View from Appalachia - Gas/Electric Partnership

Compressed Activity in
Appalachia
Dr. Robert W. Chase
Chair and Professor
Obstacles to Growth
First the Bad News:
 Lower oil and gas prices impacting exploration
budgets
 Infrastructure still lacking to move gas
 Environmental issues/complaints persist due to
support of liberal environmental groups for
landowner class action suits
Now the Good News:
 NY ban on fracing continues
2014 and 2015 Crude Oil Prices
Source: http://www.aei.org/publication/top-ten-energy-charts-year-2014/
Supply/Demand for Crude Oil
Projected Oil Price for 2015-16
The Picture is Worse for Gas
OIL & GAS PRICES
8
CONFIDENTIAL
OIL & GAS PRICES
Source:
9
CONFIDENTIAL
U.S. Natural Gas Production
What’s Happening to the Rig Count?
Baker Hughes Rig Count 1/30/2015
Development Update for Ohio (1/24/15)

Utica Shale

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Permits: 1781
Drilled: 1324
Producing: 718
Rigs Running: 48
Marcellus Shale
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Permits: 44
Drilled: 29
Producing: 29
Rigs Running: 0
NG & NGL Midstream Projects (Ohio Utica Shale)
Overview of Ohio Midstream Investments
Company
Location
Operations
Estimated Investments
MarkWest
Harrison & Noble
Counties.
G, P, & F
$2.2 Billion
M3/Access/Williams
Columbiana & Harrison
Counties.
G, P, & F
$2.4 Billion
NiSource
Mahoning
G&P
$390 Million
Dominion/Caiman
Monroe +
G&P
$800 Million
Spectra*
Northern & Eastern
Ohio
G – Natural Gas
$430 Million +
Enterprise
Eastern, Central,
& Southwestern Ohio
G- Ethane
$1 Billion +
*Announced
Gathering/pipeline – Processing – Fractionation
18
NG & NGL Midstream Projects (Ohio Utica Shale)
Company
Location
Operations Estimated Investments
Kinder Morgan &
MarkWest*
Tuscarawas Processor &
NGL Pipeline to Gulf.
G&P
PVR Partners
Belmont, Jefferson and
Harrison.
G
$125 Million +
Kinder Morgan*
From Harrison to
NW Ohio.
G - Ethane
$300 Million +
Columbia Gas
Transmission*
Monroe, Noble, Morgan,
Perry, Hocking, Vinton, and
Jackson
G
$1 Billion +
Energy Partners*
Tuscarawas to Defiance
Counties
G
$3 Billion
TBD
*Announced
Gathering/pipeline – Processing – Fractionation
19
Condensate Midstream Projects (Ohio Utica Shale)
Company
Location
Operations
Estimated
Investments
MarkWest/Midwest
Terminals
Harrison County
Stabilization/rail and
truck terminal
$100 Million +
Marathon Petroleum
Condensate pipeline from
Harrison to Stark counties and
transfer plant in Columbiana.
Pipeline and transfer
plant.
$200 Million +
EnLink
Condensate Pipeline Guernsey,
Noble & Washington Counties
Pipeline, Stabilization
and Compressors
$250 Million
Over $12 billion of midstream
investment in Ohio alone!
20
Impact of Lower Oil & Gas Prices

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Dec. 2014: Antero Energy lays off 600 in Appalachia
land services
Dec. 24: REX Energy cuts exploration budget from
$350M to $200M
Jan. 2: U.S. Steel idles steel pipe mill in Lorain, OH
and lays off 600
Jan. 22: Antero Resources cuts exploration budget
from $3B to $1.8B
Jan. 22: Stone Energy cuts budget from $895M to
$450M

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Jan. 22: Chevron lays off 162 in Marcellus
operations
Jan. 26: Hess cuts Utica exploration budget from
$500M to $290M for 2015
Febr. 1: TMK IPSCO Steel in PA lays off 10% of
work force
Febr. 2: Gastar cuts exploration budget from $257M
to $103M
French-based Vallourec Star will idle $1B steel plant
in Youngstown, PA
The End