SCOOP/STACK Play – Oklahoma
Citizen Energy Operating, LLC announced that it has entered into a merger agreement with Roan Resources, Inc. in an all-cash transaction valued at $1 billion, including Roan’s debt. Roan stockholders will receive $1.52 in cash for each share of Roan common stock in the deal. Roan Resources, headquartered in Oklahoma City, is one of multiple successor companies to LINN Energy, which filed bankruptcy in May 2016. Its production areas are focused in the SCOOP, STACK and Merge plays in the Anadarko Basin.
In early October, Bison, Oklahoma’s largest water infrastructure, logistics and solutions provider, announced it had acquired the water management assets of Tapstone Energy. The two companies also entered into long-term agreements in which Bison will exclusively manage all of Tapstone’s produced water infrastructure and water hauling logistics, including any future acreage acquired or operated by Tapstone within a 2.6 million-acre swath of the play area across the Northwestern part of the Anadarko Basin.
Eagle Ford Shale – Texas
Enterprise Products Partners announced in October that it secured long-term agreements with oil producers to support an expansion of its system connecting a 6-million-barrel storage facility in Midland to the company’s ECHO Terminal near Houston in the northeastern extent of the Eagle Ford region. The pipeline, which will carry crude from both the Permian Basin and the Eagle Ford region, will have a daily capacity of 450,000 barrels and could be expanded to 540,000 barrels per day.
EP Energy, a significant producer in the Eagle Ford since 2010, announced in early October that it would file for Chapter 11 bankruptcy protection. EP Energy was created as a spin-out during the 2012 merger between Kinder Morgan and El Paso Corporation.
Marcellus/Utica Shale – Pennsylvania/West Virginia/Ohio
In a newly-updated estimate, the USGS now projects that the Marcellus Shale and Point Pleasant-Utica Shale formations of the Appalachian Basin contain an estimated mean of 214 trillion cubic feet of undiscovered, technically recoverable continuous resources of natural gas. This is a massive increase from assessments conducted in 2011 and 2012, when the USGS estimated that the two formations held a combined 122 trillion cubic feet of technically recoverable natural gas.
Democratic Pennsylvania State Senator Daylin Leach proposed a constitutional amendment that would ban hydraulic fracturing in that state, based on activist claims that the “damage” caused by fracking outweighs its economic benefits.
Bakken Shale – North Dakota/Montana
With an eye towards taking greater advantage of the massive amount of natural gas liquids being produced in the state from Bakken Shale wells, the North Dakota Industrial Commission is considering commissioning a study by the University of North Dakota’s Energy & Environmental Research Center to examine how the chemical makeup of natural gas liquids changes over the life of an oil well. Advocates say that such a study would offer insight into whether the extracted gas becomes richer or experiences a drop in liquids as time progresses. The findings could then be used as part of a program to attract investments in North Dakota by petrochemical companies, who have made massive investments in new plants and equipment in states like Texas, Louisiana and Pennsylvania in recent years.
Gov. Doug Burgum indicated he would support the study. “Part of the reason for why this study would be super important is that if we’re going to attract additional gas processing or pet-chem investment in our state, they need to know that there’s a gas resource here that would warrant them making an investment,” he said.
Denver/Julesburg (DJ) Basin – Colorado
A new study by the Colorado Department of Public Health and Environment found that people living within 2,000 feet of drilling operations “might” face a higher risk of short-term health impacts from emissions of benzene, a known cancer-causing chemical, and other substances in worst-case scenarios. The study found no long-term impacts to public health, or of any benzene concentrations that rose above safe levels defined by the EPA, nor did it take into account the improvements in emissions control equipment since 2014-15, which was the period of time its data was based upon. Despite that, the Colorado Oil and Gas Commission is using the study results as a reason to expand the scope of proposed oil and gas sites that will get additional review while the rules are being developed.
Haynesville/Bossier Play – Louisiana/East Texas
DTE Midstream, a unit of U.S. utility DTE Energy, announced in October that it had agreed to a $2.25 billion cash acquisition of Haynesville Shale midstream assets from Momentum Midstream and Indigo Natural Resources. Included in the acquisition are an existing gathering system and a 150-mile gathering pipeline, which is currently under construction and expected to be commissioned in the first half of 2020.
Louisiana Oil & Gas Association President Gifford Briggs encouraged LOGA members to become more active on social media and to “tell the industry’s story” at one of LOGA’s “State of the Industry” events in Baton Rouge on October 8. “We are losing the public relations battle,” Briggs says. “The other side spends hours sharing their message everywhere they can. We have to hit that head-on. We have an amazing story to tell. I know you don’t do this for the accolades, but we need to tell that story.”
Permian Basin – Texas/New Mexico
Despite current conventional wisdom in the media and investor community that the Permian Basin is slowing down, Chevron CEO Mike Wirth told the Midland Reporter-Telegram in October that his company remains in full speed ahead mode in the region. While independent producers were receiving most of the media’s notice in the first several years of the Permian boom, Wirth said, “We were planning — planning well design, well spacing, completion design, making sure there was gathering infrastructure, takeaway infrastructure, ensuring operational performance and safety performance.”
“It’s in our DNA to run a large operation with high efficiency and integrity,” he added. “Our goal is generating strong financial returns, not high initial potentials or long laterals.”
On its second quarter, 2019 earnings call, Chevron noted that its Permian oil production rose 150,000 barrels, or 55%, to 421,000 barrels compared to the second quarter of 2018.
About the author: David Blackmon is the Editor of SHALE Oil & Gas Business Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles — the last 22 years engaging in public policy issues at the state and national levels. Contact David Blackmon at [email protected].