Thursday, February 14, 2013
shaleplayneohio.com
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LOCAL DRILLING PICKING UP Energy companies counting on shale By BRENDA J. LINERT S h a l e P l ay WARREN, Ohio — As the number of deep-well natural gas drilling sites continues to inch upward each month in the Mahoning Valley, energy companies also are raising their predictions for local success. Halcon Resources, already drilling one well in Burghill, now is preparing a well pad for its second local well. There also are indications the company may be developing as many as five local wells soon. Ohio Department of Environmental Resources spokeswoman Heidi Hetzel-Evans said that the permit application for Halcon’s latest well on Brunstetter Road in Lordstown is among three pending with the agency. Truck traffic to the Brunstetter site has been increasing steadily since the company inked a road use agreement last week with the Trumbull County Engineer’s office. In addition, records show the company has made application with ODNR for two other drilling permits: the Hall permit on Highland Avenue in Lordstown and the Williams permit in Jackson Township, Mahoning County. Trumbull County Engineer’s
official Don Barzak said his office also is working on another road use agreement for what could be the company’s fifth planned well, this one on Hewitt-Gifford Road in Lordstown. Houston-based Halcon began drilling early this month in Burghill, and has said that process will take about a month. After that, the company will drill horizontally and then, if all goes as planned, frac the well. These wells are Halcon’s first anywhere in the Utica Shale, a rock formation thousands of feet below northeast Ohio which geologists believe could hold the world’s largest single accumulation of natural gas. Halcon spokesman Vince Bevaqua said this week that the company will contract two rigs for drilling in the Utica Shale. While Halcon has not released any specific predictions for the Utica, other companies with local interests have expressed high expectations for the shale play. BP’s General Manager of global energy markets and U.S.Economics Mark Finley this week told the Tribune Chronicle the sharp increase in production that enabled the U.S. in 2009 to surpass Russia as the world’s leading producer of natural gas came from shale production.
LOCAL UTICA SHALE DRILLING Utica Shale Well permits issued for Trumbull and Mahoning counties by Ohio Department of Natural Resources. Includes date permit issued; township; status; and operator. Trumbull County: ∫ 06/21/2012; Vienna; permitted; CNX Gas Co. ∫ 11/02/2012; Hartford; Not Drilled; Halcon Operating Co. Mahoning County: ∫ 05/04/2011; Milton; Inactive; Chesapeake Exploration LLC. ∫ 09/17/2012; Jackson; Permitted; CNX Gas Co. ∫ 08/29/2012; Jackson; Drilling; CNX Gas Co. ∫ 10/24/2012; Poland; Permitted; Hilcorp Energy Co. ∫ 12/14/12; Poland Township; permitted; Hilcorp Energy Co. BP, which has leased mineral rights for more than 80,000 Trumbull County acres, has said it will drill 10 wells in the Utica beginning in April. “Rising production of natural gas, oil and other fuels means that domestic energy production will be sufficient to meet 99 percent of U.S. energy consumption by 2030. That is compared to 70 percent in 2005,” Finley said. Still, Finley said the company does not worry about production outpacing demand.
In a company outlook report released last week, BP projected that by 2026 natural gas will replace oil as the leading source of energy consumption in the United States and that the country soon will become a net exporter of natural gas, subject to government permits. “Consumers and producers alike respond to changing market circumstances, so that supply always equals demand (except for minor factors such as inventory changes),” Finley said.
“Markets work: where they are given the opportunity to do so, energy consumers and producers respond to changing market signals. The U.S. has been at the forefront in developing new sources of energy supply because it has fostered a competitive marketplace that drives innovation. This holds the key for people interested in topics ranging from climate change to energy efficiency and renewable energy ... policies that bring market forces to bear and encourage innovation hold the best prospects for delivering tangible progress.” Another big player in the local gas drilling process, Consol, last week told investors the company’s first Portage County Utica Shale well as having “good shows of gas and oil.” The company also reported three Mahoning County wells were drilled last year, including the company’s first “multi-well Utica Pad” in North Jackson expected to be completed by June. Consol, which is operating a joint natural gas drilling venture with Hess Corp., said it expects to use its two horizontal drilling rigs to drill 11 wells in 2013. All are expected to be in Noble County, however, well south of the Mahoning Valley.
SURVEY: Residents believe shale will bring jobs B y C A S E Y J UN K I NS Shal e Pl ay WHEELING, W.Va. — Arrowsmith Fabrication owners Brett Francis and Michael Siebieda are welding and fabricating their way into the Marcellus and Utica shale boom that is rushing through the Tri-State. The business, located in South Wheeling, has manufactured the 6,000pound “cattle stop” for the Williams Partners natural gas processing plant at Fort Beeler. The owners hope this is the first of many contracts they will receive as the gas industry grows in the region. “We feel oil and gas is going to be our bread and butter in the future,” said Siebieda, explaining the “cattle stop” is a large steel device that Williams will place near the entrance to the Fort Beeler plant to keep animals out of harm’s way. “These operations are mostly out on farms, so they want to keep the cattle out of there.” As Siebieda and Francis perform work for Williams — and try to receive more jobs from other oil and gas companies — they are running a new business they know would probably not exist without shows that about 75 percent of West the burgeoning shale rush. A new survey by Huntington Bank Virginia residents believe there will be
Michael Siebieda, co-owner of Arrowsmith Fabrication in South Wheeling, performs some welding inside the shop on Wood Street. Photo by Casey Junkins
more jobs and companies coming to the state because of the opportunities shale presents. These jobs could involve welding and machining, as Arrowsmith is doing, or they could involve trucking, housing, chemical supply, or a number of other areas. “Huntington commissioned the survey by an independent research firm because we are committed to helping our customers understand the economy in our markets,” said Steve Steinour, chairman, president and chief executive officer at Huntington. “While many inside and outside of the energy industry are predicting growth, we wanted to find out how the residents of our markets perceive the potential economic impact of the industry on their communities.” Columbus, Ohio-based Huntington
maintains a number of banking offices in the local region. In Ohio, 58 percent of those Huntington surveyed believed the oil and gas industry would bring more business and growth to the Buckeye State. Those in western Pennsylvania also responded favorably when asked if they expected more economic activity due to shale drilling, as 79 percent there said they expected “significant opportunity.” “Many of these industrial areas have been known as the Rust Belt,” added Steinour. “With manufacturing growing again, and aggregate employment in these areas outpacing the national economic recovery, we prefer to call this swath of the country the ‘Recovery Belt.’” The Arrowsmith shop is an example of one of the many service businesses being created in the local area because the natural gas and oil extraction is taking place. Siebieda said he and Francis are also in contact with companies such as MarkWest Energy for potential work. “We prefer to hire services from local vendors and provide support to develop skills and services to address our needs ... as well as those needs of the communities near our operations,” said Williams Partners spokesman Scott Carney.