind development across the entire Marcellus shale play," according to a news release from The Nature Conservancy, which undertook the study. Findings indicate that the most significant impact from energy development in the Central Appalachians involves a decrease in watershed conditions. The study said that "36 percent of the predicted energy expansion in the study area is expected to occur in watersheds that are among the top 25 percent nationally in terms of water importance." With 106,004 new gas wells and 10,798 new wind turbines predicted for the area, an area larger than the state of Delaware will be subjected to industrial surface development. The study's authors advise the hydraulic fracturing industry to take advantage of the flexibility horizontal drilling allows regarding the location of infrastructure so as to minimize the impacts to natural habits. For more, read the full study and news release.

 
Posted by M. Warnock in  Ohio  Pennsylvania  United States  West Virginia   |  Permalink

 

Mar 09, 2014

Real estate developers in Denver are working with the oil and gas industry to mitigate landowners' concerns
 

Whereas real estate developers in the Denver area were previously "acquiring mineral rights to play defense" against oil and gas development, within the last five years they have begun working with oil and gas drilling companies to "extract more value from [their] holdings," according to The Denver Post. Real estate agents say that working with the industry opens up a dialogue that helps to mitigate landowners' concerns, which leads to less truck traffic and the consolidation of well pads and treatment facilities. Beyond the royalties, developers note another benefit in that the "[g]rowing domestic energy production is projected to lead to a manufacturing renaissance, one that will boost hiring and help fill out developments more quickly," the article said. For more, read the full story.

 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 08, 2014

Oklahoma appellate court overturns decision to allow royalty payment dispute to proceed as a class action
 

The Oklahoma Court of Civil Appeals recently reversed a Beaver County court's decision allowing a mineral owner's royalty dispute with Chesapeake Energy Corp. to proceed as a class action, The Oklahoman reports. In November 2010, a Kansas resident sued the company, alleging it had underpaid oil and natural gas royalties owed to him for some Oklahoma wells. The royalty owner argued that his lease did not allow for post-production cost deductions and that the case should proceed as a class action because "Chesapeake used a common method to pay royalties based on revenue it received under its marketing contracts." The lower court ruled in favor of the class action designation in February 2013, but the appellate court sided with Chesapeake Energy, which said there were too many variable terms included in and conditions surrounding the 75,000 leases that would be part of the proposed class action. The appellate court agreed, noting that it would "require thousands of 'mini trials' to determine liability and damages," the article said. For more, read the full story.
 
Posted by J. Hughes in  Oil & Gas Litigation  United States   |  Permalink

 

Mar 07, 2014

Pennsylvania regulators levy a $1.8 million fine against Halliburton for improperly transporting, processing and disposing of hydrochloric acid
 

A Pennsylvania Department of Environmental Protection (DEP) investigation first launched in 2011 last month resulted in "one of the largest penalties against an oil and gas service company" in the state's history, the Pittsburgh Post-Gazette reports. The state agency is fining Texas-based Halliburton Energy Services $1.8 million for "transporting, processing and disposing of hydrochloric acid without classifying it as a hazardous substance." For 12 years, the company identified its Indiana County facility as "exempt from provisions of the state's Solid Waste Management Act because of a federal exemption for oil and gas companies that handle less than 200 pounds of waste per month," the article said. The investigation found that the facility was actually a large-quantity facility, "meaning it was processing 2,220 pounds of waste monthly, or 10 times the limit of exempt facilities." Because the facility was identified as exempt for so long, Halliburton did not keep records regarding the transport of hydrochloric acid, but the DEP concluded that at least 255 violations occurred between 1999 and 2001. These violations involved the acid being improperly neutralized with lime and then "sent to facilities that were not permitted to accept such waste." The facility no longer accepts hydrochloric acid from well sites, but is "still permitted to store new acid at the facility and transport it to well sites, because that qualifies as a product, not as waste," the article said. For more, read the full story.
 
Posted by D. Gerken in  Oil & Gas Litigation  Pennsylvania   |  Permalink

 

Mar 06, 2014

BP is creating a wholly owned subsidiary to manage its U.S. onshore oil and gas assets
 

BP announced this week that that it is forming a new, separate, wholly owned business to "manage its onshore oil and natural gas assets" in the continental United States, The Wall Street Journal reports. Although the company is attempting to recover from its "2010 Macondo explosion and oil spill in the Gulf of Mexico," its strategy is similar to that of other large oil companies that are "trying to coax profits from the North American shale boom." These energy giants hope these subsidiaries will be able to achieve the success that the "smaller, nimbler producers" have achieved in the domestic shale boom, the article said. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 05, 2014

Halcon Resources suspends its Utica drilling operations this year to focus on developing its holdings in North Dakota and Texas
 

Houston-based Halcon Resources Corp. is suspending its Utica shale drilling operations in northeastern Ohio and northwestern Pennsylvania in 2014 so that it can focus its efforts on developing its holdings in North Dakota and Texas, The Business Journal reports. During a conference call last week, Halcon President and CEO Floyd C. Wilson told analysts that the company plans to hold off in the Utica until it can see what results certain existing wells produce, noting that its holdings there "haven't been too wonderful" in the far northern tier of the play. Wilson noted as much during a conference call to investors in November in which he said that northern Trumbull, Mercer and Crawford counties were "no longer his company's focus" due to their poor production results (See our Nov 22, 2013, blog post – "Halcon Resources CEO says the company will focus on the southern portion of the Utica shale play"). For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States   |  Permalink

 

Mar 04, 2014

CONSOL Energy to supply ethane from the Marcellus to Ineos Europe AG
 

CONSOL Energy recently announced a partnership with Ineos Europe AG to export ethane derived from CONSOL's Marcellus operations, The Intelligencer / Wheeling News-Register reports. The ethane will be transported across Pennsylvania via the Sunoco Mariner East pipeline at a rate of 70,000 barrels per day. For more, read the full story.
 
Posted by M. Warnock in  Pennsylvania  United States   |  Permalink

 

Mar 04, 2014

Rice Energy is thriving after its January IPO
 

Founded in 2007, Pennsylvania-based Rice Energy went public in January (See our Oct 25, 2013, blog post for more information). Since the offering, the company’s value has risen 14 percent, Bloomberg News reports. The company owns 46,490 net acres in the Utica shale, the majority of which are located in Belmont County. The company also holds 43,350 Marcellus acres in western Pennsylvania, the article said. Just last week, a Rice Energy subsidiary "bought assets in eastern Washington and Green counties, Pennsylvania," from an M3 Midstream LLC subsidiary for $110 million cash. For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States   |  Permalink

 

Mar 03, 2014

Companies must file for temporary permits while the ODNR finalizes regulations for radioactive waste disposal
 

Envirotank Clean Inc. in Belpre is seeking authorization to grow its business to include the handling of technologically-enhanced naturally occurring radioactive material (TENORM) from the increasing number of oil and gas drilling sites in the region, The Marietta Times reports. The company currently provides disposal services of "non-hazardous liquids from industrial plants in Ohio and West Virginia that municipal wastewater treatment plants cannot accept." Provisions of H.B. 59 – Gov. John Kasich's budget bill that he signed into law in July 2013 – required the Ohio Department of Natural Resources (ODNR) to develop stronger regulations regarding the disposal of TENORM (See our Feb 15, 2013, blog post for more information). The House bill established a January 1, 2014, deadline for these regulations, which the department was unable to meet. Until the new rules are developed, ODNR is requiring companies like Envirotank "to submit an application for a temporary permit" to continue operating, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  West Virginia   |  Permalink

 

Mar 03, 2014

New Comfort Suites adds 102 rooms to Marietta's hotel market
 

With the oil and gas boom continuing to stress the availability of rooms and housing in the Mid-Ohio Valley, the recent opening of Marietta's newest hotel is welcome news to the area, The Marietta Times reports. The Comfort Suites on Cherry Tree Lane provides 102 additional rooms to Marietta's market and is just one of nearly a dozen such projects planned for the region (See our Dec 10, 2013, blog post – "Several hotel projects are in the works to meet the needs of the oil and gas industry in eastern Ohio"). For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 03, 2014

The Utica shale play now has 300 actively producing horizontal wells
 

The latest update from the Ohio Department of Natural Resources (ODNR) shows that the Utica shale play now has 300 horizontal oil and gas wells actively producing out of the 707 drilled, Columbus Business First reports. According to the report, the state has issued 1,074 horizontal drilling permits as of Feb. 1. For more, read the full story and the latest ODNR update.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 02, 2014

Ohio Controlling Board approves $230,470 for Stark State's shale training facility
 

The Ohio Controlling Board recently approved $230,470 in funding for Stark State College's planned Energy Industry Training Center in Canton, according to The Review. The college purchased a downtown property where it will consolidate all of its energy industry programs. The $1.3 million project includes a 7,000-square-foot indoor-outdoor facility that is expected to be finished by the fall of 2014 (See our Nov 6, 2013, blog post for more information). For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 02, 2014

Ohio Oil & Gas Commission grants K&H Partners' request to participate in appeal proceedings for its second planned injection well in Athens County
 

The Ohio Oil & Gas Commission recently granted West Virginia-based K&H Partners' request to participate in an appeal filed by the Athens County Fracking Action Network (ACFAN), The Athens Messenger reports. ACFAN is challenging the state's issuance of a drilling permit to the company for its second well in Athens County (See our Jan 27, 2014, blog post for more information). Neither ACFAN nor the state objected to K&H participating; however, the Ohio Attorney General's office "has filed a motion seeking dismissal of the appeal on grounds that drilling permits cannot be appealed to the commission." Both sides have until February 18th to respond to the motion to dismiss, and the commission "plans to rule in March on the motion." In its appeal, ACFAN "raises technical and legal objections about the adequacy of the proposed injection well to protect groundwater," the article said. For more, read the full story.

 
Posted by D. Gerken in  Ohio  Oil & Gas Litigation   |  Permalink

 

Mar 02, 2014

Oil and gas education workshops help teachers educate their students
 

Recognizing the need to prepare students for shale-related employment, the Ohio Oil & Gas Energy Education Program (OOGEEP) is regularly providing free training workshops for educators from around the state, The Columbus Dispatch reports (See our July 3, 2013, blog post for more information). The program, "funded by the state's oil and gas producers and those who receive royalties from production," received flak last month when concerns that a partnership with Radio Disney bordered on indoctrination drove Radio Disney to back out. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Mar 02, 2014

U.S. EPA outlines permit requirements for using diesel in hydraulic fracturing operations
 

The U.S. Environmental Protection Agency (EPA) recently released standards for the use of diesel fuel in hydraulic fracturing. Although industry leaders claim the use of diesel has been phased out of the hydraulic fracturing process, it nonetheless "sought to block the EPA's criteria, saying it could lead to greater federal oversight and delays in getting permits," Bloomberg reports. The Safe Drinking Water Act (SDWA) was amended through the Energy Policy Act of 2005 to specifically include all fluids and propping agents used in hydraulic fracturing except diesel. For more, read the full story and EPA guidance.
 
Posted by M. Warnock in  United States   |  Permalink

 

Mar 01, 2014

Landowner group files lawsuit to force New York to expedite its environmental review of hydraulic fracturing
 

The Joint Landowners Coalition of New York recently filed a lawsuit to try to force the state to expedite its environmental impact review of hydraulic fracturing, Bloomberg News reports. The state halted hydraulic fracturing operations in 2008 to allow time for the review, and the state's environmental commissioner said regulations on the process would not be issued "until at least April 2015" (See our Aug 11, 2013, blog post for more information). The group claims it is "losing out on the financial benefits of gas drilling." The case is Joint Landowners Coalition of New York v. Cuomo, Supreme Court, State of New York (Albany). For more, read the full story.
 
Posted by D. Gerken in  Oil & Gas Litigation  United States   |  Permalink

 

Mar 01, 2014

Oklahoma is the latest oil and gas drilling state to experience unusually heavy seismic activity
 

Oklahoma joins a growing list of states experiencing "unusually heavy seismic activity near oil and gas drilling and disposal wells," Time magazine reports. There is no definitive proof that hydraulic fracturing itself contributes to earthquakes; however, a stronger link between wastewater injection wells and earthquakes does appear to be emerging (See our Jan 21, 2014, blog post – "Texas Railroad Commission plans to hire an in-house seismologist to research whether injection wells are causing earthquakes"). Other states experiencing this activity include Arkansas, Kansas, Texas and Ohio. In March 2012, the Ohio Department of Natural Resources (ODNR) introduced new injection well regulations after its researchers linked a brine disposal well to seismic activity in the Youngstown area (See our July 11, 2012, blog post – "Gov. Kasich signs executive order regulating deep-injection wells"). For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Mar 01, 2014

Williams Energy's Oak Grove facility in West Virginia just received its first de-ethanizer
 

It took four days for a 41-yard long, 510,000 pound de-ethanizer to travel just 30 miles across Marshall County, West Virginia, to Williams Energy's Oak Grove facility, The Intelligencer / Wheeling News-Register reports. Upon arrival, it became the first de-ethanizer at the facility, although a second one is currently planned. The de-ethanizer will help the company to refine more ethane. Once the ethane is stripped, it will be sent to the Gulf Coast via the ATEX pipeline or to Sarnia, Canada, via the Mariner West pipeline, the article said. For more, read the full story.
 
Posted by M. Warnock in  West Virginia   |  Permalink

 

Feb 28, 2014

12 governors launch bipartisan effort to promote state regulatory authority over oil and gas drilling
 

Governors from 12 states have formed a bipartisan group to promote states as the "primary and appropriate regulators" of oil and gas drilling, Bloomberg News reports. The States First initiative is composed of Alabama, Alaska, Colorado, Kentucky, Mississippi, Montana, Nevada, North Dakota, Oklahoma, Pennsylvania, Texas and Utah, and is a "partnership between the Interstate Oil & Gas Compact Commission and the Ground Water Protection Council, organizations that represent energy-producing states and their regulators." States First plans no formal lobbying. Its costs are "paid by the commission, which is funded by fees from member states based on oil and gas production," the article said. For more, read the full story.
 
Posted by M. Warnock in  Pennsylvania  United States   |  Permalink

 

Feb 28, 2014

Marietta considers leasing 95 acres to Protege Energy III
 

Marietta City Council recently heard feedback from city residents and other interested parties on a proposal from Tulsa-based broker Protege Energy III to "lease up to 95 acres of city property that would be included among 6,100 surrounding acres for a drilling operation that would be located on property near the city," The Marietta Times reports. MNW Energy LLC is "working with about 200 area landowners to put together a 6,000- to 7,000-acre block of properties in Washington County" for Protege to drill on. The deal on the table is for $4,750 per acre, plus a 17.5 percent royalty. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 28, 2014

PDC Energy and Rex Energy review their 2013 in the Utica shale play
 

Denver-based PDC Energy Inc. "established proved reserves of 14 million barrels of oil equivalent in the Utica shale play in 2013," Columbus Business First reports. The Utica in Ohio and the Wattenberg in Colorado constitute the company's main focus for 2014. In reviewing its 2013, Pennsylvania-based Rex Energy Corp. said it "has 28 current well permits in Ohio and spent $233 million to fund Ohio Utica and Marcellus shale operations last year," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  Pennsylvania  United States   |  Permalink

 

Feb 27, 2014

Monthly E-newsletter provides a recap of ShaleOhio’s most popular blog posts
 

For a recap of ShaleOhio’s most popular blog posts, please sign up for our monthly Shale Recap – a convenient e-newsletter distributed around the middle of each month. To subscribe, go to this link and select the Shale, Oil and Gas Monthly Recap under our listing of Energy and Environmental Bulletins and newsletters.
 
Posted by M. Warnock in  Ohio  Oil & Gas Litigation  Pennsylvania  United States  West Virginia   |  Permalink

 

Feb 26, 2014

New study assesses the potential economic impact of the proposed ASCENT petrochemical complex in West Virginia
 

A new study presented yesterday to the West Virginia House of Delegates' Gas Works W.V. Caucus estimates that the proposed petrochemical complex ASCENT (Appalachian Shale Cracker Enterprise) would have an economic impact of more than $2 billion during the four-year construction process alone, the Parkersburg News and Sentinel reports.  In November, W.V. Gov. Earl Ray Tomblin announced that international petrochemical company Odebrecht plans to build an ethane cracker and three polyethylene plants in Wood County, W.V. (See our Feb 2, 2014, blog post for more information). The study, titled "Building Value from Shale Gas: The Promise of Expanding Petrochemicals in West Virginia," was funded by Brasken America, which is owned by Odebrecht, and was authored by Tom S. Witt, PhD, chief economist for Witt Economics LLC and professor emeritus and former director of West Virginia University's Bureau of Business and Economic Research. The study did not focus on Wood County specifically, but "looked at the construction of a hypothetical $3.98 billion cracker plant and associated polyethylene plants that would use materials generated by the cracker" in West Virginia, the article said. Among the wealth of statistics presented, the study concludes that construction would result in a total of 24,118 direct, indirect and induced jobs for a total employee compensation of $1.116 billion. The total employment for operation of the plant, including direct, indirect and induced jobs, would be 2,088 with a total compensation of $116 million. Total annual output at start-up would be $764 million, with total annual output at full operation reaching $840 million. The cracker and polyethylene plants would employ 325 at full operation. For more, read the full story.
 
Posted by M. Warnock in  West Virginia   |  Permalink

 

Feb 25, 2014

Local leaders in eastern Ohio consider the overall impact of shale development to be positive
 

The Ohio University Voinovich School of Leadership and Public Affairs on Monday released the primary findings from its 2013 Ohio Shale Development Community Impact Survey, which it mailed at the end of July 2013 to local officials in the following 17 eastern Ohio counties: Belmont, Carroll, Columbiana, Coshocton, Guernsey, Harrison, Holmes, Jefferson, Mahoning, Monroe, Muskingum, Noble, Portage, Stark, Trumbull, Tuscarawas and Washington (See our Feb 18, 2014, blog post for more information). Of the 540 surveys mailed, a total of 227 responses were received (42 percent). Thirty-six respondents were excluded from analysis due to incomplete responses. Respondents included 66 mayors and city managers (34.6 percent); 16 county commissioners (8.4 percent) and 109 township trustees (57.1 percent). While the impacts of shale development are being felt across eastern Ohio, it is "particularly acute in counties where respondents feel refineries or horizontal well drilling is taking place," especially with regard to infrastructure. Respondents reported very little impact on public safety, but reported that some of the most significant impacts are those related to "increases in traffic volumes and the need for public road maintenance." A copy of the survey as it was distributed is available here.

According to the survey's findings, the majority of local officials (61.4 percent) reported that the impact of shale activity has "generally been positive," while 25.7 percent reported no change to their service area, and only 7.8 indicated that the overall impact has been negative. The majority of respondents reported that property and land costs have increased in counties with shale activity. This increase was attributed to: injection well construction (54.8 percent), horizontal shale well drilling (63.2 percent), pipeline construction (68 percent), worker camps (75 percent) and supply yards/staging areas (77.3 percent).

Nearly two-thirds or more of respondents indicated that rental housing costs have increased due to the impact of shale development, with 90 percent attributing it to refinery development, followed by supply yards and staging areas (86.2 percent). Only a small percentage of respondents indicated that certain crimes have increased due to shale development activity: alcohol-related offenses (13.3 percent), drug-related offenses (12.4 percent), property theft (11.2 percent), assaults (6.2 percent) and prostitution (2.8 percent).

Between 61 and 95 percent of all respondents indicated a need for public road maintenance as a result of ongoing shale development activities, while between 52.4 and 66.7 percent of all respondents reported an increased need for bridge maintenance and inspection. More than half of the surveyed county commissioners and township trustees (61.4 percent) indicated that Road Use Maintenance Agreements (RUMA) had been signed in their service area.

Although only 35.6 percent of respondents indicated that local tax revenues have increased as a result of shale development, "considerable differences were seen between the types of local officials." A large majority of county commissioners (87.5 percent) reported an increase in tax revenue, while 43.1 percent of city managers and mayors reported such an increase, and 22.2 percent of township trustees. "Local tax revenue is the only economic survey item where major differences were seen among the local official positions."

The surveyors clarified that the opinion survey and its findings are "not meant to draw causal relationships," and are instead a "baseline analysis and a snapshot in time." In the future, the group plans to conduct similar studies and track "how attitudes and opinions may vary as Ohio's shale play matures."

For more, read the full news release and access this slideshow presentation from Monday's webinar.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 24, 2014

Gov. Kasich appoints Craig Butler director of the Ohio EPA
 

On Friday, Ohio Gov. John Kasich announced the appointment of Craig Butler as the director of the Ohio Environmental Protection Agency (EPA). Butler was appointed interim director in early January following the resignation of Scott Nally (See our Jan 10, 2014, blog post for more information). Butler has more than 24 years of public service experience. He previously served as director of the Ohio EPA's central and southeast district offices, as well as a senior policy advisor for the Kasich administration on environmental, energy, public utility and agricultural issues. For more, read the full news release.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 24, 2014

ODNR proposed plan from 2012 outlined a public relations campaign to promote drilling in state parks
 

Newly released documents detail a plan created by the Ohio Department of Natural Resources (ODNR) in 2012 in which the regulatory agency would have helped "sell the public on plans to allow oil and gas drilling in state parks while seeking to counter criticisms from legislators and environmental groups," according to The Hannah Report. The 10-page memo, "Oil and Gas Stand Lands Leasing: Draft Outline for Communication Plan," was never officially implemented. One part of the plan particularly concerning to some is the proposal to enlist "supporters/participants of economic oil and gas development in Ohio" – the very entities the agency is charged with regulating – to "minimize public concern" about drilling, The Columbus Dispatch reports. Although Gov. John Kasich signed a law in mid-2011 establishing a new mechanism for state agencies to enter into oil and gas leases, his spokesman Rob Nichols said last week that the governor "doesn't support fracking in state parks." The 2011 law gave Kasich until November 2011 to appoint a "five-member commission that would have leased park and forest mineral rights to the highest bidders." The governor has not appointed the commission. For more, read these three Columbus Dispatch stories here, here and here.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 24, 2014

XTO Energy might fund an infrastructure upgrade to Belmont County's sewer system
 

As a customer of the Belmont County sanitary sewer district, Texas-based XTO Energy is talking with county commissioners about a possible infrastructure project, the Times Leader reports. The proposed project would include "the installation of about four miles of new waterline, a new pumping station, a power upgrade, fire hydrants, gas valves, air release and pressure reducing valves, and the connection of 60 homes to the line." The project would provide the company with its needed increased water flow, but the waterlines would remain the property of the county, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 23, 2014

Industry expert says the Utica shale play's short history makes for an uncertain future
 

Oil and gas industry experts outlined a host of considerations regarding the future of the Ohio shale boom during Crain's Shale Summit 2014 last week, The Plain Dealer reports. Tom Stewart, executive vice president of the Ohio Oil and Gas Association, expressed concern that certain provisions of the current severance tax proposal could dampen the industry's economic impact for the state (See our Feb 13, 2104, blog post for more information). Houston-based analyst G. Allen Brooks found the relative immaturity of the play most concerning, noting that while the newly required quarterly production reports from the Ohio Department of Natural Resources (ODNR) will help, they "won't be enough to make a sweeping prediction about Ohio's future as a major oil and gas state," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 23, 2014

MarkWest Energy subsidiary completes purchase of the Youngstown & Southern Railroad
 

The Columbiana County Port Authority recently announced that the sale of the Youngstown & Southern Railroad’s assets to an affiliate of Denver-based MarkWest Energy Partners LP is complete, The Business Journal reports (See our Oct 3, 2013, blog post for more information). The MarkWest subsidiary, Mule Sidetracks, paid the port authority $3 million for all of the "ties, ballast, rails and rights of way of the 36.8-mile railroad," which runs from Youngstown to Darlington, Pennsylvania. It will continue rail service on the line "pursuant to an operating lease with the Youngstown & Southeastern Railroad," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 23, 2014

T. Boone Pickens: Converting heavy trucks to run on domestic natural gas will reduce U.S. dependence on OPEC
 

T. Boone Pickens, business magnate and chairman and CEO of BP Capital, recently published an op-ed column in The Columbus Dispatch making the case for converting the nation's approximately eight million heavy-duty trucks to run on domestic natural gas. Although his major energy policy proposal, the Pickens Plan, promotes wind and solar, he maintains that "only one percent of our electricity is produced from oil." Converting the heavy trucks would be an easy start because refueling stations could be placed along their scheduled routes. Pickens said this is the United States' best bet for reducing the $130 billion of wealth that is currently transferred to Middle Eastern governments each year as part of the Organization of the Petroleum Exporting Countries (OPEC). For more, read the full op-ed.


 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 22, 2014

American Energy Partners secures an additional $1.25 billion to spend in the southern Utica shale play
 

Former Chesapeake Energy Corp. CEO Aubrey McClendon's new venture American Energy Partners LP recently secured an additional $1.25 billion in financing for Utica shale play operations, Columbus Business First reports. The company is "selling $750 million of seven-year, 3.5 percent convertible subordinated notes, an increase from the $500 million American Energy Partners had announced last month" (See our Jan 29, 2014, blog post for more information). The company will direct the money toward "leasehold acquisitions and expenditures in the southern portion of Ohio's Utica shale region," the article said. The company also secured a $500 million increase to its borrowing limit, taking it to $950 million. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 22, 2014

Drilling-related companies in Ohio make a push for Canadian business
 

Ohio business officials recently met with representatives of a half-dozen Canadian oil companies in an effort to secure contracts related to the extraction of oil from the northern Alberta tar sands, WKSU.org reports. During the business-to-business forum in Cuyahoga County, several Canadian representatives credited the Utica shale boom with creating a "very sophisticated technology-driven industrial base" that drives their interest in working with businesses within the state. Ohio business officials did acknowledge unique challenges faced while working in the remote northern part of Canada, which generally pertain to frigid temperatures. "Canada is Ohio's largest foreign trading partner, as the Buckeye State exports more goods to the northern neighbor than the next 10 countries combined," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 22, 2014

EnCap Flatrock Midstream to invest up to $500 million in a new oil and gas infrastructure business
 

The Oklahoma-based private equity firm EnCap Flatrock Midstream will invest as much as $500 million in a new company started by former executives of DCP Midstream Partners LP and Chesapeake Energy Corp. called Tall Oak Midstream LLC, Bloomberg reports. Tall Oak is based in Oklahoma City, where it will "invest in new and existing oil and gas gathering assets in the middle of the U.S." EnCap Flatrock Midstream, an affiliate of the buyout firm EnCap Investments LP, "has committed to an initial $100 million investment" in Tall Oak. For more, read the full story.
 
Posted by M. Warnock in  United States   |  Permalink

 

Feb 21, 2014

Drillers employ several strategies for dealing with leases nearing expiration
 

With many Ohio leases signed in the early part of the Utica shale boom nearing their expiration, and the sweet spots of the play finally coming into focus, E&P companies are taking several different approaches based on the specific circumstances surrounding each deal. In the northern counties, companies often "took the assignment of deep rights" from existing conventional well owners and will continue to hold those rights so long as the conventional wells are there, WKSU.org reports. Others will file commence operations at the last minute to fold properties that haven't been drilled into active development units. Re-leasing is also an option, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 21, 2014

Monroe County hopes drilling will fill the financial void created by Ormet Corp.'s bankruptcy
 

With Ormet Corp. moving through its bankruptcy proceeding, Monroe County officials and residents are looking to the shale boom to fill the void in the area's long-term finances, The Intelligencer / Wheeling News-Register reports. Ormet incrementally reduced its workforce throughout 2013 to cut electricity costs, which were primarily responsible for the company's bankruptcy. It closed its smelter in October 2013. Now, many are wondering if Ormet is receiving royalties from three Magnum Hunter wells that are producing natural gas on Ormet's Hannibal property and whether those funds could be used for operating costs, the article said (See our Jan 7, 2014, blog post for more information). For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 21, 2014

Pennsylvania-based AMERIgreen releases infographic outlining the benefits of buying domestic energy
 

Pennsylvania energy wholesaler AMERIgreen recently released statistics on fuel consumption in the United States. In detailing the benefits of buying domestic fuel, the company found that the United States transferred $380 billion of wealth to other countries in exchange for fuel in 2012 alone. For more, read the full news release and infographic.
 
Posted by M. Warnock in  Pennsylvania  United States   |  Permalink

 

Feb 20, 2014

Chesapeake Energy takes a $500 million line of credit using a Pennsylvania landowner's 12 leased acres as collateral
 

Some landowners who have leased mineral rights for drilling are finding that such companies have used their property as part of financing transactions, the Greene County Messenger reports. Oklahoma City-based Chesapeake Energy Corp. took a $500 million line of credit out on a Pennsylvania landowner's property for which it had leased 12 acres. Company officials declined to comment, but a Marcellus Shale Coalition spokesman said that "[i]n some cases, companies leverage their leased mineral estate in an effort to secure additional capital," noting that the lien is "placed against the leasehold estate of the operator, not the royalty interest of the landowner or property itself." Despite this, landowners can still face problems as a result of these liens. For more, read the full story.
 
Posted by M. Warnock in  Pennsylvania  United States   |  Permalink

 

Feb 20, 2014

Magnum Hunter places its first dry gas Utica shale well on production in Monroe County
 

Houston-based Magnum Hunter Resources recently announced that its Stalder #3UH well – its first dry gas Utica shale well – was placed on production earlier this week and recently tested at a peak rate of 32.5 MMCF of natural gas per day on an adjustable rate choke with 4,300 psi FCP. The well is located on the Stalder Pad in Monroe County, which has the potential for 18 wells. Wholly-owned Magnum Hunter subsidiary Triad Hunter operates the well with a 47 percent working interest, with Eclipse Resources and others as non-operating partners. For more, read the full news release.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 20, 2014

Spectra Energy affiliate wants to build the Ohio Pipeline Energy Network Project for $468 million
 

Texas Eastern Transmission LP, a unit of Houston-based Spectra Energy Partners LP, recently filed a proposal with the U.S. Federal Energy Regulatory Commission (FERC) to "spend about $468 million to build 76 miles of 30-inch pipeline from the Kensington processing plant in Columbiana County, Ohio, to interconnect with Texas Eastern's existing hub in Monroe County," Reuters reports (See our Dec 21, 2011, blog post for more information). The Ohio Pipeline Energy Network (OPEN) Project would transform a significant portion of the Texas Eastern system into a bidirectional pipeline. This trend emerges as the traditional direction of pipelines is being altered by "record gas production in shale plays like the Marcellus and Utica in Ohio," the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 19, 2014

Ohio House Public Utilities Committee holds hearing on bill to permit natural gas companies to apply for an infrastructure development rider
 

On Wednesday, the Ohio House of Representatives Public Utilities Committee will hold its second hearing on H.B. 319, which House Majority Whip Cheryl Grossman (R-Grove City) introduced in October to permit natural gas companies to apply for an infrastructure development rider to cover the costs of certain economic development projects. According to the Gongwer Ohio Report, the Leveraging Energy to Advance Development (LEAD) proposal "would permit natural gas companies to create new funds to extend utility infrastructure to the boundary of a development site," allowing local officials to "more aggressively pursue economic development that might not otherwise occur due to a lack of infrastructure." The Public Utilities Commission of Ohio (PUCO) would determine eligibility on a case-by-case basis. The rider would apply to all of the natural gas company's customers, and the "company's annual investment cannot exceed one percent of the utility's net plant investment utilized in establishing base rates in the  company's most recent base rate case," the article said. For more, read the full text of H.B. 319.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 19, 2014

Seventh Circuit’s Court Judge Posner sends groundwater contamination class action back to district court
 

The United States Court of Appeals for the Seventh Circuit recently sent a proposed class action case "back down to the district court to revisit certification" after finding "no dangerous link between benzene in the groundwater" in the small Illinois town of Roxana and its residents' class action claims against Shell Oil, FindLaw.com reports. In the opinion for Parko v. Shell Oil, No. 13-8023 (Jan. 17, 2014), Judge Richard Posner held that the district judge "simply assumed a pleading standard in accepting class counsels' assertions that contamination in the ground equaled some sort of common damages," even though there was "no evidence whatsoever that benzene was present in Roxana drinking water (they use a separate aquifer) or that property values were commonly depressed due to benzene in the groundwater." For more, read the full story and the opinion.
 
Posted by J. Hughes in  Oil & Gas Litigation   |  Permalink

 

Feb 19, 2014

United Airlines to drop the direct Oklahoma City flight from its Cleveland hub
 

Among the "more than two dozen nonstop flights" that United Airlines expects to eliminate from its Cleveland hub this spring is Oklahoma City, which is home to several prominent companies active in the Utica shale play (e.g., Gulfport Energy, Chesapeake Energy and American Energy Partners), The Plain Dealer reports. The company first "initiated the non-stop service between the two cities in August 2012" and is currently the only nonstop flight between the two cities. For more, read the full story.
 
Posted by M. Warnock in  Ohio  United States   |  Permalink

 

Feb 18, 2014

Ohio University will release its shale community impact survey during a free webinar on Monday, February 24th
 

The Consortium for Energy, Economics & the Environment (CE3) at Ohio University's Voinovich School of Leadership and Public Affairs will release the findings of its highly anticipated Ohio Shale Development Community Impact Survey on Monday, February 24, 2014. It will be available to download here. That day, CE3 will also host informational webinars for the public (from 11 a.m.-12 p.m.) and the media (from 12:30-1 p.m.) that will discuss the report's findings in depth. For more, including registration information, read the full news release.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

Feb 18, 2014

One worker still unaccounted for after a Pennsylvania well explosion
 

The fire created from a natural gas well explosion at Chevron's Lanco 7H Marcellus shale well pad in Dunkard Township, Greene County, Pennsylvania, which had been burning since Tuesday, was finally extinguished on Sunday, the Herald-Standard reports. One of the 18 employees who escaped suffered minor injuries, however one employee of the contractor Cameron Surface Systems is still unaccounted for. Officials said it is unknown what exactly extinguished the fire, reported The Associated Press. For more, read the full Herald-Standard and Associated Press stories.
 
Posted by M. Warnock in  Pennsylvania   |  Permalink

 

Feb 18, 2014

Utica Shale Academy of Ohio charter school to be located in Jefferson County
 

The Southern Local Board of Education in Jefferson County recently approved a location for an oil and gas charter school that was itself approved by the Jefferson County Educational Service Center (ESC) in December, according to The Review. Located in room F112 of the Southern Local facility, the Utica Shale Academy of Ohio "will be for grades 9-12" and will be both fiscally represented and sponsored by the ESC as its sole governing authority. It is expected to open by mid-September of this year, the article said. For more, read the full story.
 
Posted by M. Warnock in  Ohio   |  Permalink

 

 

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