Chevron Corp. has put more than 17,000 gross acres up for sale in three central Pennsylvania counties, according to a post on the online auction service EnergyNet. Chevron has opened 12,059 gross acres of its Juniata Field in Bedford, Blair and Cambria counties to bids. Those properties currently produce 2.2 MMcf/d and 7,650 gross acres are held by production. The company is also marketing its Smithmyer Field in Cambria County, where it has 5,072 gross acres open to bids, of which 1,600 acres are held by production. The area is removed from Marcellus Shale hot spots in the northeast and southwest part of the state. Last month, the company confirmed that it planned to lay off 162 employees in Pennsylvania to prepare for a reduction in activity there (see Shale Daily, Jan. 23; Nov. 13, 2014). EnergyNet said the two land packages in Pennsylvania are part of 12 that Chevron will eventually offer on the site. Bids are due Feb. 18.
The Pennsylvania State Senate has unanimously passed two bills that would give landowners more transparency and protection when making inquiries about their lease agreements. Both SB 147 and SB 148 passed 49-0. The bills require oil and gas companies to pay royalties within 90 days from the start of production. They would also prevent operators from terminating a lease agreement or ceasing development if a landowner questions the accuracy of royalty payments (see Shale Daily, Jan. 22). Both bills passed the Senate by wide margins last year but stalled in the state House of Representatives. The House Environmental Resource and Energy Committee will now review both pieces of legislation.
Blue Racer Midstream LLC has suspended plans to build a $70 million natural gas processing plant in Northeast Ohio. Blue Racer COO Scott Williams told a crowd gathered for a recent industry conference in Pittsburgh that although the plant is not entirely out of the question, falling commodity prices and lackluster results in the Utica Shale's northern tier prompted the decision. Numerous operators, including BP America and Halcon Resources Corp. have stopped drilling in the Utica's northern tier (see Shale Daily, June 27, 2014). Blue Racer's plans for the plant had been tentative since it announced the idea in 2012. Only one other processing facility, Pennant Midstream LLC's Hickory Bend Processing Plant, serves the area's remaining operators at a location outside Youngstown, OH, near where Blue Racer had proposed their facility (see Shale Daily, Jan. 6, 2014) .
The Bureau of Land Management (BLM) office for Montana and the Dakotas completed an oil and natural gas lease auction for properties on federal lands in North Dakota, netting nearly $4.3 million. BLM said that seven leases were sold totaling 1,742 acres. That was a sharp drop off from a similar BLM auction a year earlier that garnered $17.5 million from the sale of 40 parcels totaling 2,261 acres. Billings, MT-based Herco LLC submitted the highest per-acre bid, offering $13,750 for a 233-acre parcel in Dunn County, ND. A year earlier, the high bid was $34,000/acre. The BLM oil/gas leases are awarded for 10 years and remain in effect as long as oil or gas production continues. The next lease sale is scheduled for May 6 in Billings, MT.
Stranded Oil Resources Corp. (SORC), a subsidiary of Alleghany Capital Corp., has acquired 9,000 acres of the historic Teapot Dome Oilfield in central Wyoming, known officially as Naval Petroleum Reserve Number 3 (NPR-3) from the U.S. Department of Energy for $45.2 million. The oilfield, consisting of 9,481 acres north of Casper, WY, was set aside as a naval oil reserve in 1915, and is best known for its connection to a scandal that rocked the Harding administration, and eventually shut Teapot down, in the 1920s. Apart from some exploratory and offset wells drilled in the 1950s and 1960s, the oilfield was essentially closed until full development resumed in 1976; in 1993 it became the home of DOE's Rocky Mountain Oilfield Testing Center. The sale is the culmination of a competitive bidding process that closed in October. The remaining surface acreage of NPR-3 is scheduled to be transferred in May. SORC said adding NPR-3 to its portfolio is part of its core strategy of acquiring and redeveloping mature oil fields.
In its final two meetings before gathering late in February to make final recommendations, Colorado Gov. John Hickenlooper's 21-member statewide task force examining local control issues surrounding oil and natural gas development will meet twice this week in Denver. The meetings come in the wake of the City of Erie last week rejecting a proposal to reimpose a moratorium on drilling, including hydraulic fracturing, and instead pursuing renegotiated agreements with the two major operators within the city jurisdiction -- Encana Corp. and Anadarko Petroleum Corp. (see Shale Daily, Jan. 27). The two-day task force agenda calls for reviewing draft proposals and to begin drafting proposed recommendations. Speculation among stakeholders is that the task force will be hard-pressed to come up with consensus or clear-majority recommendations (see Shale Daily, Jan. 23).