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Dix Communications - Gas & Oil

March 2013 Edition

Ohio octobER 2012 •

A FREE monthly PublicAtion

Table of Contents

◆ EQT Corp. Community Advisor Jessica Baker 3 ◆ Stark Co. seeks 4 ◆ Zane State to have Simulation Lab 6 ◆ Chesapeake CEO steps down 8 ◆ EQT donates funds 11 ◆ Watershed board approves Oil and gas lease at Seneca Lake 13 ◆ Bust to Boom in Carroll County 14 ◆ Economic numbers not exaggerated 16 ◆ Tax Revenue having huge impact 21 ◆ Appalachian gas production surging 23 ◆ Chesapeake donates vehicle 26 ◆ Preserving History in Carroll 28 ◆ CONSOL Energy awards $6,000 grant

to Noble Co. Habitat for Humanity 30 ◆ Pipeline right-of-way workshop 33 ◆ Chesapeake Energy completes sale of Midstream assets for $5 billion 34 ◆ Upcoming gas & oil events 38 ◆ Lawmakers to go after illegal waste dumpers 41 ◆ EODA focuses on severance tax 42 ◆ Energy revolution a game changer 44 ◆ Shale development could be the answer to nagging questions 48 ◆ Director talks oil and gas 51 ◆ Gas and oil industry adding jobs 54


Andrew S. Dix Co-Publisher

Rob Todor Executive Editor

G.C. Dix II Co-Publisher

Cathryn Stanley Regional Editor

Ray Booth Executive Editor

Niki Wolfe Regional Editor Kimberly Lewis Regional Editor

Ohio on ion icAti

m om go.c .ohio .ohio • www • www

PublicAt Publ thly thly mon mon A FREE A FREE

2012 h 2013 mARcbER octo

Women in The Field Bust to BoCoomuninty

Carroll gitized Donation di Stark County creating partnerships


Zane State crea ‘Land Lab’

Ed Archibald SE Ohio Sales Cambridge, Ohio Office 740-439-3531

Janice Wyatt National Major Accounts Sales Manager 330-541-9450 Peggy Murgatroyd SE Ohio Sales Barnesville and Newcomerstown, Ohio Offices 740-425-1912 Barnesville 740-498-7117 Newcomerstown Jeff Kaplan NE Ohio Sales Alliance & Minerva, Ohio Office 330-821-1200 Kelsie Davis Layout Designer

Cover Photos: EQT Employee at a control pannel, photo submitted Zane State creates ‘Land Lab’, photo by Michael Neilson/Dix Communications Stark County creating partnerships, photo by Kevin Graff/Dix Communications

“Gas & Oil” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2013.



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March 2013 Edition - Dix Communications

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Dix Communications - Gas & Oil

March 2013 Edition


EQT Corp. Community Advisor Jessica Baker

The gas and oil boom in eastern Ohio, while still in the exploration phase in many counties, has provided newfound wealth in the form of bonuses and royalties for the lucky landowners, but more important to the general population, it has provided jobs. While the male-dominated industry offers entry level jobs requiring basic education, those jobs require physical stamina and long Judie Perkowski Dix Communications hours — and days or weeks — in the oil fields, which most women would find too challenging. But there are also many jobs or positions for those with higher levels of education, available to both sexes. Jessica Baker is a community advisor for the EQT Corp. She earned her corporate level position through education, opportunity and networking. After graduating in 2007 from Waynesburg University in Pennsylvania with a Bachelor of Science in Business Management, she went on to continue her education earning a Master of Business Administration in 2009. “I knew I wanted to work with the public sector ... I really enjoy interaction with people. After graduation, I began working for a large industrial supply company in outside sales. Towards the middle of my four-year career I noticed that although aspects of my business, which had always been thriving, started to cut back and slow down. But, another part of the business was dramatically growing due to the gas and oil industry. I was intrigued at how busy they were, never seeming to slow down even with the economic downswing, and I enjoyed the relationships that emerged with the customers,” said Baker. In the spring of 2011, Baker received an offer from a large company in the Pittsburgh metro area for an inside sales position. “I thought this was a logical career move, so I accepted the offer,” she said. “I was selected to start a pilot project in October of 2011 that targeted the gas and oil industry within southwest Pennsylvania and parts of Ohio. The more time I spent on the project, the more interesting it became. One year later I started looking for a position in the gas and oil industry, and in August of 2012, it was my pleasure to accept the position of community advisor for the EQT Corp. “I am primarily responsible for managing the risk and opportunities associated with engaging and informing stakeholders in the regional operating communities where we live and work. I make sure any questions, concerns or issues are handled properly and in a timely manner. As any industry is sure to have its pros and cons, our goal at EQT is to make sure we are not interrupting a community’s everyday activities any more than absolutely necessary.” Baker said her favorite part of her job is being able to work within a community and develop an open line of communication. “I love being able to give back, to help different organizations within a community reach their goals through EQT’s local giving

Jessica Baker, community advisor for the EQT Corp.

and support. It is extremely easy for me to speak about our company because I truly believe in the gas and oil industry and in EQT, because we are doing things the right way and fairly,” she said. “The most important part of my job is creating a strong relationship within a community and with local elected officials so they have someone to reach out to if there are any questions or concerns. Creating an open line of communication is extremely important for both parties.” Baker’s job also requires a lot of traveling. In Ohio, she covers Guernsey County, in addition to Allegheny, Green and Washington counties in Pennsylvania. “I grew up in a small, rural village in southwest Pennsylvania. During the past five years I have seen my hometown transformed [because of the gas and oil industry]. The jobs are plentiful and the restaurants and convenience stores are filled with customers. Farmers, who have struggled for years, are now purchasing new tractors and making improvements to their farms

Continued on pg. 18


Gas & Oil

March 2013 Edition - Dix Communications

Stark Co. seeks gas & oil partnerships


groundbreaking event took place in Stark County recently as representatives from local government, chambers of commerce, labor unions, and construction contractors mingled with businesses to form an alliance with the purpose of bringing more oil and gas companies and support industries into the county. Laurie Huffman The Stark County Oil and Gas Dix Communications Partnership put a Choose Stark event together at the Canton Cultural Center that Canton Mayor William Healy called very, very unique. “When was the last time you have ever been to an event sponsored by a collaboration of labor, business and Dix Communications/Kevin Graff government and had everyone on the same page?” Healy asked Keith Fuller, a representative from Chesapeake talks about the the audience during his portion of the presentation. Utica Shale and its future in Stark County on Wednesday at the Choose Stark Event. Dave Kirven of the Stark County Oil and Gas Partnership explained the organization’s mission is a simple one: To prochambers and trade unions side by side. I haven’t seen that mote environmentally safe fracking and safe practices during in many years. I think it’s great and it’s going to benefit the drilling and to connect Stark County to the oil and gas industry. whole region.” While the county is experiencing an influx of oil and gas comKeith Fuller of Chesapeake Energy, the biggest Utica shale panies and support industries, an effort is being made through stakeholder in the area, gave the audience an update that inthe partnership to convince more businesses to “Choose Stark” dicated his company has leases on 1.3 million acres, mainly when deciding where to locate in the area. in the three-county corridor that consists of Carroll, ColumThe partnership has a website that will launch next week biana and Harrison. He said based that will help educate these companies about what Stark County has to “Energy is a bipartisan issue, and on the wet gas found in Utica shale, the company anticipates drilling will offer. To be found at www.ChooseSwe’re seeing bipartisan actions by continue for 20 to 30 years. “It took, there is information to be a while to convince people the Utiobtained as well as advertising op- elected officials in Ohio.” ca was real. But if you look around portunities. - Rebecca Burke this room, you can see they believe As Healy continued his talk, he init now. Companies are coming here dicated there are currently 20 compaand hiring people, so embrace it,” he said. “It is early, but we nies in Canton and another dozen in the county that are brand are here to stay. We need to drill safely and responsibly and be new due to the oil and gas industry. “They represent over 800 a part of the community,” Fuller closed. new jobs. Plus, there are existing companies that are growing Another speaker at the event, Rebecca Burke, is a native that haven’t seen this kind of activity in years,” Healy said. of Ohio who has come back to the state after being a former “This helps our community. This is exciting because we are county commissioner in Lycoming, located near Williamsjust beginning, and what’s to come will be so much more than port, Pa. She gave the audience an idea of what to expect with we anticipated.” the gas and oil activity that is emerging in Ohio, and she said Of the oil and gas activity in Stark County, Commissioner one thing they found out in Lycoming was that there were Richard Regula said, “This is the greatest thing, I think, since the industrial revolution. And I am really pleased to see local

Continued on pg. 15

Dix Communications - Gas & Oil

March 2013 Edition


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Gas & Oil

March 2013 Edition - Dix Communications

Zane State to have ‘Life in the Field’ simulation lab


f there is anything that working almost 40 years in a Texas oil field has taught Jerry Watson, it is that a true understanding of oil and gas engineering technology cannot just be learned from a book. “When you see it and when you do it, you learn it,” he said. “Feeling is believing; it becomes real to you.” Watson is a consultant for Zane State College’s Gas and Oil Engineering Technology Program outdoor land lab. Once the land lab is constructed, Zane State College will have the only oil and gas engineering technology program in Ohio that offers a hands-on simulated facility with actual oilfield equipment. Construction began on the land lab this week and is expected to be completed by May 1. Because most contractors will not allow students near equipment operating in the field due to legal liability reasons, creating a simulated field will provide hands-on experience. “What students will see is very similar to the field,” said Watson. “No program in Ohio that has anything like this,” said Zane State College oil and

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gas engineering technology instructor and project innovator Robert Stonerock. Stonerock said a physical land lab will give students direct involvement in the maintenance aspects of field work. With advice from industry experts, Stonerock and oil and gas engineering instructor Paul Paslay ensure that students will gain a clear picture of life in the field. Safety is an important consideration for the lab. The simulated oil field created by the land lab will not pump or process flammable material, but will instead utilize vegetable oil or other fluids of similar consistency to crude without volatility risks. The land lab will include several stations, including an 18-foot-deep simulated well with a pump jack. Another station will be a two 100 barrel storage tank battery—one corrosion protected and one not, so students can witness the effects of corrosion. Also planned is a pipe rack to display pipe commonly used in production wells. The College is planning for later additions, including a small slug catcher and a pig station. Local businesses are embracing the land lab concept, providing advice and donating equipment where ever possible. “We’re getting an enormously good response from (gas and oil) companies,” said Watson. He said companies understand the land lab’s potential for producing well-trained graduates and they want to be involved. The innovative Zane State College land lab program is teaching students the skills necessary for long-term employment. “The oil industry is coming to Ohio,” said Watson. “And, it’s going to be here for many, many years.” The land lab is being developed thanks to the Energize Appalachian Ohio grant and the generous contributions of area businesses. For more information about the land lab, or to join a roustabout crew to help with the land lab assembly, contact Tim Snodgrass at (740) 588-1216.


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Dix Communications - Gas & Oil

March 2013 Edition

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Gas & Oil

March 2013 Edition - Dix Communications

Chesapeake CEO steps down


iting differences of opinion with a recently-reconstituted board of directors, Chesapeake Energy co-founder, CEO and President Aubrey K. McClendon will step down from his position as head of the company he helped to build as of April 1. The 53-year-old has served as Chesapeake’s CEO since the inception of the company in 1989 and as Laurie Huffman chairman of the board from its foundDix Communications ing until 2012, following a reorganization of the board, which took place in June. The company will conduct an internal and external search to find his replacement. McClendon will continue to head the company until his successor is appointed. Archie W. Dunham, newly-appointed chairman of the board, stated, “Under Aubrey’s strong leadership, Chesapeake has built an unmatched portfolio of natural gas and oil assets in creating one of the world’s leading energy companies. He has been a pioneer in the development of unconventional resources, and he has also been a leader in the effort to make the United States energy independent.” Dunham noted, going forward, the company will strive to con-

tinue as a low-cost producer of oil and gas while further enhancing and strengthening its balance sheet. “Capital allocation and operating decisions will be made with the goal of prudently growing the company’s intrinsic value per share for the long-term benefit of its shareholders,” Dunham said. Chesapeake has stated the company and the board are committed to the current drilling program with respect to its existing $6 billion drilling and completion budget for 2013, its ongoing asset sales program, and its intention to reduce the company’s long-term debt.

“I am extremely proud of what we have built over the last quarter of a century.” - Aubrey K. McClendon

“Over the past 24 years, I have had the privilege of developing Chesapeake into one of the world’s premier energy companies. It has been an honor to work with my outstanding management team and the company’s 12,000 very talented and dedicated employees. I am extremely proud of what we Continued on pg. 12

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Dix Communications - Gas & Oil

March 2013 Edition




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Gas & Oil

March 2013 Edition - Dix Communications

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Dix Communications - Gas & Oil

March 2013 Edition


EQT donates funds for children’s playground at Samaritan Center in Cambridge


his coming spring will see a highly anticipated addition to the Samaritan Center for Children in Cambridge. The Center is the beneficiary of a $9,000 grant from EQT Corp. for a children’s playground, which will be built directly behind the Samaritan Center for Transitional HousJudie Perkowski ing, 1207 Chestnut St. Dix Communications The check was presented at the United Way office in Cambridge Thursday morning by EQT Community Advisor Jessica Carpenter to Stephanie Laube, executive director of the United Way of Guernsey County and Stephanie (Stevie) Fairchild, secretary of the Samaritan Center. “EQT is very happy to be active in the Guernsey County community,” said Carpenter. “EQT’s foundation supports healthy lifestyles, especially for children, so the money donated for the

Jessica Carpenter, c, community advisor for the EQT Corp., a gas and oil producer with operations in Guernsey County, presents a check to Stephanie (Stevie) Fairchild, l, secretary for the Samaritan Center for Transitional Center in Cambridge, and Stephanie Laube, executive director of the United Way of Guernsey County, to fund a children’s playground at the Samaritan Center for Children.

Continued on pg. 37

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Gas & Oil

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have built over the last quarter of a century, and I am confident that Chesapeake is in a great position to continue to grow and achieve great success in the future as it realizes the full value of its outstanding assets. While I have certain philosophical differences with the new board, I look forward to working collaboratively with the company and the board to provide a smooth transition,” said McClendon. McClendon will receive his full compensation and other benefits to which he is entitled, per agreement, and he will continue to be an important partner with the company given his stock ownership as well as his interests in certain company wells. Dunham, former chairman of ConocoPhillips and former CEO of Conoco, has been appointed by the board as Chesapeake’s new independent non-executive chairman. Dunham has had no previous relationship with Chesapeake. McClendon has relinquished the position as chairman, but remains a director. Chesapeake’s board also appointed four new independent directors: three proposed by Southeastern Asset Management (SAM), its largest shareholder with a 13.9 percent ownership stake, and one proposed by Carl C. Icahn, its second largest shareholder with a 7.6 percent stake. The new directors proposed by SAM are Bob G. Alexander, R. Brad Martin and Frederic M. Poses. The new director proposed by Icahn is Vincent J. Intrieri. These new directors replace four who have resigned and one who retired during the board’s reorganization.

Dix Communications - Gas & Oil

Watershed board



he Muskingum Watershed Conservancy District Board of Directors has approved entering into an oil and gas lease in the Utica Shale region for more than 6,000 acres of its property at Seneca Lake in Guernsey and Noble counties that will prohibit any surface development on MWCD property and add protections to adjacent private properties. “For nearly 80 years, the MWCD has been involved in leasing its properties for oil and gas development and has been a recognized leader in providing for environmental protections through its strong leases,” said Sean D. Logan, MWCD’s chief of conservation. “With the attention that the Utica Shale has produced here in eastern Ohio, the MWCD demanded that any leasing of the Seneca Lake region include the strongest safeguards possible and be completed in full view of the public.” The lease agreement between the MWCD and Antero Resources of Colorado was reached after several months of negotiations and a copy, has been available on the MWCD’s website ( since mid-January and was approved by board members during a meeting Feb. 15 at New Philadelphia. The conservancy district, which held a public meeting in Senecaville in October to announce that it planned to lease its available acreage at Seneca Lake and received public input then, also invited comments about the lease posted on its website through e-mail, fax or regular mail. A total of 20 comments were received and MWCD staff members have followed up with many of those people to answer questions and provide additional details. About 170 “signatures” opposing any oil and gas development also were sent to the MWCD through on an online petition drive sponsored by an environmental website. Under the lease terms, there will be no well pads, lease roads or pipelines on MWCD property, and surface operations on adjacent lands where the MWCD shares in the well or lands also leased by Antero and located within a half-mile of MWCD property also will be subject to the environmental safeguard terms of the lease, Logan said. The MWCD will have an opportunity to review erosion control and engineering plans, and the lease contains surface operation requirements to reduce the impact to the lake community, such as specifications on the drilling operations, reclamation procedures and light and sound controls. The MWCD will receive a signing bonus of $6,200 per acre and a share of 20 percent of the royalties on gross revenues of oil and gas produced from its property, according to the lease terms. The Seneca lease is the third large-acre lease that the MWCD has entered into during the Utica Shale development (along with Clendening Lake in Harrison County in 2011 and Leesville Lake in Carroll County in 2012) and the MWCD has used a portion of the signing bonus funds to pay down its debt and to invest in improvements for public access and to its recreational facilities.


March 2013 Edition


oil and gas lease at Seneca Lake

The MWCD has identified more than $80 million worth of deferred maintenance, compliance issues and needed upgrades at its facilities. The MWCD Board of Directors also has instructed the MWCD staff to review the conservancy district’s long-term financial forecast to determine if a reduction in the maintenance assessment collected by the MWCD from property owners in its 18-county region is warranted. While the MWCD has not yet received royalty payments from any of its three Utica Shale leases, all available projections are being analyzed to determine if any assessment reductions are warranted, said John M. Hoopingarner, MWCD executive director/secretary. “At the time the assessment was levied by the MWCD in 2009, the financial condition of the conservancy district was much different than it is today,” Hoopingarner said. “It is completely appropriate for the discussions to begin about any assessment reductions.” The assessment, which generates between $10 million and $11 million annually for projects that maintain the condition and operation of the system of flood-reduction dams and reservoirs in the Muskingum River Watershed, is reviewed annually by the MWCD Board of Directors. Any reductions for 2014 must be approved and submitted to county auditors near the end of September. The public meeting and public review and comment period for the Seneca lease are not required by law, and input previously received by the MWCD following the public meeting were incorporated into the proposed lease agreement with Antero, Logan said, adding that MWCD staff members were pleased that residents of the lake region and others with an interest in the process were able to participate. The MWCD has managed oil and gas leases on its properties for its entire 80-year history as a part of its overall natural resources stewardship program. There are approximately 275 traditional (Clinton development) wells that the MWCD receives royalties from, Swiger said. The MWCD, a political subdivision of the state, was organized in 1933 to develop and implement a plan to reduce flooding and conserve water for beneficial public uses in the Muskingum River Watershed, the largest wholly contained watershed in Ohio. Since their construction, the 16 reservoirs and dams in the MWCD region have been credited for saving more than $10 billion worth of potential property damage from flooding, according to the federal government, as well as providing popular recreational opportunities that bolster the region’s economy. A significant portion of the reservoirs are managed by the MWCD and the dams are managed for flood-risk management by the federal U.S. Army Corps of Engineers (USACE). For information about the MWCD, visit and follow the MWCD on Facebook and Twitter.


Gas & Oil

March 2013 Edition - Dix Communications

to Boom’ in Carroll County A

s one of the 30,000plus residents of Carroll County, Amy Rutledge said she remembers when the Tennessee Gas and Oil compression plant on the Clinton Formation was built in the 1960s, and caused quite a stir. Since then, things were pretty quiet in the county’s rural communities. Carroll County is part of the Judie Perkowski poverty-stricken Appalachian Dix Communications region — where the picturesque landscapes were something to behold, but unfortunately did not provide a robust economy. Most people, like Rutledge, director of the Carroll County Convention and Visitors Bureau and the Carroll County Chamber of Commerce, enjoyed the tranquil surroundings, but were barely hanging onto their jobs. All of that peace and quiet is now just a memory. Rutledge recounted how Carroll County turned from bust to boom to attendees at the Guernsey Energy Coalition’s monthly meeting at the Southgate Hotel in Cambridge Thursday morning. “Things started happening in Carroll County in the later part of 2008,” said Rutledge. People in the gas and oil industry were everywhere, but were very tight-lipped about what they were doing ... very secretive. But, when Chesapeake came to town, things changed dramatically. “The county recorder’s office was inundated with abstractors looking up landowner leases and white pickup trucks, which seems like the industry’s trademark vehicle, were no longer out of place. “Even though we were familiar with gas and oil activity from years ago, by 2010 we were on the fast track. Chesapeake started buying or leasing thousands of acres, paying about $2,000 an acre. It wasn’t long before a landowners’ group was formed and the asking price per acre tripled. “Chesapeake drilled our first well in 2011.” The latest figures from the Ohio Department of Natural Resources, the governing body for the gas and oil industry, states that Carroll County leads the state in well permits (185) and number of producing wells (27). The county lays claim to 36 percent of all Utica well permits, the majority belonging to Chesapeake. The discovery of the gas and oil has turned Carroll County into “the sweet spot” for exploration and production of gas and oil and has in turn benefited the community “beyond its wildest dreams.” “There have been $24 million in improvements to the county by the three major gas and oil companies, Chesapeake Energy, Rex Energy and EnerVest Energy, with the majority of funds

Amy Rutledge, l, director of the Carroll County Convention & Visitors Bureau and the county’s Chamber of Commerce, was guest speaker at the Guernsey Energy Coalition’s Thursday morning meeting at the Southgate Hotel. Rutledge was introduced by Cambridge Area Chamber of Commerce President Jo Sexton, sponsor of the monthly event.

provided by Chesapeake, who has invested about $400 million in the county, so far. Those millions account for the cost of mineral rights, road improvements, wages, drilling costs and royalty payments. More than $100 million was paid directly to property owners for mineral rights,” she said. “Our county roads are great, and other roads have been improved and widened to accommodate industry equipment and trucks. Another benefit is that the sales tax revenue for 2012 jumped by $500,000, which was very helpful for our budget. This is the first time in 10 years we have had a carry-over of funds. “Our local businesses are doing well, many have increased staffing and the owner of the Ace Hardware said she is doubling the size of her store. If it wasn’t for the gas and oil companies, she would be laying people off.” The unemployment rate went from 13.4 percent in July of 2011 to 7.1 percent in July of 2012. Carrollton, the county seat, currently has one hotel, but not for long. A Microtel with 72 rooms and an extended stay hotel will open in the spring, in addition to the Atwood Resort, which recently reopened after a two-year hiatus, and many empty buildings now have tenants. Continued on pg. 47

Dix Communications - Gas & Oil

“CO. SEEkS partnErShipS” from pg. 4 34 million acres of Marcellus shale located in 2007 and 2008, which brought $700 million in investments to the area in 2008. Burke stressed planning is important in order to capitalize on the activity, along with identifying issues and concerns. After receiving a 911 call from a worker at a drill site that could not be quickly located, her county passed ordinances to require all drilling sites to have an address and have signage posted with that address upon it. Other concerns were water, stressed roads and bridges, and the impact on the local work force. They also had to decide which counties were involved in Marcellus shale activity so they could create public policy. “Learn about the industry, but you don’t have to become an expert,” said Burke. “I’ve been asked about a magic bullet. There isn’t one. If you have a company, just do what you do best.” Burke also said to make products and sales quick and easy for gas and oil companies, or they will go elsewhere. Positive outcomes include a resurgence in manufacturing, seeing farmers being able to afford to farm, and increases in sales tax revenues, such as the increase of 25 percent seen in Carroll County in just one year. “It is estimated there will be $1 billion more invested by oil and gas industries in Ohio by 2015. It is estimated there will be tens of thousands of jobs created in the state and 2,250 wells will be drilled by 2015. There are 216 drilled now in Ohio, with

March 2013 Edition


48 producing, and in Stark County there are two permitted and two producing.” Burke also said, “Five years ago we thought we may have to import natural gas. We thought we were running out of it. But there are exciting opportunities in the country and in Ohio for natural gas now. Energy is a bipartisan issue, and we’re seeing bipartisan actions by elected officials in Ohio.” Officials who were present at the event included a number of city council members from Louisville, as well as the city’s mayor, Pat Fallot; police Chief Andy Turowski; the city’s treasurer, Jina Lingle; board of education member Mark Sigler; and Nimishillen Township Fire Chief Rich Peterson. From Alliance, Tom Pukys of Alliance Area Development was present, and a number of local business owners were to be seen, such as Todd Pugh of Enviroscapes, one of the platinum sponsors of the event, along with Mercy Medical Center, Aultcare and the Joseph A. Jeffries Company, to name a few. Business representatives from the oil and gas industry were also present, along with those representing labor, education and local chambers of commerce. Casing Cas•ing noun : Steel pipe that’s used to line the inside of the wellbore -- both for the purpose of stabilizing its structure, and, when cemented, to help prevent the movement of fluid between formations.

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Economic numbers nOT exaggerated


The evidence has shown our numbers were not exaggerated, n late 2011, the Ohio Oil and but rather ones that now appear to have been too conservative. Gas Energy Education ProOver the past year, our focus quickly shifted from projections gram (OOGEEP) released to actions that are ensuring Ohioans are prepared to maximize the Ohio Oil and Gas Industry the incredible opportunity this industry continues to offer to our Economic Impact Study.  The state. study, conducted by Kleinhenz & With that in mind, preparing our local workforce in the years Associates, recognized the signifto come is of utmost priority for the industry. OOGEEP is now icant impact of both the current working with 45 Ohio colleges, universities, career centers and oil and gas industry, as well as the vocational schools gearing up to help meet the continued deeconomic and job potential of the mand for trained workers.  Utica-Point Pleasant Shale forRhonda Reda This spring, we will be highlighting these programs across mation.  The report was met with the state in order to provide Ohio’s job-seekers and students a OOGEEP skepticism, with critics making roadmap to gainful employment in Ohio’s expanding oil and gas claims of skewed exaggeration.  industry. Whether it is training in welding, machinists, geoloToday, barely a year later, billions of dollars have been ingists or petroleum engineering, OOGEEP is prepared to provide vested in our state, and a recent study conducted by IHS-Cera on the guidance to find the correct program to develop the necesbehalf of the U.S. Chamber of Commerce, shows 38,000 Ohio sary job skills. jobs have been generated thanks to In 2012 alone, our organization the development of our local energy “Education is paramount to our awarded 35 scholarships to Ohio sturesource.  Our state has also jumped dents through our industry-funded from 48th  to 4th  in overall job cre- future success in Ohio.” Scholarship Foundation and those ation, and in the Midwest, Ohio ranks - Rhonda Reda interested in a career in Ohio’s indusfirst in this category.

Continued on pg. 18

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“JESSiCa bakEr” from pg. 3 and equipment,” she said. “My advice to women who are considering a career in the gas and oil industry is to network with others within the industry and get involved any way you can. I am a member of both Young Professionals in Energy and Young Professional Women in Energy. I found it extremely beneficial to make these connections when I was trying to enter the industry full time. It is important for women to be aware of the broad opportunities within the gas and oil industry. The possibilities are endless!” EQT is a major player in the production, midstream and commercial operations of natural gas in the Appalachian Basin.

“ECOnOmiC numbErS” from pg. 16 try are encouraged to submit an application by the March 31, 2013 deadline. Education is paramount to our future success in Ohio, and a focus on science, technology, engineering and math (STEM) needs to start as early as elementary school. To date, more than 2,600 K-12 teachers from all 88 Ohio counties have participated in OOGEEP’s state and nationally recognized STEM based curriculum workshops. These workshops not only provide lesson plans to take back to our local schools, but also provide our educators with continuing education credits (CEU) and an option for graduate credit through Ashland University. Registrations are now open for our Summer 2013 classes at no charge to the teachers or schools. The investment in education and workforce training our industry

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makes today is paramount to our future success. In the last two years, OOGEEP has also successfully trained more than 1,800 Ohio industry workers in specialized safety and technical training. In 2013, OOGEEP will continue it’s tradition of ensuring our state’s emergency responders are trained for the rare case that a response should be required at an oilfield site. With funding from Ohio’s natural gas and crude oil producers - and no burdensome taxpayer dollars – OOGEEP has successfully trained 978 Ohio firefighters, and departments from 7 other states. This year, we will be conducting another 6 training programs for fire departments from all over the state. This training program has also been endorsed by the Ohio Fire Chief’s Association. Firefighters can also receive required CEU credits and an optional graduate credit from Hocking College. The 2013 emergency response training registration is now open. Our educational efforts go beyond the classroom. As Ohio’s oil and gas industry continues to positively impact those within and beyond the borders of the developing eastern region of the state, we will continue to work diligently in the public sphere in our communities. Last year alone, OOGEEP conducted 208 public presentations around the state to local communities, business leaders, chambers and professional groups in order to educate the public not only on the common practices and technical processes involved in the exploration, drilling and production of natural gas and crude oil, but also on how many local communities and businesses can best position themselves to take advantage of the potential benefits afforded by the Ohio geological gift beneath our feet. There is still too much misinformation surrounding Ohio’s oil and gas industry.  In the coming year, and the years ahead, we will continue our focus on education, and preparation with our schools, our communities and our workforce. By working together in this shared experience, we can ensure a future of great promise, and immeasurable opportunity. Truth be told, the thousands of jobs already created - and the billions of dollars in Ohio investments - are only a glimpse of what’s to come in the years ahead...and we are just getting started.  Rhonda  Reda  is the executive director of the Ohio Oil and Gas Energy Education Program (OOGEEP), a non-profit educational program voluntarily funded by Ohio’s natural gas and crude oil producers.

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March 2013 Edition


Tax revenue having huge impact Shale production is rejuvenating economies through out eastern Ohio. Over the past year, counties with shale development have seen their sales tax increase by as much as 25%, another indicator of the incredible, positive impact the Utica Shale is bringing to the region.  From  landowners1 receiving lease payments and reinvesting in their farms or Shawn Bennett buying items for themselves they Energy In Depth - Ohio could not afford just a year earli2 er; to companies benefiting  from the increased activity in their county, Utica Shale development is not only creating jobs3,  but pumping much needed capital into the local economy4  in eastern Ohio. Taking a look at the top permitted5  counties in the state and their sales tax revenues6  over the past year, it is simple to see the tremendous impact the expanding development is having on the region.  These are numbers that can’t be ignored when having an honest discussion on the benefits Utica Shale development is having on eastern Ohio. Carroll County Carroll County7   is the most permitted county in the Utica, and has seen more development to date by good measure.  Carroll County has 176 Utica Shale permits, and has been  Chesapeake8  Energy’s most active county in the state.  With all of this development, Utica Shale has increased sales tax revenues in the county from $1,933,378.81 to $2,581,732.00.  This increase represents a sales tax increase that equates to a 25% growth in just a matter of a year. harrison County Harrison County9  is the second most permitted county in the Utica Shale, and with recent outstanding production results, has the possibility to become the sweet spot for Utica Shale develop-

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ment. With outstanding production from Gulfport10 ’s Boy Scout and Wagner wells11 , as well as Chesapeake’s Buell Well12, Harrison County has been receiving tremendous amounts of attention from shale developers in the region.  In addition with the MarkWest13 facility opening up in the Cadiz Business Park, Harrison County will continue to enormous growth for years to come.  Over the past year, Harrison County has increased sales tax revenue from $979,510.94 in 2011 to $1,234,734.40 for 2012, representing a growth of 21% sales tax revenue for the county. Columbiana County Columbiana County comes in as the third most permitted county in the Utica with 63 permitted wells.  Columbiana County has seen a number of investments, including the M3 gas processing14  plant and several new businesses moving into their business park15  thanks to Utica Shale development.  Over the past year, Columbiana County has increased sales tax revenue from $8,789,095.70 in 2011 to $9,808,162.52 in 2012, making a growth of nearly 11% in sales tax revenue for the county. Jefferson County Jefferson County comes in as the fourth most permitted county in the Utica with 32 permits.  Over the past year, Jefferson County has become home to field offices for Hess Energy16  as well as 11 new businesses17  that have relocated to the county to take part in the Utica Shale.  These businesses have hired many local residents and continue to offer opportunities for the community.  In fact there are more than 1,000 more Jefferson County residents employed18  this year than in 2011. In the past year, Jefferson County has not only attracted new businesses to the region, but has increased their sales tax revenues from $6,572,958.48 in 2011 to $7,322,109.62 in 2012 representing an increase of 10% sales tax growth. Guernsey County Guernsey County rounds out the top five most permitted county coming in at 24 permits issued in the county.  Guernsey County has seen promising results19  coming from the southern portion of the county from Anadarko20,  as well as exciting reContinued on pg. 24

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March 2013 Edition


Appalachian gas production surging



n less than four years of devel- lysts expect Appalachian natural gas production to grow to beopment, the Marcellus Shale has tween 11 and 13 bcf/d by 2015. At that point, it will make up 16 emerged as the largest single to 17% of the nation’s total production. Although most of the source of natural gas in North Ameri- Appalachian gas production will continue to come from Marca. Lying under parts of Pennsylvania, cellus, the Utica Shale will also add significant volumes as gas Ohio, West Virginia, Maryland and processing and pipeline infrastructure is built. The Northeast is the largest natural gas consuming region of New York, the field has been adding more than 2 billion cubic feet per day the U.S. Traditionally, the region’s gas demands have been met (Bcf/d) of production each year and by a number of long-haul underground pipelines that move gas should post yet another production re12 cord in 2013. Marcellus and Utica Shale Norm Shade Yet, the Marcellus is still in the Natural Gas Production Rate 10 President, [billions of cubic feet per day]  early stages of development. So far, two “sweet spots” - the dry gas area ACI Services 8 in Northeast Pennsylvania and the wet Utica gas and dry gas area in Southeast Pennsylvania - have proven to be 6 highly productive and solidly economic even in a depressed natural Marcellus gas price environment. These areas are transitioning into the full de4 velopment mode, and they will likely continue to be the Marcellus’ key productive regions in the immediate term. However, given the quality 2 Source:  EIA Actual 2007‐2012  of the shale and the continued development effort in the region, new                Wood Mackenzie Forecast 2013‐2015  economically attractive areas will surely emerge in the next few years. 0 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E According to U.S. Energy Information Administration (EIA) data,   Marcellus wells in Pennsylvania and West Virginia now produce 7 Bcf/d. That’s more than 10% of all natural gas production and 25% of from the Southwestern and Gulf Coast regions of the U.S., as all shale gas production nationwide; and it’s nearly double the Marcel- well as from Western Canada, to this major market. The effects lus production of the previous year. A recent report from Standard & of rapidly developing Appalachian gas production are rippling Poor’s said that the Marcellus could contain almost half of the current through the energy market. Most forecasts predict that supply proven natural gas reserves in the U.S, while other experts noted that will have increased enough to cover all Northeast demand by the powerful combination of resource, cost and location is altering nat- 2017, making the region self-sufficient. The onslaught of Marcellus and Utica production will curtail or even reverse the flow ural gas prices and market trends across of the pipelines that have traditionthe nation. In other words, natural gas that used to come all the way from the The surge in Appalachian natural gas ally supplied the region. Natural gas prices will decline in the Northeast Gulf Coast or Canada to feed the enproduction from the Marcellus and Utica as supply exceeds demand, particuergy-hungry Northeast is now coming Shale is forecast to make the northeast larly in the summer. Prices in the from Marcellus producers. The number of Marcellus wells U.S. self-sufficient within the next 3 to 5 Southeast and some other parts of the country will increase, providing years. drilled surged in 2012. With new pad an export incentive for the huge Apdrilling techniques – drilling multiple palachian supply. wells about 15 ft. apart – more wells are Shale gas development and the growing production are condrilled per rig and fewer drilling sites are required. Due to a shortage of tributing mightily to the U.S. economy. Lower natural gas prices fracking crews and gas pipelines, nearly 1200 wells have been drilled, have already contributed to a large growth in use of the envibut are not yet producing. It is estimated that it may take five years for ronmentally preferred fuel for electric power generation. Use this backlog to clear. of the fuel for natural gas vehicles is rapidly growing, and U.S. According to the EIA data the Marcellus contributed virtually nothand Canadian chemical plants are benefitting from the low cost ing to U.S. production as recently as 2007. Significant Marcellus proresource. Last November significant U.S. gas exports began to duction emerged in 2008 and reached 0.7% of all U.S. production in flow into Canada at Niagara, and the U.S. government recently 2009. It surged to 5.1% in 2011 and to over 10.0% in 2012. Also in 2012, a small amount of Ohio’s Utica Shale gas added to the Appala- approved the construction of two LNG export terminals for exporting U.S. gas to other parts of the world. chian production figures. While current production figures are amazing, most industry ana-


Gas & Oil

March 2013 Edition - Dix Communications

“tax rEvEnuE” from pg. 21 sults coming from the eastern portion of the county from companies like PDC21  and Gulfport22.  Utica Shale development has helped transform long standing local staples like  Buckeye Water Services23   and bring in new companies like  Nabor’s24   well services.   In the past year Guernsey County has increased their sales tax revenues from $4,072,011.88 in 2011 to 4,637,916.27 in 2012, marking a 12% increase in sales tax collection for the county. Noble and Monroe Counties should receive an honorable mention when discussing the positive effects shale development has had on our local economies.  Both counties come in sixth place with 22 permits for Utica Shale development. In Noble County they have seen a 20% growth seeing their sales tax revenue grow from $726,578.72 in 2011 to   $908,412.63.  Monroe County has seen even more growth in sales tax revenues in their county.  They have increased their sales tax revenue 23%, going from $1,066,456.04 in sales revenue in 2011 to $1,376,950.39 in 2012. These seven counties are a true testament that Utica Shale development is helping refresh a stale economy that has been prevalent for far too long in eastern Ohio.  Companies and landowners are investing, providing the need for more jobs in the region as well as providing much needed revenue for local governments.  With an average of 13% percent growth in these seven counties, it is hard to ignore the fact that Utica Shale development is providing jobs, wealth and revenue for eastern Ohio.

Sources 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 pact-on-local-economy proc.html ny-opens-fluids-facility-in-columbiana-county-1.349849 tor-for-progress-alliance/9 ing-growth/

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March 2013 Edition - Dix Communications

Chesapeake donates vehicle to sheriff’s office


he Columbiana County Sheriff’s Department received a pretty big present recently when Chesapeake Energy delivered a gleaming black Chevy Tahoe SUV that Sheriff Raymond Stone verified is a four-wheel drive vehicle. “This will be beneficial to us because we have some pretty rough roads we have to travel,” said Stone. Stone indicated the donated veLaurie Huffman hicle has 131,000 miles on it, but Dix Communications the motor was replaced at 98,000 miles, meaning it technically has been driven only 33,000 miles. The vehicle was used by Chesapeake as a “rover” for its security department, which travels from site to site, Dix Communications/Laurie Huffman Cutline: Aimee Belden, of Chesapeake Energy’s communications and it was painted to resemble a police cruiser with a black body department, hands the keys to a Chevy Tahoe to Columbiana and white doors and roof. The sheriff’s department had the roof and County Sheriff Raymond Stone, which the company recently doors painted black, added yellow stripes and their name, changed donated to the department the light bar from blinking yellow to red and blue flashing lights, Chesapeake is attempting to lessen the burden a little by donatand removed Chesapeake’s stickers, transforming it into an official ing the vehicles. vehicle in the sheriff department’s fleet. A 2013 Chevy Tahoe fourStone reported the sheriff department, located in Lisbon, has wheel drive vehicle has a sticker price of close to $44,000. 192 jail beds and a staff of 21 depuPete Kenworthy, Chesapeake’s ties. When viewed in total, vehicles in manager of media relations, reported the company recently gave another “This will be beneficial to us because the sheriff’s department’s fleet have, Chevy Tahoe to the Carroll County we have some pretty rough roads we to date, been driven an average of 70,000 miles. Sheriff’s Department. Chesapeake is have to travel” “We probably have about 30 vehithe largest gas and oil leaseholder in cles in our fleet. We try to rotate them Sheriff Raymond Stone the Utica shale play within Carroll, out a couple at a time so we’re not reColumbiana and Harrison counties, placing them all at once,” said Stone. and this is the company’s second do“We usually drive our vehicles 120,000 to 130,000 miles before nation of a Tahoe to a sheriff department within the area. Kenworthy we rotate them.” pointed out since the gas and oil industry is bringing more activity to the area, law enforcement officials have more to do, and he said

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March 2013 Edition - Dix Communications

Preserving History


ucked away in the Carroll County Genealogy Society are people working to preserve Carroll County’s historical records. A team of 14 people who are very carefully digitalizing Carroll County’s Probate Court Records from 1833-1957, Common Pleas Journals, marriages and wills. The team includes Carroll Kimberly Lewis County residents, as well as those Dix Communications employed by Chesapeake Energy. Using digital cameras, the team takes a digital copy, which is sent to Oklahoma where the image is checked for quality, cropped and preserved in a digital record, explained Aaron Dodds, president of the Carroll County Genealogy Society. Once the images are organized, the digital copy is sent to the library. “This is a monumental undertaking and will benefit the society immensely when they are finished,” Dodds said. “Digitizing records at the Carroll County Genealogy Society benefits everyone involved. Once the project is finished in a couple of months, the images will be available in an instant to Carroll County residents,” said Pete Kenworthy, manager for media relations for Chesapeake Energy Corporation. “Deteriorating records that date back into the early 1800s will be preserved forever. We are glad to be able to provide this service, along with a computer for local residents to use when searching for records information.” As part of the agreement, Dodds said Chesapeake Energy will

A donation by Chesapeake Energy Corporation is providing funds to digitize records for the Carroll County Probate Court. Here staff members are shown preparing some of the records to be digitized. Both Chesapeake employees and members of the Carroll County Genealogical Society are helping with the project.

keep the records in house and not to be shared with any outside entity for five years and then the company’s copy will be destroyed. Chesapeake Energy also donated to the library a computer with a 22-inch screen that can be rotated to view legal-size documents without the need for scrolling. “This is a wonderful feature as so many of the records are legal-size documents, plus it will be beneficial in viewing newspaper pages,” Dodds said. “The computer itself has a value of $3,500 and the overall project has an estimate of $300,000, costs that neither the genealogical society nor Carroll County could have undertaken.” Once the project is completed, library patrons can come in and access all of these records in a matter of minutes on one of the four computers available for use. This will eliminate the need for the original records and books to be handled, thus preserving them for future generations and provide a better service to researchers.

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Gas & Oil

March 2013 Edition - Dix Communications

CONSOL Energy awards $6,000 grant for Noble-co. Habitat for Humanity C

ONSOL Energy Inc. awarded Noble County Habitat for Humanity a $6,000 community investment grant for their first home build in Noble County. Along with the grant, employees of CONSOL Energy volunteered their time to help build a new home in Caldwell on Jan. 31, 2013. “The CONSOL Energy Lisa Loos Dix Communications community investment grant of $6,000 helped the Noble County Habitat for Humanity meet their final fundraising goal of $50,000, which will support construction of their first home in the county. We are very pleased that our volunteer hours helped convert the monetary investment into a new home for a very

Continued on pg. 32

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Gas & Oil

March 2013 Edition - Dix Communications

“COnSOL EnErGY” from pg. 30 deserving family,” said Harry Schurr, general manager of Utica Operations. A total of nine employees that support CONSOL’s operations in Noble County volunteered for the home build. Those volunteers included Schurr; Greg Evans, production supervisor; Robert DeJaegher, construction manager; Seth Rodriguez, site supervisor; Miranda Kessel, Community Relations coordinator, and land agents, Mark Anderson, Jon Jones, Matt Brezovsky and Doug Smith. The volunteers installed flooring in the front portion of the home that included the living room and kitchen area. The home is expected to be completed in early February, and a groundbreaking ceremony will take place at 2 p.m. Feb. 17 at the home on North Street, just north of Miller Street. CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based producer of coal and natural gas. It has 12 bituminous coal mining complexes in four states and reports proven and probable coal reserves of 4.5 billion tons. The company’s premium Appalachian coals are sold worldwide to electricity generators and steelmakers. In natural gas, CONSOL has transformed itself from a pure-play coalbed methane producer to a full-fledged exploration and production company. The company is a leading producer in the Marcellus Shale, has an active exploration program in the Utica Shale and has proved natural gas reserves of 3.5 trillion cubic feet. Operational safety is the company’s top core value and CONSOL boasts a record of almost two times

Harry Schurr, GM of Utica Operations, and Greg Evans, Production supervisor measure flooring for installation in the kitchen and living room area for the for the Habitat home build in Caldwell.   

better than the industry average for underground bituminous coal mines. In 2011, the company recorded its best safety record since it was founded in 1860. CONSOL Energy is a member of the Standard & Poor’s 500 Equity Index and the Fortune 500. Additional information about CONSOL Energy can be found at its website:




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ipeline contracts are the hot item in Eastern Ohio. Farmland owners are being asked to sign right-of-way grants on a regular basis. Like an oil and gas lease, there are many items of importance for the landowner to consider prior to signing a right-of-way grant. Ohio State University Extension is holding educational Clif Little meetings around the state which Guernsey County cover important considerations OSU Extension Office for landowners. The most important item for a landowner to do prior to signing any contract is to consult with an attorney. Next, find out what type of line is being considered: is it a gathering line, collection line, intrastate or interstate transportation line. Each system has different regulatory standards and agencies responsible for oversight. Below are additional points of consideration: • What is the proposed location of the line? • Are state or soil and water standards for installation being followed for construction? • What are the width of the temporary work easement and the width of the final easement? • Can apparatuses be placed on the right-of-way? Will these items create noise? Increase your level of burden? • What if springs, tiles, or water drainage is impacted? • How will things be reseeded? • What if timber is damaged or removed? • Is the landowner held harmless in case of accidents? • When are payments due, and the consequences of nonpayment? • Do you have a contact person indicated in the agreement? The above mentioned questions in regards to right-of-way agreements are just a few of the important items for landowners to consider. At the April 18 “Pipeline Easement and Rightof-Way Agreement Workshop” being held at the Secrest Senior Center, 201 High Street, Senecaville, we will discuss these items in more detail. The program runs from 7 to 9 p.m.. Registration is $5 and must be received by April 16. Register by calling or visiting the Guernsey County office of OSU Extension in Old Washington, 740-489-5300. Registration forms with the office’s address and other details can be downloaded at http://guernsey.

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Gas & Oil

March 2013 Edition - Dix Communications

Chesapeake Energy completes sale of Midstream assets for roughly


hesapeake Energy announced at the close of 2012 its plan to sell its Midstream assets is nearly complete. Chesapeake Energy Corporation is selling a substantial majority of its remaining midstream assets to Access Midstream Partners, L.P. (NYSE:ACMP) for approximately $2.16 bilLaurie Huffman lion. These midstream assets Dix Communications are located primarily in the company’s Marcellus, Utica, Eagle Ford, Haynesville and Niobrara shale plays. The transaction with Access includes new market-based gathering and processing agreements covering various acreage dedication areas and it closed at the end of 2012. Additionally, the company completed the sale of other midstream assets in Oklahoma and Texas, during the 2012 fourth quarter, for approximately $175 million. Finally, Chesapeake anticipates a sale of its remaining mid-

stream assets, including Mid-Continent and other assets, by the end of the first quarter of this year for approximately $425 million, bringing the total of current and anticipated midstream asset sales to $2.75 billion. Including the approximate $2.125 billion of midstream asset sales completed in the 2012 second and third quarters, the proceeds from the company’s midstream exit are anticipated to total approximately $4.875 billion. Aubrey K. McClendon, Chesapeake’s CEO, stated, “We are pleased to announce further progress towards our asset sale goals for 2012-13. We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders.” While the company has sold its Midstream assets, which is primarily installation of pipeline to be used to move the company’s anticipated gas and oil product, Chesapeake has also announced it owns its own drilling company, Nomac, which will save the company yet untold dollars when compared to the utilization of vendors. Nomac is an affiliate of Chesapeake Energy Corporation, Continued on pg. 38

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visiT OhiOGO.COM “EQt DOnatES FunDS” from pg. 11 playground fits our criteria.” Laube said the money for the playground is a blessing because there is no place for children to play that is in close proximity to the Center. “I filled out a grant application online to the EQT Foundation ... And they gave me everything I ask for,” said Laube. “The playground will occupy a lot where a burned-out house formerly stood. So, its another part of the city’s revitalization,” she said. “Thank you, EQT, we could never have been able to do this without you.” Fairchild said she is “thrilled and thankful for EQT’s donation, and with the gas and oil industry’s interest in local communities.” “We have families with young children who will benefit from this donation for many years to come.” The Samaritan Center for Transitional Housing, is a 501(c) 3 chartered with the State of Ohio as a public charity. Accommodations are transitional, it is not emergency housing. It is a place where families or an individual can stay for up to 90 days, or longer if necessary.

“Sometimes people just need temporary help,” said Fairchild. “Our mission is to strive through faith-based and community agency cooperation, to provide shelter for individuals and families in crisis, and to support them in their efforts to gain stability and permanent housing. “ The Center is run by volunteers, which Fairchild said, they are in desperate need of to help with the many chores at the Center, to provide transportation, to check on people within the community and to help with fundraisers. “There is a poker game at the Elks twice a month, which is a major source of income for the Center, we also have monthly soup luncheons. The next luncheon will be Friday, Feb. 15 at the St. Benedict Athletic and Events Center. For more information about the Samaritan Center or to volunteer, call Fairchild at 439-3558, ext. 239 EQT Corp. is one of largest and oldest natural gas producers in the Appalachian Basin operating in Pennsylvania, Virginia, West Virginia, Kentucky, and now Ohio.

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March 2013 Edition - Dix Communications

UPCOMIng gAS & OIl EvEnTS March 6-8, 2013 — Columbus: Ohio Oil and Gas Association Winter Meeting: The OOGA annual Winter Meeting brings together top industry leaders from Ohio and the nation to provide the most current state of the oil and gas industry and Shale development during business sessions, trade show, and breakout trainings. Anyone interested in finding out what is going on in the Utica play, will want to attend this event, OOGA’s 66th Winter Meeting, scheduled March 6-8 at Hilton Columbus at Easton, 3900 Chagrin Drive, Columbus. Attendee registration will open for the event the first week of January. Contact Kristy Hawthorne at March 27, 2013 — New Concord: Safety Training and Expo, John Glenn High School, 13115 John Glenn High School Road, New Concord. 7:30 a.m. to 4:15 p.m. 740-826-7841. Sponsored by Guernsey-Noble Safety Council in partnership with the Cambridge Area Chamber of Commerce (, 740-439-6688. Topics include Hazard Communication, Fall Protection, Tagout and Lockout, OSHA update, workplace violence, Communicable Disease, drug testing, emergency evacuation plans, food safety, responding to an assailant, forklift safety and many more. For a complete list of topics and more information, contact the Cambridge Chamber at March 28, 2013 — North Canton: Oil and gas education session on Understanding the Process to be held at Kent State University at Stark, in conjunciton with the Canton Small Business Development Center. Attorneys at Roetzel & Andress will be present during

this event, set for 6:30 to 8 p.m. on March 28. This public presentation is designed to provide education to members of the community through a factual forum, with an opportunity for attendees to ask questions regarding the subject matter. The session will be held in Kent State Stark’s Main Hall Auditorium, 6000 Frank Ave. N.W., in Jackson Township, North Canton. Register online at <> . The program covers stages of the process, from clearing to production, and answers questions about what equipment is used, how long it takes to drill a well, what residents will see and hear, how deep the wells are drilled, how they are constructed, piplines, access roads, how drill cuttings are disposed, when and why water is needed and how it is disposed, and injection wells, among other things. The presenter is Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program and the Ohio Oil and Gas Energy Education Foundation, both nonprofit education and public outreach programs. April 18, 2013 — Senecaville: Pipeline right-of-way workshop sponsored by the Ohio State University Extension program. 7-9 p.m., Secrest Senior Center, 201 High St., Senecaville. Registration deadline April 16. egister by calling or visiting the Guernsey County office of OSU Extension in Old Washington, 740-4895300. Registration forms with the office’s address and other details can be downloaded at

“ChESapEakE EnErGY” from pg. 34 and virtually all of Nomac’s rigs are employed in unconventional shale resource plays, making Nomac one of the leading horizontal drillers. Over the last 10 years, Nomac has been the fastest-growing driller in the U.S., growing from five rigs in 2001 to 103 marketable rigs today. Nomac Services was formed in 2011 to provide integrated directional drilling, mud logging, geosteering and geotechnical services in both conventional and horizontal applications to maximize drilling efficiencies and lower costs.

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Dix Communications - Gas & Oil

March 2013 Edition

Lawmakers to go after illegal waste dumpers


tate lawmakers plan to introduce legislation to increase criminal penalties against individuals and companies that illegally dump oilfield waste. Sens. Joe Schiavoni, a Democrat from Boardman, and Frank LaRose, a Republican from the Akron area, plan to offer the law changes, including a requirement that the state revoke existing permits and deny future ones Mark Kovac for those convicted of the crime. Dix Communications Rep. Bob Hagan, a Democrat from Youngstown, is considering comparable legislation in the Ohio House, and Republican Attorney General Mike DeWine has said he is supportive of such efforts. “Growing industries such as oil and gas have tremendous opportunity to create jobs and spur our economy, but we must balance those interests with the health and safety of Ohioans and our natural resources,” LaRose said in a released statement. “This leg-


islation puts into place tough penalties for unscrupulous operators like those in Youngstown who choose to endanger the environment and people’s health.” The legislation comes in response to an incident in Mahoning County involving the illegal dumping of hundreds of thousands of gallons of drilling waste into a storm sewer. Earlier this month, the Ohio Department of Natural Resources and the Ohio Environmental Protection Agency announced the permanent revocation of permits of D&L Energy and Hardrock Excavating, and the company owner is facing federal criminal charges. Both DeWine and Gov. John Kasich said earlier this week that the state may need to change its laws to better deal with such egregious illegal dumping incidents. Under current law, perpetrators face misdemeanor charges. Under the bill proposed by Schiavoni and LaRose, they would face felony charges, with the potential for three or more years in prison and fines of $10,000-plus. “If you’re going to cut corners and you’re going to try to save a couple of bucks, then you’re going to pay the price and it’s going to be a heavy consequence if you violate the law,” Schiavoni said, adding, “This is something that should be changed. This is something that is necessary, and this is something that can prevent future bad actors from doing this.”

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Gas & Oil

March 2013 Edition - Dix Communications

State representatives and Eastern Ohio Development Alliance officials who addressed the EODA at Salt Fork Resort & Conference Center Friday morning to discuss shale development in eastern and southeastern Ohio. From l to r, EODA President Tracy Drake, State Rep. David Hall, State Rep. Andy Thompson, State Sen. Troy Balderson, State Rep. Brian Hill, EODA Treasurer Jim Schoch, State Rep. Jack Cera and EODA Executive Director Dale Hileman.

EODA focuses on controversial severance


f you were interested to know why state representatives for eastern and southeastern Ohio object to Ohio Gov. John Kasich’s proposed severance tax increase on the gas and oil industry, the Eastern Ohio Development Alliance board of directors’ meeting Friday morning at Salt Fork Resort & Conference Center near Cambridge was to place Judie Perkowski to be. Dix Communications Talk about gas and oil and they will come. After a brief welcome to more than 100 attendees by Guernsey County Commissioner Tom Laughman, EODA President Tracy Drake got the ball rolling, followed by comments from several other speakers. “We are the region most impacted by shale development and we do not want the gas and oil companies to pack up and leave because of this tax increase. And, if this severance tax is passed, the revenue should stay in eastern and southeastern counties. My motto is ‘no taxation with localization,’” said Drake. Chris Abbuhl of the EODA’s Governmental Affairs Committee challenged members of the Ohio General Assembly to direct revenue to local governments in the Appalachian region where the gas and oil is being extracted. “Eastern [and southeastern] Ohio needs help and the shale development could be the answer.” State Rep. Andy Thompson, chair of the Appalachian Caucus, said he is against the severance tax increase, and there should be fair distribution of revenue. Thompson cited the fact that revenue


from the turnpike bonds isn’t going to be shared, it will be going to the northern counties. Furthermore, the same deal applies to the casinos in Columbus, Toledo and Cincinnati. The revenue from those entities will stay in the counties where the casinos are located. “We are the envy of other areas in Ohio, in respect to the gas and oil development,” he said. “If the cost for shale development keeps rising, some opportunities won’t be realized. “The most disappointing thing about the band of rich oil deposits, is that it is a very narrow band. Even though the Utica shale covers a lot of eastern and southeastern Ohio, the farther west it goes, the less chance of finding the oil deposits. So that narrows the area that can be explored and narrows opportunities. “We don’t want to see any part of the state eliminated from the revenue, we just want to create a reasonable business plan. We have a responsibility to our local governments to encourage job growth, which is vital to economic growth. The gas and oil industry is an opportunity for thousands of jobs, not only in the industry itself, but many ancillary services. “I feel strongly about this. Property rights belong to the landowners, not all Ohioans.” State Rep. David Hall echoed Thompson’s thoughts about Kasich’s tax plan and said the governor’s budget is not written in stone. “We are in the early stages of the budget process. We have a long way to go. It’s going to be a lot of give and take, and he [Gov. Kasich] won’t get 100 percent of what he wants.” Hall said he will be attending a meeting in Texas with representatives of several big oil companies who want to know where we stand; what is our government’s position on the future of shale development in Ohio. Continued on pg. 47

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he Ohio Petroleum Council (OPC) applauded Governor Kasich’s third State of the State address and said that Ohio’s burgeoning oil and natural gas industry is well positioned to advance the administration’s goals of continued economic growth and job creation. “Ohio’s oil and natural gas industry is a proven game-changer in the state’s economic resurgence,” said OPC Legislative Analyst Robert Eshenbaugh. “The arrival of shale energy development and production in Ohio has brought tens of thousands of new high paying jobs and the promise of a bright economic future for hard working Ohio families. Our industry not only shares the governor’s desire for progress, we are leading the way.” In 2012, more than 38,380 high paying Ohio jobs were directly attributed to oil and natural gas activity. These jobs are expected to increase to 143,595 by 2020 and to 266,624 by 2035, according to a recent study by the global information and research firm IHS. “We are encouraged by the governor’s focus on shale energy,” said Eshenbaugh. “We will continue to work closely with

the administration and legislative leaders to advance smart regulatory and economic policies for the benefit of all Ohioans.” OPC is a division of API, which represents all segments of America’s technology-driven oil and natural gas industry. Its 500-plus members provide most of the nation’s energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million a day in revenue to the government, and since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

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“EODa FOCuSES On SEvEranCE tax” from pg. 42 State Rep. Brian Hill is concerned that the gas and oil industry already pays several taxes. “We are still in the exploration phase ... We want to encourage further development, it is way too early to run people out of the area,” said Hill. As the executive vice president of the Ohio Oil and Gas Association, Tom Stewart said OOGA is in full support of Kasich’s plan to decrease or eliminate personal income tax, but does not support a tax on a particular industry. “This area of Ohio has struggled for decades. It was reported recently that 38,000 jobs in Ohio were created by the gas and oil industry. What other industry can make that claim. “And it is not just the gas and oil producers who will pay, landowners will also pay the tax in addition to other taxes. The industry pays a commercial activities tax, income tax, sales tax at the state level, in addition to county property and municipal taxes,” said Stewart. “We cannot afford to impose more taxing where innovation and development is the most important.” The EODA’s annual board of directors meeting will be April 26 at the Carlisle Inn in Walnut Creek. The Eastern Ohio Development Alliance is a nonpartisan, independent, nonprofit organization, consisting of 16 counties in eastern and southeastern Ohio. Alliance members are Athens, Belmont, Carroll, Columbiana, Coshocton, Guernsey, Harrison,

March 2013 Edition


Holmes, Jefferson, Monroe, Morgan, Muskingum, Noble, Perry, Tuscarawas, and Washington. EODA, through the cooperation of its 16 member counties, promotes economic growth of the region.

“buSt tO bOOm” from pg. 14 Rutledge said, “another plus is that the Chamber now has 242 members, up from 175 in 2011. Many of which are local businesses that have been around for many years, but never would join the Chamber. Since the gas and oil industry has become ingrained in our area, they want to be a part of it.” And, as with everything else in life, you have to accept the negative along with the positive. She said the biggest complaint from residents is the traffic. The endless stream of trucks and equipment rolling through town has been a problem. “When you the weigh the good and bad, this is an exciting time in Carroll County. You can see hope in people’s eyes,” she said. The Guernsey Energy Coalition monthly meetings were initiated and are sponsored by Jo Sexton, president of the Cambridge Area Chamber of Commerce, to educate local businesses, government employees and organizations about the future of gas and oil development in Guernsey County. Every month, speakers from all areas of the industry are invited to share their knowledge and expertise in the complicated energy business.

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Gas & Oil

March 2013 Edition - Dix Communications

Shale development could be the answer to nagging questions in the U.S.


Global Impact: Greg Kozera, President- Virginia Oil & Gas Asso-

ciation What if we could break OPEC’s control over world oil prices? What if it were in our power to bring our brave soldiers home from the Middle East because we no longer need to protect the Mideast oil supGreg Kozera ply? What if we could clean Virginia Oil & Gas Asso. up the environment without government regulations? What if we could create thousands of good paying jobs? And, what if we could help our poor without using tax dollars? It is indeed a rare point in history when we, as a nation, can do something that will create such a large positive global impact. The development of the Marcellus shale, the Utica and other shale fields could do just that. Suddenly we have a 200-year supply of natural gas, when just a few years ago some predicted our supplies were running out. The Marcellus shale that runs from New York to Virginia is now the second largest natural gas field on the entire planet and it is right here in the USA. Other new shale gas reservoirs here in the USA are not far behind. What does this mean for Ohioans? First it means stable, economically priced and dependable natural gas for homes and businesses. In 2011, average homeowners saw a $1,000 per year decrease in their gas bill. This is quite a stimulus package and it didn’t cost the taxpayers a dime. It also helps our poor, who pay a larger percentage of income for basic needs Additionally, it means dependable natural gas supplies since the source of the natural gas is now close to the end users and major residential, commercial and industrial markets. If we begin to use natural gas to power our vehicles it can mean more jobs for Ohioans and lower fuel costs. Currently the natural gas equivalent of a gallon of gasoline is $1.99 per gallon in the Pittsburgh and Baltimore areas. In Oklahoma it is $1.35 per gallon. This is a lot cheaper than $3.49 per gallon of gasoline. In 1947, the oil and gas industry discovered hydraulic fracturing— or “fracking”—as a way to improve the production of this country’s oil wells. Fracturing is a way of making the wellbore, the path through which the hydrocarbons flow, larger. Instead of the natural gas having just a 4-inch or 5-inch pipe to flow into, we create an underground crack or fracture that extends several hundred feet from the well. The oil and gas flows into the crack. It is easier for oil and gas to move through a crack or fracture than through unfractured rock. Fracturing is a little like building a multi-lane highway. If a lot of cars are trying to leave a city on a two-lane road it takes a long time. If we build a four- six- or eight-lane highway, more cars can move faster. The shale reservoirs we have today have a lot of natural gas trapped

in them, but they also have very low porosity and permeability. Fracturing is the highway we use to release the natural gas in the shale. Hydraulic fracturing has become as common and as necessary as drilling. There is not a “new drilling process called fracking,” as many, including reporters for the New York Times, have written. These are separate processes. For many years, more than 90 percent of the wells drilled in the United States have required fracturing to produce natural gas or oil. Without fracturing we have no significant domestic oil industry and must rely on imports for almost 100 percent of our fuel for transportation. If this ever happens, you will think $4 gasoline is cheap. The new technology that has changed everything is the ability to drill wells horizontally and then hydraulically fracture them multiple times. This has only become feasible in the last decade and it is the reason we are now able to unlock the gas in our shale reservoirs. This process is like constructing a 12-lane highway (the horizontal well) into a city with four-lane highways (the fractures) running into the highway. Fracturing a horizontal well is no different than fracturing a vertical well. The only difference is that there is only one wellhead at the surface. Some horizontal wells can have as many as 15 or 20 separate fractures. This is the equivalent of drilling 15 or 20 vertical wells but with less surface disturbance and far less environmental impact. There are a number of popular myths about hydraulic fracturing. It does NOT cause earthquakes. The great eastern earthquake of 2011 was centered in Virginia and over 250 miles from the nearest well. We have had MILLIONS of earthquakes in this country since 1900. Now suddenly fracturing causes earthquakes. I don’t think so. In the case of shale wells, the fracturing takes place at depths of up to 10,000 feet below the surface. It simply CANNOT contaminate groundwater. I have never seen water run up hill. A water molecule at 5,000 feet or even 2,000 feet would rather move downward or sideways than fight solid rock and GRAVITY to move upward. There are four steel and cemented pipes between the fracturing fluids, natural gas and our groundwater. I have more concern about my neighbor’s uncemented, unregulated water well next to his pig pen, that is in the same water aquifer that I get my water from. The use of horizontal drilling and hydraulic fracturing together has produced so much natural gas that the price of the commodity has fallen significantly in a period where most other commodities, including such basic items as milk, have increased. Greater use of natural gas due to increased supply and lower price — especially as a fuel for power generation — has reduced our CO2 emissions to 1992 levels, without government intervention. To break OPEC’s control of world oil prices we need to use natural gas for transportation. We can start with fleets and large vehicles like buses and trash trucks. If this became a national

Continued on pg. 52

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Area Visitors and Conventions Bureau Director talks oil and gas boom


rying to prepare for the anticipated oil and gas industry was the main idea behind the recent Newcomerstown Chamber of Commerce luncheon meeting. Amy Rutledge, executive director of the Carroll County Visitors and Convention Bureau and president of the Carroll County Chamber of Commerce, spoke about how the influx of the oil and gas industry has changed her county. “The ‘game’ hasn’t started yet,” Rutledge said about the oil and gas industry that is taking over her county. “We are still early in the stages of development.” She said the first oil wells were drilled in March-April 2011 in Carroll County. However, before this, title searches were completed and property owners had leases signed. She said on averNiki Wolfe Newcomerstown news age there were some 40 people running title searches on property at the county Court House on any given day. She said jokingly said that Carroll County has become the “Home of White Trucks.” Those “white trucks” are what brings in the oil well employees. She said she has seen license plates from Louisiana, Texas, Oklahoma, Pennsylvania and West Virginia. “They are hiring local but not every job is ready to be hired locally,” she said. Safety has become the top aspect of all companies working in the oil and gas industry, she said, including in her county. She said companies are very conscientious of employees’ and residents’ safety. “They don’t want an accident anymore than we would want to see one,” Rutledge said.

Amy Rutledge, executive director of the Carroll County Visitors and Convention Bureau and president of the Carroll County Chamber of Commerce, spoke to the Newcomerstown Chamber of Commerce recently.

Continued on pg. 52

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“ShaLE DEvELOpmEnt” from pg. 48 priority we could make the transition from gasoline to natural gas in three to five years. We are currently sending $1 billion U.S. dollars every day to buy oil. How many jobs could we create by keeping this money here? We are Americans. All things are possible. We just need to make the decision and get busy. Greg Kozera, President, Virginia Oil & Gas Association, author of “Just the Fracks, Ma’am,” and environmentalist, who has a goal to educate people on the positive impact natural gas and hydraulic fracturing can have on families and communities.

“DirECtOr taLkS OiL & GaS” from pg. 51 Right now, Chesapeake Energy is the main driller in the county and Rex Energy has one well. But there are 170 permits issued for Carroll County to drill oil wells. In terms of what the influx of these oil field workers have done to the local economy, she said it’s amazing. Carroll County did have 14 percent unemployment and now its below the state average of 6.1 percent. For instance, one local restaurant that is only open for lunch did have three employees but now has to have six for the lunch crowd rush. Carrollton is lucky because all four of its main state routes run straight through the heart of the county. “It’s not a sleepy, small town anymore,” she said. In a county that budgets only $600,000 for county road improvements, Rutledge said the oil companies have made over $26 million

in road improvements themselves. That’s to make sure that all the heavy drilling rig equipment can travel down township roads safely. In terms of Carroll County Chamber membership, she said the membership list has grown from 175 in 2011 to 242 currently. “The app you are working on is a great thing,” she said about the mobile app that the Newcomerstown Chamber of Commerce is working on. She said her county is working on getting broadband Internet. On the down side, she said crime in her county has risen but that comes with the influx of more people. But, she said it’s not perpetuated by the oil and gas workers. She said, in most cases, it’s the locals who are breaking into the worker’s vehicles. But, the oil and gas field workers are tough, she said, working 12-hour shifts and being out there in temperatures from 5 degrees to 105 degrees. And these workers are renting houses in Carroll County which has cost rent prices to sky-rocket. In terms of how to prepare for this anticipated boom, Rutledge said she’s not sure but she would say to continue to offer good customer service because the workers “will find you if you continue to treat them well.” Overall, she said the oil and gas industry is “changing our landscape. It’s exciting and I hope you guys will see it, too.”

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MArcellus shAle

8 0 2 3 5 2 0 20

Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing inactive Plugged total horizontal Permits

uticA shAle

27 7 Wells Permitted 15 Wells Drilling 148 Wells Drilled 7 Not Drilled 6 9 Wells Producing 3 inactive 10 Plugged 529 total horizontal Permits

Data as of 2/21/13 Source: Ohio Department of Natural resources

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March 2013 Edition


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Gas/oil industry adding thousands of jobs paying $59K to $74K a year


ore than 167,000 people were working in Ohio’s growing shale oil and gas industry as of late last year, according to a new report released this week by the state. The Ohio Department of Job and Family services also noted that those workers are earning average salaries between $59,000 and $74,000, according the first issue of Mark Kovac “Ohio Shale: Quarterly Economic Dix Communications Trends for Ohio Gas and Oil Industries” (online at OhioShale/OhioShale.htm). “The growing oil and gas industry holds great economic potential for Ohio,” ODJFS Director Michael Colbert said in a released statement. “This report provides individuals, businesses and community leaders with important information that can help guide economic development decisions and career choices.”

The first report provides a snapshot of Ohio’s oil and gas industry as of November. Among the statistics included: • Employment was up 1,066 (17 percent) in pipeline construction and well drilling, 4,809 (3.1 percent) in trucking, environmental consulting and other ancillary industries; and 90,435 (1.9 percent) in other related positions. • The number of shale-related businesses rose to 13,412. According to the report, “Between the first quarter of 2011 and the first quarter of 2012, 16 oil and gas well-drilling operations, six natural gas liquid extraction operations, five oil and gas pipeline construction businesses, and nine businesses offering oil and gas industry support services opened in Ohio.” • Carroll County led the state in terms of number of wells drilled, with more than 50. Columbiana County was second, with 21-50. Jefferson, Harrison and Noble counties had 1120. Stark, Guernsey and Belmont had 6-10. More than 10 others, including Mahoning, Portage, Wayne, Ashland and Holmes, had up to five.


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March 2013 Edition

Top CounTies WiTh horizonTal Drilling aCTiviTy By numBer of siTes

1. Carroll County 191 2. Harrison County 65 2. Columbiana County 65 3. Jefferson County 35 4. Guernsey County 33 5. Monroe County 32 6. Noble County 29 7. Belmont County 24 8. Mahoning County 16 9. Portage County 14 10. Stark County 13 11. Tuscarawas County 12 12. Coshocton County 5 13. Muskingum County 3 Holmes County 3 Trumbull County 3 14. Knox County 2 15. Ashland County 1 Geauga County 1 Medina County 1 Wayne County 1 Well SiteS in variouS StageS: Permitted, drilling, drilled, ComPleted, ProduCing, Plugged SourCe: ohio dePartment of natural reSourCeS aS of 2/21/13










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March 2013 Ohio Gas & Oil Magazine  

The March 2013 edition of Ohio Gas & Oil Magazine published by Dix Communications.