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Summer 2017

Each weekday Marcellus Drilling News locates and shares news, along with a healthy sprinkling of commentary, for the Marcellus and Utica Shale. Over 50,000 people read MDN each month, making it an excellent barometer to inform ONG Marketplace readers which topics generated the most interest for those who work in the oil and gas and associated industries. Below is a summary of the top 5 stories that were most-read over the past 30 days on MDN. #1 Most Read: Great Scott! Eclipse Drills New Longest Lateral in World – in Utica Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, has done it again. In early May, as part of Eclipse’s first quarter 2017 update, the company announced it has broken its own record for drilling the longest land-based lateral well in the world by drilling a Utica well with a lateral that’s 19,300 feet long (3.7 miles). Incredible! You may recall Eclipse was the previous holder of that record with their Purple Hayes well (18,500 feet long), drilled one year ago. Eclipse seems to have taken a chapter from Rice Energy by naming their wells with creative names. Purple Hayes was named after the landowner (Hayes). The new record-holder? Great Scott--presumably named after the landowner (Scott). Eclipse reports drilling its newest record setting “Super-Lateral” well, the Great Scott 3H, with a total measured depth of 27,400 feet and completable lateral extension of 19,300 feet in less than 17 days from the drill bit hitting the ground to total depth (called spud to TD) in the company’s Utica Shale condensate area. If you’re an MDN subscriber, you were already expecting this big news. Back in April, MDN editor Jim Willis attended the Oil & Gas Investment Symposium in New York City and reported on Eclipse’s session. At the time Jim reported: “They [Eclipse] plan to drill 11 'super lateral' wells that exceed 15,000 feet long. Two wells they hope to drill will break the existing Purple Hayes record--by going to 19,000 feet!” Just a month later and the company is already delivering on its promise. Even bigger news: Eclipse is currently drilling a second well of the same length next to Great Scott! To read more about Great Scott (I & II), use this URL: #2 Most Read: Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought? On May 2, Noble Energy dropped a bombshell that it has sold its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer.” That works out to be $3,181 per acre. Not included in the sale is Noble’s half operating interest in the CONE Midstream pipeline gathering system (which the company sold later in May). It was just three years ago that Noble announced it would lease 138,000 feet in a new office building in Southpointe, PA and move in 200 employees. At the time, Noble’s CEO said the Marcellus is “the premiere gas play in the United States” and that the Marcellus figures prominently in Noble’s future plans. That was then, this is now. Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy--a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). All of the above is what you get from other news sources. The reason you read MDN is because we found out who the buyer of the Noble acreage is. According to a wellplaced source, HG Energy, headquartered in Parkersburg, WV, is the buyer, backed with money from investment firm Quantum Energy Partners. For more of MDN's exclusive coverage of this deal, read: #3 Most Read: CONSOL Energy 1Q17 – Posts Loss, Selling Everything in Sight CONSOL Energy, one of the larger drillers in the Marcellus/Utica, released its first quarter 2017 update in early May. The company reports losing $34 million in 1Q17. Production was down too--but just slightly, less than 2% from 1Q16. The big news is how fast CONSOL is selling stuff. CONSOL sold $108 million worth of assets in the Marcellus/Utica in 1Q17, part of their plan to sell off a total of $400-$600 million in assets this year. According to a CONSOL statement, the company “recently closed on three asset sale transactions for total cash consideration of $108 million...One of the transactions was the sale of approximately 6,300 net undeveloped acres of the

Page 13 Utica-Point Pleasant Shale in Jefferson, Belmont and Guernsey counties, Ohio, for total cash consideration of approximately $77 million, or approximately $12,200 per undeveloped acre.” We have a highly placed source that tells MDN that Ascent Resources is the buyer. CONSOL CEO Nick DeIuliis said on an earnings call that the bust-up with Noble Energy last year has allowed CONSOL to sell off acreage that was previously tied up in the joint venture. Noble is doing the same (see our companion story). This MDN post featured the full update from CONSOL, including financial statements, along with the latest PowerPoint presentation, which you may read here: #4 Most Read: Noble/CONSOL Breakup Continues: Noble Sells 50% of CONE Midstream In early May, Noble Energy dropped a bombshell that it has sold its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer”. MDN exclusively shared the news of exactly the who the “undisclosed buyer” is: HG Energy, headquartered in Parkersburg, WV, backed with money from investment firm Quantum Energy Partners. HG is a “portfolio company” of Quantum. The press release announcing the acreage/asset sale went to great lengths to stress that Noble’s half operating interest in the CONE Midstream pipeline gathering system was not part of the deal. CONE is a 50/50 joint venture between CONSOL Energy (the “CO” part of the name), and Nobel Energy (the “NE” part of the name). CONE was Noble’s final connection to our region. No more. Several weeks after the first announcement, Noble Energy announced they’ve also sold their 50% stake in CONE to Quantum Energy Partners for $765 million. This time Noble went ahead and announced the buyer, perhaps figuring MDN would find out and blab it any ;-). This post shared the announcement that Noble Energy has left the Marcellus/Utica building. Read about it here: #5 Most Read: Frack Crew Shortage Hits Nationwide, Including the Marcellus Once upon a time (in 2013), the oil and gas industry was expanding so rapidly that in places like North Dakota workers at the local McDonalds were getting a singing bonus and making $20/hour. No lie. Workers on drilling rigs and frack crews were paid a premium to keep working. But we became victims of our own success. So much oil and natural gas was produced, the market became saturated and prices crashed. And along with the price crash, rigs were idled and workers were laid off--in the tens and eventually hundreds of thousands. By the time of the deepest, darkest part of the down cycle (early 2016), some 350,000 workers in the industry had received a pink slip. Oil and gas is a boom and bust business--that’s the reality. And guess what? The boom times are back. There are now not enough workers and some crews are leaving one company and going to work for another--lured away by higher wages. It’s happening across the Fruited Plain. It’s also happening in the Marcellus. One (very big) Marcellus driller was “left short of fracking crews during the first quarter when some pumping companies walked away for higher-paying contracts.” What does it all mean? It means the good times are here again. Let’s enjoy it while it lasts. Read about the current crew shortage here: eQFDoQ.

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The Northeast ONG Marketplace - Summer 2017  

The only monthly publication directly mailed for free to over 10,000 industry professionals operating in the northeast U.S. shale plays.

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