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November 2013 Edition
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Carroll County 338 2. Harrison County 139 3. Columbiana County 90 4. Monroe County 72 5. Noble County 67 6. Guernsey County 60 7. Belmont County 55 8. Jefferson County 38 9. Mahoning County 28 10. Portage County 15 11. Tuscarawas County 14 Trumbull County 14 12. Stark County 13 13. Washington County 9 14. Coshocton County 5 15. Muskingum County 3 Holmes County 3 16. Knox County 2 17. Ashland County 1 Astabula County 1 Geauga County 1 Medina County 1 Wayne County 1 WELL SITES IN VARIOUS STAGES: PERMITTED, DRILLING, DRILLED, COMPLETED, PRODUCING, PLUGGED SOURCE: OHIO DEPARTMENT OF NATURAL RESOURCES AS OF 10/19/13
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Gas & Oil
Northern Zone Edition
November 2013 Edition - Dix Communications
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November 2013 Edition
Table of Contents 4
Kent Professor Studies Gas/Oil Industry
7
50th Anniversary
8
Moving Forward, In Limited Fashion
Kim Brenning Southern Zone Sales Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531
11
The Language of Oil and Gas
12
Drilling Down: Part 2 of 4 part Series
Peggy Murgatroyd Southern Zone Sales Barnesville and Newcomerstown, Ohio Offices PMurgatroyd@dixcom.com 740-425-1912 Barnesville 740-498-7117 Newcomerstown
15
OOGEEP Coordinates Education
16
Chesapeake Energy Restructuring
19
Utica Shale Joint Venture
20
Welding Binds Education, Industry Together
Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450
22
First Ohio Well
24
Energy Council Reaches Agreement
Jeff Pezzano VP Advertising Sales & Marketing Kent Ohio Office JPezzano@dixcom.com 330-541-9455
27
Pipeline Has Secured Land
28
Keeping It Green
30
Consol Energy Kicks Off Powerup School Challenge
31
Pipeline
32
EQT Manager Offers Advice for Job Seekers
Harry Newman Northern Zone Sales Kent, Ohio Offices HNewman@dixcom.com 330-298-2002
Jeff Kaplan Southern Zone Sales Alliance & Minerva, Ohio Office JKaplan@dixcom.com 330-821-1200
LAYOUT DESIGNER Pete Kiko
“Gas & Oil” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2013.
Bobby Warren / Dix Communications Laurie Huffman / Dix Communications
Daniel Plumley / Attorney
Laurie Huffman / Dix Communications
Linda Hall / Dix Communications
Laurie Huffman / Dix Communications
Alison Stewart / Dix Communications
Lisa Loos / Dix Communications
Chuck Keiper / Northeast Ohio Public Energy Council Dylan Lovan / Associated Press
A Business & Events Directory Judie Perkowski / Dix Communication
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Gas & Oil
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November 2013 Edition - Dix Communications
ENT — For Brian Lutz, Ph.D., a native of Lordstown, Ohio, what started out as a curiosity while working on his family farm has led him to where he is now: asking critical research questions on fracking and shale gas issues that can affect millions of people in his home state. Growing up on the farm, Lutz spent summers applying nitrogen to cornfields. “I was always stunned at how much it took and always wondered where it went and how it affected the environment,” Lutz said. Lutz now studies how humans alter the chemistry of their environment as an assistant professor of biogeochemistry in the Department of Biological Sciences at Kent State University. Hired in November 2012, his most recent research has focused on the environmental challenges and domestic energy benefits of shale gas production compared to conventional gas production and mountaintop coal mining. Study Yields Surprising Results Lutz and colleagues from Duke University just released a study of hydraulically fractured natural gas wells, which are often perceived as inordinately wastewater intensive. In fact, the study published in the journal Water Resources Research shows that these wells are actually producing three times less wastewater per unit of gas recovered than conventional wells. “That surprised us, given the popular perception that hydraulic fracturing creates disproportionate amounts of wastewater,” Lutz said. “But it’s a double-edged sword. On one hand, shale gas production generates less wastewater per unit of gas. On the other hand, because of the massive size of the Marcellus resource, the overall volume of water that now has to be transported and treated is immense. It’s likely going to become the defining challenge for shale gas development in this part of the world.” Lutz argues that if the challenge becomes constraining natural gas production to an acceptable volume of wastewater, the logical conclusion may be to constrain conventional production prior to shale gas production. “That turns our perception of what regulation should potentially do on its head,” he said. “This is the reality of increasing domestic natural gas production,” said Martin Doyle, professor of river science at
Northern Zone Edition
Duke University’s Nicholas School of the Environment and co-author of the study. “There are significant tradeoffs and environmental impacts whether you rely on conventional gas or shale gas.” The researchers analyzed gas production and wastewater generation for 2,189 gas wells in Pennsylvania, using publicly available data reported by industry to the state’s Department of Environmental Protection, in compliance with state law. They conducted their analysis with no external funding. In hydraulic fracturing, large volumes of water, sand and chemicals are injected deep underground into gas wells at high pressure to crack open shale rock and extract its embedded natural gas. As the pace of shale gas production grows, so too have concerns about groundwater contamination and what to do with all the wastewater. Adopting New Technologies and Approaches “Our traditional method for getting rid of this wastewater is to inject it back underground, but much of the geology throughout this region is not suitable for underground injection,” Lutz said. Lutz and Doyle argue that we need to come up with novel technological and logistical solutions for wastewater management, including better ways to recycle and treat the waste onsite or move it to places where it can be safely disposed, both of which are happening rapidly. “Opponents have targeted hydraulic fracturing as posing heightened risks, but many of the same environmental challenges presented by shale gas production would exist if we were expanding conventional gas production,” Lutz added. “We have to accept the reality that any effort to substantially boost domestic energy production will present environmental costs.” Water has long been Ohio’s greatest natural resource, and many believe that the state’s economy and the health and welfare of Ohioans hinges on access to clean water. The ability to recover gas from the enormous reserves in shale formations promises to have an important impact on the economy of Ohio. “Because hydraulic fracturing produces vast quantities of wastewater, there is an immediate need to adopt new technologies and approaches to dealing with the impact of this
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production on our state’s water resources,” said James Blank, Ph.D., interim dean of the College of Arts and Sciences at Kent State. Additional Fracking Research Needed Kent State has emerged as a center of excellence in the issues related to the ecology and sustainability of our land and aquatic environments. “Dr. Lutz has joined a large group of researchers across multiple disciplines that are focused on issues related to hydraulic fracturing,” Blank said. “Their approaches range from the biology and ecology of Ohio’s natural environments, to the biogeochemistry of aquatic environments, to the political and sociological impact on Ohio and its citizens.” “There is still a lot of research that needs to be done to better understand the environmental impacts of shale gas development,” Lutz said. “But any method that we use for harvesting fossil energy from the earth is going to have an environmental footprint, and these new methods that are changing energy production in the U.S. are not wholly good or bad. They have advantages and disadvantages against conventional methods.” Lutz and his colleagues are now working to develop a framework that will allow comparisons to be made between the environmental impacts of hydraulic fracturing and shale gas development to mountaintop removal coal mining. “Having grown up here in Northeast Ohio, I recognized that this is an ideal landscape for understanding human activities and impacts on the environment,” Lutz said. “We’re situated between coal mining in the Appalachians and hydraulic fracturing in the Northeast. The role that these important resources will have in America’s energy future will depend on our ability to understand their environmental costs and to be able to weigh tradeoffs among them.” Lutz earned a Bachelor of Science degree in biology in 2005 at the College of Wooster and completed a doctorate in biogeochemistry at Duke University in 2011. He resides in Edinburg, Ohio, with his wife, Dory, and two daughters, ages 4 and 2.
Scott Horning, CRPC®
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Northern Zone Edition
November 2013 Edition - Dix Communications
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November 2013 Edition
7
50th Anniversary
Eric and Martha
spend day promoting safety Bobby Warren Dix Communications
A
PPLE CREEK — Eric Smith, board chairman of the Ohio Oil and Gas Energy Education Program and owner of Maric Drilling, Mount Eaton, spent his 50th anniversary with his wife, Martha, at OOGEEP’s training facility, watching another round of firefighters learn how to battle oil field disasters. Smith, who lives in Winesburg, has been involved in drilling wells since 1975, and he started his company in 1995. An industry that has been relatively unchanged for nearly a century in Ohio has changed dramatically within the past few years, he said. Gas and oil companies were generally family businesses started by someone’s grandfather, and they were drilling in the Clinton and Berea sands. Then, along came horizontal drilling, hydraulic fracturing and a shale play that attracted big, multi-national producers, “almost putting the legacy producers out of business,” said Smith, who operates “a little drilling company.” Because of the big corporations coming in, it has not done much for production for small companies like Maric Drilling.
Dix Communications Photo / Bobby Warren Eric Smith, owner of Maric Drilling and board chairman of the Ohio Oil and Gas Energy Education Program, says the industry has been relatively unchanged for nearly a century, that is, until a few years ago with big producers coming into Ohio. Smith and his wife, Martha, spent their 50th wedding anniversary at the Wayne County Regional Fire Training Facility, Apple Creek, where OOGEEP conducts its oil field training.
With natural gas prices low, it is not economical for legacy producers to drill for natural gas, Smith said. From Smith’s perspective, the large producers come in, produce a well and when production declines, they want to get out, sell it and have someone else come in. “This industry is always cyclical with its ups and downs,” he said. “What is different now is shale is so big, I see no ups for conventional producers.” While Smith and his wife were at the training facility, which is located in the Wayne County Regional Fire Training Facility, he commented how the entire facility is “fantastic, not just our part, but the whole campus.” OOGEEP has a great relationship with the leaders of the training facility, and they continue to help firefighters understand what happens when an oil tank catches on fire.
8
Gas & Oil
Northern Zone Edition
November 2013 Edition - Dix Communications
Moving Forward, In limited Fashion
Laurie Huffman Dix Communications
L
ouisville’s city manager, Tom Ault, met with officials from Chesapeake Energy on Oct. 9 regarding the Utica field office that is currently under construction between Route 44 and Beck Avenue. Ault noted the project is moving forward, but he said the original plans included an office building, maintenance facility and a sand trans-load center. Chesapeake had also predicted another facility would be built at the location to house some of their support industries. So, far, only the office building, is being constructed. “They plan to have the office building complete in February or March, and to occupy it in March or April. But, like any plan, that is subject to change,” said Ault. “So far, the office building is the only thing being constructed. We don’t know what is happening with the other original plans.” However, Ault pointed out the reorganization at Chesapeake Energy is to be complete within a month, and he estimates another couple of months beyond that will be needed to get new plans in place or reconfirm original plans. “So, it will probably be the first of the year before we find anything out for sure. That is what we estimate,” said Ault. In 2012, Chesapeake Energy purchased 291 acres of land comprising the Beck Industrial Park, an area the city of Louisville had developed. Chesapeake stated at that time the plans were to construct facilities for its Utica shale operations on the site. The office building under construction is a five-story structure. What else will end up at the location is still a question for Louisville officials. The other big question for Louisville is how many jobs the completion of the office building, or the larger Utica Shale Operations site, will bring. “That is also something we still don’t know,” Ault closed.
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Gas & Oil
Northern Zone Edition
November 2013 Edition - Dix Communications
OHIO WELL ACTIVITY
by the numbers
MARCELLUS SHALE
17 3 8 0 7 0 0 35
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
UTICA SHALE 3 5 2 Wells Permitted 83 Wells Drilling 331 Wells Drilled 0 Not Drilled 1 6 9 Wells Producing 0 Inactive 0 Plugged 935 Total Horizontal Permits
Data as of 10/19/13 Source: Ohio Department of Natural Resources
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THE LANGUAGE OF
OIL AND GAS Daniel H. Plumley Critchfield, Critchfield & Johnston
E
terest, a lease hound holds a 5% overriding royalty interest in the oil and gas developer has 100% working interest, the developer would have an 80% net revenue interest. Net versus Gross: this relates to the calculation of the royalty. A gross royalty is the amount paid on what is produced, and a net royalty is the amount paid after deductions for such things as compression, dehydration, transportation, and market enhancement. It is customary for the landowner to seek a gross royalty calculation; however, it is becoming more common for the landowner to share in certain post production costs particularly the cost of processing wet gas. Wet Gas: natural gas containing additional compounds that can be converted or “cracked” into butane, pentane, propane, and ethane. Wet gas is more valuable than dry gas. Dry Gas: is essentially just gas only containing methane. Pugh Clause: a clause that forces the producer to release land (horizontal pugh) and formations (vertical pugh) that are not developed within the primary term of the lease. While the above terms are only a small sample of the lexicon related to oil and gas leases, these are the most common terms you will encounter. After learning the above you may not be fluent in the language, but you will at least be able to be conversant. Good luck at your next social event where oil and gas is the topic of discussion!
ven though it is English, the terminology of oil and gas leases is “foreign” to most people. As with many businesses, to understand the business, you must first learn the language. Here are some of the common terms you will encounter: Primary Term: the number of years the oil and gas developer has to drill a well on the property. Secondary Term: once a well has been drilled, the secondary term will last so long as the well is producing in paying quantities. Formation or Horizon: the geological formation in which the well has been drilled e.g. Clinton, Marcellus, Utica. Royalty: the percentage of production revenue retained by the landowner. This usually ranges from 12.5 to 20% and is not affected by the cost of drilling, completion or operation. Over Riding Royalty Interest: an interest held by a third party that receives a share of the production revenue but does not share in the costs of drilling, completion or operation. Working Interest: percent of ownership that is paying for the drilling completion and operation of a well. Lease Hound: the person that is retained to acquire a lease and often retains an overriding royalty interest for the serDaniel H. Plumley is a member at the law firm of Critchfield, vices performed. Critchfi eld & Johnston. Net Revenue Interest: the absolute ownership held in a lease. For example if a landowner retains a 15% royalty in-
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Gas & Oil
November 2013 Edition - Dix Communications
Northern Zone Edition
Drilling DOWN
Part 2 of 4 part series Laurie Huffman Dix Communications
T
he U.S. EPA states there are currently 168,000 Class II deep injection wells in the country. The ODNR states only oilfield wastes may be transported from drilling sites and injected into Class II wells, which are specifically designed for this type of waste disposal. These wells are drilled into porous formations of limestone or sandstone, usually at about 4,000 feet in depth. Class II injection wells require four layers of protective steel casing and cement, which safeguards underground water aquifers. But, environmental experts say cement doesn’t hold up forever. The injection zone is also always below a layer of impermeable formation, which keeps the fluids trapped deep in the porous formations below. All aspects of the drilling and construction of Class II injection wells and surface casing are witnessed by an inspector, the ODNR also states. And, after deep injection begins, inspectors continue to monitor the well on a regular basis for mechanical integrity. Each well is inspected about once every 10 to 11 weeks. All injection wells are also to be strictly regulated by the ODNR and the U.S. EPA. Yet, some grassroots organizations report oil and gas industry waste is legally exempt from federal hazardous waste regulations and from important portions of the Safe Drinking Water Act and Clean Air Act. They have concerns that these toxic wastes are legally designated nonhazardous by virtue of these exemptions. If tested, they believe they would be deemed hazardous and would be required to be disposed
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• Complete Oil Field Services • Frac Support
of in a Class I, hazardous waste injection well, which range from 2,000 to more than 10,000 feet in depth. The EPA reports there are only 680 of these wells in existence in the U.S., and three facilities in Ohio currently operate a total of ten Class I injection wells regulated by Ohio EPA. The Columbus Dispatch also reported in September 2012 that a U.S. geological survey indicated liquid fracking waste from Pennsylvania, which is where most of Ohio’s oilfield waste currently originates, had levels of radioactivity over 3,600 times drinking water standards and more than 300 times higher than Nuclear Regulatory Commission limits for industrial discharges to water. It can take up to four million gallons of water to fracture a horizontally drilled shale well, which the ODNR compares to four-to-five million gallons used weekly by an average golf course. The ODNR states chemical make up is less than 1 percent of the fluid used, and only about 15-20 percent of the water returns to the surface as waste, called flowback. Injection wells have been managed by the ODNR for the last 30 years, and large volumes of oilfield wastes have been injected through the program, which is designed to protect drinking water and ecosystems. Fees raised by injection wells support permitting, certification, and inspection of the wells and service operations.
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November 2013 Edition
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OOGEEP coordinates education opportunities Linda Hall Dix Communications
W
OOSTER — The Ohio Oil and Gas Energy Education Program is working with students, teachers and leaders in the oil and gas industry to prepare employees in an area experiencing “huge demand,” said OOGEEP’s executive director, Rhonda Reda. OOGEEP prioritizes “assisting schools with their science curriculum,” said Reda, who pointed out schools in Ohio have “fallen behind,” as reflected in students’ academic scores. “Without a doubt,” she said, boosting science curriculum and holding teacher workshops to engage instructors in the oil and gas industry are tied to work force development. If teachers, and as a result, their students, can get excited about geology or engineering, they can pursue available careers in the industry, Reda said. In fact, she said, “all of our programs are funded by Ohio’s oil and gas producers,” including KENOIL, Buckeye Oil Producing Co., Franklin Gas & Oil Co., LLC, J. R. Smail, Inc., and Cedar Valley Energy. “We do not utilize any tax dollars,” Reda said. “We’re trying to reach the younger generation about the importance (of oil and gas) in our country,” said Ron Grosjean, an OOGEEP board member from KENOIL, Inc. in Wooster. “This industry has been here for 200 years,” Grosjean said, “and has been the livelihood for a lot of people.” “This country cannot survive without oil and gas,” he said, while at the same time respecting the role of wind and solar energy. While some adults “can’t see over what they think is the bad part (of the oil and gas industry),” Grosjean said, students as young as fifth- and sixth-grade are comprehending its significance. “There are many types of jobs this industry generates,” Grosjean said, such as geologists and engineers. But there are also people needed to build a road to the sites being drilled, drill the wells, construct pipelines and tend the wells, to name a few. In “try(ing) to create jobs in our area,” Grosjean said, OOGEEP offers 25 scholarships every year to young people “working toward oil field-related careers.”
As it stands now, oil and gas field employees are coming to Ohio from other states to work in the industry because Ohio doesn’t have a sufficient number of trained personnel, Grosjean said. Bill Bennett, Cedar Valley Energy, Wooster, affirmed the benefit to people and the state as a whole of “training workers for fairly high paying jobs.” The industry, along with providing “good wages for people working in the oil fields,” offers opportunities for advancement, Bennett said. “There are many, many people in our industry,” he said, who progressed from laborers in the field to owners of their own small oil companies. “I’m one of them,” Bennett said. “I’m the president of the company. It can be done.” Industry employees earn a good living from the beginning, Bennett said, adding, “There is a career field if they want it.” OOGEEP focuses on “bridging science and industry,” Reda said. “OOGEEP is working hard to develop a trained workforce for the expanding oil and gas industry,” said Sarah Tipka, an OOGEEP board member, education committee chair and oil and gas producer from A.W. Tipka Oil and Gas, Inc., in an August 2013 statement for OOGEEP. Tipka labeled teacher workshops as “an invaluable tool that allows the industry to work with teachers and their students who may one day help develop, produce and supply our domestic energy needs.” Kubota’s rugged RTV utility vehicles are already proven workhorses. And now, an even more powerful Kubota RTV900XT has evolved. Engineered with a 21.6 HP Kubota diesel engine, a smooth VHT Plus 2 transmission and hydraulic power steering. RTV900XT...Evolved to work hard and to work smart.
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Northern Zone Edition
November 2013 Edition - Dix Communications
Laurie Huffman Dix Communications
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estructuring at Chesapeake Energy Corporation following the removal of Aubrey McClendon from the board and his position as CEO of the company is just about complete, industry officials believe. Some of the changes made will mainly affect the stockholders. Others will be noticed by the communities in this area. Once Robert Douglas Lawler took the Chesapeake helm, he eliminated local public relations positions around the country, as the more conservative Lawler is quoted as saying that can be handled from Chesapeake headquarters in Oklahoma City. This action took Pete Kenworthy and Ken Fuller, two spokespersons the people in Northeastern Ohio were accustomed to seeing around their towns, out of the picture. Lawler also announced the office of the chairman position would be discontinued. Archie W. Dunham, Steven C. Dixon and Domenic J. Dell’Osso Jr. continue to serve in their roles as non-executive chairman of the board, executive vice president of operations and geosciences and chief operating officer, and executive vice president and chief financial officer, respectively. Lawler, a 46-year-old who had been the senior vice president of International and Deepwater Operations at Anadarko Petroleum, officially joined Chesapeake as CEO and a member of the Board of Directors over the summer. Lawler is a petroleum engineer with 25 years of experience in the upstream exploration and production industry. He has served in increasingly senior leadership roles at Anadarko, the second-largest independent upstream company in the U.S. with a $45 billion market capitalization. He also has a proven track record as an oil and gas executive, with significant expertise in asset development, operations management and engineering as well as experience in corporate and strategic planning. Lawler has stated Chesapeake Energy has an unparalleled asset portfolio, focused management team and very talented and dedicated employees. “There is significant value in Chesapeake’s asset base and the growth potential of the company is tremendous,” he also announced. Chesapeake is scheduled to release its 2013 third quarter operational update and financial results before the market opens on Nov. 6, via conference call. The conference call will be webcast live on Chesapeake’s website at www.chk.com in the “Events” subsection of the “Investors” section of the company’s website. The webcast of the conference will be avail-
able on our website for one year. On July 3, Chesapeake announced the execution of agreements to sell assets in the Northern Eagle Ford Shale and Haynesville Shale to EXCO Operating Company, LP a subsidiary of EXCO Resources, Inc., for proceeds of approximately $1 billion. The transactions are expected to close in the 2013 third quarter. On Aug. 1, Chesapeake reported financial and operational results for the 2013 second quarter. Key information related to the quarter is as follows: Adjusted net income per fully diluted share of $0.51, compared to $0.06 in the 2012 second quarter; daily production rises of 44 percent over the past year, and total daily production increases of 7 percent. Chesapeake also reported net income available to common stockholders of $457 million, or $0.66 per fully diluted share.
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OVER — Red Hill Development announces that it has entered into a joint venture with American Energy-Utica, LLC (“AEU”) for the development of a portion of Red Hill’s Utica Shale acreage located in Eastern Guernsey and Western Harrison County. Red Hill Development was founded in 1975 by the Kimble family of Dover with various family members playing key roles in management of the company over the years. Red Hill continues to be operated by the Kimble family today producing aver 600 shallow and deep wells on its leaseholds located primarily in Tuscarowas, Coshocton, Harrison, and Guernsey counties of Ohio. American Energy-Utica, LLC is an affiliate of American Energy Partners, LP, which is a private campany formed by former Chesopeoke Energy CEO Aubrey McClendon. McClendon recently mode headlines relative to his raising in excess of $1.6 billion dollars to fund Utica Shale development. “The joint venture will enhance our ability to fully and expeditiously develop our acreage in Harrison and Guernsey Counties while we continue to explore opportunities for development of our additional holdings in the region,” said Keith B. Kimble, manager of RHDK Oil & Gas, LLC dba Red Hill Development. “We’ve spent a great deal of time and energy studying the Utica Shale and the best available technologies to use in order to effectively develop the Utica. We have a lot of history drilling through the Utica and know it can be challenging and will require tremendous amount of capital. The family has explored all options so that we could provide the best opportunity for expeditious, safe and productive development of our leases.” Red Hill Development spent the last few years working
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with various banks and private equity groups to finance drilling operations, and negotiating with midstream companies for transportation and processing options. According to Kimble, “After all of our due diligence the best fit for rapid, safe and productive development was a joint venture relationship. Aubrey’s ability to raise money for development, and his experience in horizontal drilling in general and the Utica Shale in particular, were a perfect fit for Red Hill Development.“ The AEU-Red Hill Joint Venture plans to begin immediately applying for Utica well permits and commencing construction on well sites as early as October of this year, with the first well to be spud before the end of 2013. Plans for additional drilling activity are being developed for 2014 through 2016. As a co-venturer, Red Hill Development will maintain a significant ownership position in its Utica leaseholds included in the Joint Venture, and will be involved in future investment and drilling operations alongside AEU.
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November 2013 Edition - Dix Communications
Welding binds education, industry together Alison Stewart Dix Communications
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KRON — The Dominion Foundation has recently donated $20,000 grants to the engineering department of select schools, including The University of Akron. According to Sarah Steidl, Director of Marketing and Communication for the Engineering Department at the university, the $20,000 grant will go toward the Steel Bridge Team’s welding project. Students are currently in the process of constructing a bridge for the annual regional competition. According to Steel Bridge Captain Katie Kitner, a senior at the university, the team begins bridge construction every December, to be ready for the March competition. “Right now we are going through welding training sessions,” said Kitner. “Some of our seniors will be leaving this year so it is important for them to train the underclassmen before they go.” The grant from Dominion will go toward welding and building supplies. Welding is a process which involves melting pieces of metal and adding a filler material to link them together as they cool down to form a finished sculpture. Derek Hauff, a junior at the university, said this can be dan-
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gerous. “You should not stare at the light that is produced,” said Hauff. “Being exposed to the light for too long without proper gear can result in sunburn.” “Every August, we receive a list of rules for the upcoming competition,” said Kitner. “This year the bridge will be 19 feet long and two feet and four inches tall.” The bridge must be able to hold 2,500 pounds without deflecting more than three inches, to pass through to the next round. Once the bridge deflects past two inches, points are deducted. The bridge is also tested by loading it with weight and pulling the bridge to the side. The bridge can only move one inch to stay in the competition. There are a total of five categories in the competition. Disqualifications and penalties can occur. The score is based on how efficient and heavy the bridge is. According to Kitner, the students have already begun their bridge design. The steel is donated from ITS every year. The students are currently waiting for the parts to arrive. In the meantime, they are drafting standard drawings in 3d in order to prepare. Hauff has been providing welding lessons for underclass-
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men. “Right now we are going over basics for the new people,” said Hauff. “They need to get used to welding different thicknesses of metal from different angles in difficult situations.” The weldings are tested before the bridge is welded together to make sure they do not break under pressure said Hauff. Rich Vineyard, a freshman at the university, has been undergoing welding training sessions. “I like the design aspect and putting things together,” said Vineyard. “My advisor informed me about the Steel Bridge Team and so far my first semester hasn’t been too bad.” There will be a variety of schools in the region who will be competing against one another at the 2014 regional competition in Pittsburgh. The event will be held at Carnegie Mellon. Every year students submit requests to have the national competition held at their campus. According to Steidl, the national competition will be at The University of Akron in May of 2014. The Dominion Foundation, the philanthropic arm of Dominion Resources, Dominion East Ohio’s parent company, is dedicated to improving the physical, social and economic well being of the communities served by Dominion companies. Dominion and the Foundation annually award more than $20 million to causes that protect the environment, promote education and help meet basic human needs. “Dominion East Ohio has a long and proud tradition of providing natural gas services throughout the state,” Jeff Murphy, Managing Director, Commercial Operations, said. “We were an active participant in the first Appalachian natural gas boom of the early 1900s and are now providing competitive, reliable gathering, transportation and processing services for Ohio producers in the new, 21st century natural gas boom. Ohio’s colleges and universities also provide an essential service to the natural gas renaissance. They are equipping our area workforce to maximize the economic benefits and to ensure effective stewardship of these new energy supplies. Potentially even more significant, the talented innovators that study at Ohio’s colleges today will contribute to the growth of the manufacturing, transportation and service sectors made possible by affordable, abundant, local energy.”
Dix Communications - Gas & Oil
November 2013 Edition
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Welding binds education, industry together
Photos /Robert J. Lucas Above: Derek Hauff of West Salem and Rich Vineyard of Cuyahoga Falls check out the welds. The University of Akron engineering students are constructing a bridge for a competition in March. Left: Rich Vineyard of Cuyahoga Falls and & Derek Hauff of West Salem, engineering students at The University of Akron, are pictured welding. They are constructing a bridge for a competition in March.
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Salt makers drilled first Ohio well Lisa Loos Dix Communications
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ALDWELL — In 1814 Silas Thorla and Robert McKee drilled a salt well in Olive Township, Noble County. The well struck not only the intended brine but also gas and oil, giving rival to Col. Edwin L. Drake’s discovery of oil in Titusville, Pa., in 1859, and putting Noble County on the map as being the first well in existence in the United States and probably in North America. Noble County Historical Society operates and maintains several sites including the First Oil Well in North America, junction of Route 78 and Route 564, here, in Noble County. The oil well site is open to the public year-round. It should be noted the preserved site is a second well drilled by Thorla and McKee in 1816 not far from the first. The 1814 well was destroyed when Route 78 was made. The land on which the property sits is owned by the Noble County commissioners. The late Dr. Sherman Smith, a longtime physician who had an interest in promoting Noble County, served for a time as chairman of the county department of tourism. Dr. Smith was primary in the preservation of the ThorlaMcKee oil well , and in 1991 he helped get the site nominated and later included on the National Register of Historic Places. That same year fence was placed around the well to protect it and the parking lot was stoned. Private donations along with those from various oil well companies helped fund that work. In 1992, an Ohio Historical Marker was erected at the Thorla-McKee well site. It too was paid for with donations. The site is listed in directories of the Ohio and national historical societies as well. Due to lack of funds the site was never fully developed and the plans for a museum and renovation of a nearby railroad car located on the original roadbed of the BZ&C narrow gauge railroad have literally fallen apart. The Ohio Historical Marker sign was knocked to the ground, where it remains. The key to developing the site is simple. Local officials need to work with the gas and oil companies and show them where “it” all began. And then get some donations. And take Dr. Smith’s preservation effort’s further.
Today Noble County is a hotbed of gas and oil production. Independent exploration and production companies have moved here to acquire NGLs and oil. MarkWest Utica EMG LLC is building a 200-MMcfd cryogenic gas plant at its Seneca processing complex in Noble County. It will support rapidly growing drilling by Antero Resources, Gulfport Energy Corp., and other producers in the southern Utica shale, the company reported. Route 78 has been closed numerous times in the past months so that equipment larger than one lane of highway could be moved to MarkWest’s cooling plant construction site in Summerfield. Traffic on Route 78 has increased tenfold as the result of gas and oil activity — and it’s all within a bird’seye view of the Thorla-McKee well site. What if MarkWest donated the funds to build a museum? “Seneca Oil” — the magical black salve that Thorla reportedly peddled as a medicinal cure for rheumatism, sprains and bruises — could be bottled and sold. Next year will mark the 200th anniversary of the First Oil Well in North America. It is the perfect time for Thorla and McKee to be remembered in Noble County. Lisa Loos is the Noble County writer. E-mail her at lloos@ daily-jeff.com or follow her on Twitter at LisaLoosDJ.
Intact is the original hollow sycamore log casing of the 1816 salt well drilled by Silas Thorla and Robert McKee in Olive Township, Noble County.
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Salt makers drilled first Ohio well
A railroad car is located nearby on the original roadbed of the narrow A cage protects the oil well which sporadically emits gas and bubbles gauge railroad. The donated train car either needs repaired or removed black oil and salt water. Decking around the well casing needs replaced and the interior of the cage cleaned up. The Thorla-McKee well was from the site. drilled with a spring pole — a method where the drill is lifted with a rope, after the fashion of a pump. A spring pole model also is at the site.
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Energy Council Reaches Agreement to Provide Natural Gas Chuck Keiper Northeast Ohio Public Energy Council
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AVENNA — Hundreds of thousands of Northeastern Ohio residents and businesses soon will be able to benefit from the state’s shale gas boom. The Northeast Ohio Public Energy Council (NOPEC) has reached a new six-year agreement to supply natural gas to its natural gas customers in Northeastern Ohio, which will be less expensive than purchasing out- of-state gas that has much higher gas transportation costs. NOPEC has about 270,000 natural gas customers in 10 counties in Northeastern Ohio. “NOPEC is pleased to help Northeast Ohio residents and businesses cut their heating bills for years to come,” said Joe Migliorini, chairman of NOPEC’s Board of Directors. “We’ve all heard and read about Ohio’s extensive shale gas deposits, but this agreement allows Northeast Ohioans to capitalize on
this great local resource. NOPEC expects to purchase a large amount of Ohio natural gas at a significant savings which will be contractually passed along to our customers.” The six year pact between NOPEC and NextEra Energy Services, Ohio LLC will mean an estimated savings of 50 to 60 cents per thousand cubic feet because of lower costs compared to today’s delivered gas prices. Additional savings may also be realized by using more Ohio gas, with total potential savings estimated to be as much as a total of $1 per Mcf, based on expected Ohio gas production trends. At this time, it is not possible to project exact savings as gas prices fluctuate constantly. With the new agreement between NOPEC and NESO – which does not take effect until March 2014 -- there will certainly be significant cost advantages by buying local gas. The new agreement could see up to $25 million in savings annually for NOPEC’s customers – which
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Energy Council Reaches Agreement to Provide Natural Gas could total up to $150 million over the term of the agreement. Chuck Keiper, NOPEC executive director, said the new agreement supports economic growth in Northeastern Ohio. “NOPEC is very excited to be able to look at the resources available in our region in a new way and put together a programmatic way for our customers and communities to benefit while at the Same time supporting jobs and economic growth within our state,” Keiper said. “NOPEC has been working on changing this paradigm for our customers for many months. The staff and the board of directors have very diligently and thoughtfully examined what is happening in the market in order to construct what we believe to be a true value-add and real savings opportunity for the people we serve,” he added. NESO will replace Virginia-based Dominion Energy Solutions as the endorsed supplier of gas to NOPEC’s natural gas aggregation customers. The Dominion East Ohio and Columbia Gas of Ohio distribution utilities will continue to deliver gas within their respective service areas and will also continue to provide customers with their monthly bills so that the change will be seamless for NOPEC customers. Since its inception in 2000, non-profit NOPEC— the nation’s largest retail public energy aggregation — has used bulk-buying strategies to cut Northeast Ohio’s utility costs by
more than $200 million. NOPEC provides low-cost electricity and gas to a total of 750,000 customers — including an estimated 270,000 natural gas customers — in 10 Northeast Ohio counties. The concept of public aggregation is a simple one. Aggregation allows consumers to pool together their usage into one large buying group, offering consumers choice and the opportunity to lower the cost of the generation portion of their utility bill. NOPEC members enjoy the advantage of bulk buying power, professional expertise and consumer advocacy on their behalf. NOPEC is governed by a General Assembly, formed from one representative from each member community. The representatives for each county then elect one person to serve on the 10-member NOPEC Board of Directors. No taxpayer funds are used. For more information, go to www.nopecinfo.org. NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy company with revenues of approximately $14.3 billion and nearly 15,000 employees in 26 states and Canada as of year-end 2012. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
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Dylan Lovan Associated Press are involved in allowing a pressurized hazardous materials pipeline to be installed on your property,” Fitzgerald said. Fitzgerald said signing an easement deal could have tax implications and may affect a property owner’s mortgage agreement and insurance. Last month, state officials declared during a hearing before a legislative committee that the pipeline builders would not be allowed to invoke eminent domain law if certain landowners along the proposed route are unwilling to cooperate. Company officials maintained that businesses do have the authority to use the law to obtain right of way if necessary. The company has said the easement deals would be onetime payments to landowners.
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OUISVILLE, Ky. (AP) — A company planning to build a natural gas pipeline in Kentucky says it has secured land-use deals in parts of nine counties along the pipeline’s proposed path. Officials with the Bluegrass Pipeline say they have reached easement agreements with private landowners in nine of the 13 counties along the proposed route. The entire 500-mile pipeline route also stretches through Ohio and Pennsylvania. A spokesman for the Williams Co. of Oklahoma, one of the energy firms behind the project, said he did not know how many miles of the proposed route in Kentucky have been secured. The path would bypass two properties owned by Roman Catholic communities in central Kentucky. Last month, the company said it would stay well north of the 780-acre tract in Marion County owned by the Sisters of Loretto. Williams spokesman Tom Droege said Tuesday that the company is looking for a route around the 2,500-acre property owned by the Abbey of Gethsemani in Nelson County. Droege said the monks who live at the abbey have refused to allow surveyors on their land. “We’ve respected their wishes and pursued other routes,” Droege said. The company is expecting to spend $30 million to $50 million on the 50-foot wide easements purchases in Kentucky, according to an informational letter from Williams Co. manager Rob Hawksworth that was given to The Associated Press. The company is also currently securing easements in Ohio, Droege said. The sisters in Marion County have joined environmental groups and local residents in opposing the project, which would build a 24-inch thick underground pipeline to carry natural gas liquids from the northeast to an existing connection in Kentucky that runs to the Gulf of Mexico. The liquids are a byproduct of the natural gas refining process that is used to make consumer products such as plastics and carpet. Tom Fitzgerald, director of the Kentucky Resource Council, an environmental lobbying group, said landowners who are considering an easement deal should consult an attorney first. “You will inevitably regret it if you sign on the dotted line before you have a chance to consider a number of issues that
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November 2013 Edition - Dix Communications
ALDWELL — Farmers who are negotiating easements across their property for shale oil and gas pipelines may want to consider including a clause about when the company should reseed their pastures, a forage expert with Ohio State University’s College of Food, Agricultural, and Environmental Sciences said. Reseeding at the wrong time of year, which appears to be happening frequently, often results in failure, he said. Farmers need to be aware of the impact that the construction, maintenance and long-term presence these pipelines can have on their property, particularly when it comes to reseeding pipeline right-of-way pasture and hay areas, said Clif Little, an educator with the college’s outreach arm, Ohio State University Extension. Little and Mark Sulc, an OSU Extension forage specialist, recently wrote a paper, distributed to county Extension educators across the state, that said farmers should be involved in decisions regarding reseeding of pipelines. The paper is online at http://belmont.osu.edu/news/shalegas-resources-for-landowners. The difficult issue in reseeding these easements is that installation of the pipeline may occur at any time of year, and when installation is complete, reseeding of the area may occur at a time that is not ideal for forage establishment, they said. “We’re seeing a lot of pipelines going in across Ohio farmland and because farmers are hoping to get production off of that land the next year, the timing could impede pasture establishment,” Little said. “The issue is that the majority of pastures and hayfields in Ohio are composed of perennial cool-season grasses and legumes. “But reseeding of perennial cool-season grasses that occur during late June thru July 31 and Sept. 15 thru Oct. 30 will likely result in the failed establishment of a perennial
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cool season forage. So farmers need to be aware of this, as it’s their farms and their production that is on the line.” The issue is that pipelines go in when the companies need the infrastructure to transport product, Little said. But the installation and resulting reseeding doesn’t always occur in the ideal time period. “While in most cases, the shale gas and oil companies are the ones doing the actual reseeding, farmers should try to make sure that they are in charge of the type of forages that are reseeded and if they can, also when the reseeding is to occur,” Little said. “This is good for the famer and the pipeline reclamation because both parties want the seeding to take and be successful the first time around.” During mid-summer, cool-season forages may not germinate, or if they do germinate they may die from heat and dry soil stress. And even if they do germinate and begin to grow they will not compete well with aggressive warm season annual weeds such as foxtail and ragweed, he said. For farmers who aren’t able to ensure a spring reseeding, the best approach for a late seeding involves performing all the preparatory agronomic practices during the summer and then planting the cool season-forages with annual forage at the proper time in August, Little said. That includes: preparing the soil for a proper seed bed; soil testing, applying and mixing in lime, starter nitrogen, phosphate and potassium; followed by seeding and mulching between Aug. 1 and Sept. 1, he said. The other problematic time to attempt to seed cool-season perennial forages is Sept. 15 thru Oct. 15, as cool-season perennial forages will probably germinate but will not likely establish a root system that is developed enough to carry them through the winter, at least not before a killing
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freeze occurs, Little said. “To avoid this, farmers should plant by mid-August in northern Ohio and by Sept. 1 in southern Ohio,” he said. “If not, one alternative is to wait and plant the last week of October or anytime in November through early December and include a cool-season annual forage along with the perennial cool-season forages.” Little said that with the late planting, the intended goal is that cool-season perennial grasses not germinate until spring. “But it probably would be better to hold off seeding until early spring to avoid losses of seed viability or from washing of the seed during the winter months,” he said. “Either way, the soil will need to be protected somehow from erosion losses over the winter.” That could be achieved by planting annual forages such as cereal rye and oats to control erosion even in perennial mixtures, Little said. Other options growers can use include controlling weeds by mowing or using herbicides as soon as they come in. Growers can find more information, including manPhoto / Clif Little agement and selection tips, in the OSU Extension “Ohio Farmers who are negotiating easements across their property for shale Agronomy Guide, Bulletin 472” which can be purchased oil and gas pipelines may want to consider including a clause about when the company should reseed their pastures. from any of the 88 OSU Extension offices statewide, Little said.
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CONSOL Energy kicks off PowerUp school challenge
P
ITTSBURGH — CONSOL Energy kicked off its PowerUp challenge Wednesday with Caldwell, Shenandoah, Beallsville, Monroe Central and River high schools in eastern Ohio, and several in southwestern Pennsylvania at CONSOL Energy Center. Through PowerUp, CONSOL Energy is providing schools across the region an opportunity to showcase their school spirit, learn about energy and win $20,000. CONSOL Energy brought together school district officials on Oct. 16 to kick off the PowerUp challenge and watch the Pittsburgh Penguins practice. “CONSOL Energy has supported schools within our operating area for many years. The PowerUp challenge is an extension of that commitment,” said Laural Ziemba, CONSOL Energy’s director of community relations. “Through this new initiative, which has a substantial social media component, we hope to establish new channels of communication with students, their families and educators, while at the same time supplying two hardworking schools with a deserving financial boost.” In addition to various contests throughout the school year, CONSOL Energy is making a $20,000 investment in education by awarding one school district in each state (Ohio and Pennsylvania) the top prize. Through a new microsite, CONSOLPowerUp.com, students and the public are encouraged to vote for their school and learn about how coal and natural gas power the region, and explore potential careers in the fast growing energy industry. “This program is a homerun for all schools,” said Mark Ziengenfuss, manager of program development at the Challenge Program. CONSOL PowerUp is a new initiative of CONSOL Ener-
gy’s community investment program, with a common goal of supporting civic and student organizations and activities that benefiting the entire community. Education is at the core of building a new generation of leaders and CONSOL Energy is committed to fostering educational initiatives in the areas where its employees live, work and raise their families. Any individual with a valid email address can participate by visiting the site and voting. The school in each state who receives the most votes will be awarded $10,000 in May 2014. Throughout the school year, students can log on to CONSOLPowerUp.com and view the leaderboard, which will keep a running tally of all votes. CONSOL Energy Inc. is a Pittsburgh-based producer of coal and natural gas. It has 12 bituminous coal mining complexes in four states and reports proven and probable coal reserves of 4.5 billion tons. The company’s premium Appalachian coals are sold worldwide to electricity generators and steelmakers. In natural gas, CONSOL has transformed itself from a pureplay coal bed methane producer to a full-fledged exploration and production company. The company is a leading producer in the Marcellus Shale, has an active exploration program in the Utica Shale and has proved natural gas reserves of over 3.5 trillion cubic feet. Operational safety is the company’s top core value and CONSOL boasts a record of almost two times better than the industry average for underground bituminous coal mines. In 2011, the company recorded its best safety record since it was founded in 1860. CONSOL Energy is a member of the Standard & Poor’s 500 Equity Index and the Fortune 500. Additional information about CONSOL Energy can be found at its website: ConsolEnergy.com.
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EQT MANAGER
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OFFERS ADVICE FOR
JOB SEEKERS Judie Perkowski Dix Communications
“T
he more you learn, the more you earn,” an axiom, a self-evident or universally recognized truth. Something that should be drummed into the heads of children long before they reach high school. But, now more than ever, it’s never too late to learn a new skill. With high demand from employers and employees for jobs in the gas and oil industry, sometimes it’s a matter of education that stops job seekers from landing one of those high-paying jobs. Sometimes it’s just a matter of signing up for training classes to earn a certification, sometimes it takes more than just training — it takes a two, four or even six year degree program. And, what better place to ask about education or on-the-job training in the gas/oil industry than a company that has a stake in the Utica shale region. EQT Production has been a major player in the Appalachian Basin for more than 120 years. And, according to the EQT website, the company “employs, assigns and promotes employees based solely on their qualifications, abilities, and potential. The company provides equal opportunity in all employment-related activities and continually strives to improve our ability to recruit and develop qualified, diverse candidates,” During an interview with Linda Robertson, Manager, Media Relations at EQT Corporation, answered questions pertaining to employment and education. Q: What kind of training does EQT offer its current or new employees? Robertson: Field employees are required to take part in educational instruction through EQT’s training department, in addition to training they receive while on the job. Depending on the position, in particular, for well operators and pipeline
EQT employees enroll in training programs to advance their skills
operators Operator Qualification training is required. Of course, different positions require different training in all specialized programs. These programs are designed to improve the employee’s effectiveness in their specific position. Q: What jobs require more than a high school education? Robertson: EQT has an Education Assistance Program with 100 percent tuition reimbursement that offers employees incentive to seek out advanced degrees that will apply to their current position and help in future positions at EQT. The company also encourages employees to take part in course training designed to enhance and maintain specific certifications, such as those needed by CPAs. In general, for both field and office positions, EQT offers supervisory leadership training for individuals who manage people. For industry specific technical positions, such as engineers, landmen, etc., employees are encouraged to find specific training courses that are more tailed to their individual needs for their job. Q: What are the most sought-after or desirable jobs and what and how much formal educations is required: Robertson: Some of the most sought-after positions at EQT are for entry level engineers, geologists and landmen, all careers which require a college degree. Other sought-after positions are in the field: routsabouts and well operators, positions that require a high school or GED diploma. Also, EQT’s internship program is always in high demand. The program focuses on talent in land, engineering and geology. For job postings, visit EQT Corporation and click on the link “career opportunities,” or visit the Guernsey County Opportunity Center (also known as the One Stop), 324 Highland Ave., 740- 432-2381.
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