Nine (9) Away From The Century Mark -- March 18, 2015; One Well In The Marcelllus -- Almost One Million BOE In First Year

Updates

Later, 9: 17 a.m. Comments are not google-searchable, so I brought the first comment below up here --

The production numbers coming out of the Marcellus/Utica plays is nothing short of staggering. 

One of the numerous 'monster wells' - Rice Energy's Bigfoot 9-H - has been producing 16MMcf/day, and is expected, in a few weeks time, to post a first year output of 5 1/2 Bcf. 

In oil equivalent terms, (dividing by 6), Bigfoot is putting out over 2,600boe/day and over 900,000boe its first year. 

There are several others with profiles comparable to, or exceeding, this well's production.

Original Post

Active rigs:

	3/18/2015	03/18/2014	03/18/2013	03/18/2012	03/18/2011
Active Rigs	109	191	186	205	171

RBN Energy: Part 3 of the Marcellus / Utica infrastructure

Natural gas production is growing faster in the Marcellus and Utica than any other part of North America. Even with lower prices, Appalachia natural gas production will probably hit record highs in the next few days, and NGL production is into the stratosphere, now more than four times where it was two years ago, growing on average 6% PER MONTH!

All of that new production requires lots of new gathering, processing and pipeline infrastructure and consequently midstream construction in the region has been booming.  But building midstream infrastructure in Appalachia doesn’t work the way it does in other high-growth shale plays. The region has lots of huge, legacy natural gas pipelines that are being repurposed, new gas plants and fractionation that must be build, and a paucity of underground salt formations needed for high-volume NGL storage. Today we get further into the details of Marcellus/Utica infrastructure, starting with natural gas pipelines.

This is Part 3 of our blog series covering the latest developments in Marcellus/Utica midstream infrastructure. In Part 1 we described the huge growth in Marcellus/Utica natural gas production since 2010 and the subsequent expansion in natural gas liquids (NGL) production from Marcellus and Utica wet gas when many drillers switched their focus to liquids in 2011. Part 2 provided an overview of Marcellus/Utica geography. We discussed how even though these two shale formations cover most of Pennsylvania, West Virginia, Eastern Ohio and parts of other states, it turns out that most of the production comes from only 20 or so counties across those states. Such geographic concentration has significant implications for regional infrastructure development and take-away capacity.

Our ultimate aim in this blog series is to examine the unique aspects of the Marcellus/Utica region that have spurred midstream companies to build gas processing infrastructure from a small group of stand-alone plants into a fully integrated system designed to operate without the luxury of significant NGL storage capacity. The clue to this intent is in our title - “Join Together With Demand” – designing infrastructure to join supply to demand with fault tolerance as a foundation of the design.

One has to chuckle. Steve Jobs would have been the first to notice this if he had been in the fossil fuel / renewable energy business. With all the Algore fees and penalties, solar energy -- as expensive as it is -- will reach parity with coal in ten years (or so I've been told). The real story is natural gas.

Steve Jobs always talked about skating to where the puck WOULD be. With so much natural gas being produced and so much infrastructure in place AND so much opportunity for investors, the real question is not whether heavily-subsidized solar energy will reach parity with high-penalty coal, but whether heavily-subsidized solar energy will ever reach parity with natural gas. Deutsche Bank may be looking at the wrong commodity.

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Speaking of Coal, Which In Fact We Were ...

This is kind of interesting. The Wall Street Journal has a human interest story on "the last man betting on coal": Robert Murray.

The king of American coal is 75 years old, has had four strokes and broken his neck three times, but Robert Murray is still gobbling up mines.

This week, he said his closely held Murray Energy Corp., based in St. Clairsville, Ohio, would pay $1.4 billion for a controlling stake in Foresight Energy LP, which has extensive coal operations in the Illinois basin and was founded by longtime rival Christopher Cline.

Mr. Murray’s big bet would create the nation’s No. 3 coal producer—after Peabody Energy Corp. and Arch Coal Inc.—highlighting his faith in a fuel under pressure from lower natural-gas prices and new emissions regulations.

Mr. Murray built up his company, which was the country’s eighth-biggest just two years ago, through aggressive deal making. A year ago, with Foresight’s shares treading water after an initial public offering, it made its first approach to Mr. Murray, said a person familiar with the matter.

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Another Inconvenient Truth

The party of Obama is upset that the "Lynch" nomination has not yet been brought up for a Senate vote; the party blames the GOP of stalling. In fact, her nomination was made last fall when the party of Obama was in control of the Senate.  Making inflammatory statements like "back of the bus," it's only a matter of time before we see references to "the plantation," and "lynching." Reminds me of the "lynching of Bork," a phrase used by the liberal Washington Post.