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Dix Communications - Oil & Gas June 2012 Edition

Table of Contents ◆ Shale Development A Game Changer............ pg. 2 ◆ Expert says development will take some time ............................................. pg. 4 ◆ Programs Available to Educate Workers......... pg. 6 ◆ 7 tips for landowners ....................................... pg. 8 ◆ ‘Get an attorney’............................................ pg. 10 ◆ ‘It’s all about the jobs,’ ................................... pg. 12 ◆ A ‘tsunami’ that smells like money ................ pg. 16 ◆ Force Incorporated bringing jobs to Belmont County ....................................... pg. 18 ◆ Region studies use of roads for oil and gas industry...................................... pg. 22 ◆ Industry takes ‘STEPS’ to be safe ................. pg. 24 ◆ For Eastern Ohio, these days, business is good ......................................................... pg. 26

◆ Oil in the early days ...................................... pg. 30 ◆ Infinity Oilfield Services opens site in Newcomerstown ................................ pg. 32 ◆ It’s happening here, it’s happening now ....................................... pg. 34 ◆ Ohio Well Activity by the numbers ................ pg. 36 ◆ Industry leader comes to Southeast Ohio ........................................ pg. 38 ◆ Top Ohio Counties with Horizontal Drilling Activity ............................................. pg. 42 ◆ Association opposes Kasich proposal .......... pg. 44 ◆ Senate passes bill, creates annual environmental award for oil and gas drillers ................................................... pg. 45 ◆ Oil & Gas Fact Sheet .................................... pg. 46

Attributions Andrew S. Dix Co-Publisher ASDix@dixcom.com

Ray Booth Executive Editor RBooth@dixcom.com

G.C. Dix II Co-Publisher GCDixII@dixcom.com

Cathryn Stanley Regional Editor CStanley@dixcom.com Niki Wolfe Regional Editor NWolfe@dixcom.com

PUBLICATIO A MONTHLY JUNE 2012

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Ed Archibald SE Ohio Sales Cambridge, Ohio Office EArchibald@dixcom.com 740-439-3531

Peggy Murgatroyd, SE Ohio Sales Barnesville and Newcomerstown, Ohio Offices PMurgatroyd@dixcom.com 740-425-1912 Barnesville 740-498-7117 Newcomerstown Jeff Kaplan NE Ohio Sales Alliance & Minerva, Ohio Office JKaplan@dixcom.com 330-821-1200 Owen Williams Layout Designer

“Oil & Gas” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2012. Cover Photo by: Sarah Gordon, Ashland Times-Gazette Crews from Halliburton, a company contracted by Devon Energy, work on the horizontal hydraulic fracturing phase of a well in northern Ashland County.

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Oil & Gas June 2012 Edition - Dix Communications

Shale Development A Game Changer for U.S. Oil and Natural Gas Production

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s recently as the late 2000s, the U.S. energy picture was bleak. By 2008, U.S. oil production had declined steadily from its 1970s peak. Natural gas production was on a similar downward spiral. Already importing 80% of its crude oil needs (costing more than $1 billion each day!), forecasts were for increased natural gas (LNG) Norm Shade imports to meet future U.S. energy needs. 37% of U.S. energy needs come from oil, primarily for transportation fuel. 25% currently comes from natural gas. The rest comes from coal (21%), nuclear (9%), and renewable sources (8% including hydroelectric, ethanol, wind and solar). The cleanest burning of all fossil fuels, natural gas is used for electric power generation, heating, and feed stock for plastic, fertilizer and other important chemicals. A small portion is used for transportation fuel. Fortunately, in less than 10 years, new technology has

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“Natural gas production has increased so much that underground storage capacity is full and wellhead prices are down to mid1990s levels.”

Bakken play in North Dakota and the Eagle Ford play in Texas. Many producers are forecasting similar potential from the Utica Shale in Eastern Ohio. Natural gas production has increased so much that underground storage capacity is full and wellhead prices are down

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Dix Communications - Oil & Gas June 2012 Edition

to mid-1990s levels. Gas imports peaked in 2007 and have fallen markedly ever since. According to the U.S. Department of Energy’s Energy Information Administration (EIA), shale gas, not much of a factor 5 years ago, accounted for more than 32% of U.S. production in 2011. Industry experts estimate that developable natural gas reserves are vast enough to supply the country’s needs for more than 100 years at current rates of consumption. Barnett in North Texas, Fayetteville in central Arkansas, and Haynesville in Northwest Louisiana are all prolific shale plays that have led the rapid turnaround in U.S. production. And there is significant upside as newer plays like the Marcellus and Utica Shale are developed. Both of these plays,

W. Norm Shade President of ACI Services Inc. Headquartered in Cambridge, OH. ACI is a leader in the manufacture of custom engineered gas compressor products used throughout the world. Shade received BME and MSME degrees from The Ohio State University, graduating Summa Cum Laude in 1970, and he is a registered professional engineer in Ohio, Oklahoma and Texas. Before heading ACI in 2004, he spent 32 years in various engineering and management roles with Cooper Cameron Corporation (now Cameron International) and 2 years developing his own Houston, TX based consulting company that continues to provide market research and technical

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which extend into the Eastern part of Ohio, are believed to hold vast recoverable deposits of natural gas and oil. Responsible production from shale plays will greatly reduce the need for imports, and some optimists predict that the U.S. can become energy independent by the end of the decade. Not only does domestic energy production create lots of jobs and wealth for producers and lease holders, development of these plays is important for our national security.

services to major companies in the oil and gas industry. He has authored more than 170 technical papers and articles, and serves as a regular Contributing Editor for COMPRESSORTechTwo magazine, a monthly gas machinery journal. Shade is on the Advisory Board of the Gas Compressor Association and is active in the Gas Machinery Research Council, INGAA and the American Society of Mechanical Engineers, having chaired various committees. In 2000, he was named a Fellow of the American Society of Mechanical Engineers, recognizing his career achievements in the engineering field; and he has received many other awards including the ASME Distinguished Service Award and the Ohio State University E.G. Bailey Entrepreneurship Award.

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Oil & Gas June 2012 Edition - Dix Communications

Interview Expert says development will take some time

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uring a recent interview with geologist and oil and gas producer David R. Hill, several topics were presented to Hill to enlighten the masses on the status quo of the oil and gas industry, from exploration to expectations to the proposed severance tax to Senate Bill 315. First and foremost Hill said, Judie Perkowski Dix Communications “although we are smack dab in the middle of the oil window” [of the Utica Shale Play], we have to “temper our expectations ... and be cautiously optimistic. “A lot of this information is theory, as more wells are drilled and we get more data points (information), maps will be redrawn to coincide with current or newly discovered data.” Relative to the projection of the number of jobs created in southeastern Ohio, Hill stands by the results of an economic impact study by the Ohio Oil and Gas Energy Education Program released in 2011, which estimates Ohio’s job market will demand more than 200,000 jobs, and industry wages would climb to more than $12 billion in annual salaries and personal income to Ohioans, by 2015. Job growth for 2012 is estimated at 22,297. The study stated jobs would involve leasing, royalties, exploration, drilling, production and pipeline construction to produce oil and gas from the Utica Shale Play. Hill agrees with the volume of jobs created by the industry, but is less optimistic about it all happening by 2015. “If Ohio grows at the same pace as Pennsylvania, we could benefit from approximately 200,000 jobs within the next five years,” he said. “From leasing to actual production, approximately 200 different job classifications will have a hand in developing that well. “It is also estimated that Ohio would benefit from $1.054 billion in tax revenue if the industry is allowed to develop under the existing tax code. “In addition to the proposed increase in the severance tax levied on the industry, oil and gas companies also pay sales tax, commercial activity taxes, fuel use taxes, personal

income taxes, and ad volorem taxes. The ad volorem tax is Latin for ‘according to value.’ Property ad valorem taxes are incurred through ownership of an asset and are the major source of revenue for local governments. Ad volorem taxes are roughly equal to 1 percent of gross sales, that money goes back to the county where David R. Hill the well exists. Of the money sent back to the county, 71 percent goes to the local school district where the well is located. Ad volorem taxes benefit the local economy. “The severance tax is a gross receipts tax. Generally, the landowner and the oil company are subject to the severance tax. Raising the severance tax means landowners will send 10 percent of their royalties to Columbus (Based on 4 percent severance tax on high volume wells, and a 6 percent state income tax). The average cost to drill a horizontal well is approximately $8 million. The difference between the Marcellus Shale, which covers a thin strip of eastern Ohio, and the Utica Shale, which covers about half of Ohio, is the Marcellus is “dry gas,” whereas the Utica is a “wet gas” and/or oil reserve. Although there is currently no fully defined quantitative definition of a wet gas flow that is universally accepted, what constitutes the value of wet gas is the concentration of ethane, propane, butane and other gas by-products. Methane is indigenous in both wet and dry gas. “All of Ohio has a stake in the development of the oil and gas industry,” said Hill. “Senate Bill 315 is currently being debated in the legislature to strengthen well construction requirements. Virtually all mishaps in the hydraulic fracturing process may be traced back to faulty well construction. The Ohio Oil and Gas Association is fully engaged in the process. I am convinced common sense will prevail.”

“If Ohio grows at the same pace as Pennsylvania, we could benefit from approximately 200,000 jobs within the next five years.”

David R. Hill has 32 years of experience in the oil and gas industry. He is the secretary/treasurer for the Ohio Oil and Gas Association, and a member of the American Association of Petroleum Geologists. He has served on the OOGA technical advisory council under the Taft, Strickland and Kasich administrations.


Dix Communications - Oil & Gas June 2012 Edition

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Oil & Gas June 2012 Edition - Dix Communications

Programs Available to Educate Workers Recognizing the need to prepare for the influx of workers in the oil and gas industry, several local colleges and universities offer a number of programs and courses: ZANE STATE COLLEGE (ZANESVILLE) The Natural Gas Engineering Technology associate degree program includes classroom, laboratory and field experiences. A sample course curriculum covers: Natural gas distribution and compression; petroleum geology; oil and gas reservoirs; formation evaluation; industrial mechanics; drilling methods/operations; field services; natural gas production; mineral rights and leases; world regional geography; physics; introduction to mechanical modeling; and general chemistry. Curriculum also includes an internship. For program information contact Engineering and Energy Science Professor Daniel Durfee, 740-588-1282 or ddurfee@zanestate.edu or visit www.zanestate.edu.

BELMONT TECHNICAL COLLEGE (ST. CLAIRSVILLE) NGT 100 - Introduction to the Oil and Gas Industry is a 5 1/2 week 4-credit course beginning on July 3 and meeting Tuesdays and Thursdays from 5:30 to 9:30 p.m. at the main campus. End date is Aug. 7. This course provides a survey of the oil and gas industry, it’s history, development, influence on society and work politics, and its current state. The course will cover concepts of petroleum discovery, geology, production, transportation, refining, marketing, and economics. Course learning outcomes include: To introduce the petroleum industry from inception to the present; to review the history of petroleum and natural gas development as a function of changing society and technology; to explore the discovery, geologic and development, technology of oil and gas prod u c -

tion; to introduce the techniques of modern on and off shore exploration and production; to review domestic and world markets for oil, gas, and their many derivative products; to explore current world use, future demand, and alternatives; and to introduce U.S. and state regulations on the industry. For registration information call 740-699-3809 or visit www.btc.ed.

WASHINGTON STATE COMMUNITY COLLEGE (MARIETTA) New programs and courses offered for credit include: Geoscience; Geotechnical Drafting; Private Security Academy; and Introduction to the Oil & Gas Industry. Existing programs and courses to support the oil and gas industry include: CAD Drafting; Electronics; Industrial Machining & CNC; Instrumentation, Control & Electrical; Process Technician; Chemical Operator Online; and Diesel Truck Technician. For program information contact Dean of Business, Engineering & Industrial Technologies Brenda Kornmiller, 740-374-8716 or bkornmiller@wscc.edu or visit www. wscc.edu.

MARIETTA COLLEGE (MARIETTA) Bachelor of Science degree offered in petroleum engineering. Courses required of all petroleum engineering majors include: Petrophysics; Core Analysis Laboratory; Drilling and Completion Fluids; Well Control and Casing Design Laboratory; Hydrocarbon Phase Behavior; Reservoir Engineering; Drilling Engineering; Production Systems Engineering I; Production Systems Engineering II; Formation Evaluation; Enhanced Recovery; Natural Gas Engineering; Transient Pressure Analysis; and Senior Capstone Design Seminar. For program information contact Dr. Robert W. Chase, 740-376-4776, or visit www.marietta.edu

KENT STATE UNIVERSITY (KENT) The Oil and Gas Management Certificate is designed to enable industry executives, senior budget-holders and decision-makers in investment banks, consultancies, government agencies and large multinational corporations to evaluate and manage risk and exploit business opportunities in the global oil and gas industry. The course includes three modules: Module I, Project Management in Oil and Gas – Managing Resource; Module II, Oil and Gas Accounting – Oil and Gas Operations and Costing; and Module III, Essentials of Leadership. Cost includes an Apple iPad 2 pre-loaded with course materials. The course is offered during the summer and fall to suit an organizations’s schedule. May be arranged for a group of 20 or more. For further information, contact Dr. Pratim Datta at pdatta@kent.edu or Pam Silliman at psillima@kent.edu or visit www.kent.edu.


Dix Communications - Oil & Gas June 2012 Edition

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Oil & Gas June 2012 Edition - Dix Communications

7 tips for landowners

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any landowners in eastern Ohio have been disappointed because they signed an oil and gas lease too quickly. By “too quickly,” we mean the lease was signed without a full understanding of the words in the lease, or because nearby landowners got better terms – including more lease bonus and higher royalty – or J. Richard Emens because the landowner did not Emens & Wolper understand the process that ocLaw Firm curs after signing and prior to the landowner receiving payment of the lease bonus. Therefore, we offer the following “Seven Secrets” to assist landowners who are considering signing an oil and gas lease: 1. There is no such thing as a Standard Form Oil and Gas Lease. 2. Every paragraph/word of an oil and gas lease (and related documents) is negotiable. 3. The Landowner wants many landowner friendly terms in the lease. These terms should protect the landowner’s surface, sub-surface, water, agriculture and other rights and activities.

4. The Landowner needs to understand every word of an oil and gas lease prior to signing, including the importance of implied covenants; this recommendation also applies to documents which may be related to the lease such as “Order of Payment,” “Amendment to Lease,” “Memorandum of Lease,” and “Easement.” (An Easement is not a lease, but a permanent grant of real estate rights.) 5. The Landowner wants the oil and gas lessee to be an oil and gas company (“OGC”) with the technical and financial capability to competently drill, produce, and operate a well or wells. The reputation of the OGC in the oil and gas industry is also important. 6. The Landowner wants the lessee to sign the lease (most oil and gas leases are set up so the lessee does not sign) and the related documents. 7. The Landowner always wants to retain a copy of any signed oil and gas lease and the related documents (with signatures of both the Landowner and the lessee). Landowners who spend sufficient time to educate themselves generally about the oil and gas business and benefit from these Seven Secrets may end up happier than those landowners who sign an oil and gas lease too quickly.


Dix Communications - Oil & Gas June 2012 Edition

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Oil & Gas June 2012 Edition - Dix Communications

‘Get an attorney’ to study older leases

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resenting detailed information about older oil and gas leases at the Buffalo Campus of the Mid-East Career and Technology Center recently, Dale Arnold said the best advice he could give them was to “get an attorney.” Arnold is director of Energy, Utility and Local Government Policy at the Ohio Farm BuJudie Perkowski Dix Communications reau. “Leases are very complex ... Get an attorney,” said Arnold. “Your lease may have changed hands many times since the original owner signed on, and you may now have a new business partner ... Get an attorney.” “Twenty five percent of leases in Ohio are new leases, 75 percent are older leases. An oil and gas lease is defined as a legal deed by which a landowner authorizes exploration for and production of resources on his/her land; usually in consideration of a royalty. “Many farm families have handed down leases through generations. The original owner is gone, and the family-owned

small oil company has been bought and sold several times. So, who is the legal owner? The only lease that is enforceable is the one on file in the county recorder’s office, witnessed and notarized. The lease is still good even if the landowner or the company is gone,” he said. Take the time to get to know your new business partner. Ask questions. Just as important is your legal counsel. Ask legal counsel how many years of experience he/she has working with complex leasing/contracts used in energy and utility-rej lated issues. Are they familiar with different types of energy technology being used today. Do you have access to financial planning resources for the farm (business functions, taxes, etc.) and family, (estate planning, gifts, trusts, multi-generation benefits, taxes, etc.). Do you have access to family counseling services, philanthropy and working with local foundations. When you acquire a lot of money, you should ask yourself if you want to give it to a community charity, like a church, school or civic organization, or do you want to give it to the tax man? “Every lease is unique. A lease is a basic implied covenant where anything and everything is negotiable — within reason. “And, most important: Do Not Cash the Check, until your attorney has read, understands and has communicated to you about immediate tax ramifications, and everything clause in


Dix Communications - Oil & Gas June 2012 Edition

the lease. Once again, get an attorney. It is worth every penny,â&#x20AC;? said Arnold. Arnold also advised the group to know and understand the workings of the Ohio Department of Natural Resources. â&#x20AC;&#x153;The ODNR is your police force. The oil and gas division regulates, inspects and enforces rules for oil/gas drilling, operating, production operations for brine disposal, underground injections wells, and every phase of drilling and capping wells. You can also track oil and gas permits, project completions, production reports, the name of the well, the name of the oil/gas company and the stage the drilling process is in. And, all information is updated weekly. It has been reported several times about the anticipated results from the Marcellus and Utica Shale formations. The Marcellus covers a thin strip of eastern Ohio and contains dry

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gas reserves. The Utica Shale Play has wet gas, which lies beneath the Marcellus and covers about a third of Ohio. The Utica is expected to produce 5.7 billions barrels of oil. â&#x20AC;&#x153;Anyplace you have seen oil and gas production in Ohio, itâ&#x20AC;&#x2122;s approximately 40 to 60 percent of what lies below the surface ... The oil companies are coming back to get the rest,â&#x20AC;? he said. For more in-depth information of Arnoldâ&#x20AC;&#x2122;s presentation in PDF format, and/or a list of experienced oil and gas attorneys, call or email: Dale Arnold, Director, Energy Services Ohio Farm Bureau Federation at 614.246.8294 or Email: darnold@ofbf.org. For the Ohio Department of Natural Resources Oil & Gas Resources Management, call (614) 265-6922 or visit WWW. ODNR.com.

â&#x20AC;&#x153;Many farm families have handed down leases through generations. The original owner is gone, and the family-owned small oil company has been bought and sold several times. So, who is the legal owner? The only lease that is enforceable is the one on ďŹ le in the county recorderâ&#x20AC;&#x2122;s ofďŹ ce, witnessed and notarized. The lease is still good even if the landowner or the company is gone...â&#x20AC;?

jperkowski@daily-jeff.com

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Oil & Gas June 2012 Edition - Dix Communications

‘It’s all about the jobs,’ says One Stop director

“T

hings are start$4,000 for a five-week training to pick up ing course. There is a federal again,” said Sue grant for the course for people Thomas Sikora, Cambridge who qualify. If you are laid manager for the Opportunioff from a job, you must be ty Center, part of the “Oneeligible for or are receiving Stop” system that, in addiunemployment benefits. There tion to Guernsey, includes are also income limitations. Muskingum, Coshocton and For example, income for a Licking counties. family of four cannot exceed “The oil/gas companies $46,100. If there is no federal were involved in planning, surmoney, One Stop will work Judie Perkowski Sue Sikora veying, leasing and explorawith any school for assistance. Dix Communications tion,” Sikora said. “They also Also in demand are welders, requested a wage analysis for the area. All those things take heavy equipment operators, people skilled in heavy manutime. facturing and outdoor construction, in addition to general, “We are now experiencing an upswing, albeit slowly, in manual labor. The oil and gas companies prefer to hire people requests for people, and it’s not just in the oil and as industry. who live within one or two hours of the work site. The increase is in all sectors of businesses. Business owners Also on the horizon is a 30-hour oil and gas industry career are beginning to evaluate their needs. It is evident by the intraining program for land men and abstractors at the Career crease in the number of job orders Center for Adult Technical Trainwe receive ... They are more coning in Caldwell. No experience is fident and have begun expanding and there is on-the-job “We are really in a good place for required and adding more jobs. training. Call for details and/or to employment in general, across the register at (800) 648-3695 or on“We are really in a good place for employment in general, across board. We all have been so preoc- line at www.mycareerschool.com. the board. We all have been so Tuition is $549. cupied with Chesapeake and Halpreoccupied with Chesapeake and An abstractor is someone Halliburton, but small business who gathers information from a liburton, but small business owners owners are beginning to benefit variety of sources and presents it are beginning to benefit from the in a unified document called an from the demand for goods and demand for goods and services. services. abstract, which discusses the most “We are moving in the right important and pertinent pieces of direction. The market has shifted,” information from these sources. she said. “Our mission is to keep jobs here. If you want to Abstractors are employed in the information science sector, work, I can find you a job ... and veterans receive priority and they can work in a wide range of industries. As an abstatus.” stractor for the oil/gas industry obtains information primarily The One Stop is the regional office for companies looking about land leasing. for fill a multitude of jobs. After filling out an application and “This program is the first of its kind in this area. Call One going through the pre-screening process. Pre-screening helps Stop at (740) 432-2381, or visit the office at 324 Highland the job applicant understand the process and makes the comAve. to see if you qualify for any portion of the tuition,” said mitment. The office provides job leads, helps applicants learn Sikora. how to look for work online, how to fill out applications, how jperkowski@daily-jeff.com to fill out a resume, what to do and what not to do during the interview process, and what kind of training might be required for a particular job opening. The job opportunities are updated daily online at guernseyworks.com. “The oil and gas companies in our area are Drill string Drill•string noun looking for truck drivers, truck drivers and more truck drivers. : A column, or string, of pipe that transmits drilling But, the jobs are for CDLs-plus. Which means they need to do fluid (via the mud pumps) and torque (via the Kelly more than drive. It’s lots of heavy, dirty work. You are part of drive or top drive) to the drill bit. a team that tears down rigs,” Sikora said. Sikora said the training program for getting a CDL is about


Dix Communications - Oil & Gas June 2012 Edition

13

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Oil & Gas June 2012 Edition - Dix Communications

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Dix Communications - Oil & Gas June 2012 Edition

15

The Safety Group, LLC 10901 Clay Pike Derwent, Ohio 43733 Phone (740) 685-8784 • Fax (740) 685-0288

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16

Oil & Gas June 2012 Edition - Dix Communications

A ‘TSUNAMI’ that smells like money

‘S

ome will get paid and some won’t.’ I have heard this several times from a local oil and gas man. From personal experience, I know this to be true. But, it isn’t always the oil and gas guys who don’t get paid. We are in the middle of a gold rush the likes of which we haven’t seen in a long time. Donald J. Gadd Like most, I have deep ties Independent Landman to Guernsey County, and I am 39 years also a history teacher who has enjoyed many hours pursuing the history of this area. Perhaps the greatest times here were the 1880s when General A.J. Warner, who was from time to time a congressman from this area, bought up a lot of the coal rights in the area and also was the key figure in establishing a railroad from Cambridge to his home area in Marietta.

‘With some more good results, this may be the tsunami I have been predicting for the last three years and we may only be at the beginning.’ From that point on, Guernsey County became the capital of the raw material for the U.S. industrial revolution. Good number seven Cambridge coal was wanted by all and spurred many an investor to become bond holders for one of the many mines that would spring up. Depending on when you got in on the strike, some got paid, some didn’t. You see, these strikes are

just that. They create a fever pitch on both sides and are cyclical going up, up, up one month and just as quickly falling off the map the next month. Hand in hand with this comes the money, the excitement, the anxiety, and most of all the influx of new people. This is what I will be writing about over the next several months, as we are in the very beginning stages of a huge “gold strike”, black gold that is, Texas tea. I can’t wait to see what is going to happen, and in turn, I will try to write about many of the questions and things that you may be asking yourself why this is so. I have already seen and smelled oil from one of the local wells that has been drilled. It smells like money. Otherwise, why would some of the largest companies in the oil and gas world be in our backyards? With some more good results, this may be the tsunami I have been predicting for the last three years and we may only be at the beginning. So, let usa begin to understand what will take place. Educate some on what to look for and, as always, it’s not the miner who generally makes the money. It’s the guy that owns the dry goods store.


Dix Communications - Oil & Gas June 2012 Edition

;=8-:17:

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Oil & Gas June 2012 Edition - Dix Communications

Force Incorporated bringing jobs to Belmont County

A

Pennsylvania company serving the oil and gas industry is expanding its operations to Barnesville and bringing with it an estimated 100 jobs in the next three years. In February, Bryan Force, president and CEO of Force Incorporated, headquartered in Indiana, Pennsylvania and state, county, Cathryn Stanley Dix Communications township and village officials announced that the company is leasing the former M & S Auto building on State Route 147. Belmont County Port Authority Director Larry Merry said the announcement was the first of many such projects coming to Belmont County. “We are thrilled to welcome Bryan Force and his company to Belmont County,” Merry said. Thirty-year-old Force said he began the company 11 years ago, after having three years experience in the oil and gas industry. Force Incorporated provides oil field services that include excavating, water hauling, “frack” job set up, spill containment, roustabout service, construction aggregate and building, repair, modification and maintenance of oil and gas production equipment, sites, wells and pipelines. Their asphalt services include asphalt paving, soil stabilization and road milling. “We will be implementing all facets of our business here in Ohio,” Force said. He said the Barnesville yard will be the staging area for the growth of the company’s tank service line in the area. He predicted that his company is the first of many to bring their business from Pennsylvania to this part of Ohio. “If the Utica shale has as good oil play as the Marcellus has had gas play, many companies will be shifting their rigs to Ohio,” Force said. “It is phenomenal what we’ve seen in the Marcellus play. We’ve been fortunate to have helped improve the economy of many Western Pennsylvania communities.” “We are fortunate to have found a facility like this in this location,” he continued, credited the Jefferis family for helping

Bryan Force, president and CEO of Force, Incorporated of Indiana, Pennsylvania addresses the public and state, county, township and village officials on Monday, Feb. 13 when it was announced that the company has leased the former M & S Auto building on State Route 147. Force said he plans to hire 75-100 people at the Barnesville location within the next three years.

him. “I finally found a facility I can grow into instead of out of,” he said. Merry also commended the Jefferis family whom he said were “private enterprise at its finest.” “They chose to sell the building to the company that would have the most dramatic impact on the community,” Merry said. Force said one of the company’s top three customers has a distribution well in Barnesville and Force is expected to begin serving them in March. “We are really excited to get out here,”Force said. “This is an untapped area for employment.” He predicted that 75 to 100 people will be hired out of the yard in the next three years. “I think that will be an easy goal to reach with the amount of business pending in the area.” Force said the company, which includes his brother, Chris who serves as vice president, is looking forward to becoming part of the community. Belmont County Commissioner Matt Coffland thanked Force for choosing Belmont County. “I think you will find good people and a good place in

“If the Utica shale has as good oil play as the Marcellus has had gas play, many companies will be shifting their rigs to Ohio.”


Dix Communications - Oil & Gas June 2012 Edition

19

Barnesville,” he said. “I don’t think you’ll find a more receptive community than Belmont County and Barnesville,” said Commissioner Ginny Favede. “They are good people in a close-knit community,” she said. “This is a tremendously exciting time for us,” she continued, mentioning an upcoming oil and gas expo and the promotion of area chambers of commerce on an oil and gas Web site. “The oil and gas industry is a small world and we are excited to know that Belmont County is in that world,” she said. “This means opportunities for local families,” Merry said. Barnesville village officials, the Warren Township board of trustees and developer T.J. Jefferis, who owns the building and surrounding acreage are currently working on a Joint Economic Development District agreement to extend sewer lines to the property. A hearing on the JEDD was held on May 22. The Belmont County Board of Commissioners also own acreage within the proposed JEDD area. Future development of the area in response to the needs of oil and gas workers is expected. Cathryn Stanley is editor of The Barnesville Enterprise, a weekly newspaper in Belmont County.

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Dix Communications - Oil & Gas June 2012 Edition

21

Marcellus Shale landowners: With new wealth comes new opportunities.

Potential earnings from Marcellus Shale gas rights could bring complexity and opportunities to your financial situation. Making the right decisions today can help you feel confident about your financial future. As Ameriprise financial advisors, we’ll work with you to determine the right investment strategies to help you grow and preserve your wealth, and address other financial concerns you may have. Discover the one-to-one attention you deserve, backed by the strength of America’s largest financial planning company.*

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10035912


22

Oil & Gas June 2012 Edition - Dix Communications

Region studies use of roads for oil and gas industry

J

ust days after the Ohio Senate approved Senate Bill 315, executives from the Ohio Department of Transportation Ohio Department of Natural Resources, and the Governors Office of Appalachia met with local officials to explain part of the bill that refers to the model Road Use Maintenance AgreeJudie Perkowski Dix Communications ment (RUMA), initiated and developed by county and township officials, the oil and gas industry, ODOT, ODNR and other entities that are, or could be, affected by road use agreements. The meeting was at the Crossroads Branch Library in Cambridge. In addition to visiting Guernsey County, the group traveled to Noble, Morgan, Belmont and Muskingum counties to educate local government officials and establish an outreach for the public when they have questions about the state’s role in the agreement, and how it will impact local communities. According to ODOT Director Jerry Wray, SB 315 strengthens existing regulations for drilling, public safety, the environment, and to establish a mutual understanding of what is expected from the oil and gas industry, the county and the townships. He emphasized that the state’s version of the RUMA is only a model. “This is a starting point. We are providing tools for protecting our infrastructure ... Each county and township can modify the agreement to suit their particular needs. The quality, conditions and logistics of county and township roads are unique and have to come into consideration. This legislation will give the agreement more visibility in the permitting process,” said Wray. Carlo LoParo, chief of communications for the ODNR, said SB 315 changes the process for oil and gas operators. Currently, the operator does not need a permit for road access. We are hopeful the Ohio House will approve the legislation by early fall. “The agreement is not mandatory. Operators do not have to sign the agreement, but they cannot ignore it, either. If they do not sign the agreement, they must file a signed affidavit stating they negotiated in good faith but could not reach an agreement with the county or township. If the county/township finds it unacceptable, their recourse is in the court system,” said LoParo. Guernsey County Commissioner Steve Douglass and Guern-

sey County Engineer Delmar George were among the meeting’s attendees. Douglass said even though there has been a road use agreement in effect for many years, in the past when directional (vertical) drilling was the only option for drilling a well, a limited amount of vehicles and equipment was used in the process. With the advent of horizontal drilling, it’s a whole new ball game. The amount of equipment and trucks required for the process has tripled, not only in the amount of equipment and number of trucks, but in size and weight. Especially with the number of trucks. Because of the millions of gallons of water required for hydraulic fracturing, and unless the well pad is close to a pipeline, all that water must be trucked in — constantly — which adds to more wear and tear on roads and bridges. A section of the agreement also includes railroad crossings. Work performed at a railroad crossing may contain a separate agreement at the railroad’s discretion. George reiterated “We want our county and township roads to be as good as they are or better. We aren’t asking for the moon, we just want the operator to follow the rules. “The RUMA is a mutual agreement between two parties. We modeled our agreement after Jefferson County’s, but tailored it to fit our needs. Each county operates differently, but every operator will be treated the same — big or small. RUMA provides protection for both the county and the operator. Our primary concern is safety. It is our responsibility to provide a safe infrastructure — roads and bridges — and that includes culverts that are 36 inches or larger. There are also required to post a bond for $300,000 per mile of roads they access. “We want to meet with these companies that are coming into our area and talk about access roads they would like to use. We believe we can help them ... We are offering our services. We want to do whatever we can to make sure they understand what and where potential problems can arise. We have a road use maintenance agreement that defines the operator’s, the county’s and the townships’ responsibilities.” The model Roadway Use and Maintenance Agreement for horizontal drilling projects and infrastructure in Guernsey County includes term and conditions that both parties agree to. And, although there a dozen stipulations, the language is not complicated or misleading. It also includes an appendix which designates anything else agreed to by both parties, such as plans prior to construction, or if the county or township doesn’t want anything in the Appendix, that is their option. The parties could also address if more than one operator is involved on the same route.

“We want to meet with these companies that are coming into our area and talk about access roads they would like to use. We believe we can help them.”

jperkowski@daily-jeff.com


Dix Communications - Oil & Gas June 2012 Edition

23

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24

Oil & Gas June 2012 Edition - Dix Communications

Industry takes ‘STEPS’ to be safe

T

he Buckeye STEPS Network was recently formed to address safety concerns related to the growing oil and gas industry and the impact on the local community. “It is a proactive engagement for the oil and gas industry to be actively interactive with local companies, as well as federal, state and local governRick Stillion Dix Communications ments, to understand the concerns and fears regarding safety and create an environmental stewardship,” said Joe Greco. “The network’s objective is to get the worker home safely. “The program promotes safety, health and environmental improvement in the exploration and production of oil and gas in the U.S. We will follow national STEPS protocol. Our priority is safety,” added Greco.

“The program promotes safety, health and environmental improvement in the exploration and production of oil and gas in the U.S. We will follow national STEPS protocol. Our priority is safety,” The Buckeye STEPS Network based in Cambridge is forming partnerships such as one with the Haven of Hope to assist families in the event of an injury or death related to the oil and gas industry. “While you are never prepared for an injury or a death, they (Haven of Hope) know what it means and they can help families ease into it,” said Greco. The network also works closely with the Occupational Safety & Health Administration and the Environmental Protection Agency. The Buckeye STEPS Network will meet periodically to share and discuss safety, health and environmental incidents, best practices and related issues; establish focus groups to address specific issues; and work with organizations and associations, educational institutions and others interested in the advancement of worker health, safety, security and the environment. Buckeye STEPS Network meets the first Friday of each month, although next month the group will meet on June 8.

The original STEPS (South Texas Exploration and Production Safety) network was formed in South Texas in October, 2003, in response to the OSHA Corpus Christi Area Office reaching out to the Oil and Gas Exploration and Production industry in an attempt to reduce injuries and fatalities. In 2006, an OSHA Region VI regional administrator recognized the STEPS Network as a best practice and encouraged area directors and industry leaders to expand the program. The first national STEPS Network meeting was held in Houston, Texas, in December 2008. The National STEPS Network includes operators and contractors in oil and gas exploration, production and product transmission industry as equally valued members. It encompasses the geographic region within the Continental United States. The national network promotes safety, health and environmental improvement in the exploration and production of oil and gas in US onshore operations. The National STEPS Network fosters a work environment that relies upon open communication and trust. Today, the STEPS Network has grown to eight independent organizations across the country with expansion continuing. Visit nationalstepsnetwork.com for additional information. rstillion@daily-jeff.com


Dix Communications - Oil & Gas June 2012 Edition

25

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26

Oil & Gas June 2012 Edition - Dix Communications

For Eastern Ohio, these days, business is good

F

or eastern Ohio, these days, business is good. But we know that hasn’t always been the case. Long before anyone thought to develop the vast natural resources beneath our feet in the Utica Shale, and long before it became a national conversation, Appalachia was mired in a stagnant economic recession. Ohio’s own gift, sitting thousands of feet below the surface, Shawn Bennett is bringing about an economic Energy gy in Depth p – Ohio revitalization and promise not se seen in our area inn a generation. This past T month, Halmon m liburton broke llibu gro ground on the their new regio gional equipme ment and field ser service center in Zanesville. Th The move com comes with aan iinvestment of up to $50 mil llio Already, million. the co company has hire ed m hired more than 100 Oh Ohioans, with planss to hire up to 3000 in the near future. A few wm months prior, MarkWes st E MarkWest Energy Partners investedd oover $500 million to deve elop natural develop gas processing facil liti in Harfacilities rison and Noble counties s. T counties. The facilities will create over 700 constru uct construction jobs, with over 40 permanent, w ell paying well positions. That’s in addition to the 100 jobs tthe they will be filling to staff their new field office iin C Cadiz. Producers Services Corporation, a sta staple of Muskingum County for the last 31 year rs iis preparing years, to add 30-40 new employees to their operations to meet the

rapid increase in the demand of their services. Head up north, and we’ll find something most people may not remember - steel and manufacturing - prospering, expanding… and hiring. The opportunities for our region to benefit directly are boundless. Pipefitters, welders, construction workers, truckers and more are already finding work. Our colleges and trade schools are training (and retraining) members of our community to fill the demands of a burgeoning industry now and in the years to come.

Ohio’s own gift, sitting thousands of feet below the surface, is bringing about an economic revitalization and promise not seen in our area in a generation. As the industry prepares to expand in the coming years, we must also do the same. We must all work together to ensure our state and our communities are in the best position to benefit. With the continued effort from our local government, our local businesses and our local chambers of commerce, we can position our region to attract more business, more investment and more growth. Eastern Ohio can be the hub of this rebirth. With over 200,000 Utica Shale development related jobs projected through 2015, we are in position to be the driving force not only in our resurgence, but Ohio’s future and economic prosperity as well. Shawn Bennett is Field Director for Energy in Depth-Ohio, a research, education and public outreach campaign.

Chainhand chain•hand noun : an experienced laborer capable of maintaining most parts of the rig. The chainhand is in charge of throwing the chain to make up or break down pipe stands during tripping pipe. They are also responsible for maintaining the motors on the drilling rig.


Dix Communications - Oil & Gas June 2012 Edition

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Oil & Gas June 2012 Edition - Dix Communications

locally owned since

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Dix Communications - Oil & Gas June 2012 Edition

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30

Oil & Gas June 2012 Edition - Dix Communications

Oil in the early days

j

A history y of the business from the settlers to the late 1920s Many years ago in this neck of the woods, crude oil wasn’t thought of as “black gold” and folks weren’t anxiously awaiting the money spigot to turn on, as they are today. In fact, there was a time when oil was considered a pain in the posterior. In the early Greg Parks 1800s, an oil find Dix Communications was met with disinterest or dismay. Pioneers who settled here dug wells to find water or brine, a source of salt. They were disappointed when they found oil. According to the local history Stories of Guernsey County, Ohio by William G. Wolfe (published by the author in 1943), the oil industry in Guernsey County had its beginning shortly after the coming of the first settlers. An oily substance discovered on the waters of what is now the upper course of Wills Creek attracted their attention. Although, as afterwards learned, it was common petroleum that had oozed from the ground, it was called Seneca oil, because it was believed to be the same kind of oil as that found in New York and named for an Indian Tribe. The name Seneca was given the creek, and a town platted near the stream at a later date and was called Senecaville. The oil was collected by wringing it from blankets that had been spread on the surface of the creek. The crude oil was believed to possess medicinal qualities. Peddlers would procure a supply and canvas the pioneer homes, guaranteeing it to be a sure cure for rheumatic and other aches and pains. It was not until the sinking of a great well in 1859 by Col. Edwin Drake at Titusville, Pa., that any consideration was given the oil and gas possibilities of Guernsey County. Much excitement followed

the Pennsylvania strike, and when the report reached some prospectors there that oil had floated on the waters of Seneca Creek and that some had been found here by drillers for salt, they came out to view the Guernsey County field. The Jeffersonian of April 5, 1861, quotes one of them, as follows: “I can see no reason why your county is not full of oil, in fact, I feel sure of it.” About this time oil also was found on Duck Creek in Noble County, and the excitement there rivaled that in Pennsylvania. According to Wolfe, the excitement extended into Guernsey County, and drilling began in the area of Cumberland. The Jeffersonian, which kept its readers informed weekly as to the progress made in the drilling, reported in April 1861 that a well had reached a depth of 90 feet and a strike was expected at any time. Wells were drilled in 1861 at Cambridge, Old Washington, Middletown, Kimbolton and other places. As all were shallow wells, not much oil or gas was found. “For several reasons this first Guernsey County oil excitement died down in a few months,” Wolfe wrote. “The prospectors were not acquainted with the business. Holes were sunk in a haphazard way. The immense production in Pennsylvania had so lowered the price of oil that the industry ceased to be attractive, then the Civil War opened and diverted the attention of the people to other things.” Not until 10 years later was there a revival of interest in Guernsey County oil and gas. The following appeared in the Guernsey Times of Nov. 3, 1870. “Within three miles of Cambridge, in a direct line on the premises of David Sarchet Sr., is an inexhaustible salt well, from which constantly flows a stream of salt water several inches in diameter, and with it a large and constant supply of natural gas. We have the authority of a scientific gentleman from the East, who visited this well during the oil excitement here, for saying that there is an abundance of gas flowing from this well to light up a place much larger than Cambridge, and that it could easily be conducted here for that purpose at very great costs; and he expressed great surprise that steps had never been taken to utilize so valuable a production of nature. The sub-


ject is one that should sufficiently claim the attention of the city fathers as to cause them to make such investigation of the matter as to ascertain the feasibility of the plan.â&#x20AC;? But the city fathers did nothing, according to Wolfe, and the people of Cambridge continued to use the kerosene lamps. About 1885, oil and gas were found near Lima and Findlay, Ohio. The excitement resulting from these discoveries reached into Guernsey County. There still lingered the belief that oil and gas could be found here. Prospectors from Pennsylvania came into the county again, and began drilling in Senecaville. Seneca oil had never been forgotten. The drilling there was abandoned on account of a strong flow of salt water. Testing was done in other parts of the county. On the Hutton farm in Jackson Township a well was drilled that produced 21 barrels of oil a day. Three or four wells were sunk to the Berea sand at Quaker City in 1886-87, and some gas was found, which was utilized locally. About the same time a well near Kimbolton produced a moderate flow of gas. Three wells drilled in Cambridge Township prior to 1892 yielded gas in paying quantities. Oil was found at the edge of Senecaville in 1897, at a depth of 167 feet. Before 1900, the most productive gas field in Guernsey County was the Harmony field in Jackson Township. The Cambridge Light and Fuel Company had several wells there, some of which produced from 1,000,000 to 2,000,000 cubic feet a day. This was piped to Cambridge and Byesville. For several years following the oil and gas activities of the 1880s and 1890s, the interest for languished but never died. Some venturesome prospectors would lease land and sink wells and occasionally make strikes. Oil was found in Lore City and Monroe Township. The produc-

Dix Communications - Oil & Gas June 2012 Edition

31

tion was not large at either place. Guernsey County had its greatest gas boom during 1926-27. Drilling activities were most extensive in Knox, Adams and Westland townships, in which there were more than 100 heavy producing wells. One of the first of these was drilled in the northwestern part of Knox Township by the Ohio Fuel Gas Company. The initial yield of this well was beyond the measuring capacity of any available instrument, according to Wolfe. However, it was claimed to be from 50,000,000 to 75,000,000 cubic feet a day. Immediately following this sensational strike, a number of companies began drilling and wells yielding from 2,000,000 to 30,000,000 cubic feet a day became numerous. The field was extended as the drilling advanced. By the close of 1927 fairly definite boundaries were established, showing it to be a strip about four miles wide and 25 miles long, extending from northeast to southwest. It not only included Knox, Adams and Westland townships, but extended to Jackson, Wheeling, Monroe and some other townships. A 12-inch distributing main was laid by the Ohio Fuel Gas Company and much of the product carried to points in Ohio, West Virginia, Pennsylvania and Michigan. Following the gas strikes, oil was found in the southern part of the territory. Some of the oil wells were said to yield from 50 to 300 barrels a day. At the close of 1927, there were about 40 wells producing oil in Jackson and Westland townships. This was sent to the refineries of Parkersburg, W.Va., through a main laid by the Buckeye Pipe Line Company. Much oil was found in Wheeling Township, and this, too, was piped to refineries.


32

Oil & Gas June 2012 Edition - Dix Communications

Infinity Oilfield Services opens site in Newcomerstown

T

he anticipated oil and gas boom in Ohio has prompted one company to re-locate to Newcomerstown â&#x20AC;&#x201D; and with that â&#x20AC;&#x201D; bringing more than 50 jobs to Tuscarawas County. â&#x20AC;&#x153;Ohio should be bigger than Texas in the oil and gas (industry) â&#x20AC;&#x201D; thatâ&#x20AC;&#x2122;s what they are saying,â&#x20AC;? said Kevin Glazer, who is in field operations/dump truck Niki Wolfe manager at Infinity Oilfield Dix Communications Services in Newcomerstown. Chad Kerns is the operations manager of the Ohio yard for Infinity Oilfield Services LLC. Infinity Oilfield Services is based out of Williamsport, Pa. Glazer, who once drove a truck for a living, switched careers and joined Infinity Oilfield Services in Newcomerstown. The Newcomerstown operation just opened in May. Right now, he said they are mostly working in the Carrollton area. But, he said their trucks, which supplies water as well as stone/gravel for Chad Kerns is the operations manager maintaining the of the Ohio yard for Infinity Oilfield road into the oil Services LLC. Cheri Hill, Manager (740) 439-7777

P.O. Box 1837 Cambridge, Ohio 43725

Kevin Glazer of Infinity Oilfield Services in Newcomerstown stands in front of a row of the large water hauling trucks (they are also known as "straight trucks") that are used at oil and gas well production sites.

well, will go within a 100-mile radius of Newcomerstown. However, he said there are workers from the Newcomerstown location working along the Ohio River supplying water to oil wells. They take a van from Newcomerstown to the river where their trucks are located. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ll pretty much go where they (oil well supervisors) want us to go,â&#x20AC;? he said. â&#x20AC;&#x153;We never know on a day-to-day what weâ&#x20AC;&#x2122;re going to get into.â&#x20AC;? Glazer said his employees work a 12-hour shift (6 a.m. to 6 p.m.) and work four days on and have two days off, but their days off are never the same two days. Soon, mechanics will be coming to the Newcomerstown site and trucks will be repaired in-house. In Newcomerstown, they have 30 water trucks and will have another 20 more by the end of the month. However, they also have 10 specially-made chrome dump trucks from San Antonio, Texas, that are used to haul stone and gravel for the road

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Dix Communications - Oil & Gas June 2012 Edition

MAST TIRE Commercial Truck Tires – we also offer –

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Looking at the computer, Kevin Glazer of Infinity Oilfield Services in Newcomerstown looks at what orders they have for the upcoming days.

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into the well site. More dump trucks are expected to be added to the fleet. As far as hiring more drivers, Glazer said they are always taking applications. He said drivers, both men and women, must have a CDL, Class A, license with no Hazmat endorsement. To learn more about Infinity Oilfield Services, visit www.infinityoilfield.com or stop by their Newcomerstown location which is behind the Newcomerstown Truck Stop on Adena Drive. “Right now, we’re in a good location, between I-77 and US 36,” Glazer said. “We can go four different directions.” And they are looking forward to what Ohio has to offer — beneath the ground.

33

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740-498-4242


34

Oil & Gas June 2012 Edition - Dix Communications

IT’S HAPPENING HERE...

it’s happening now

The Ohio Oil and Gas Energy projections with over 6,000 reported jobs created or supported by Education Program (OOGEEP) the industry. is a non-profit statewide educaThe long dormant steel industry has returned to Youngstown tion and public outreach program. and Lorain as plants prepare to meet the demands of an invested As one of only two organiza- and optimistic oil and gas industry. tions of it’s kind in the country, Ohio, a state that has witnessed countless companies – and inwe provide a variety of programs dustries – leave it’s borders, is now welcoming new parties conthroughout the state, focusing tributing incredible assets and creating new jobs in our communiprimarily on teacher workshops, ties. scholarships, student education, Billions of dollars in investments have poured into our state by firefighter training, and research. these companies seeking to create the needed infrastructure reOne of our most vital func- quired to develop these untold volumes of energy. Rhonda Reda tions, however, and one of utmost In short – it’s happening here, and it’s happening now. The opOhio Oil and Gas importance now and in the years portunity to continue grow our economy is tied directly to continEnergy Education ahead, is the development of our ued success in the Utica Shale. Program industry workforce. However, it is important to recognize we are still in the very Last September, we released infancy of this movement. In order to ensure continued success, our 2011 Economic Impact Study, providing the first compre- we remain fully committed to the development of Ohio’s most hensive analysis about how planned development in Ohio’s Utica valuable resource – our dedicated work force. shale formation could impact the state in the coming years. The next few years are critical to Ohio’s economic rebirth. As And with projections of over we work through the leasing and 204,000 Ohio jobs created and exploration phase of development, supported by the development of Billions of dollars in investments have our organization and the industries this geological gift, the positive this recovery are working poured into our state by these com- driving impact it will have in eastern Ohio diligently with education centers and beyond is nothing short of as- panies seeking to create the needed and training facilities across the tounding. infrastructure required to develop state to ensure Ohioans are best In the few short months since prepared and best positioned to fill the study’s release, we are already these untold volumes of energy. the jobs that will soon be in high seeing the benefits of shale dedemand. velopment come to fruition with enormous and immediate gains in Ohio’s workforce. Reported Ronda Reda is executive director of the Ohio Oil and Gas employment tied to shale development has surpassed our initial Energy Education Program.

61077 Southgate Parkway Cambridge, OH 43725 Phone: (740) 995-3158 Cell: (330) 795-8552

Family Campground

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Mon. - Fri. 8-7 Sat. 8-5, Sun. 9-4

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(Near Salt Fork Lake)

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Bobby Elam District Manager

David Martin North Division Ops Manager

8583 Georgetown Rd., Unit A Cambridge, OH 43725

8583 Georgetown Rd., Unit A Cambridge, OH 43725

phone (740) 255-5393 cell (740) 630-3071 robert.elam@wildcatwireline.com

phone (713) 338-1505 david.martin@wildcatwireline.com

35

10037431

Dix Communications - Oil & Gas June 2012 Edition


36

Oil & Gas June 2012 Edition - Dix Communications

OHIO WELL ACTIVITY

by the numbers

Marcellus Shale 8 0 3 4

Wells Wells Wells Wells

Permitted Drilling Drilled Producing

15 Total Horizontal Permits

Utica Shale 127 25 43 16 10 1

Wells Wells Wells Wells Wells Wells

Permitted Drilling Drilled Completed Producing Plugged

221 Total Horizontal Permits

Data as of 5/21/12 Source: Ohio Department of Natural Resources

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10039394


Dix Communications - Oil & Gas June 2012 Edition

37

Office: 740-435-0003 Toll Free: 877-435-0003 Each office independently owned and operated.

www.realestatepartners.org

927 Wheeling Ave., Suite 206, Lori Dickens (740) 255-0182 Cambridge, OH 43725

All Inclusive Homes For Lease! Check Out Our Inventory at ... www.dannylowerealestate.com

We have single family homes for lease. These properties are fully furnished, utilities and maintenance managed by the Owners. Owners pay our one time fee. We don’t charge the LESSEE.

Call Lori or Danny For Details!

Danny Lowe Philip Carpenter (740) 732-7000 (740) 260-4128

DID YOU SIGN AN OIL AND GAS LEASE AND DID NOT GET PAID? • We might be able to help you obtain a lease in Guernsey or Noble Counties. • We work for you, the mineral rights owner, and have a landowner friendly lease. • (No disposal wells, no use of your water, no regional transmission lines). • The Guernsey County offer is $5,000 per acre and 20% gross. • The Noble County offers are between $4,500 to $5,000 per acre and 18% to 20% gross depending on your location.

CALL DANNY LOWE AT 740-732-7000 OR PHILIP CARPENTER AT 740-260-4128 10038468


38

Oil & Gas June 2012 Edition - Dix Communications

Industry leader comes to Southeast Ohio

H

alliburton, a leading provider of innovative products and services to the energy industry, is pleased to be one of the newest members of Zanesville-Muskingum Countyâ&#x20AC;&#x2122;s business community. Halliburtonâ&#x20AC;&#x2122;s history in Ohio can be traced to the 1950s, and with the recent groundbreaking for our new site in Zanesville, we are excited about strengthening our roots in Ohio once again. The Zanesville facility will be a full-service center supporting eight or more of Halliburtonâ&#x20AC;&#x2122;s business lines. The site will measure approximately 135,000 square feet and house an administration office, maintenance shop, general warehouse and bulk storage facilities for sand and cement. Halliburton has already hired more than 100 Ohio residents in preparation for the opening of the new facility, which is expected to employ approximately 300 people. Job openings include field operators, field engineers, diesel mechanics, material handlers, and some management and administrative support functions. Please visit www.gohalliburton.com <http://www. gohalliburton.com> to view and apply for job openings and to

learn about Halliburtonâ&#x20AC;&#x2122;s competitive compensation packages. At Halliburton, we are committed to being a good corporate neighbor by devoting time and resources to charitable organizations and educational institutions wherever our people live and work. Each year around the world, our employees complete hundreds of community projects and donate thousands of volunteer hours. We look forward to building strong ties in the Zanesville community and to serving our customers in this region for many years to come.

Halliburton has already hired more than 100 Ohio residents in preparation for the opening of the new facility, which is expected to employ approximately 300 people.

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Dix Communications - Oil & Gas June 2012 Edition

39

Halliburton broke ground Tuesday in the EastPointe Business Park east of Zanesville. Participating were, l to r, Jeff Hibler, vice president of Halliburton; Ron Hall, senior vice president; Ohio Gov. John Kasich; Mike Jacoby, executive director of the Muskingum County Port Authority; and David Mustine, general manager of Jobs Ohio.

While we’re now in 80 countries around the world, we’ve never forgotten our roots. Halliburton has had a business presence in Zanesville, Ohio, dating back to the early 1950s. Since then, we’ve opened additional facilities throughout the state. Now, with exciting opportunities emerging in the Utica shale play, Halliburton is returning to its Ohio roots by increasing our presence in Zanesville with the construction of a new facility—and taking our place as a major area employer. Thanks to new local opportunities, Halliburton is hiring. Please visit www.gohalliburton.com to view our job opportunities. For more information about Halliburton, visit us online at www.halliburton.com.

Solving challenges.™

HALLIBURTON

© 2012 Halliburton. All rights reserved. 10039236


Dix Communications - Oil & Gas June 2012 Edition

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Oil & Gas June 2012 Edition - Dix Communications

Association opposes Kasich proposal

Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association, said recently that the Ohio Business Roundtableâ&#x20AC;&#x2122;s analysis of Gov. Kasichâ&#x20AC;&#x2122;s proposal to increase the severance tax on oil and natural gas producers throughout the state is based on several ďŹ&#x201A;awed assumptions. â&#x20AC;&#x153;The study, conducted by Ernst & Young, drastically underestimates the up-front cost of developing a horizontal well,â&#x20AC;? Stewart said in a news release. â&#x20AC;&#x153;The cost of an average horizontal well in Ohio is between $8 and $12 million, far more expensive than the reportâ&#x20AC;&#x2122;s assumption of $4 million per well. The report also assumes that an average Ohio well will produce 90,000 barrels of natural-gas liquids in the initial

year of operation. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re also very curious as to why the CEOs and business leaders that comprise Ohioâ&#x20AC;&#x2122;s Business Roundtable would support a tax increase on another business, particularly when they pay a commercial activity tax (CAT) rate of just 26 cents per $100 in revenue, while asking one industry to pay a rate nearly 16 times higher.â&#x20AC;? The Ohio Oil and Gas Association is a trade association with more than 2,500 members involved in the exploration, production and development of crude oil and natural gas resources within the state of Ohio. For more information, visit www.ooga.org.

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Dix Communications - Oil & Gas June 2012 Edition

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Senate passes bill Creates annual environmental award for oil and gas drillers

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The latter also would be responsible for setting procedures for selecting a winner and for designing â&#x20AC;&#x153;a plaque or other commemorative item, according to an analysis by the stateâ&#x20AC;&#x2122; s legislative service commission. â&#x20AC;&#x153;I have been told by members of the oil and gas industry that this type of program has been very successful in other states and that similar awards have been highly sought after,â&#x20AC;? Balderson said. â&#x20AC;&#x153;It is my hope that this bill ... will play a small role in encouraging mindful stewardship on the part of those many businesses across the state.â&#x20AC;? Sen. Michael Skindell, a Democrat from the Cleveland area, cast the lone no vote. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s my belief that itâ&#x20AC;&#x2122;s the governorâ&#x20AC;&#x2122;s prerogative to grant an award and that decision should lay within the governorâ&#x20AC;&#x2122;s office, that this legislature should not be dictating to the governor in granting awards in this type of field,â&#x20AC;? he said. â&#x20AC;&#x153;And I think the legislature is overstepping its bounds.â&#x20AC;?

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he Ohio Senate approved legislation Tuesday honoring environment-minded oil and gas drillers. Senate Bill 328 would require the Ohio Department of Natural Resources to create the Governorâ&#x20AC;&#x2122;s Award for Environmental Stewardship, targeted at companies and individuals involved in the oil and gas inMarc Kovac dustry who represent â&#x20AC;&#x153;wise enDix Capital Bureau vironmental stewardship.â&#x20AC;? â&#x20AC;&#x153;It will allow Ohio to show its appreciation to those who balance productivity with conservation, profitability and growth with smart-minded stewardship,â&#x20AC;? said Sen. Troy Balderson, a Republican from Zanesville. The final vote was 30-1, and the legislation heads to the Ohio House for further consideration. Potential honorees could be nominated by lawmakers, private citizens or industry representatives, under rules that would be developed by ODNR.

10039032


46

Oil & Gas June 2012 Edition - Dix Communications

Oil & Gas Fact Sheet

Ohioâ&#x20AC;&#x2122;s rich natural gas and crude oil reserves provide many opportunities to help the stateâ&#x20AC;&#x2122;s economy grow and prosper. â&#x20AC;˘ The industryâ&#x20AC;&#x2122;s 4,490 direct jobs and another 12,950 indirect jobs support a total of 17,440 Ohio jobs. â&#x20AC;˘ The industry is responsible for $793 million per year in Ohio salaries. â&#x20AC;˘ Ohio keeps $793 million per year in the state when buying locally produced natural gas and crude oil. â&#x20AC;˘ Ohio consumers save $30 million per year in avoided interstate pipeline transportation costs, and another $9.2 million per year due to the price reducing impact of local natural gas supplies. â&#x20AC;˘ The industry reinvests $238 million annually on exploration and development. â&#x20AC;˘ The industry pays over $32.7 million annually in local, state and federal taxes. â&#x20AC;˘ The industry generates approximately $988 million in gross state product and a statewide output or sales of $1.7 billion per year. The industry paid over $90 million in royalties and provided another $61 million in free gas last year to local landowners (mineral interest owners) including farmers,

businesses, schools, churches and local governments with wells on their property. â&#x20AC;˘ Ohioâ&#x20AC;&#x2122;s a national energy leader in natural gas and crude oil production. â&#x20AC;˘ Ohio is ranked fourth in the total number of wells drilled. Ohio has drilled over 273,000 wells to date, followed only by Texas, Oklahoma and Pennsylvania. â&#x20AC;˘ Ohio drilled 460 new wells in 2011. â&#x20AC;˘ Ohio produced 4.9 million barrels of crude oil in 2011. Today, crude oil is reďŹ ned into more than 6,000 everyday products including medicines, personal care products, plastics, synthetics and fuel. â&#x20AC;˘ Ohio produced 73 billion cubic feet of natural gas in 2011, creating enough energy to heat over 1 million Ohio homes and businesses. Nearly 7 out of every 10 homes are heated with natural gas. Almost 100% of the Ohio natural gas produced remains in the state. â&#x20AC;˘ Ohioâ&#x20AC;&#x2122;s natural gas and crude oil production has one of the smallest environmental surface footprints of any energy source. â&#x20AC;˘ Advances in technology leave smaller footprints and less surface disturbance.

Our Foundation,

Your Future. At Peoples Bank, our history is tied to your success. 110 years ago, Peoples Bank was built by oilmen and backed by the idea that working together matters. Today, we continue to honor that tradition by serving the business and personal clients who are part of the oil and gas industry in our communities. By working with you, weâ&#x20AC;&#x2122;re focused on building your success. Whether you need strategies for wealth management or lending options for your oil and gas business, Peoples Bank has the programs, the people and the proven history to turn your dreams into reality.

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Dix Communications - Oil & Gas June 2012 Edition

• The average well site footprint today is 30 percent of the size it was in 1970. Today, Ohio well sites are typically the size of a family dining room, and the actual well has a diameter about the size of a soccer ball. • Specific environmental laws and regulations are regularly inspected and supervised by the Ohio Department of Natural Resources (ODNR) Division of Mineral Resources Management (DMRM)and other government agencies. Ohio’s industry is continuing to create energy, economic and lifestyle benefits ---yesterday, today and into the future. Ohio’s natural gas and crude oil producers are truly Ohio’s most dependable energy farmers. They choose

47

to participate in a high risk business, and they are accustomed to working long hours and operating under adverse weather conditions. Innovations, perseverance, and hard work are key to survival in an industry built on a variety of uncertain conditions geological, economical and operational. Through an ongoing commitment of Ohio’s natural gas and crude oil producers, the domestic industry remains strong. Ohio’s supply of natural energy resources is indeed significant. As the states supply adds to the national supply, our resources are helping keep prices in balance, while also helping us be more independent from foreign energy supplies.

Photo by Kevin Graff, The Alliance Review

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Oil & Gas June 2012 Edition - Dix Communications

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Oil & Gas June 2012 Edition - Dix Communications

WELCOME OIL AND GAS WORKERS! The

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Dix Communications - Oil & Gas June 2012 Edition

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42

Oil & Gas June 2012 Edition - Dix Communications

TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY (By number of sites)

Carroll County .......... 78 2. Columbiana County .. 34 3. Jefferson County ....... 25 4. Monroe County......... 21 5. Harrison County ....... 12 6. Belmont County ........ 10 Stark County ............ 10 7. Mahoning County ...... 9 8. Guernsey County ....... 7 Noble County ............ 7 Portage County.......... 7 9. Tuscarawas County.... 5 10. Muskingum County .... 3 11. Coshocton County ...... 2 Trumbull County ........ 2 Knox County ............. 2 12. Geauga County ......... 1 Ashland County ......... 1 Medina County .......... 1 1.

Well Sites in various stages: Permitted, Drilling, Drilled, Completed, Producing, Plugged Source: Ohio Department of Natural Resources


June 2012 Oil & Gas  

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