Colo. Anti Advocates Murdering Fracking Workers

It’s finally come to this. There is one anti-fossil fueler who sent a letter to the editor of a Colorado newspaper–the Boulder Daily Camera–that says antis “have a moral responsibility to blow up wells and eliminate fracking and workers.” In a followup interview, the same anti said, “I wouldn’t have a problem with a sniper shooting one of the workers” at a drilling site. Have we not warned you that anti-fossil fuel lunacy has finally tipped over into violence? Did we not point out the mob in North Dakota that destroyed millions of dollars in equipment, burned tires, and shot at police–is planning to spread their sedition to places like the Marcellus/Utica (see Dakota Access Pipeline Protesters Turn Violent; Coming Here Next?). And now one of their own, in Colorado, is revealing the true black heart of the movement–just use bombs and guns to stop fossil fuels. Terrorism. The man needs to be locked up in prison–or an insane asylum–before he hurts someone…
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Chesapeake Deducts from Current Royalty Check for Old Loss in PA

Truly maddening. A Pennsylvania farming family has had to put up with Chesapeake Energy’s lame justifications for not paying them a dime in royalties over the past two years, even though Chesapeake continues to extract gas from their property. Chesapeake claims that since 2015, their costs to extract/sell gas from Russ Forba’s land exceeded any revenue generated–by $112,000. Chesapeake promised Forba that the company would not try to recoup those “costs” from future royalties. The company just broke its promise. On Monday, Forba received a statement from Chesapeake revising the price of the gas sold (down), and revising the post-production costs claimed (up) for the month of April 2015. Chesapeake then deducted the extra $5,700 “loss” from current royalty payments to cover the difference–something they PROMISED would never happen. This is why PA landowners are incensed and calling for legislation. We don’t blame them…
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OH Law Would Bailout Nuke Plants for $5.4B, Kill NatGas Plants

In January, MDN highlighted a developing issue in Ohio that potentially impacts Utica/Marcellus shale in the region (see OH Power Cos. Try to Stop Gas-Fired Plants with “Re-Regulation”). Three large utility companies–FirstEnergy, American Electric Power, and Dayton Power and Light–are behind an effort to re-regulate the electric power generation industry in Ohio. The electricity industry is a complicated industry, with some some power producers operating as “regulated” and some operating as “unregulated.” Regulated power producers have their rates, and rate of profit, set by government regulators–which limits but also guarantees profits. Unregulated power producers, on the other hand, do not have the safety net of the government forcing ratepayers to pony up–they operate in the free market, taking all of the risks, and reaping the rewards if those risks prove worthwhile. Many (most?) of the new natural gas-fired electric plants getting built, like those we have focused on in Ohio, are of the unregulated kind. If Ohio rolls back the clock 18 years to re-regulate, it would likely spell the end of billions of dollars of investments in unregulated/shale-powered electric plants. A disaster. The latest tact companies like FirstEnergy are using to force through a rotten piece of legislation is to claim without it, their nuclear power plants will close down. And precious “diversity” of sources to generate electricity is needed. The legislation proposed (Senate Bill 128 and House Bill 178, same language) is actually a $5.4 billion bailout for FirstEnergy. So says Clean Energy Future CEO Bill Siderwicz. Clean Energy is in the middle of investing $4.5 billion in five new shale-fired electric plants in Ohio. That investment and those plants will disappear if this disastrous “bailout FirstEnergy” bill becomes law…
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Sunoco Logistics Partners Ceases to Exist as of Today

As of today, the nameplate on the door that says “Sunoco Logistics Partners” is getting changed to “Energy Transfer Partners” (ETP). On paper (and for investors) Sunoco LP & ETP have been different companies, but functionally both companies have co-existed under the Energy Transfer Equity (ETE) umbrella for years–essentially as different divisions of the same company. Sunoco LP is (currently) best known for its Mariner East pipeline projects–along with the Marcus Hook refinery/terminal. ETP is (currently) best known for the recently completed Dakota Access Pipeline. Sunoco LP’s headquarters will move from Newtown Square, PA to combine with ETP’s HQ in Dallas, TX. For investors, Sunoco LP will stop trading at close of business today and become part of the ETP ticker symbol as of Monday. Shareholders for both companies approved the paper merger on Wednesday…
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“Father of Marcellus Shale” Terry Engelder Retiring from Penn State

Penn State University professor Terry Engelder, the geologist who first discovered the potential of the Marcellus (and called “the Father of the Marcellus Shale”) is retiring from Penn State in June. The Marcellus Shale boom, while starting with a single Range Resources well in 2004, is largely due to the insights of Engelder. In 2007 he did some “back of the envelope” calculations that showed (first) there is roughly 50 trillion cubic feet (Tcf) of recoverable natural gas in the Marcellus. He later revised that number, to 489 Tcf. It was Engelder’s calculations that caught the interest and confidence of drillers who then decided to give the Marcellus a try. The rest is history–and we have Dr. Engelder to thank. Penn State News does a good job in providing a tribute to celebrate the contributions of Engelder to the university’s geosciences department. What will Engelder miss the most when he retires? Finding new shale layers? Figuring out new techniques to extract oil and gas? Maybe a better way of predicting earthquakes? Nope. He’ll miss the people–students and the professors/staff at “one of the finest geosciences departments in the world.” Here’s a proper sendoff for a key figure, a giant in the canon of the Marcellus story…
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Range Resources 1Q17: Production Soars 40%, 1st Profit in 2 Yrs

Range Resources, one of the most prolific producers in southwestern Pennsylvania, reported its first quarter of profit in two years. Range swung from a loss of $94 million in 1Q16 to a profit of $170 million in 1Q17. After two years of cutting its capital expenditure spending, Range is once again increasing capex. This year, Range plans to spend $1.15 billion, with 65% allocated to the Marcellus Shale in PA, and the rest to the Terryville Field in LA. Production soared for the company by 40% year over year, to a new record high of 1.93 billion cubic feet equivalent (Bcfe) per day. Below we have the full Range 1Q17 update, along with the latest PowerPoint slide deck. We’ve also extracted out some interesting comments from the quarterly earnings call, which highlight Range’s program of drilling longer laterals in the Marcellus…
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EQT 1Q17: Production Up 6%, Revenue Up 2,829%

EQT, one of the biggest drillers in the Marcellus/Utica, had quite a ride in 2016. A good ride! In the last 10 months EQT has added 220,000 acres to its Marcellus/Utica portfolio–by buying large tracts from other companies. One of the deals included buying the other company (Trans Energy) lock, stock and barrel (see EQT Buys Trans Energy + 60K Marc/Utica Acres in 2 Deals for $683M). EQT recently turned in its 1Q17 update. While EQT’s production went up by 6% in the first quarter, its net income went through the roof–up 2,829%! In 1Q16 EQT’s net income was $5.6 million. In 1Q17, net income was $164 million. Somebody is doing something right. On the ever-present quarterly earnings call, EQT’s newly-minted CEO, Steve Schlotterbeck, said EQT’s strategy is to consolidate “scattered acreage positions in Appalachia.” According to Steve, the companies that consolidate, “will hold a competitive advantage that will yield higher returns for their shareholders” and “further consolidation within the Marcellus core is the best path to creating a sustained competitive advantage.” Below is EQT’s full 1Q17 update, the latest PowerPoint slide deck, and select comments by Steve from the earnings call…
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Rex Energy 1Q17: Production Drops 8.5%

As they have in previous quarters, Rex Energy released only part of their first quarter 2017 update earlier this week. Rex released an operation update on Monday, but elected to not release (yet) a financial update. Rex has struggled. They are a smaller driller focused mainly on the Marcellus/Utica–headquartered in State College, PA. In 2016, Rex lost $109 million (see Rex Energy Lost $109M in ’16, Drilling to Hold in ’17, NGLs in ’18). In company’s 2016 production was down from the previous year (see Rex Energy 4Q & 2016 Update – Production Slips from 2015). In Monday’s quarterly update, Rex reports production slipping again, down 8.5% from 1Q16. Is Rex Energy still our “little engine that could?” What’s going on with Rex? Perhaps some of the clues can be found in the quarterly production update and latest PowerPoint we could find (from March)…
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Marcellus & Utica Shale Story Links: Fri, Apr 28, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Gas-focused E&Ps double down on spending in the Marcellus/Utica; Mountain Valley Pipeline plans moving forward, FERC approval due by June 23; is northeast natgas market no longer pipeline constrained?; FERC wants more info from Cove Point LNG; ODNR issues 7 Utica permits, OH rig count at 22; Pitt prof tells Beaver County air quaality will suffer from Shell cracker; natgas rigs up by 1 in PA; WV businesses anticipate next oil & gas boom; shale is crushing solar; Trump’s first 100 days in the energy sector; oops, warmists just lost the Antarctic peninsula – now cooling; and more!
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WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe

More twists and turns to report with respect to an issue we previously reported with the potential to impact every mineral rights owner and driller in West Virginia. In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). A member of the West Virginians for Property Rights group said members are “pretty nervous about this.” Those who already won the case say the high court’s decision to rehear is tantamount to playing the fourth quarter of a playoff game all over again–fundamentally unfair. The court will rehear the case next Tuesday–IF they don’t grant a motion to dismiss the rehearing. The mineral rights owners involved filed the motion saying the newest justice who just came on the bench in January should not have voted to rehear a case she previously didn’t hear…
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NJ DEP Temporarily Rejects PennEast Request for Wetland Permits

The New Jersey Department of Environmental Protection (NJDEP) has temporarily rejected PennEast Pipeline’s Freshwater Wetlands Individual Permit and Water Quality Certificate application, submitted April 6. NJDEP said in their response that PennEast has not provided enough detail about the project–leaving out key pieces of information for two-thirds of the pipeline’s 37-mile trek through NJ. NJDEP says they want the application refiled within 30 days, and if PennEast doesn’t give them what they want within 60 days, the DEP will consider the application “withdrawn.” The news from NJ comes on the heels of the U.S. Army Corps of Engineers also telling PennEast they need more information too. Radicalized antis are rejoicing and their mouthpieces in mainstream media are painting this as a grim development for PennEast–perhaps the death rattle has begun. PennEast, on the other hand, is treating the news as a minor bump in the road–the application has just a “few outstanding items” that PennEast needs to track down and provide to the DEP, and then all will be just fine. We suppose the next 30-60 days will tell the tale…
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WV Driller Northeast Natural Energy Gets $300M Investment

Northeast Natural Energy (NNE) is a midsize driller headquartered in Morgantown, WV. NNE owns 49,000 net acres of leases “in the heart of the Marcellus Fairway,” and operates 27 Marcellus wells and over 100 conventional oil and gas wells. In 2011 NNE fought Morgantown for the right to drill a couple of wells just outside the city limits (see our stories here). NNE won that fight. Yesterday two investment firms–Trioloma EIG Energy Income Fund and EIG Global Energy Partners–announced they have joined forces to infuse $300 million into NNE. Looks like a very active drilling program is just ahead for the WV driller…
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MarkWest Spending $300M+ This Year in WV Expansion Projects

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MarkWest Energy, formerly a standalone company but bought out by MPLX (i.e. Marathon Petroleum) in December 2015, continues its aggressive expansion in the Marcellus/Utica. Particularly in West Virginia. MarkWest owns a number of processing plants in the Mountain State. This year, the company will spend $200 million to expand and upgrade its facilities in Doddridge County (Sherwood facility) to process natural gas and separate out ethane, and $110 million to expand and upgrade facilities in Marshall County (Majorsville facility) to process ethane. Folks, that’s nearly one-third of a BILLION dollars–in just two counties. Talk about economic stimulus! Last year MarkWest spent $120 million on upgrades in Wetzel County. MarkWest’s WV customers include: Antero, EQT, Southwestern, CNX, Chevron, Range Resources, and Eureka Hunter. Here’s more details on what to expect from the mighty MarkWest in WV this year…
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Rover Pipeline Paying $2.3M for Knocking Down Historic OH House

On Feb. 3, the Federal Energy Regulatory Commission (FERC) gave its final approval to Energy Transfer’s Rover Pipeline project–a $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada (see ET Rover Pipeline Gets Final Approval by FERC). Normally when FERC approves such a project, they issue a “blanket certificate” that allows the pipeline company to move forward with construction without getting “Mother May I?” permission for every step along the way. But FERC denied ET a blanket certificate for Rover. Why? Because Rover demolished a house that was under consideration for a national registry of historic homes, without first telling FERC (see Rover Pipeline in Hot Water Over Demolishing Historic House in OH). In May 2015, Rover purchased a house in Carroll County, OH, located near where the pipeline, and a compressor station for that pipeline, is due to run. Rover bought the house to use for offices for several Rover affiliate companies. After buying it, Rover determined the house was “ill-suited for its intended purpose” and decided to demolish it. Problem was/is, that house was under consideration to be added to the National Register of Historic Places. The house was not yet on the list of Historic Places, but was on a list of properties under consideration. FERC says Rover should have reported their decision to demolish the house, which has Rover in hot water with FERC and the Advisory Council on Historic Preservation. That’s the last we had heard about the “historic” house–until we spotted an article that makes reference to a deal Rover agreed to, to pay out $2.3 million “to a fund administered by the Ohio History Connection Foundation and the State Historic Preservation Office. A total of $1 million is for preservation work in the 18 counties crossed by the pipeline. The rest of the money will be used for projects across the state.” So Rover didn’t pay a fine. Instead, they paid hush money. A shakedown, with money going to a PRIVATE nonprofit organization…
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NETL Researchers Find Tiny Earthquakes Help Marcellus Production

Broadband seismometer used for surface seismic monitoring

We hesitated to use the headline that we did, given the way virulent anti-drillers bastardize the issue of fracking and earthquakes. But we used it to make a point. Quick history: The headline-grabbing “fracking causes swarms of earthquakes” in places like Oklahoma is about frack wastewater that is injected in special saltwater injection wells, deep below the surface. There are, literally, hundreds of thousands of such wells across the country. Unfortunately, when such a well is located directly over or very close to an underground fault (large crack), the fluid getting injected acts like grease, allowing rock layers to slip and slide–in some cases causing low level earthquakes–typically earthquakes under 2.0 on the Richter scale (can’t be felt on the surface). Is fracking itself ever the cause? Statistically, no. But it has been documented to happen in a handful of cases–under 10 times in the entire world, out of millions of fracked wells. And again, it only happened because of fracking directly over an underground fault. However, any time you explode charges underground, which is what fracking is, if you have equipment sensitive enough, you can detect it. Is that an “earthquake”? We’d say no. Perhaps it is considered an “earthquake” according to a technical definition, but those extremely low vibrations are brief–typically 30-60 seconds–and they never cause any kind of harm on the surface. In fact, the vibrations can’t be felt at the surface. So our headline referring to “tiny earthquakes” is somewhat tongue-in-cheek, a way to tweak antis. Researchers at the National Energy Technology Laboratory (NETL) have discovered that those vibrations from fracking–what they call “low frequency tremors”–can be measured and used to figure out how to get more production out of Marcellus Shale wells in PA and WV…
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Michigan AG Schuette Wishy-Washy on Support of NEXUS Pipeline

Bill Schuette

Last fall MDN speculated Michigan Attorney General Bill Schuette’s (Republican) keynote speech at the Michigan Oil and Gas Association’s Annual Meeting was likely an effort to repair the damage he had done to his reputation in aggressively attempting to shake down Chesapeake Energy over supposed lease collusion (see Michigan Succeeds in Shaking Down Chesapeake for Measly $25M). During his speech, Schuette gave his full support to the NEXUS Pipeline project (see Michigan AG Lends His Full Support to NEXUS Pipeline). Rover was slightly delayed, but the Federal Energy Regulatory Commission approved the project on Feb. 3 of this year (see ET Rover Pipeline Gets Final Approval by FERC). This gets a little complicated, but stick with us. One of the partners in Rover is DTE Energy. DTE’s electric customers will benefit from Rover (cheaper natural gas to power electric plants, giving them cheaper electricity), so DTE Electric will charge those customers a small fee in their electric bill to help build the project. Schuette, at the prompting of Michigan Environmental Council and the Sierra Club, filed a brief with the Michigan Public Service Commission opposing DTE Electric’s plan to begin assessing the charge this year, in 2017. Why? Schuette says with the delays, there’s no way Rover will go online this year. Rover disagrees and maintains it will be online by November. So essentially Schuette took a swipe at Rover, after he had lauded them last fall. And what caused us to investigate and write about all of this is because two days ago MDN (and presumably other media outlets) got a brief statement from Schuette’s office, once again praising and expressing support for the project, admitting it “will be moving forward.” Whaaaat? He loves it, then he sides with antis against at it, then he loves it again. What’s going on?…
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