American Oil and Gas Reporter - January 2015 - 181

ConventionSection: Independent Oil & Gas Association of West Virginia
young, bright minds who are skillful
leaders, capable of creative exploration
and problem-solving."
Cracking The Gas
IOGAWV members are eagerly awaiting Brazilian-based ODEBRECHT's proposed polyethylene cracker plant in Wood
County, W.V., Haney says. Royal Dutch
Shell Corp. has expressed preliminary
plans to build a similar plant in Pennsylvania.
Considering the permitting hurdles
each facility still must clear, Haney suggests neither plant will begin operation
sooner than three-four years. However,
he says Appalachia's overall situation
has improved greatly since the recession.
"The state's west-central area and the
northern panhandle have thrived because
of Marcellus and Utica shale gas production," he says. "However, the low gas
prices going into 2015 are not making it
any easier for conventional operators in
the southern half of the state."
More pipelines to the Northeast likely
will alleviate some of the price weakness

associated with bottlenecks, he states.
Although major Appalachia-to-Northeast
pipeline projects are in the works, Haney
predicts it will take a few years before
the gas really can start moving.
"There is definitely a bottleneck in
moving gas to the Northeastern markets,"
he elaborates. "Essentially, we are being
penalized. All companies are experiencing
a negative cost basis adjustment, because
it is affecting everyone's ability to get
their gas to market. With the West Virginia
gas bottleneck, we are getting a very
negative cost basis for our product."
One West Virginia company, he cites,
can only sell its gas at a $1.30 discount,
which trims already slim margins even
further.
"Prices and production levels are down
from what we have experienced lately,"
he says. "But, on the whole-especially if
we are looking at the big picture-we are
so much better off than we were. Even if
the cracker plants and pipeline projects
are a few years off, the fact that they are
coming says the midstream and downstream
folks believe the upstream market will

continue its steady rise. And that's something our members can appreciate."
Ì

Magnum Hunter Having
Success In West Virginia
HOUSTON-Magnum Hunter Resources Corp. announces that its Stewart
Winland 1300U well in Tyler County,
W.V., has started producing; it is the
company's first Utica Shale well drilled
and completed in West Virginia.
The company says this well is on the
play's southeastern edge and has tested
at a peak rate of 46.5 million cubic feet a
day of natural gas on an adjustable rate
choke with 7,810 psi in final circulating
pressure. The well has been flowing to
sales through the Company's Eureka
Hunter Pipeline system.
According to Magnum Hunter, the
Stewart Winland 1300U was drilled and
cased to a true vertical depth of 10,825
feet with a 5,289-foot horizontal lateral,
and successfully fractured with 22 stages.
Ì

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JANUARY 2015 181

American Oil and Gas Reporter - January 2015

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