2015 Marcellus and Utica Shale Databook - Vol. 3

Marcellus and Utica Shale Databook 2015 Volume 3: 2015 Sep-Dec Drilling Permit Maps; Waste Facilities Directory; Valuing Mineral Rights

91 Detail Maps & Charts, Individual County Maps for Permits Issued Sep-Dec; Regulatory/Legal Update; Permits by Driller/County & More!

January 2016 Edition

©Marcellus and Utica Shale Databook 2015 – Volume 3 Page 2

Table of Contents

Section I - Overview

Introduction & Methodology 6

Drilling Update Sep-Dec 2015 7-9

Marcellus Wans, Utica Expands 7

NatGas Production by Shale Play 2015 (chart) 7

NatGas Production in Marc/Utica 6 Yrs (chart) 7

Marcellus/Utica Prices in Basement in 3T15 8

Henry Hub vs Marcellus Gas Spot Price (chart) 8

Marcellus/Utica Permits Down Again in 3T15 8

Marcellus/Utica Permits Issued – Trends (chart) 8

Rig Counts Continue to Decline in 3T15 9

BH U.S. Rig Counts – Year to Year (chart) 9

Marcellus/Utica Rig Counts by State (chart) 9

Permit Counts – a Databook Innovation 10

Permits by Driller 2013-15: PA, OH, WV (chart) 10-13

Permits by County 2013-15: PA, OH, WV (chart) 14-15

Regulatory/Legal Update: PA, OH, WV, NY, MD 16-20

Marcellus/Utica Latest Lease Offers (map) 21

Guide to Using the County Maps (chart) 22

Section II - Pennsylvania Permits

PA Gas Well Permits – Entire State (map) 23

Allegheny County (map) 24

Armstrong County (map) 25

Section II - Pennsylvania Permits (continued)

Beaver County (map) 26

Bradford County (map) 27

Butler County (map) 28

Cameron County (map) 29

Clarion County (map) 30

Clearfield County (map) 31

Elk County (map) 32

Fayette 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

Potter County (map) 40

Sullivan County (map) 41

Susquehanna County (map) 42

Tioga County (map) 43

Venango County (map) 44

Washington County (map) 45

Westmoreland County (map) 46

Wyoming County (map) 47


Section III - Ohio Permits

OH Gas Well Permits – Entire State (map) 48

Belmont County (map) 49

Carroll County (map) 50

Columbiana County (map) 51

Guernsey County (map) 52

Harrison County (map) 53

Jefferson County (map) 54

Monroe County (map) 55

Noble County (map) 56

Tuscarawas County (map) 57

Washington County (map) 58

Section IV - West Virginia Permits

WV Gas Well Permits – Entire State (map) 59

Barbour County (map) 60

Brooke County (map) 61

Doddridge County (map) 62

Gilmer County (map) 63

Harrison County (map) 64

Lewis County (map) 65

Marion County (map) 66

Marshall County (map) 67

Monongalia County (map) 68

Ohio County (map) 69

Preston County (map) 70

Ritchie County (map) 71

Taylor County (map) 72

Tyler County (map) 73

Wetzel County (map) 74

Table of Contents


Table of Contents

Section V – Directory of Marcellus & Utica Drilling Waste Facilities

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’s, dba “ShaleNavigator”’s or Marcellus Drilling News’ liability to the Recipient or anyone else exceed the fee paid for the Databook product. Use of information provided in this report is at your own risk. Editor’s Note: If you spot anything you believe is inaccurate or should be added, tell us! You may qualify for a free MDN or ShaleNavigator subscription.

Flowback and Brine 75 Drill Cuttings and Solid Waste 76 Strengths and Weaknesses of this List 76 Consolidated Map of Northeast Waste Facilities 77 List of Facilities by Geography – NY (chart) 78 List of Facilities by Geography – OH (chart) 78-84 List of Facilities by Geography – PA (chart) 84-86 List of Facilities by Geography – WV (chart) 86-88

List of Facilities by Type – Injection Well (chart) 89-97 List of Facilities by Type – Landfill (chart) 97-98 List of Facilities by Type – Recycle Cuttings (chart) 98 List of Facilities by Type – Storage (chart) 98 List of Facilities by Type – Recycle Water (chart) 98-99

Section VI – Valuing Mineral Rights – Location & Transportation Costs

Introduction 100 Defining Our Terms 100 Conventional vs. Unconventional 101 Supply and Demand Factors 101 Costs of Transportation 102 Conclusion 102



Marcellus Wans, Utica Expands We begin this Drilling Update with a re-statement of the obvious—Marcellus/Utica production continues to be prolific. It is “too” prolific, if such a thing is possible. Because of the enormous amount of gas that continues to be pumped in the northeast, there’s not enough pipelines to shuttle the gas to markets outside of the region where it might fetch a better price. That situation is improving, ever so gradually. Several major pipelines came online in 2015, including a partial reversal of the Rockies Express pipeline. Northeast gas is finding new markets—but not fast enough. We’re still a long way from having the kind of capacity we need to get the gas to market. The two charts on the right tell an interesting story. The chart at the top shows an estimate for how much natural gas was produced by shale play for all of 2015. As you can see, the Marcellus stands head and shoulders above the rest by producing nearly 6 trillion cubic feet of natural gas. The Utica only surpasses the Bakken in natgas production—and the Bakken is largely an oil play. But that does not tell the whole story. The chart on the bottom is stacked to show Marcellus and Utica average production combined, month by month, for the past six years. As you can see, combined output seems to have reached an apex and is now, slowly, beginning to decline. But the reason is because of less drilling, and shut-in wells, in the Marcellus—not the Utica. The share of total output from the Utica continues to increase month over month. So the real story here is that while Marcellus drilling and production began to decrease in the later half of 2015, the Utica continues to expand. Will that trend continue in 2016? Stay tuned for the 2016 edition of the Databook to find out!

DRILLING UPDATE: SEP-DEC 2015 by James Willis, Editor, Marcellus Drilling News


PERMITS BY DRILLER 2013-2015

Who’s Drilling & How Much?


In this section it we take a look at the number of permits issued by “trimesters” or Jan-Apr (1T), May-Aug (2T) and Sep-Dec (3T)—for each driller active in either the Marcellus and/or Utica Shale. The numbers reflect a permit received by that driller for a distinct, unique well (not pad, but individual well). That is, if the driller applied for and received a permit for any purpose—to begin drilling, to continue drilling, to frack, to re-drill, etc.—that number is included. This chart shows intent—an indication of potential activity. We filter out multiple permits for the same well and show only unique, distinct well locations. So a driller with a “46” for a given period means that driller received at least one permit for 46 different, distinct wells. Use this information to spot trends and get a high-level overview of activity for a particular driller—where, when, and how much they are drilling now—or soon will be.

1T13 2T13 3T13 1T14 2T14 3T14 1T15 2T15 3T15 1T13 2T13 3T13 1T14 2T14 3T14 1T15 2T15 3T15 1T13 2T13 3T13 1T14 2T14 3T14 1T15 2T15 3T15

AB Resources 5 3 1

Abarta Oil & Gas 8 1

Alpha Shale 4 1 9 8 1 6

Alta Mesa 2 2

American Energy/Ascent Res. 1 8 8 33 63 59 50 69 20 25 29

American Petroleum Partners 2

Anadarko Petroleum 20 60 41 3 5 36 3 7 4 3

Antero Resources 12 19 18 30 52 59 35 17 28 204 213 216 241 329 309 146 113 117

Apex Energy 4 2 4 8

Arrington Oil & Gas 1

Atlas Resources 2 12 1 1 12 1 8 3 1 3 4

BEUSA Energy 1

BP 3 2 4

Brammer Engineering 1 1 3

BRC Operating 11 2 4

Burnett Oil 1

Cabot Oil & Gas 46 53 63 63 47 45 27 43 36

Cameron Energy 1

Cambell Oil & Gas 1 2 1 3 2 2 4

Carrizo 8 11 20 1 2 4 15 15

Chesapeake Energy 250 137 77 329 211 131 131 97 14 92 96 63 82 72 50 48 43 15 67 119 87 96 95 50 31 4 6

Chevron 59 25 39 39 10 17 25 19 11 2 3 3 3 3 24 31 11 45 37 53 30

Chief Oil & Gas 36 53 74 35 68 15 13 4 17 4 4 2

Citrus Energy 5 2 2

CNX Gas/CONSOL Energy 31 26 27 53 60 53 37 14 2 8 7 4 22 9 18 10 2 58 105 75 64 96 78 61 9 8

Pennsylvania Ohio West Virginia



REGULATORY/LEGAL UPDATE by James Willis, Editor, Marcellus Drilling News

West Virginia Permitting and drilling in West Virginia is regulated by the West Virginia Department of Environmental Protection (WVDEP). Forced Pooling Back on the Docket – “Now or Never” At 11 pm on the last day of the 2015 legislative session in West Virginia, a session that lasts only 60 days at the beginning of each year, the WV legislature voted down what everyone thought was a sure thing to pass–House Bill (HB) 2688, otherwise known as the forced pooling bill . It was defeated by Democrats in retribution over another bill they wanted passed that Republicans defeated. The Democrats decided to give as good as they got and voted down HB2688. However, it’s back for a fifth time in six years. The Republican chairman of the House Energy Committee, Lynwood “Woody” Ireland believes a new version of the forced pooling bill is as fair as it gets for both landowners and drillers. Ireland also believes if the bill doesn’t pass this year, it is likely a dead issue–period. It’s “now or never” for a forced pooling bill in WV. WV’s Democrat Governor Proposes Lower Severance Tax WV Gov. Earl Ray Tomblin is proposing the state LOWER its oil and gas severance tax in 2016. Tomblin, in his State of the State Address, highlighted key pieces of legislation and what he identifies as his top priorities. Everything from economic development to education is covered, including a section on what he calls fiscal responsibility. The Governor specifically indicates his desire to reduce West Virginia’s severance tax rates on the natural gas industry to “[provide] much-needed relief for energy businesses struggling with low prices.” Given current market prices for natural gas and natural gas liquids, this move could not come at a better time. With producers cutting back budgets, the trickledown effect to supporting industries—environmental scientists, trucking, engineering firms—is being felt across the region and by hundreds of thousands of employees. Scores of “Nuisance” Lawsuits Against WV Drillers Combined More than 200 residents in WV (likely those who don’t own the mineral rights under their land) began filing “scores” of “nuisance” lawsuits over the past couple of years against Antero Resources and Hall Drilling, in places like Doddridge County. The lawsuits claim excessive traffic, odors and noise from nearby drilling make it “impossible” for them to enjoy their homes. Each lawsuit has its own unique circumstances and should be handled separately–one size does not fit all. The troubling development is that all of these lawsuits (dozens? hundreds?) have been rolled up into one mega lawsuit that, as of last October, was sitting before the WV Mass Litigation Panel. More recently it appears the lawsuit was moved from the WV Mass Litigation panel into Ohio Circuit Court. Think class action lawsuit. If the case moves forward and goes against Antero (one of the largest drillers in WV), it could very well mean a scale-back of future drilling in the Mountain State.

http://www.dep.wv.gov/

http://www.dep.wv.gov/


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: Hepburn– 6 (6). The first number - “6” in this case - shows the total number of permits issued. The second number - “(6)” 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 red 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 red 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.

#4 – Major gas pipelines are

indicated with red lines and the name of the pipeline somewhere along the line.

#5 – The location for pipeline

compressor stations is indicated by a green triangle–the name is next to it.


Lycoming County

Section II – Pennsylvania Permits

By Municipality: Anthony – 1 (1) Cascade – 2 (2) Cogan House – 2 (2) Cummings – 3 (3) Franklin – 1 (1) Gamble – 5 (5) Hepburn – 6 (6) Lewis – 2 (2) McHenry – 3 (3) McIntyre – 1 (1) Mifflin – 2 (2) By Operator: Anadarko Petroleum – 4 (4) Atlas Resources – 3 (3) EXCO Resources – 1 (1) Inflection Energy – 3 (3) PA General Energy – 2 (2) Range Resources – 8 (8) Seneca Resources – 5 (5) Southwestern Energy – 2 (2)


Belmont County

Section III – Ohio Permits

By Municipality: Colerain – 4 (4) Goshen – 3 (3) Mead – 10 (10) Pultney – 5 (4) Richland – 10 (10) Smith – 2 (2) Somerset – 5 (5) Washington – 21 (16) Wayne – 10 (10) Wheeling – 31 (20) York – 39 (27) By Operator: Ascent Resources– 44 (33) Eclipse Resources – 6 (6) Gulfport Energy – 38 (30) Rice Drilling – 25 (16) XTO Energy – 27 (26)


Doddridge County

Section IV – West Virginia Permits

Entire County: 243 (73) By Operator: Antero Resources – 131 (52) CNX Gas – 7 (7) EQT – 105 (14)


Section V – Directory of Frack Waste Facilities

DIRECTORY OF MARCELLUS & UTICA DRILLING WASTE FACILITIES List of Waste Facilities Sorted by State-County-City (1 of 11)

DISPOSAL METHOD OPERATOR/FACILITY NAME ADDRESS CITY STATE ZIP COUNTY PHONE

LANDFILL HYLAND FACILITY ASSOCIATION 6653 HERDMAN RD ANGELICA NY 14709 ALLEGANY 5854667271

LANDFILL CHEMUNG COUNTY LANDFILL 1486 COUNTY RD 60 LOWMAN NY 14861 CHEMUNG 5857975941

LANDFILL ALLIED WASTE SYSTEMS 5600 NIAGARA FALL BLVD NIAGARA FALLS NY 14304 NIAGARA 7162853344

STORAGE ENVIRONMENTAL PRODUCTS & SERVICES OF VERMONT 532 STATE FAIR BLVD SYRACUSE NY 13209 ONONDAGA 3154516666

LANDFILL HAKES C&D LANDFILL 4376 MANNING RIDGE RD PAINTED POST NY 14870 STEUBEN 6079376044

INJECTION WELL DRUMMOND - JOHN KLOSTERMAN JR 4095 CENTER RD CONNEAUT OH 44030 ASHTABULA 4405941116

INJECTION WELL KASTLE RESOURCES - MONROE (SWIW#29) 6655 HILLDOM RD CONNEAUT OH 44030 ASHTABULA 8147348896

INJECTION WELL TUSSEL CLARENCE JR - LASCH G (SWIW#26) 3696 CENTER RD CONNEAUT OH 44030 ASHTABULA 4405763415

INJECTION WELL RIDGWAY REALTY & LAND - VICTORIA LUKEY 3800 E UNION RD DORSET OH 44032 ASHTABULA 4408582114

WASTEWATER RECYCLE PETROWATER INC 1972 FOOTVILLE-RICHMOND RD JEFFERSON OH 44047 ASHTABULA 4405639475

INJECTION WELL PETROWATER INC - P.H. DIETRICH (SWIW#20) 2214 STATE ROUTE 167 JEFFERSON OH 44047 ASHTABULA 4405771881

INJECTION WELL PETROX - ARCHIBALD-HAMILTON UNIT (SWIW#22) 1955 BLACK SEA RD JEFFERSON OH 44047 ASHTABULA 3306535526

INJECTION WELL RHOA #3 (SWIW #8) 5035 STATE RT. 46 JEFFERSON OH 44047 ASHTABULA 3305101282

INJECTION WELL BIG SKY ENERGY - H. PERRY (SWIW#7) 6375 STATE ROUTE 46 ORWELL OH 44076 ASHTABULA 7408267325

INJECTION WELL AMERICAN ENERGY - RENSHAW/BRADNAN (SWIW#23) 1548 STATE ROUTE 7 N PIERPONT OH 44082 ASHTABULA 4408624041

INJECTION WELL B&B OILFIELD SERV - CLINTON OIL (SWIW#21) 6730 STATE ROUTE 86 WINDSOR OH 44099 ASHTABULA 3305275376



INJECTION WELL B&B OILFIELD SERV - MILLER & CO (SWIW#28) 6909 HUNTLEY RD WINDSOR OH 44099 ASHTABULA 3305275376

INJECTION WELL B&B OILFIELD SERV - MILLER & CO (SWIW#32) STATE ROUTE 86 WINDSOR OH 44099 ASHTABULA 3305275376

INJECTION WELL CARPER WELL SERV - HAZEL GINSBURG (SWIW#2) 8730 CENTER STAKE RD ALBANY OH 45710 ATHENS 7403742567

INJECTION WELL LEE OIL & GAS - EARL AKERS (SWIW#7) 3044 BAKER RD ALBANY OH 45710 ATHENS 9378908856

INJECTION WELL PETRO QUEST - CARLESS MILLER ETAL (SWIW#6) 17987 RIVER RD ATHENS OH 45701 ATHENS 7405933800

INJECTION WELL K & H PARTNERS LLC #1 (SWIW #10) 28333 WEST BELPRE PIKE COOLVILLE OH 45723 ATHENS 3044880701

INJECTION WELL K & H PARTNERS LLC #1 (SWIW #8) 28333 WEST BELPRE PIKE COOLVILLE OH 45723 ATHENS 3044880701

INJECTION WELL STONEBRIDGE OPERATING - HAHN PAUL & SHARON (SWIW#1) 20859 RIVER RD GUYSVILLE OH 45735 ATHENS 7403736134

INJECTION WELL DAVID R HILL, INC - GEORGETOWN MARINE #1 SWIW 1 COUNTY RD 214 BELLAIRE OH 43906 BELLAIRE 3303630239

INJECTION WELL CNX GAS - BUCKEYE UIC BARNESVILLE (SWIW#2) 63951 BARNESVILLE HENDRYSBURG RD BARNESVILLE OH 43713 BELMONT 7246271246

LANDFILL MARTINS FERRY TENORM FACILITY 801 NORTH MAIN ST MARTINS FERRY OH 43935 BELMONT 7406093806

INJECTION WELL ENERVEST - LEE UNIT (SWIW#9) 437 S PLUM ST MAGNOLIA OH 44643 CARROLL 3043435505

INJECTION WELL ENERVEST - LINDENTREE (SWIW#7) 1180 MAGNOLIA RD NW MAGNOLIA OH 44643 CARROLL 3043435505

INJECTION WELL ENERVEST - LINDENTREE (SWIW#8) 9020 STALLION RD MAGNOLIA OH 44643 CARROLL 3043435505

INJECTION WELL DOWNRIGHT BRINE DISPOSAL - STEPHENSON (SWIW#2) 8025 CUTLER RD SW SHERRODSVILLE OH 44675 CARROLL 3303647665

INJECTION WELL BUCKEYE BRINE - ADAMS (SWIW#10) 23949 AIRPORT RD COSHOCTON OH 43812 COSHOCTON 5126804265


Section VI – Valuing Mineral Rights

LOCATION & TRANSPORTATION COSTS – FACTORS IN VALUING MINERAL RIGHTS by Mike Coles, Coles and Associates, Inc.

Introduction

As the decline in the number of drilling rigs continues, the general perception is that no one would knowingly sell at the bottom of the market.

However, there are many reasons why mineral rights may still need to be valued:

• Estate settlement

• Matrimonial

• Financial needs

• Age (“I’m 85 and in good health with no heirs and don’t want to wait years for the

market to rebound.”)

When valuing mineral rights in the Marcellus and Utica shale region (or any shale play), the

factors an appraiser considers continue to evolve. Two very important factors are location

and transportation costs.

Location: Proximity to a pipeline; primary shale thickness; lease offers; and decline rates are primary considerations under the umbrella of location.

Transportation: Additionally, transportation costs—whether pipeline, truck, or train, for example—are additional factors identified that influence

value. Capacity of these transportation means and their ability to transport natural gas, oil, or other natural gas liquids (NGLs) also influences the

value of analyzed mineral rights. If capacity is maxed out, the products cannot be delivered to market.

Defining Our Terms

A big challenge when valuing mineral rights has been that the terms used in the oil and gas industry are often different from state to state. The term

“oil and gas shale” can mean dry gas (methane) or wet gas (natural gas liquids) including oil, depending on the context of the discussion. For brevity

and clarity in this article, I suggest drill bit hydrocarbon or DBH1 as a comprehensive term to mean natural gas, natural gas liquids (NGLs) and oil

from shale. When an explanation applies to all three hydrocarbon products, DBH is used. Otherwise the individual product(s) will be stated.

1E. Russell Braziel, The Domino Effect, How the Shale Revolution is Transforming Energy Markets, Industries and Economics, (Wisconsin, CWL Publishing

Enterprises, Inc., 2016), 44-45


Marcellus and Utica Shale Databook 2015

Volume 1: 2015 Drilling Permits (Jan-Apr); Drilling Contacts, Regional Pipelines, Property Valuations

Publish Date: May 2015

Volume 2: 2015 Drilling Permits (May-Aug), List of Pipeline/Infrastructure Projects, Big Data

Publish Date: Sep 2015

Volume 3: 2015 Drilling Permits (Sep-Dec), Waste Facility List, Factors in Valuing Mineral Rights

Publish Date: January 2016

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Buy each 2015 volume individually for $225, or buy all three for $525 $350

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2015 Marcellus and Utica Shale Databook - Vol. 3