marcellus and utica shale databook 2012 - sample pages for vol. 3

Marcellus and Utica Shale Databook 2012 Volume 3: 2012 Jul-Dec Drilling Permit Maps; Production Predictions; Supply Chain 101

80 Detail Maps, including individual county maps for permits issued Jul-Dec; Impact of New Regulations, and More!

Sample Pages

©Marcellus and Utica Shale Databook 2012 – Volume 3 Sample Pages

Table of Contents

Section I - Overview

Introduction & What’s New 6-7

Drilling Update Jul-Dec 2012 8-11

Henry Hub Prices

Baker Hughes Rig Counts

Marcellus & Utica Production 2007-2011

Predictions: Marcellus & Utica Production 2012

Regulatory Update 12-14

PA, OH, WV, NY, MD, SRBC, DRBC, EPA, DOI

Marcellus/Utica Lease Offers (map) 15

2012 Ohio Well Production Results (table & map) 16-17

Guide to Using the County Maps (chart) 18

Section II - Pennsylvania Permits

PA Gas Well Permits – Entire State (map) 19

Allegheny County (map) 20

Armstrong County (map) 21

Beaver County (map) 22

Bradford County (map) 23

Butler County (map) 24

Cameron County (map) 25

Centre County (map) 26

Clarion County (map) 27

Clearfield County (map) 28

Section II - Pennsylvania Permits (continued)

Clinton County (map) 29

Crawford County (map) 30

Elk County (map) 31

Fayette County (map) 32

Forest County (map) 33

Greene County (map) 34

Indiana County (map) 35

Jefferson County (map) 36

Lawrence County (map) 37

Lycoming County (map) 38

McKean County (map) 39

Mercer County (map) 40

Potter County (map) 41

Somerset County (map) 42

Sullivan County (map) 43

Susquehanna County (map) 44

Tioga County (map) 45

Venango County (map) 46

Warren County (map) 47

Washington County (map) 48

Wayne County (map) 49

Westmoreland County (map) 50

Wyoming County (map) 51


Table of Contents

Section III - Ohio Permits

OH Gas Well Permits – Entire State (map) 52

Athens County (map) 53

Belmont County (map) 54

Carroll County (map) 55

Columbiana County (map) 56

Coshocton County (map) 57

Guernsey County (map) 58

Harrison County (map) 59

Holmes County (map) 60

Jefferson County (map) 61

Mahoning County (map) 62

Monroe County (map) 63

Morrow County (map) 64

Noble County (map) 65

Portage County (map) 66

Stark County (map) 67

Trumbull County (map) 68

Tuscarawas County (map) 69

Washington County (map) 70

Section IV - West Virginia Permits

WV Gas Well Permits - Panhandle (map) 71

WV Gas Well Permits - Lower State (map) 72

Barbour County (map) 73

Brooke County (map) 74

Doddridge County (map) 75

Gilmer County (map) 76

Grant County (map) 77

Greenbrier County (map) 78

Harrison County (map) 79

Kanawha County (map) 80

Lewis County (map) 81

Marion County (map) 82

Marshall County (map) 83

Monongalia County (map) 84

Nicholas County (map) 85

Ohio County (map) 86

Pleasants County (map) 87

Preston County (map) 88

Putnam County (map) 89

Randolph County (map) 90

Ritchie County (map) 91

Taylor County (map) 92

Tyler County (map) 93

Upshur County (map) 94

Webster County (map) 95

Wetzel County (map) 96


Table of Contents

Section V – Marcellus/Utica Shale Supply Chain Opportunities

Introduction 97

Exploration (table) 98

Lease, Acquisition, Permits (table) 99

Site Construction (table) 100

Drilling & Well Construction (table) 101

Hydraulic Fracturing (table) 102

Well Completion (table) 103

Production & Pipeline (table) 104

Strategy for Locating & Contacting Prospects 105-111

About ShaleNavigator ShaleNavigator (ShaleNavigator.com) is a web-based mapping solution that displays information specific to the leasing and development of shale plays in the United States, with particular focus on Marcellus and Utica development activity. Other U.S. Shale plays are available as well within the interface. ShaleNavigator’s Available Property listing service allows landowners to display their properties within the context of the development map, and ShaleNavigator's unique Newsboard locates and maps news, data, and deals on a daily basis. ShaleNavigator is a product of Select Analytics, LLC, a geospatial consulting firm that has served government, real estate development, environmental, and energy industries for over 15 years. Subscriptions are still available, and there is a free, 7 day trial account that can be activated by visiting www.shalenavigator.com. About Marcellus Drilling News Marcellus Drilling News (MarcellusDrilling.com) is an online news service dedicated to bringing news and resources to landowners and businesses in the Marcellus and Utica Shale (Appalachian) region of the United States. MDN scours the news daily, identifying and analyzing what’s happening with exploration, production, processing and delivery of Marcellus and Utica natural gas and its derivatives. We are blessed in the Marcellus region to have an abundant supply of clean energy beneath our feet, ready to be used. MDN chronicles the journey to energy independence by tapping the Marcellus and Utica Shale.

Methodology and Accuracy Information in this report is from a combination of publicly available databases, company press releases, news reports, and in-house proprietary information. While every effort was made to ensure the accuracy of the data, readers should be advised that there are no assurances of 100 percent accuracy. Information provided is only as accurate and comprehensive as the source documents. Maps found throughout the document provide pictures of data, that independently, show themes divided by county, state, or region, depending on the subject. At times, multiple “layers” are displayed in a single map to provide context where one layer might have impact or relate to another. Maps have been produced from the ShaleNavigator web-based mapping system and the Select Analytics desktop mapping programs. Use of information provided in this report is at your own risk. Disclaimer: Select Analytics, LLC, dba “ShaleNavigator” and Marcellus Drilling News, are not liable for any direct or indirect damages suffered related to the use of this Databook product arising from any errors, omissions, inaccuracies, or any other inadequacies of the Databook or the Recipient’s use of the Databook. In no event will Select Analytics, LLC, dba “ShaleNavigator” or Marcellus Drilling News liability to the Recipient or anyone else exceed the fee paid for the Databook product.

http://www.shalenavigator.com/

http://www.shalenavigator.com/

http://marcellusdrilling.com/


DRILLING UPDATE: JUL-DEC 2012


The Mighty Marcellus Roars – The Utica Grows Up The second half of 2012 saw an acceleration of the trends that began in the first half of the year. As we stated in Databook Volume 2, perhaps we should have seen it coming, but we didn’t. The “it” was the collapse of the commodity price for natural gas. The spot price for natural gas sank to an average $1.95 per million Btus in April. By the end of the year it had rebounded to $3.34 MMbtus (see the chart at right). In a near-perfect commodity market like natural gas, when supplies outstrip demand, prices for the commodity fall, and that’s just what we saw in 2012 (see Databook Volume 2 for an explanation of natural gas supply and demand economics). As recently as June 2011, the commodity price for natural gas stood at $4.54 MMbtus. Energy producers are less willing to drill when the price is at a level where profits are small or non-existent. Gas storage and pipeline company Spectra Energy estimates the “breakeven price” which drillers need to receive just to stay in the black is $4.26 MMbtus for drilling in the central Marcellus region, and $3.44 MMbtus in the less-expensive-to-drill area of northeastern PA. Energy consulting firm Enercom pegs the average breakeven number for the entire Marcellus at $2.88 MMbtus. Only the drillers themselves know the real breakeven price—it’s different for each driller (and a closely guarded secret they don’t share). When the price started heading lower in the latter half of 2011, it took a few months but we eventually saw rig counts—an indication of willingness to drill—go steadily down for the first nine months of 2012 (see the rig count chart at right). However, rig counts seemed to have reached their low point in September and since then have steadily inched up. One notable event related to rig counts is that near the end of the year Ohio’s rig count passed that of West Virginia—the first time that’s happened in years, thanks to the white hot Utica Shale.


SPECIAL: 2012 Ohio Well Production Results


Unfortunately the Ohio Dept. of Natural Resources (ODNR) only requires annual reporting for production results. The first real official insight we will have into how productive (or not) the Utica Shale is for natural gas will be in March 2013. However, ahead of that, the Databook has collected what we know about Ohio production from press statements issued by the producers themselves. Below is that table. Well locations are mapped on the next page.


GUIDE TO USING THE COUNTY MAPS


#1 – The municipality or

operator name is followed by two sets of numbers, with the second number in parentheses. Example: Plumcreek – 4 (3). The first number - “4” in this case - shows the total number of permits issued. The second number - “(3)” in this case - indicates how many wells the permits were issued for. Usually a single well requires several permits during drilling, to allow the driller to continue to the next stage.

#2 – A purple dot indicates

where a well pad is located. Each well pad can have from one to ten wells on it. Typically a pad will contain 2-4 wells. Because of the size of the maps (vastly reduced to show an entire county), sometimes the purple dots will be “on top of each other” and sometimes will not be labeled with a driller’s name.

#3 – The boundary of each

county is indicated with a blue outline. County names are also in the same blue color.

#4 – Major gas pipelines are indicated with red lines and the name of the pipeline somewhere along the line.

#5 – NEW in Volume 3! The location for pipeline compressor stations is indicated by a green triangle–the name is next to it.


Armstrong County

Section II – Pennsylvania Permits

By Municipality: Bethel – 1 (1) Boggs – 2 (2) Burrell – 4 (3) East Franklin – 3 (3) Gilpin – 2 (1) Madison – 1 (1) Manor – 1 (1) North Buffalo – 2 (2) Plumcreek – 4 (3) Rayburn – 2 (2) South Bend – 1 (1) South Buffalo – 1 (1) Sugarcreek – 1 (1) West Franklin – 1 (1) By Operator: Chevron – 3 (2) EQT – 8 (6) EXCO Resources – 2 (2) MDS Energy – 4 (4) Snyder Brothers – 7 (7) XTO Energy – 2 (2)


Columbiana County

Section III – Ohio Permits

By Municipality: Butler – 1 (1) Center – 2 (2) Elk Run – 3 (3) Fairfield – 3 (3) Franklin – 3 (2) Hanover – 2 (2) Knox – 1 (1) Middleton – 1 (1) Salem – 5 (4) By Operator: Chesapeake Energy – 20 (18) Sierra Resources – 1 (1)


Marion County

Section IV – West Virginia Permits

Entire County: 156 (44) By Operator: Chesapeake Energy – 45 (12) EQT – 3 (2) Trans Energy – 35 (6) Waco Oil & Gas – 5 (3) XTO Energy – 68 (21)


Section V – Marcellus/Utica Supply Chain Opportunities

Exploration Lease, Acquisition,

Permits Site Construction

Drilling & Well Construction

Hydraulic Fracturing

Well Completion Production &

Pipeline

What Happens During This Stage:

o Vertical "air rig" (uses air and not fluid for drilling) is mobilized/brought to site

o Air rig is set up and used to drill a vertical wellbore to a point just above the shale layer

o Several casings (metal pipe, cement) are placed into the wellbore to protect the water aquifer

o After all casings are in place & cemented, a wellhead is placed at top to prevent casing movement

o Air rig is mobilized out (removed)

o A much larger horizontal rig using drilling mud (water or oil-based drilling fluid) is mobilized in

o Water used for drilling is trucked in and stored in a pit or special tanks

o Downhole motors and electromagnetic survey equipment is used to drill the wellbore

o The wellbore is drilled in a curve, then horizontally through the shale layer

o Steel pipe is inserted and cemented in place

o Both drill rigs are contained in a special area encased with pit liners to guard against fluid spills

o As drilling is done, drill cuttings (rock, dirt and fluids) are removed and trucked away

o Geologists & engineers collaborate with drilling crews to analyze and fine tune the drilling process

o When the horizontal wellbore is done, the horizontal rig is mobilized out (removed) to next job

Supply Chain Opportunities: 213111 - Gas well drilling on a contract basis 213112 - Geological exploration for oil and gas on a contract basis 213112 - Mud service for oil field drilling on a contract basis 213112 - Cementing oil and gas well casings on a contract basis 213112 - Building, erecting, repairing, and dismantling oil and gas field rigs 238320 - Engineering structure painting (e.g., oil storage tank, water tower) 238990 - Crane rental with operator 238990 - Manufactured (mobile) home set up and tie down 331210 - Well casings made from purchased iron or steel 332420 - Water tanks, heavy gauge metal, manufacturing 332420 - Bulk storage tanks, heavy gauge metal (secure), manufacturing 333132 - Gas well machinery and equipment, including drill bits, reamers, etc. 336211 - Tank trucks (e.g., water) assembling on purchased chassis 423320 - Cement merchant wholesalers 423610 - Generators, electrical, merchant wholesalers 424340 - Boots (safety/work) merchant wholesalers 424690 - Drilling muds merchant wholesalers 424720 - Petroleum and petroleum products merchant wholesalers (diesel fuel) 482112 - Short-line railroads 484220 - Mobile home/office towing services, local 484220 - Trucking services (equipment, drill cuttings, water) 485510 - Bus charter services 531110 - Apartment rental or leasing 531190 - Mobile (manufactured) home/office rental or leasing 531190 - Trailer/RV park or court, residential 532120 - Truck trailer rental or leasing 532310 - General rental centers (construction tools, etc.) 532412 - Oil & gas well drilling machinery and equipment rental or leasing 532412 - Crane rental or leasing without operator 532490 - Generator rental or leasing 541330 - Engineering services (geological, petroleum, environmental) 561612 - Security guard services 561990 - Support Services: Pit Liners 562111 - Garbage collection services 562991 - Portable toilet renting and/or servicing 721110 - Hotels & motels 722320 - Catering services 812332 - Protective apparel supply services 812332 - Work clothing and uniform supply services, industrial 812332 - Laundry services, industrial

Drilling contractor (owns rigs & equipment)

Daywork drillers

Drill site management

Pit liners

Steel pipes/casings

Cement

Wellhead equipment

Float equipment, centralizers, baskets, etc.

Drill bits, reamers, tools, power tongs

Drilling mud & chemicals

Fuel to operate the rig

Diesel generators (power supply)

Off-road diesel fuel to operate generators

Trucking - equipment, water

Short-line railroads - move equipment

Water pipelines

Water tanks (frack tanks)

Geologists

Engineering consultant

Portable toilets

Portable trailers, used for offices, living quarters

Catering - food for workers

Apartment rentals

RV parks

Hotels/motels

Misc tools, services & rentals

Onsite security

Secure storage containers (for equipment)

Bus service to shuttle workers

Garbage hauling

Products & Services Used:


Marcellus and Utica Shale Databook 2012

Volume 1: 2011 Drilling Permits; 2012 Company Strategies, Contacts, Legislation

Publish Date: March 2012

Volume 2: 2012 Drilling Permits (Jan-Jun), NY Bans/Support for Fracking, Landowner Coalition Directory

Publish Date: July 2012

Volume 3: 2012 Drilling Permits (Jul-Dec), Production Predictions, Compressor Stations, Supply Chain Tutorial

Publish Date: January 2013

Purchase Options

Buy each volume individually for $149, or buy all three for $447 $298

Site licenses/volume discounts also available,

contact us for details

To purchase, contact:

Marcellus Drilling News Web: marcellusdrilling.com/databook

Email: [email protected] Phone: (607) 238-2500

http://marcellusdrilling.com/databook

http://marcellusdrilling.com/databook

mailto:[email protected]

marcellus and utica shale databook 2012 - sample pages for vol. 3

News & Politics

ohio county map

clarion county map

gilmer county map

randolph county map

cameron county map

brooke county map

noble county map

belmont county map