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Airports and Marcellus Shale And Marcellus Shale Case Study – Williamsport Regional Airport. Rick Holes, PE VP – Operations Manager – Aviation Services Tom Hart Executive Director – Williamsport Regional Airport. Aviation Industry Woes. From 2007-2009, passenger traffic dropped by 8.2%

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Airports and marcellus shale and marcellus shale case study williamsport regional airport

Airports and Marcellus ShaleAndMarcellus Shale Case Study – Williamsport Regional Airport

Rick Holes, PE

VP – Operations Manager – Aviation Services

Tom Hart

Executive Director – Williamsport Regional Airport


Aviation industry woes
Aviation Industry Woes

  • From 2007-2009, passenger traffic dropped by 8.2%

  • 2010 traffic is expected to increase, though

  • Multiple airline mergers/failures have occurred

  • Large, commercial service airports have suffered from

    • Reduced passenger volumes

    • Reduced number of airlines

    • Reduced revenue

    • Increased costs

  • General aviation airports have also suffered


Aviation industry woes1
Aviation Industry Woes

  • ASCE Infrastructure Report Card for Aviation = D (Poor)

    • Estimates $87 billion to upgrade infrastructure from 2009-2014

    • Estimated spending is $46.3 billion

    • Estimated shortfall is $40.7 billion

  • The last AIP Bill expired in several years ago

  • Congress has forced the FAA to operate under CR’s

    • In 2010, 5 CR’s were issued

    • As a result, funding is parceled

    • Projects need to be delayed or completed in phases

    • Projects are taking longer and costing more


Aviation industry woes2
Aviation Industry Woes

  • In PA, the Aviation Restricted Account is has a negative cash flow

    • Fuel sales greatly reduced from pre-9/11 levels

    • Fuel tax cap is set at $0.02 per gallon

    • In 2009/10, oil price index reduced tax to $0.016 per gallon

    • Current tax rate is $0.017 per gallon

  • Meanwhile, construction costs have skyrocketed

  • Utility costs are increasing dramatically


Marcellus shale aviation savior
Marcellus Shale – Aviation Savior??

  • Since 2007, Marcellus Shale companies are moving into PA, WV and NY

  • Focus has been on mineral rights acquisition and drilling

  • Landowners have been approached by gas companies for drilling rights

    • Offers started at $100/acre and have increased from there

    • Royalties of up to 18+% have been offered

  • Economy slowed down the movement for a while, but it’s back to full-speed


The marcellus shale play
The Marcellus Shale Play

  • Basin is 600 miles in length along its axis

  • Contains an estimated 500 trillion cubic feet of gas, in-place



Companies in the marcellus shale industry
Companies in the Marcellus Shale Industry

  • Many players in the market at the current time

  • Small to large firms

  • Some of the best energy companies in the US

  • Leasing, Exploration, Drilling, Production, Transmission, and Service Companies

  • Potentially the largest natural gas field in the US

  • Region could become the US natural gas capital


Companies in the marcellus shale industry1
Companies in the Marcellus Shale Industry

  • AW Tipka Oil & Gas, Inc. (OH)

  • Abarta Oil & Gas Co., Inc. (PA)

  • Admiral Bay (CO)

  • Allegheny Energy Devel. (OH)

  • Allstate Energy Corp. (WV)

  • Anadarko Petroleum (TX)

  • Appalachian Drilling Co. (KY)

  • Ardent Resources, Inc. (PA)

  • Artex Oil Company (OH)

  • Atlas Energy Resourcs (PA)

  • Atlas Gas & Oil Co. (MI)

  • Belden & Blake Co. (PA)

  • Belmont (CA)

  • Berwind Oil & Gas (WV)

  • Blue Creek Gas Co. (WV)

  • Boyd Oil & Gas Co. (WV)

  • Cabot Oil & Gas (WV, TX)

  • Cameron Oil & Gas Co. (TX)

  • Campbell Oil & Gas (NC)

  • Carrizo Oil & Gas, Inc. (TX)

  • Carter Oil & Gas, Inc. (VA)

  • CDX Gas (WV)


Companies in the marcellus shale industry2
Companies in the Marcellus Shale Industry

  • Dart Oil & Gas (TN, MI)

  • DH. Arrington Oil & Gas (MI)

  • Dee Drilling Co. (IL)

  • Deep Rock Energy (IL)

  • Denex Petroleum Corp. (WV)

  • Domestic Energy Corp. (NY)

  • Dominion E&P (WV, PA)

  • Dorward Energy Corp. (FL)

  • Dynatec Systems, Inc. (NJ)

  • East Resources, Inc. (PA)

  • Eastern American (PA)

  • Energy Corp. of America (PA)

  • CGas Exploration Inc. (OH)

  • Champlain Resources (Canada)

  • Chautauqua Energy (NY)

  • Chesapeake Energy (OK, WV)

  • Chestnut Ridge Storage (PA)

  • Chief Oil & Gas (PA)

  • Citation Oil & Gas (IL)

  • CNX Gas Corp. (PA)

  • Cohort Energy Co. (PA)

  • Core Energy (MI)

  • DAC (CA)

  • Dale Property Services (PA)


Companies in the marcellus shale industry3

EOG Resources (TX)

Epsilon Energy – US (MI)

Equitable Resources (PA)

Equity Oil & Gas Funds (OH)

EXCO Resources, Inc. (TX)

Federal Oil Co. (MI)

Fortuna Energy Inc. (NY)

Franklin Oil & Gas (OH)

GEOLEX, Inc. (CA)

GeoMet Operating Co. (TX)

GFI Oil & Gas Corp. (PA)

Great Lakes Energy (OH)

Companies in the Marcellus Shale Industry

  • Great Oak Energy, Inc. (PA)

  • Great River Energy (MN)

  • Guardian Exploration (Canada)

  • Headington Oil (TX)

  • Highmount Midwest Energy (MI)

  • Horizon Energy Corp. (WV)

  • Independent Energy (CO)

  • Interstate Gas Marketing (PA)

  • IOGA of West Virginia (WV)

  • Jordan Development (MI)

  • Kastle Resources (PA)

  • Key Oil Company (KY, WV)


Companies in the marcellus shale industry4

Knox Energy Inc. (OH)

M&M Energy LLC (PA)

Marathon Oil Co. (TX)

McIntosh & Associates (CA)

McIntosh Oil & Gas (WV)

Mid-Central Land Services (IN)

Mike Ross, Inc. (WV)

Mountaineer Gas Co. (WV)

Murvin & Meier Oil Co. (IL)

Noble Energy (IN)

Nornew Inc. (NY)

North Coast Energy (OH)

Companies in the Marcellus Shale Industry

  • NorthstarEnergy Corp. (WV)

  • Ohio Oil Gathering (OH)

  • OilsandsQuestm, Inc. (CAN)

  • PC Exploration, Inc. (CA)

  • PC Oil & Gas, USA (FL, TX)

  • Penn Virginia Corp. (PA)

  • Penn Virginia MC Energy (OK)

  • Penn Virginia Oil & Gas (TN, TX)

  • Penncara Energy, LLC (PA)

  • Penneco Oil Company (PA)

  • PA General Energy Co. (PA)

  • PetroEdge Resources (TX)


Companies in the marcellus shale industry5

Petroleum Development (WV)

Range Oil & Gas (Canada)

Range Resources (PA)

Rex Energy (PA)

Riley Natural Gas Co. (WV)

Rockwell Energy (TX)

Savoy Energy (MI)

Seneca Resources (NY)

Sigma Corp. (CA)

Snyder Associated Co. (PA)

Sojourner Drilling (TX)

Southern Land Co. (TN)

Companies in the Marcellus Shale Industry

  • Southwestern Energy (TX)

  • Stephen Wilson Gas Co. (FL)

  • Stone Energy Corp. (LA, TX)

  • Sunrise Exploration, Inc. (IL)

  • Talisman Energy (CAN)

  • TanglewoodExplor. (TX)

  • Texas Keystone (PA)

  • Trans/Republic (TX)

  • Tri County Oil & Gas (WV)

  • TURM Oil & Gas (PA)

  • Tuscany Oil & Gas (OK)

  • TXOK Energy (OK)


Companies in the marcellus shale industry6

Typhoon Energy (PA)

Ultra Gas Co. (PA)

Ultra Petroleum (TX)

Victory Energy (PA)

Waco Oil & Gas (WV)

West Bay Exploration (MI)

Western Land Services (PA)

Winchester Energy (LA)

XTO Energy (TX)

Z Oil & Gas (PA)

Companies in the Marcellus Shale Industry


Companies in the marcellus shale industry7
Companies in the Marcellus Shale Industry

  • The previous list of companies are involved in the leasing, land acquisition, drilling, exploration, transmission, and distribution of natural gas

  • However, they are followed by support companies that include:

    • Halliburton

    • Superior

    • Sooner Pipe

    • PBT and Hart Resources

    • Holloman Corporation

    • BJ Services

    • Universal

    • National Oil Well Varco

  • These companies provide pipe, sand, and other materials and support needed as a part of the Marcellus Shale drilling operation


The marcellus shale industry and airports
The Marcellus Shale Industry and Airports

  • Drilling Opportunities

    • Commercial – Service Airports

      • Large amount of open space

        • Typically at least 500 acres of land

      • Noise is typically not a problem

      • In most cases, water is available

    • General Aviation Airports

      - Open space

      • Typically at least 100 acres of land

        - Sometimes hedged-in by development

        - May be in more rural areas


The marcellus shale industry and airports1
The Marcellus Shale Industry and Airports

  • Drilling Issues to Address

    • Must receive Fair Market Value for Leases

    • National Environmental Policy Act of 1969 (NEPA)

      • Environmental Finding on Drilling

      • Environmental Finding on Water Usage

      • Environmental Finding on Waste Water

      • Must be reviewed and approved by FAA prior to signing lease

      • Typically will require a Short Form Environmental Assessment

    • Need to ensure Grant Assurances are met

    • Drill rigs must be Airspaced

    • Need at least 120 Days for approvals


The marcellus shale industry and airports2
The Marcellus Shale Industry and Airports

  • Drilling

    • PA Airports Where Drilling is Proposed or Occurring

      • Pittsburgh International

      • Bradford Regional

      • Johnstown-Cambria County

      • DuBois Regional

      • Indiana County

      • Connellsville

      • Rostraver


The marcellus shale industry and airports3
The Marcellus Shale Industry and Airports

  • What is the Marcellus Shale Industry looking for?

    • Land for drilling or development

    • Access to major highways

    • Access to railroads

    • Proximity to Commercial Service or large General Aviation airport

    • Available workforce

    • Tax breaks

    • Keystone Opportunity Zones


The marcellus shale industry and airports4
The Marcellus Shale Industry and Airports

  • What Do Airports Offer?

    • Land – typically flat and developable

    • Access to major highways

    • Some are near railroads

    • Aviation access

    • Typically near population centers

    • Utilities are readily available

    • Already noise generators

    • Some offer KOZ’s


The marcellus shale industry and airports5
The Marcellus Shale Industry and Airports

  • Development Opportunities

    • Many companies looking to locate in Northern PA

      • Drilling Companies

      • Pipe Suppliers

      • Gas Companies

      • Most are from Texas, Louisiana, Oklahoma, Washington, or Oregon

    • Looking for 5 – 25 acres

    • Some want to be ON an airport

    • Most want to be NEAR an airport

    • ALL will UTILIZE the local airport


The marcellus shale industry and airports6
The Marcellus Shale Industry and Airports

  • Development Opportunities - Airport Usage

    • Many companies have their own aircraft

      • Fly staff to PA on Monday morning

      • Fly staff back to home on Friday afternoon

      • Typically 5-20 seat jet aircraft

      • Some have as large as 50-passenger jet aircraft

      • May need hangar space

    • Many use existing commercial service

      • This will help attract more and larger aircraft

      • May need to look at different routes

      • Parking facilities can become overtaxed


The marcellus shale industry and airports7
The Marcellus Shale Industry and Airports

  • Development Opportunities – Issues to Address

    • Show on Airport Layout Plan (Pen and Ink Change)

    • Can’t use land identified for “Airport Development”

    • Can’t normally sell land – Long-term leases are preferable

    • Must receive Fair Market Value for Leases

      • Need at least one appraisal

      • Leased value must be greater than Fair Market Value

    • Development in construction must be Airspaced

    • Must receive environmental finding

    • Allow at least 90 days for approvals


The marcellus shale industry and airports8
The Marcellus Shale Industry and Airports

  • Development Opportunities – Recommendations

    • If you are located within the Play, BE PREPARED!! You will be contacted by companies associated with Marcellus Shale

    • Meet early on with FAA and/or PADOT Bureau of Aviation

    • Need to start coordination early in the project

      • Expect FAA/PADOT coordination to take minimum of 3 months

    • Meet early on with Local Municipal Officials

      • Check Zoning

      • Meet land development requirements

    • Hire an attorney who has experience in mineral rights and/or the Marcellus Shale industry


The marcellus shale industry and airports9
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Williamsport is the Marcellus Shale Capital of Northern PA

      • Good Highway Access

        • US Route 15 connects Maryland to New York through Harrisburg

        • US Route 220 provides access from Central PA

        • Interstate 180 provides direct connection to Interstate 80

      • Good Rail Access

        • Lycoming Valley Railroad

      • Good Air Access

        • 6,824’ Runway

        • 580 Acres of Land

        • Plenty of available office/hangar space


The marcellus shale industry and airports10
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Scheduled Air Service

      • Prior to 9/11, there were 4 flights to PHL and 3 flights to PIT

      • Passenger enplanements were over 52,000 in 2000

      • Enplanements dropped to a low of 20,000 in 2009

      • Currently, there are 3 daily flights to Philadelphia

      • In 2010, enplanements increased by 12%

      • In January 2011, USAirways switched to 50-passenger DASH-8 aircraft

      • Currently looking at service to Dallas, Houston and Chicago

      • Increased service is supported by Halliburton


The marcellus shale industry and airports11
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • General Aviation

      • IPT saw fairly consistent GA usage (4 to 8 jets (<30,000 lb.) per week)

      • Major usage during Little League World Series

      • In 2009, GA traffic started to increase

      • Currently, GA traffic averages 15 jets per week

      • Major GA usage by:

        • Halliburton (50-passenger RJ)

        • Anadarko


The marcellus shale industry and airports12
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Sooner Pipe Facility at Williamsport Regional Airport

      • Sooner Pipe, LLC

      • World’s largest tubular distributor and logistic service provider to the oil and gas industry

      • Headquartered in Houston, TX

      • Sales of $5 billion annually

      • Other Locations

        • Crosby, TX

        • Searcy, AR

        • Midland, TX

        • Godley, TX

      • Looking to locate a pipe yard in Central PA


The marcellus shale industry and airports13
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Sooner Pipe Facility at Williamsport Regional Airport

      • Typical Pipe Yards


The marcellus shale industry and airports14
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Sooner Pipe Facility at Williamsport Regional Airport

      • Total Leased Area = 24.3 Acres

        • Lease Value = $__ per acre for 20 years

      • Construction has included:

        • 80’ x 250’ Shop Building

        • 60’ x 50’ Office Building

        • 60-vehicle parking lot

        • Rail siding to Lycoming Valley Railroad tracks

        • Two pipe storage yards

      • Eventually, facility will employ 75 people

        • Management – Local staff trained in Houston

        • All other employees will be hired locally


The marcellus shale industry and airports15
The Marcellus Shale Industry and Airports

  • Case Study – Williamsport Regional Airport

    • Sooner Pipe Facility at Williamsport Regional Airport

      • Proposed usage

        • Pipe is delivered via rail

        • Upon delivery, pipe isthreaded for use

        • Stored in storage yard

        • Loaded on trucks for delivery to field

        • Using local trucking company

        • Average time pipe spends in yard < 1 week


Thank you questions

Thank You – Questions?

Rick Holes, PE

VP – Operations Manager – Aviation Services

Tom Hart

Executive Director – Williamsport Regional Airport


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