What the Frack? Weekly Ollison Hydraulic Fracturing Update

BW Resources: Ollison Hydraulic Fracturing Report

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction.  With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced.  If you have any questions or would like additional information, please contact us.
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
The San Benito County Board of Supervisors voted 5-0 (starts on page 90)to amend the County’s oil and gas regulations and put in place novel notice, chemical disclosure, bonding, insurance, water testing, and other requirements that expressly apply to the operators of wells that engage in drilling, hydraulic fracturing, and other well stimulation activities. For more information please contact HBW Resources.
PDC Energy has finalized the selling of its non-core Colorado assets to Caerus Oil and Gas LLC for approximately $185 million in net proceeds in a move to focus on its shale assets and work towards a more liquid-rich asset base. The assets sold are approximately 99% natural gas in terms of reserves, producing approximately 40 million net cubic feet of natural gas equivalent per day in the first quarter of 2013.
Weld County leased mineral rights for more than 1,000 acres, filling county coffers with another $1.7 million from the oil and gas industry. That brings the net total for oil and gas lease-related revenue up to $5.3 million so far this year, a number on track to meet last year’s $12.9 million. Royalties for the county were boosted to 25 percent and rental fees to $2.50 per acre per year — up from 20 percent and $1 per acre last year, thanks to commissioners’ request for a code change currently in the hearing process, said Esther Gesick, Weld County’s deputy clerk to the board. Commissioners are also proposing increases to fees associated with the leases.
The state began requiring oil and gas companies to disclose the ingredients of hydraulic fracturing chemicals on April 1, 2012. In a notice issued to oil and gas companies, the Colorado Oil and Gas Conservation Commission announced it would begin enforcing that rule July 1 — 15 months after the requirement took effect. Under the rule, energy companies are required to disclose chemicals used for fracking wells within 60 days of a fracking operation and post the data to the website Fracfocus.org. For more information please contact HBW Resources.
Chesapeake Energy has formally opened its Mansfield office, its fifth office in the Haynesville Shale, designed to support operational functions in construction, drilling, well completions and productions and proof that it is committed to its operations in the shale play where it has been drilling since 2007.
The Maryland Department of the Environment and the Department of Natural Resources released its draft report, “Marcellus Shale Safe Drilling Initiative Study”, on best practices
that should be applied to horizontal drilling and hydraulic fracturing if drilling for natural gas in the Marcellus Shale in Maryland in permitted. The report includes recommendations to protect public health and safety, natural resources and the environment. The draft report, which was prepared in consultation with an advisory commission, includes recommendations to protect public health and safety, natural resources and the environment. An overview of the report will be given at a public informational meeting July 9. Comments on the draft report must be submitted by August 9, 2013.
Environmentalists are pressing Beacon Hill lawmakers to back a bill, H 788, introduced by Rep. Denise Provost (D, District 27) that would ban the practice of hydraulic fracturing in Massachusetts as well as the collection, storage, treatment or disposal of wastewater hydraulic fracturing fluid, wastewater solids, sludge, drill cuttings or byproducts from hydraulic fracturing. Contact us for additional information.
Encana Corp. has laid out plans to drill 500 new natural gas wells in Northern Michigan, using a technique that could consume more than 4 billion gallons of groundwater — or about as much water as Traverse City uses in two years. Encana Corp., will rely on hydraulic fracturing or “fracking,” a technique cloaked in controversy that requires large amounts of water, mixed with chemicals and other elements, to break down rock formations and release natural gas. Encana, for example, used 8.5 million gallons of groundwater earlier this month to frack a single gas well, the Westerman in Kalkaska County, east of Traverse City.  For more information please contact HBW Resources.
The Tuscaloosa Marine Shale (TMS) covers an area of approximately 5,900 square miles across the Gulf Coast Region of Louisiana and Mississippi. The oil-prone formation of the TMS is comprised of gray and black shale, with sand present in some areas. A 1998 report by LSU’s Basin Research Institute estimated the 2.9-7.4 million acres prospective for the play may hold over 7 billion barrels of oil. Mississippi Governor Phil Bryant cut the tax rate from 6% to 1.3% for oil and gas extracted from qualified horizontally drilled wells for a period of 30 months or until the payout of the well. The wells must be drilled between July 1, 2013 and June 30, 2018, and the lower tax rate also applies to oilfield service companies. Twenty completion results and roughly a year of production data prompted single-well EURs of 600-800 Mboe (90% oil) predictions from both companies wells. In February 2013, Goodrich’s Crosby 12H‐1 well came on line in Wilkinson County with an initial potential of 1,300 Mboe and produced 60 Mboe (90% oil) in its first 60 days of production, while Encana’s Anderson 18H‐1 has produced 122 Mboe in 11 months. Goodrich currently holds approximately 135,000 net acres in the TMS, acquired at  an average price of roughly $225 per acre, and now expects to spend the higher end of its previously announced 2013 capital expenditure budget in the TMS of approximately $50 million. For Goodrich, single-well costs are already dropping, down $3 million from $13 million to $10 million. Please contact our firm if you would like additional information.
A federal judge declined to require the U.S. Bureau of Land Management (“BLM”) to impose methane emission reduction requirements on oil and gas development on federal lands. In
Montana Environmental Information Center vs. United States Bureau of Land Management, the court rejected the argument that the lack of controls would lead to global climate change, holding that if drilling on federal lands could be deemed culpable for global climate change, then “anyone could be liable” for undertaking everyday activities, such as driving to work. The plaintiffs had argued that global climate change resulted from the aggregate emissions of many small sources and that, collectively, oil and gas wells were responsible for 2% of U.S. greenhouse gas emissions. BLM and industry groups, however, successfully countered that the plaintiffs lacked standing because they failed to show how the emissions from these oil and gas wells actually impacted their interests. For additional information, please contact us.
New York
Democrats in the Monroe County Legislature want to institute a ban on fracking on county land. In May, the state appellate division upheld local bans on fracking, a controversial method of extracting natural gas. Brighton, Rush, Perinton, Mendon, Penfield and Rochester have such bans. In addition, 13 counties have bans on fracking on county land, similar to what local Democrats are proposing. County land would include the wastewater treatment plant and the landfill. The issue crosses party lines. Legislator Joe Carbone (R, District 16), has submitted a referral asking legislators to support a memorializing resolution. This resolution, if approved by a majority at the July 9 meeting, would send a message that the Legislature supports a fracking ban. For additional information, please contact us.
Former Florida Governor Jeb Bush, appearing at the New York State Conservative Party’s annual fundraising dinner, blasted Governor Andrew Cuomo for failing to approve hydraulic fracturing to boost New York’s upstate economy.  “We should be celebrating this phenomenal achievement – and we do, in North Dakota, in Pennsylvania, in south and west Texas. Some states, like here in New York, are choosing not to grow. They won’t approve fracking,” the former Florida governor said. “Meanwhile, in parts of New York where huge opportunities exist for the restoration of economic activity, people languish.” He said fracking can be done safely and “create economic activity for all sorts of people who don’t live in Manhattan.” For more information please contact HBW Resources.
North Carolina
The state House and Senate each picked five lawmakers, or conferees, for closed-door talks in the House-Senate conference on Senate Bill 76. The two bills couldn’t be more different. The Senate version would lift the state’s fracking moratorium, boot the state geologist from the N.C. Mining and Energy Commission, allow for injecting fracking waste in wells, and eliminate a registry for “landmen” who sign drill leases with property owners. The House version would undo those changes. In addition, it would impose fines on fraudulent landmen and criminal penalties for operating without a state license. Please contact our firm if you would like additional information.

The Ohio Supreme Court agreed to hear an appeal in a potentially precedent-setting northeast Ohio case. Cities, townships and villages in Ohio have no say in oil and gas drilling in their communities. That’s the result of a 2004 law passed in the General Assembly stripping local jurisdictions of authority over drilling and giving control to the state’s Department of Natural Resources. In a case involving the Akron suburb of Munroe Falls and Beck Energy wanting to develop a site there, Ohio’s 9th District Court of Appeals said the law means that even traditional home-rule laws covering zoning, road use and the like are unenforceable if they impede drilling. 
Rex Energy announced the results of its recent Ohio Utica Shale wells and provided an update on its operations. The G. Graham 1H, located in Carroll County, Ohio, was placed into sales from its 60-day resting period and produced at a five-day sales rate of 1,710 barrels of oil equivalent per day (boepd) (41 percent natural gas liquids (NGL), 30 percent gas, 29 percent condensate), assuming full ethane recovery and a natural gas shrink of 36 percent. The well went on to average a 30-day sales rate of 1,256 boepd (46 percent NGLs, 33 percent gas, 21 percent condensate), assuming full ethane recovery and a natural gas shrink of 36 percent. The well produced with an average casing pressure of 2,364 psi during the
five-day sales period and 1,672 psi during the average 30-day sales period on a 24/64 inch choke. The well was drilled to a total measured depth of 12,098 feet with a lateral length of approximately 3,973 feet and was completed in 27 stages, utilizing the company’s “Super Frac” completion technique. Based on composition analysis, the gas being produced is approximately 1,262 British thermal units. For more information please contact HBW Resources.
The Ohio Oil and Gas Commission ruled that D&L Energy shared responsibility in its sister company’s decision to dump tens of thousands of gallons of oil field waste into the Mahoning River in January. D&L went before the commission in May to argue against a decision made by Richard J. Simmers, chief of the Ohio Department of Natural Resources’ Division of Oil and Gas Resources Management. Simmers in February revoked six injection-well permits, denied applications for three others in the state and suspended D&L’s waste storage and disposal business. That decision came after a state and federal investigation revealed that Ben W. Lupo, the former owner of D&L, instructed an employee of Hardrock Excavating — a company that Lupo also owned — to dump a mixture of oil and brine down a storm drain at the companies’ shared headquarters on Salt Springs Road in Youngstown. The waste made its way into a tributary that fed into the Mahoning River. Lupo and his employee, Michael P. Guesman, both were charged with violating the Clean Water Act. They have since pleaded not guilty.
America’s Natural Gas Alliance recently established a $50,000 scholarship program for veterans to participate in the ShaleNET training program at Stark State College in North Canton and Eastern Gateway Community College in Steubenville. ANGA’s scholarship will provide funding for nearly 40 veterans to receive training through the ShaleNET program. The course work can be completed in a matter of weeks. It is designed to train students in the basic technical skills needed in the natural-gas industry. Military veterans interested in applying for a scholarship to train for a career in the natural-gas industry are encouraged to submit applications before Friday. Those interested can apply at www.shalenet.org/.
Transfac Capital, Inc., a specialty finance company providing accounts receivable financing to small and mid-sized companies, announced the expansion of its presence into the Utica and Marcellus Shale fields. Transfac Capital has developed specialized programs for the trucking industry in general, and for oilfield and pipeline transportation companies, specifically. Transfac Capital intends to become a leader in providing working capital funding to the energy industry in the tri-state region. For additional information, please contact us.
An Ohio law that allows oil and gas companies to shield information about fracking chemicals from emergency-management officials and first responders violates federal law, according to the U.S. Environmental Protection Agency. The state law, passed in 2001, requires that drilling companies share information about hazardous chemicals only with the Ohio Department of Natural Resources, which is supposed to keep the information available for local officials. But federal EPA officials have taken a different view. A letter to state emergency officials and environmental activist Teresa Mills states that the Right-to-Know Act of 1986 supersedes the Ohio law. Please contact our firm if you would like additional information.
D&L Energy Inc. of Youngstown, accused of dumping oil field waste into a tributary of the Mahoning River in January, has lost is appeal to retain its injection well permits in Ohio. The Ohio Oil and Gas Commission has upheld the order it issued in March in which it ruled D&L Energy cannot keep its permits and must properly dispose of any waste it is storing, said the Ohio Attorney General’s office.
The Pennsylvania Democratic State Committee’s call for a moratorium on fracking has drawn condemnation from its most famous progeny – former Gov. Ed Rendell. Party officials voted 115-81 in favor of the resolution asking for the open-ended ban. Proponents argued that fracking was savaging the environment by polluting the state’s water supply. For additional information, please contact us.
A study in the Proceedings of the National Academy of Sciences found drinking water wells in northeastern Pennsylvania within a kilometer of high volume hydraulic fracturing, or fracking, showed methane concentrations six times greater, on average, than in wells further away. The gas occurs naturally in the area’s aquifers. But the study showed the chemical composition of methane in wells near the drilling sites is the same as the natural gas extracted in the area. The researchers tested water samples from wells in six counties where fracking has touched off a natural gas boom. Another study by Duke University, “Higher Levels of Stray Gases Found in Water Wells near Shale Gas Sites” which sampled 141 drinking water samples from private water wells across northeast Pennsylvania’s Marcellus Shale basin. They found that, on average, methane concentrations were six times higher and ethane concentrations were 23 times higher at homes within a kilometer of a shale gas well.  Propane was detected in 10 samples, all of them from homes within a kilometer of drilling. Industry group, Energy In Depth responded to the report by stating “Four things to Know about Duke Study #2.” The four facts EID highlight are: 1) Methane in water wells outside drilling proximity, 2) Thermogenic fingerprinting contradicted by USGS, 3) Still ‘No Evidence’ of fracturing fluids impacting drinking water, and 4) Still no random sample. The Marcellus Shale Coalition also provided some context to the Duke University study. “Duke researchers did not perform pre- and post-drilling/fracturing analysis, thus they cannot – and have not – proved causality between levels of methane present in private water wells and natural gas production activities.”

Oil production in Texas’s Eagle Ford shale formation rose 54 percent in April from the previous year. The nine fields that make up the majority of Eagle Ford yielded 530,689 barrels of crude a day, according to preliminary data released by the Texas Railroad Commission, which oversees oil and gas drilling in the state. The fields produced 345,702 barrels daily in April 2012. February output was revised to 561,554 barrels a day from the preliminary report of 529,874, the commission said. Production totals typically increase in subsequent months as the state receives revised, corrected or late reports. Growing production out of Eagle Ford is helping fuel a renaissance in Texas crude. The state produced 2.37 million barrels a day in March, the highest monthly level since February 1986, according to the Energy Information Administration. For additional information, please contact us.
Kirkpatrick Oil & Gas LLC is looking to sell some of its Eagle Ford Shale and Pearsall Shale properties in La Salle and Frio counties. The company said it has hired E-Spectrum Advisors LLC to sell its non-operated properties. Kirkpatrick’s ownership includes 41 producing wells which are operated by Cheyenne Petroleum Co. and making about 6,000 gross barrels of oil per day (135 net barrels to Kirkpatrick), with nine wells in various stages of drilling and completion. Another nine wells are permitted for drilling and the operator is running one rig in the region.
Interest has grown in the past two years in the Cline shale play in West Texas’ Permian Basin, according to energy industry officials. Found at a depth of about 9,000 feet and covering an area of approximately 1.6 million acres, the Cline production looks promising, though the 80 to 100 horizontal wells drilled to date are too few to draw any definite conclusions. The Cline shale is approximately 200 to 550 feet thick with total organic content of between 2 and 8 percent and a porosity of five to 12 percent, has produced light sweet crude with an American Petroleum Institute gravity of 38 to 42 degrees, similar to the Eagle Ford.  These factors make the Cline shale “an excellent candidate” for horizontal work and hydraulic fracturing. Initial Cline production results for a number of relatively large wells – 400 to 800 barrels of oil per day with 60 to 75 percent oil production, have been reported by companies that include Apache Corp., Devon Energy Corp., Callon Petroleum Corp. and Gulfport Energy Corp. Wells are costing about $9 million to drill and have an estimated ultimate recovery rate of between 500 and 700 boe with 25 frac stages. For more information please contact HBW Resources.
The Texas shale boom has led to record growth in the demand for electricity in West Texas, experts said at the Gulf Coast Power Association panel. Oil and gas worker camps and drilling activity have dramatically increased demand for electricity in previously unpopulated parts of Texas, including the Eagle Ford and the Permian Basin regions. The growth has left transmission and utilities scrambling to keep up. For example, Oncor, which provides the transmission lines for the territory around Midland, Abilene and Odessa, added 247 megawatts to its system in the last three years, a thousand percent increase over the 22 megawatts added from 2006 to 2009. Utility representatives said they also are investing heavily in infrastructure in these regions to meet the huge leap in demand. The demand has skyrocketed local prices  in the interim — electricity prices have reached as much as 10,000 percent higher in the Midland area compared to Houston or Dallas prices in the last year. For additional information, please contact us.
West Virginia
The local region has many abandoned coal mines filled with water, and this water could be treated and used in the fracking process, West Virginia lawmakers were told at a recent meeting of the Joint Standing Committee on the Judiciary. John Owsiany, director of water systems and operations for Consol Energy, spoke of Consol’s new Northern West Virginia
Water Treatment Facility. The $200 million plant is being constructed near Mannington, W.Va., and he said it is expected the plant will treat 5 million gallons of mine water daily. The meeting acknowledged that many industries don’t want to purchase treated mine water because of the long-term liability concerns they have. They believe they could be held responsible for discharging mine drainage into the environment. Delegate Tim Manchin, D-Marion, vice chairman of the House Judiciary Committee, asked them what legislation they wanted the Judiciary Committee to draft pertaining to the use of mine water. Owsiany replied that they hoped lawmakers would craft bills that emphasize the reuse of water.  For more information please contact HBW Resources.
Crestwood Midstream Partners has announced that its subsidiary, Crestwood Niobrara, has entered into an agreement to acquire a 50% interest in Jackalope Gas Gathering Services from RKI Exploration & Production for approximately $108 million. The Jackalope gathering and processing system, located in Converse County, Wyoming, provides Crestwood with an early-stage entrance into the emerging Powder River Basin Niobrara Shale play and positions Crestwood for significant future infrastructure development opportunities across the rich gas and crude oil midstream value chain. Please contact our firm if you would like additional information.
Sen. Jim Inhofe (R, OK) has reintroduced the Fracturing Regulations are Effective in State Hands Act (FRESH ACT) which would give states sole authority to regulate fracking, including on federal lands. Companies with hydraulic fracturing operations on Federal lands would be forced to comply with the applicable State laws.Rep. Louie Gohmert (R, TX 1) has introduced a companion bill in the House.
Pittsburgh ranks with Houston, Dallas and Denver as the four American cities whose energy sectors are disproportionately helping to lead the recovery of the office market nationwide, according to a new Energy Outlook report by Jones Lang LaSalle. The report notes that the four cities have seen 22.3 percent of the absorption of office space nationwide while only representing 12.6 percent nationwide.
Frito-Lay North America took its latest step toward ditching diesel, announcing a series of new stations to refuel its growing fleet of natural gas-powered trucks. The move will help the snack-making division of PepsiCo cut its greenhouse gas emissions 50 percent by 2020, the company said. PepsiCo is also moving forward with other changes that will allow it to stop purchasing hundreds of thousands of gallons of diesel annually. Major corporations, amid a growing push for cleaner fuels, are trying to slash their use of diesel. Frito-Lay unveiled its first compressed natural gas refueling station last week in Wisconsin and will break ground on seven other stations this year across the United States, according to a news release. The stations will serve Frito-Lay’s fleet of natural gas trucks, which will grow to 208 vehicles this year, 20 percent of Frito-Lay’s overall truck fleet, the company said.
States with the biggest shale gas production tend to have the most extensive environmental regulations, a new study by Resources for the Future finds. The report, The State of State Shale Gas Regulations, chose 25 kinds of state regulations, then examined whether state-by-state differences could be explained by statistical analysis of more than 50 environmental, demographic, political and other variables. The report concludes that it is not clear how well the states follow their own rules.  For more information please contact HBW Resources.
As the price of gas has fallen in the U.S., coal has become a less attractive domestic option and more has become available for export. A record 13,6m short tons of US coal were exported in March, according to U.S. Energy Information Administration (EIA) data — a sixfold increase from just above 2Mt/month in 2004. US shale gas production has increased from less than two trillion cubic feet (tcf) in 2004 to 7,8tcf in 2011 and is projected by the EIA to reach 16,7tcf in 2040. The record American coal exports have been brought about because US coal miners have had to look for alternative markets, as coal’s share in US power generation has tumbled to 32.4% in April 2012 from 39.4% in December 2011 while over the same period the share generated from natural gas surged to 32.4% from 25.7%.
Argentina is struggling to raise cash to develop its lucrative shale oil and gas resources. The problem, industry analysts say, is not that the shale deposits are hard to access. The government’s energy policies, they say, are keeping investors away. Argentina is rated to have the largest shale oil and gas deposits, outside the United States, in the Western Hemisphere. Latest research data indicate Argentina may be the world’s fourth-largest oil-rich shale owner, after Russia, China and the United States.
Natural gas turbines now are powering the world’s fastest ferry, according to GE. Two of the turbine-maker’s engines, capable of generating a combined 59,000 horsepower, were installed on a 325-foot passenger and vehicle ferry. The ferry has reached record speeds while running fully on natural gas and will soon be delivered to Argentina, where it will begin shuttling passengers between Buenos Aires and Montevideo, Uruguay, according to GE. The “wave-piercing catamaran” can travel at a speed of 58.1 knots, or 67 miles per hour, Australian ferry builder Incat Tasmania said in a statement. For more information please contact HBW Resources.
A push for a two-year moratorium on fracking in South Australia may not be successful in State Parliament but it will get politicians talking, said Greens MLC Mark Parnell. He tabled his Petroleum and Geothermal Energy Amendment Bill 2013 in the SA Legislative Council which, if successful, would ban fracking on farmland, residential and conservation areas. Fracking is used about 30 per cent of the time for coal-seam gas mining, and 100pc of the time for tight or shale gas – all of which were earmarked for exploration by the State Government last year in its Roadmap for Unconventional Gas Projects in SA.
Protesters demonstrated outside of Energy Minister Craig Leonard’s Fredericton office and called for a public meeting to discuss the impact of a potential shale gas industry in the capital city area. Members of the Council of Canadians and others opposed to the shale gas industry gathered outside of Leonard’s constituency office. The protesters left a 400-name petition seeking a town hall meeting in the city at the energy minister’s office. The Fredericton demonstration was low key compared to the protests that are being held in Kent County against seismic testing in the region. The RCMP has arrested more than 30
people at the various anti-shale gas protests in Kent County in recent weeks. SWN Resources Canada is in eastern New Brunswick conducting seismic testing to see if there is enough gas to create a viable industry. Please contact our firm if you would like additional information.
Transerv Energy and Tamaska Oil and Gas are selling their Duvernay Shale and Rock Creek acreage in Alberta, Canada to Canadian Pan Ocean (CPO). The two companies will receive about $14.2 million and $3.6 million respectively from the sale. Transerv has a 34% interest in the Duvernay Shale acreage and 34% in the Rock Creek while Tamaska has 8% and 16%. Following completion of the transaction, CPO will kick off a major drilling program over the Duvernay acreage with Mako Hydrocarbons under their Alberta Joint Venture. This will see the drilling of up to 20 wells over three years to appraise and develop the Duvernay Shale.
According to the U.S. Department of State, shale was one of the main topics discussed during the fourth round of US-India Strategic Dialogue in New Delhi, held between Secretary of State John Kerry and Minister of External Affairs Salman Khurshid. Secretary Kerry also announced that Vice President Joe Biden would be travelling to India next month for what will be the highest level visit by an American official for three years.  For more information please contact HBW Resources.
The U.S. has assured India priority access to its vast shale gas reserves that the world is eyeing, in a diplomatic quid pro quo for New Delhi’s dramatic cuts in oil imports from Iran. U.S. energy secretary Ernest Moniz made the commitment — critical for India that is increasingly looking at shale gas as an energy source to feed the voracious appetite of its economy — during the strategic dialogue with Indian negotiators.
Oman Oil and Gas Minister Dr Mohammed bin Hamed al Rumhy has said that the US shale boom will not have an impact on the country’s energy strategy, including developing hydrocarbon reserves, adding that it would continue to monitor global trends and ‘hope for the best.’ Last year, the ministry announced that it had commissioned a study to assess the country’s shale gas potential. Moreover, tests conducted by Petroleum Development Oman on shale gas accumulations were reportedly “very encouraging”, according to the company’s Managing Director of the majority government owned company who also said that exploration and drilling activities targeting potential shale gas deposits had yielded promising results, with efforts now focused on testing the “productibility” of the fields. For more information please contact HBW Resources.
Wisent Oil and Gas, partly owned by Poland’s Petrolinvest and the U.S. Hallwood Resources, found its initial shale oil and gas operations in Poland promising and decided on further drilling, the company said. Until now 46 wells have been drilled in Poland, with few key hydraulic fracturing processes taking place on more than 100 licenses awarded to companies.  Please contact our firm if you would like additional information.
Statoil and Rosneft signed agreements that complete the contractual framework of their Joint Venture to explore offshore frontier areas in the Sea of Okhotsk and in the Barents Sea.
The companies have also concluded a Heads of Agreement to explore shale oil opportunities in the Samara region. The companies will under the Heads of Agreement execute a pilot exploration program on the Domanik shale formation at 12 license blocks in the Samara region. Rosneft stake in the project will be 51%, while Statoil will hold 49%. In accordance with the agreement, Statoil will provide carry-based funding of up to $60 mln to perform the pilot survey program, and contribute state-of-the-art technologies and professionals for hard to recover reserves.
Russia lost its position as prime supplier of gas to Europe last year, with Norway edging Russia out of the No. 1 spot for the first time. Although Russia will remain a key supplier to Europe, it is also seeking to diversify export markets for its gas to Asia as part of the strategy to unlock frontier regions like the Arctic and Eastern Siberia for hydrocarbons development. Gas production from these new regions is intended to enhance export capacity and to replace declines in existing fields. Dynamics in the global gas market are shifting, however, and Russia’s ability to secure markets in Asia, which is crucial given that European markets are stagnant, will largely depend on its ability to navigate the challenges and opportunities that these shifting dynamics pose.  For more information please contact HBW Resources.

TOTAL S.A. further enhanced its worldwide natural gas assets. TOTAL’s subsidiary Total E&P Tajikistan B.V. acquired an interest in Bokhtar PSC in Tajikistan. This field was owned by Kulob Petroleum Limited, a subsidiary of Tethys Petroleum Limited, jointly with CNPC Central Asia B.V., a subsidiary of CNPC.  Post acquisition, Total E&P Tajikistan B.V. and CNPC Central Asia B.V. will each hold a 33.335% interest in the PSC, while Kulob Petroleum Limited will retain a 33.33% stake. The deal has been approved by the Tajikistan government. The value of the deal was not disclosed.
Chevron Ukraine B.V. will invest $25 billion in exploitation and recovery of shale gas on the Olesske gas field (Lviv Region and Ivano-Frankivsk Region). Chevron has allocated a grant of UAH 10 million for the environmental monitoring of production of shale gas on the Olesske field.
U.S. Representative and founder of the Congressional Natural Gas Caucus Tim Murphy hosted a 10-member delegation of Ukrainian officials visiting the U.S. to learn about environmentally responsible shale gas exploration in southwestern Pennsylvania. The delegation participated in several meetings in Carnegie, Pennsylvania, including a roundtable discussion with members of the Marcellus Shale Chamber. For more information please contact HBW Resources.
United Kingdom
The Environment Agency (EA) is preparing to announce that conventional exploratory wells, which have been drilled onshore for years without the regulator’s oversight, will now require permits for “mining waste” and flaring. The EA will also announce plans to significantly streamline and speed up the permitting process. The rule change for conventional drillers is likely to raise questions about the regulator, given it apparently only realized the need for the permits after a challenge by Friends of the Earth. Please contact our firm if you would like additional information.
The U.K. said fields of shale gas in northern England are twice as large as previously estimated, offering the potential to boost economic growth, replace depleted North Sea deposits and cut energy imports. The shale rocks under counties including Lancashire and Yorkshire may hold as much as 1,300 trillion cubic feet of gas, Treasury Chief Secretary Danny Alexander said, citing the British Geological Survey. While only a fraction of that gas will be extracted, a recovery rate of 10 percent, similar to fields in the U.S., would give the U.K. enough gas to meet demand for about 47 years. The government is pushing for shale exploration to replicate the boom in U.S. gas output that’s cut energy costs and boosted economic growth. To win support for drilling, which requires the controversial technique of hydraulic fracturing, local communities will be offered a share of production revenue, the British Broadcasting Corp. reported today. Using a 10 percent extraction rate for the figures published today would add 130 trillion cubic feet to the U.K. proved reserves, putting it ahead of Norway as Europe’s largest holder of the commodity. Proved gas reserves in the U.K. were estimated at 8.7 trillion cubic feet last year, while Norway has 73.8 trillion cubic feet.  For more information please contact HBW Resources.
The UK Chancellor of the Exchequer signaled changes to the planning regime and tax breaks to help push forward with fracking for shale gas. In the spending review, George Osborne said the Government would “make the tax and planning changes which will put Britain at the forefront of exploiting shale gas”. He also promised to provide the certainty investors needed to pour £100bn of investment into the UK’s energy infrastructure. The news comes as the British Geological Survey was due to release its report into the total resources of shale gas under the North West. It is thought it will show that the amount of gas, previously estimated at around 300 to 400 trillion cubic feet – enough to satisfy Britain’s total gas requirement for 13 years – is actually much greater.
Additional Information
For additional information, please contact Bo Ollison with HBW Resources.  His contact information is below.
Bo Ollison
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bollison@hbwresources.com
Web: http://www.hbwresources.com
 Twitter: @BoOllison

Contact Information
If you have any general questions, please contact us anytime. Previous versions of the HBW Ollison Hydraulic Fracturing Report, the HBW Greenfield Offshore Energy Report, daily updates and new Member profiles can be viewed at:  http://www.mzehrhbw.wordpress.com.  Hope you all have a great day!
Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Web: http://www.hbwresources.com


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