Pandemic hits oil and gas industry

Oil and gas has been greatly affected by the coronavirus, according to WTOV9. The industry was saved hardships when Governor DeWine considered it “essential” for the lockdown period. However, a drop in demand led to crude oil to trade at a negative price. Workers remained positive and compliant as new safety precautions were implemented for their well-being. However, oil and gas production is expected to rise steadily as the country reopens. For more, read the full article.

Ohio

FERC commissioners dispute natural gas project approvals

On May 21, 2020, the Federal Energy Regulatory Commission (FERC) denied requests to reconsider the approval of two natural gas projects despite a commissioner’s concerns about the COVID-19 pandemic and decreasing demand for natural gas. For more, read the full article

National, Oil & Gas Litigation

Opinion: Ohio’s natural gas and oil energy production “essential to modern life”

The oil and natural gas produced in Ohio does more than fill our vehicle fuel tanks and heat our homes, “as nearly every consumer product we touch is manufactured using these raw materials,” interim executive director of Ohio Oil and Gas Energy Education Program Greg Mason writes in an opinion piece for insidesources.com. Some of those products include hand sanitizer, advanced medical equipment, medicine and bandages, Mason says. Additionally, he says, “America’s surge in energy production has created generational benefits for Ohioans.” A ban on hydraulic fracking would eliminate 700,000 Ohio jobs over five years and shrink our economy by $245 billion, according to analysis from the U.S. Chamber of Commerce. Rising energy costs could increase cost-of-living expenses by $6,000 annually. For more, read the full article.

Ohio

One-two punch of warm weather, COVID-19 may lead to shale bankruptcies

Natural gas prices “bobbing not far from 25-year lows hit on March 23” as warmer spring weather and COVID-19 pandemic lockdown measures “have slashed commercial demand for heating” has led to major budget changes for exploration and production companies — and bankruptcies may be next, investing.com reports. Gas production in the lower 48 U.S. states averaged 92.92. billion cubic feet per day for the week ending March 27, slightly lower than the previous week. Bankruptcies “are expected to gain momentum in the second quarter, accelerating as some drillers are forced to shut in production amid reduced oil demand and low available storage capacity.” For more, read the full article.

National, Oil & Gas Litigation

Force majeure provisions: Dusting off a law school exam topic for the COVID-19 pandemic

As the COVID-19 pandemic increasingly causes business disruption across the United States and the world, the issue of force majeure will become increasingly relevant. On a near daily basis, national, state and local governments are implementing stringent containment policies. States of emergency have been declared, schools and institutions of higher education closed, travel restrictions imposed, businesses shuttered, sporting events cancelled, large gatherings banned and worship services cancelled. While the long term effects of the pandemic are yet unknown, it is certain that these containment strategies will present unique challenges as businesses struggle to adapt to the new realities presented by COVID-19, including the ability to comply with various contractual obligations. In evaluating the range of options available to deal with performance under a contract amidst the uncertainty, parties should consider how the concept of force majeure will impact their rights, obligations and remedies. For more, read the full story.

National, Ohio

COVID-19 Resource Center Available

Amid growing concerns about the COVID-19 (coronavirus) outbreak, businesses and employers are forced to respond quickly and accurately to this evolving situation. A cross-disciplinary team of Bricker attorneys is regularly monitoring COVID-19 news and guidance to help our clients assess the potential impacts on their operations. 

If you have questions regarding COVID-19 and it's impact on energy matters or regulatory proceedings in Ohio, or if a situation arises and you need legal counsel, please visit our Resource Center for more information.

 

National, Ohio

Ohio’s natural gas producers shift focus from production to profits

A change is underway for Ohio’s natural gas producers; after focusing on boosting production the past few years, they are now looking at ways to increase profits, the Akron Beacon Journal reports. Jeff Fisher, CEO of Ascent Resources, told attendees at the annual Ohio Oil & Gas Association meeting, “[i]nvestors are demanding that we put growth aside and manage the business with the idea of making profit,” according to the article. Producers have been so successful at boosting production that demand growth “has been phenomenal,” but supply “has been a little more phenomenal,” Fisher said. Matt Hammond, the association’s president, said while he doesn’t expect double-digit production increases to continue, the mood among those at the meeting “remains good.” For more, read the full article.

Ohio

Vendel named Chief of ODNR’s Division of Oil and Gas Resource Management

Eric Vendel, who has served as lead attorney for the Ohio Department of Natural Resources (ODNR)’s Division of Oil and Gas Resource Management since 2012, will become the new chief of that division, according to an ODNR news release. ODNR Director Mary Mertz made the announcement of Vendel’s selection, saying his “extensive legal and administrative experience in oil and gas regulation” make him the “ideal candidate,” according to the release. As lead attorney for the division, Vendel has “drafted and reviewed oil and gas rules and regulations, Chief’s orders, contracts, and compliance agreement,” among other duties. He holds a J.D. from Capital University Law School, a master’s degree in organic chemistry from The Ohio State University, and a bachelor’s degree in chemistry from Wittenberg University. For more, read the full release.

Ohio

Last-quarter Ohio oil production up 17 percent over same quarter previous year

The Ohio Department of Natural Resources (ODNR) announced the state’s horizontal shale wells “produced 6.8 million barrels of oil” during the fourth quarter of last year, an increase of 17 percent over 2018 fourth-quarter totals, CantonRep.com reports. Natural gas production during the same quarter was 685 billion cubic feet, an increase of 3 percent over the same quarter in 2018, according to the article. ODNR reported production from 2,452 wells, which averaged 2,774 barrels of oil, 279 million cubic feet of natural gas and 90 days of production. For more, read the full article.

Ohio

EQT may sell “small portion” of royalties from natural gas production

Pittsburgh-based EQT Corp., the largest independent natural gas producer, “is in talks to have an investor take a 1 percent royalty interest in revenue from natural gas production,” the Pittsburgh Business Times reports. The company’s new management team “has been working to cut drilling costs and improve the company’s financial picture” as the domestic shale industry is experiencing sharp declines, according to the article. EQT said during the third-quarter conference call “it was evaluating ways to monetize its interest in natural gas production.” Then-Interim CFO Kyle Derham said, “[w]e are confident this strategy could generate significant proceeds that can be used to de-lever without a significant impact on development returns.” For more, read the full article.

Pennsylvania
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