Shale Gas News – February 2, 2019

Bill desRosiers
External Affairs Coordinator, Cabot Oil & Gas

The Shale Gas News, heard every Saturday at 10 AM on 94.3 FM, 1510 AM and Sundays on YesFM, talked about the Trans Mountain Pipeline, Mariner East shut down, PA Marcellus drilling map and much more last week.

The Shale Gas News has grown again; welcome Gem 104 as our FOURTH station! Gem 104 helps to solidify the Shale Gas News coverage in an important Marcellus region, PA’s northern tier. The Shale Gas News is now broadcasting in Bradford, Lackawanna, Lancaster, Lebanon, Luzerne, Lycoming, Pike, Sullivan, Susquehanna, Tioga and Wayne Counties, as well as in greater central PA. The Shale Gas News is aired on Saturday or Sunday depending on the station.

Every Saturday Rusty Fender and I host a morning radio show to discuss all things natural gas. This week, as guests, we had Dan Kish, Senior Fellow with the Institute for Energy Research (IER) and Frank Scavo, CEO of Scavo Investment Properties.

Shale Gas News

The Shale Gas News, typically, is broadcast live. On the February 2nd show (click above), we covered the following new territory (see news excerpts below):

  • America Is Producing the Wrong Kind of Oil. The shale boom has created a world awash with crude, putting a lid on prices and markedly reducing U.S. dependence on imported energy. But there’s a growing problem: America is producing the wrong kind of oil.  Texas and other shale-rich states are spewing a gusher of high-quality crude — light-sweet in the industry parlance — feeding a growing glut that’s bending the global oil industry out of shape.
  • Trump’s Price Policies Hurting US Shale Activity. With oil prices around the mid-50s, more than three quarters of U.S. shale E&P companies are unable to cover capital spending from operating cash flow. Because, as Rystad Energy ShaleWellCube notes, the well-head break-even prices for 2018 were on average too low for comfort at Eagle Ford $47.68; Bakken at $44.13; $42.76 in the Permian Midland and $37.94 in Permian Delaware. The decline in U.S. West Texas Intermediate (WTI) crude futures from a near four-year high of $76.90 Oct. 3, 2018 to a one-year low of $53.76 Jan. 18 has hit the over-leveraged independents hard.
  • BLM releases notices for oil, gas lease sale. The Bureau of Land Management (BLM)’s Montana/Dakotas State Office today released the March 2019 Notice of Competitive oil and gas lease sale list, which includes 305 parcels totaling about 167,113 acres. The sale is scheduled to occur online at http://www.energynet.com starting on March 25, 2019. The proposed parcels are located in 15 counties in Montana (Carbon, Musselshell, Valley, Blaine, Toole, Big Horn, Carter, Custer, Dawson, Fallon, Powder River, Richland, Roosevelt, Rosebud, and Wibaux), and Fall River County, South Dakota.
  • Canada May Have Overpaid For Trans Mountain Pipeline. Canada’s government negotiated a price to buy the controversial Trans Mountain Pipeline at the higher end of estimates, while further delays in the expansion project would reduce the final price that the federal government can obtain when it re-sells it, Canada’s Parliamentary Budget Officer (PBO) said in a report on Thursday.  The Trans Mountain expansion has become one of the most controversial pipeline projects in North America as it pitted two provinces—Alberta and British Columbia—against each other.
  • Columbia Sues Southwestern Energy for Shorting Royalties in WV. Here’s an interesting twist on the theme of drillers shorting leaseholders out of royalty money. Usually such cases involve drillers claiming post-production deductions from landowner royalty checks. This time the landowner/rightsholder is Columbia Gas Transmission (pipeline company owned by midstream giant TransCanada), and the claim is that Southwestern Energy (driller) is not paying royalties for gas produced but not actually sold.
  • All of Mariner East 1 NGL Pipe Shut Down Indefinitely by PA PUC. MDN previously reported that last Sunday a new sinkhole appeared exposing a tiny section of the Mariner East 1 (ME1) NGL pipeline in Chester County, PA, prompting Sunoco Logistics Partners to close down ME1 in the Greater Philadelphia area. Following discussions with state Public Utility Commission (PUC) investigators, Sunoco Logistics Partners closed down the remainder of ME1 on Monday. The pipeline, at the prompting (demand?) of the PUC, is completely shut down, flowing no ethane or propane from southwest PA to the Marcus Hook refinery near Philly. Which is a shame.
  • PA Marcellus Map – Where Does Drilling Happen? A few weeks ago MDN brought you an updated map showing where Utica drilling has (and has not) happening in Ohio. We heard from a number of MDN subscribers asking for similar maps for Pennsylvania and West Virginia. We struck out for WV, but we do have a map that shows the location for shale wells in PA. Click here to view the map online.

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