Barnett Shale

Barnett rig count down 8 to 30

Active drilling rigs in the Barnett Shale took an unusually large drop this week, down eight to 30, as icy weather could have delayed activity in the field, most of which received snow Christmas Day. Half the area's rigs were in Montague and Wise counties, where operators migrated months ago in search of oil and liquids-rich gas. Devon Energy was running seven rigs in four counties, while EOG Resources had five, all in Montague and Cooke counties, according to RigData. Montague was busiest with eight rigs, followed by Wise with seven, and Parker and Tarrant with three each.

Nationally, the rig count dropped 11 to 1,763. Rigs seeking crude oil were down 13, to 1,327, and rigs seeking natural gas were up two, to 431. Five were miscellaneous. 

-- Jim Fuquay

Mineral Owner Mart is a new online resource aimed at mineral rights owners who are interested in leasing their property or selling their royalties after production is established. Blake Thompson says he launched the project in early September after working about five years as an independent landman in the Barnett Shale and elsewhere. A listing doesn't cost the mineral rights owner anything. Thompson says he typically earns a 10 percent commission on a transaction, sort of like an auction house  would do when it adds a "buyer's premium" to the selling price. Sellers can name a price or simply ask for an offer.

Prospective buyers can search Mineral Owner Mart by state and county. For example, the site shows nine active listings in Montague County, reflecting the area's status for oil and "wet" gas production.  

A link to the site is here.

-- Jim Fuquay

Another Barnett Shale monitor goes online at TCEQ

The latest air monitor in the Barnett Shale to start reporting its results on the website of the Texas Commission on Environmental Quality is in Rhome, in southern Wise County. It's the 11th active automated gas chromatograph (auto GC) monitor in North Texas. To see its exact locations and data, look for "Rhome Seven Hills Road" on the TCEQ's auto GC page.

The Star-Telegram on Sunday carried an extensive report on efforts by the TCEQ and Environmental Protection Agency to keep track of emissions in the Barnett Shale via a network of dozens of monitors. A link to the report is here.

-- Jim Fuquay

Shale critic Deborah Rogers named to advisory board

Fort Worth resident Deborah Rogers, who has been critical of natural gas drilling and the economics of shale gas production, has been named to a 21-member advisory committee to the Department of Interior. The group will "guide and oversee implementation of the United States Extractive Industries Transparency Initiative," which DOI describes on its website as "a voluntary, global effort designed to increase transparency, strengthen the accountability of natural resource revenue reporting and build public trust for the governance of these activities." DOI said President Barack Obama committed the U.S. to the international effort in 2011. Advisory committee members include representatives from environmental organizations, academia and industry.

Rogers, in a prepared release, called the committee's work "a tremendous opportunity to address financial issues with respect to natural resource extraction in this country." She was a 2008-2011 member of an advisory council to the Dallas Federal Reserve Bank, serves on the committee that advised the Texas Commission on Environmental Quality as it located air monitors in the Barnett Shale, and is a board member of Earthworks' Oil and Gas Accountability Project, according to the release. The release said she will appear in the upcoming documentary "Gasland 2"

In 2011 she founded Energy Policy Forum, "a consultancy and educational forum dedicated to policy and financial issues regarding shale gas and renewable energy." In an October blog post on her site, Rogers argued that shale gas is a money-loser driven by Wall Street. "There is no doubt that the investment banking community has been the driving force behind shale production since the economic downturn. Shale should have unravelled long before now. But Wall Street saw an opportunity to generate massive fees and so shale was taken to new heights... ." In 2009 she paid for air quality tests at her Westworth Village farm that showed elevated levels of several chemical compounds associated with natural gas production and flaring. The same year, which saw a sharp decline in the price of natural gas as supply surged, she concluded that shale gas wells "are depleting so quickly that the operators are in an expensive game of 'catch-up,' " according to an e-mail quoted in a New York Times report.

 

 

 

EPA releases hydraulic fracturing water study framework

The Environmental Protection Agency on Friday released a report describing how it will pursue its study of the impact of hydraulic fracturing on drinking water supplies. "The EPA has designed the scope of the research around five stages of the hydraulic fracturing water cycle," it said. The five areas being studied for their impact on ground and surface sources of drinking water are: large water withdrawals; spills of hydraulic fracturing fluids; injection wells and the fracturing process; spills of flowback and produced water; and inadequate treatment of wastewater. It will examine each issue using "existing data, scenario evaluations, laboratory studies, toxicity assessments and case studies." 

The agency began its research last year. It's expected to complete it in 2014. As of September, it said it had information on fracturing chemicals and practices on 24,925 wells fractured between September 2009 and October 2010. It will also take data from FracFocus, an intergovernmental disclosure site of fracturing fluids supported by energy companies. "Two rounds of sampling at five case study locations in Colorado, North Dakota, Pennsylvania and Texas have been completed," and water samples "have been collected from over 70 domestic water wells, 15 monitoring wells and 13 surface water sources," a summary of the progress report said.

-- Jim Fuquay

Two views on what's killing coal

The good folks at the Sierra Club issued a news release Thursday trumpeting the decline of coal in the past year and attributing it to "an unprecedented coalition including Sierra Club and more than a hundred local, regional and national organizations." There are some interesting numbers, but as far as what's driving the change, the Energy Information Administration at the U.S. DOE, and National Public Radio, and the San Francisco Chronicle, and The Wall Street Journal, and the Houston Chronicle, with a more nuanced version, offer a different interpretation. But their answers basically come down to two words: natural gas. Make that three words: cheap natural gas.

A link to the EIA's report is here. NPR's print version is here. The San Francisco Chronicle's story is here, and the Houston Chronicle's report is here. The Wall Street Journal's pay wall will likely catch nonsubscribers, but the link is here.

-- Jim Fuquay

IHS says 576,000 Texas jobs tied to shale

 Texas has 576,000 jobs tied to unconventional oil and gas development and its economic ripples, IHS Global Insight says in a report today. It approaches half the nearly 1.3 million jobs nationwide associated with unconventionals in 16 producing states, IHS said. It's the group's second study of the economic impact of shale development and the first do to a state-by-state count.

"No other state approaches Texas in the number of jobs tied to unconventional oil and gas or the economic revenue contributions from the activity. In addition to jobs directly related to oil and gas production, the state's professional, scientific and technical services; construction; and oil and gas extraction industries are among the largest source of direct and supply chain (indirect) jobs," the consultant's release on the study said.

It said unconventional energy activity "will also account for more than $101 billion in value added contributions to Texas gross state product (GSP) in 2012, a figure that will increase to $169 billion in 2020. The study estimates that unconventional oil and gas activity in Texas will generate more than $22 billion in federal, state and local revenues in 2012, or more than $790 billion cumulatively through 2035."

"The unconventional oil and gas revolution is having a bigger impact across the country, including in non-producing states, than is generally recognized," said Daniel Yergin, vice chairman of IHS and author of two highly-regarded histories of oil and gas development, mostly recently The Quest. 

The study said the top 10 producing states for unconventional oil and gas-related activity — Texas, North Dakota, California, Colorado, Oklahoma, Pennsylvania, Utah, Louisiana, Ohio, and Arkansas— "will contribute nearly 1.2 million jobs, almost $47 billion in government revenues, and approximately $178 billion in value added contributions to their state economies this year."

A link to the study is here.

-- Jim Fuquay

Air Liquide expands Cleburne plant, plans new jobs

Air Liquide Industrial U.S. said Monday it has expanded its Cleburne air separation plant with a second "nitrogen liquefier" to meet demand from users including the oil and gas industry. Nitrogen is used in a number of energy applications, including drilling and completing of wells and maintenance of pipelines. Food and beverage companies as well as makers manufacturers also use nitrogen. Air Liquide said it expects to add 21 new permanent jobs over the next two years in Cleburne, expanding employment by about a third. Air Liquide, headquartered in France, opened the Cleburne facility in 1998 to produce oxygen, nitrogen and argon.

-- Jim Fuquay

Cheniere signs deal with Total for LNG exports

Houston-based Cheniere Energy said today its Sabine Pass Liquefaction subsidiary agreed to sell liquefied natural gas equivalent to about 91.25 billion cubic feet a year to Total Gas and Power North America. It said today it will also sell another 13.5 bcf equivalent on a seasonal basis from the Gulf Coast facility being built. Those volumes are equal to about 2 million metric tonnes of LNG a year. (A tonne, or 1,000 kilograms, is about 2,200 pounds, or 1.1 tons U.S.). Each of five planned "trains," or LNG processing lines, is expected to have a capacity of 4.5 million tonnes a year. Two trains are under construction, Cheniere said, and two more will begin construction in 2013. The deal runs for 20 years once Cheniere brings the fifth train online, and can be extended another 10 years, the company said. "Deliveries from train five are expected to occur as early as 2018," Cheniere said. Total, a French energy firm, has invested in U.S. shale gas assets, including $2.25 billion nearly two years ago for a 25 percent stake in Chesapeake Energy's Barnett Shale production.

The company's news release is here.

-- Jim Fuquay

 

Chesapeake offering buyouts to 275 employees

Oklahoma City-based  Chesapeake Energy this morning said it "has offered a voluntary separation program to certain Chesapeake employees as part of the company's ongoing efforts to improve efficiencies and reduce costs." Julie Wilson, Chesapeake's chief officer in the Barnett Shale, said the buyouts dod not affect the company's area operations, which employ about 500.

Chesapeake said eligibility of about 275 workers is based on "a combination of age and years of Chesapeake service." Terms apparently are pretty good: StateImpact Oklahoma, citing an email attributed to Chesapeake senior vice president of land Henry Hood, said the buyouts offers a year's pay, a year's health benefits payments and "various stock benefits." Those generous terms and the limited nature of the buyouts -- the company has more than 13,000 employees, including more than 4,000 at the Oklahoma City headquarters campus, StateImpact said -- the buyouts likely are aimed at higher-ranking executives.

The company's official announcement said eligible employees have 45 days to take the offer. Separations are effective in February, but the company said it could delay departures if needed for business needs. "This program is designed to give our longer-term employees the chance to benefit from their years of service to Chesapeake while furthering our efforts to maximize corporate performance and maintain our leadership role in this competitive and constantly evolving industry," Martha Burger, senor vice president of human and corporate resources, said in the release.

-- Jim Fuquay