Range Resources Loses $225M in 2Q16, Marcellus Production Up 16%

Range ResourcesRange Resources, one of the largest (and the very first) Marcellus Shale drillers, issued their second quarter 2016 update yesterday. While there was plenty of good news Range highlighted at the beginning of the release–Marcellus production was up 16% year over year at 1.379 billion cubic feet per day, costs were down 8%, total debt as low as it’s been since 2012–there was no getting over the 800-pound gorilla in the room: Range lost $225 million for the quarter in 2Q16, versus losing $119 million in 2Q15. One of the things Range seems most jazzed about is buying Memorial Resource Development Corp. and drilling in Louisiana instead of the Marcellus (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B). CEO Jeff Ventura did mention the company can quickly ramp up drilling on 200 well pads in the Marcellus when/if the time is right. Below is Range’s 2Q16 update, along with a copy of their latest PowerPoint presentation, with lots of interesting slides…
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CONSOL Energy to Restart Drilling in August – Mainly in Utica

CONSOL EnergyThe parade of quarterly updates continues. Yesterday CONSOL Energy, once one of the largest coal companies in the U.S., now one of the largest independent drillers in the Marcellus and Utica Shale, issued their update. And in interesting one it is. After having idled its rigs, CONSOL reports they will begin a “modest” drilling program once again in August. However, the strategy is shifting. CONSOL plans to drill eight new Utica wells (in Monroe County, OH) and only two new Marcellus wells (in Washington County, PA). CONSOL will own 100% of the Utica wells but only has a 50% working interest in the Marcellus wells–which may be the biggest reason why they are focusing on the Utica for now. Also in the update: CONSOL’s natgas production jumped 32% in 2Q16 over 2Q15. The big financial news is that CONSOL lost $470 million in 2Q16, but that’s an improvement over 2Q15 when the company lost $603 million. Revenue dropped almost in half–from $545 million in 2Q15 to $286 million in 2Q16. Yesterday’s comprehensive update contains breakdowns of production by shale play, details on a 10-well “plugless” completion, and much more. We’ve also tracked down and embedded CONSOL’s latest PowerPoint presentation…
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Pot Shot: PennEast Partner Seeks to Stop New England Pipeline

friendly fireIn September 2014, PSEG (Public Service Enterprise Group) Power–New Jersey’s largest utility company–became the fifth company to become a partner in the much-needed PennEast Pipeline, the $1 billion pipeline project that would flow cheap, abundant and clean-burning Marcellus Shale gas from northeast Pennsylvania all the way to Trenton, New Jersey (see NJ’s Largest Utility Becomes 5th Partner in PennEast Pipeline). You know the travails PennEast has had in trying to get the project approved. Nutjobs like THE Delaware Riverkeeper, funded by the William Penn Foundation, Heinz Endowments and others, has continually harassed and sued PennEast. One of Riverkeeper’s favorite tactics is to write gajillions of letters to the Federal Energy Regulatory Commission telling FERC that PennEast isn’t needed and isn’t wanted. So we found it a tad hypocritical to read that PSEG Power has turned around and filed their own letter with FERC–telling FERC another pipeline project, Spectra Energy’s much-needed Access Northeast pipeline which will bring more Marcellus gas to New England, isn’t needed and isn’t wanted…
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NY & MA AGs Refuse to Comply with Congressional Supeona

lawlessThe lawless Attorney General in New York, Eric Schneiderman, and his philosophical twin in Massachusetts, AG Maura Healey, are refusing to obey a subpoena issued by Congress for copies of their communication records that would show the two (along with other AGs) have been unethically (perhaps illegally) colluding with Big Green groups in targeting Exxon Mobil over the issue of so-called global warming. As MDN previously reported, Schneiderman, Healey and several other far-left radicals made fantastical claims that Exxon “knew” that burning their evil, filthy, nasty oil and natural gas is causing Mom Earth to warm up, so the AGs served subpoenas to Exxon to turn over every piece of communication the company has ever had. Why? So the AGs could try to build a case against Exxon’s expression of free speech (see NY AG Targets/Accuses ExxonMobil of Lying about ‘Climate Change’). Interestingly, Schneiderman, Healey and others in this cabal were suspected, now with proof, that they’ve been colluding with each other and with radical Big Green groups in their witch hunt of Exxon (see Smoking Gun: AGs Signed Pact to Keep Exxon Documents Secret). So Congress went on a little fishing expedition of its own, issuing subpoenas to Scheiderman et al (see NY AG, Others Served Congressional Subpoena re Exxon Witch Hunt). Schneiderman and Healey are officially refusing to obey the subpeona. Hey psycho AGs: Exxon has every right to refuse YOUR subpoenas too! Sauce for the goose…
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Group of Protesting/Ignorant Kids Briefly Block Philly Refinery

Barter_Children_ppc_08.inddA small group of ignorant children (look the photo) preened and pretended to actually know something when they marched outside of the Philadelphia Energy Solutions (PES) refinery in South Philly where PES would like to expand by leasing an extra 200 acres at the Southport facility. The children blocked traffic causing a backup, making drivers unhappy. The kids also prevented trucks from entering and exiting the facility–for about 10 minutes. Philly police watched and did nothing. Sycophantic media (StateImpact) claimed there were “around 100” but a picture of the event shows nine (that we can see), none of whom appear to be old enough to drink beer. PES is pushing the concept of making Philadelphia an “energy hub” and they (PES) want to ship Marcellus Shale gas from the Southport facility location after piping it there from other parts of PA. A number of people are bidding on the property and it’s not at all a foregone conclusion that PES will get it (see Marcellus Caught in Crossfire of Philly Port Leasing Controversy). Apparently the subtleties of who may one day lease and operate the site were completely lost on the ignorant kids running around behaving badly…
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FERC Grants Williams Constitution Pipeline a 2-Year Extension

FERC logoAs we reported yesterday, last Friday Williams and the Constitution Pipeline filed a request with the Federal Energy Regulatory Commission (FERC) to extend their application to build the Constitution Pipeline from Susquehanna County, PA to Schoharie County, NY (see Constitution Pipeline Requests 2-Year Extension from FERC). New York’s corrupt governor, Andrew Cuomo, is trying to stop the project (apparently his hands didn’t get greased enough). It didn’t take long. FERC granted Constitution’s request yesterday…
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FERC Grants Dominion Clarington Project a 1-Year Extension

FERC logoIn June 2014 Dominion filed an application with the Federal Energy Regulatory Commission (FERC) to construct and operate new compression facilities at existing compressor stations in Marshall County, WV and Monroe County, OH, and certain other facilities, collectively called the Clarington Project (see Dominion Asks FERC for New Compressors in Upstate NY, WV). The Clarington project, costing a modest $76.5 million, will allow Dominion to provide 250,000 dekatherms (Dth) per day of firm transportation service for CNX Gas, otherwise known as CONSOL Energy. Last August, FERC approved Dominion’s request (see FERC Approves Dominion WV/OH Compressor Project, Rips Anti Group). FERC gave Dominion a year to complete the project, but Dominion filed a request last Friday requesting more time. FERC agreed and has extended the project completion date an extra year…
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What can a PA Oil & Gas Equipment Auction Tell Us?

auction-gavel.jpgMDN editor Jim Willis grew up going to auctions. Sometimes it was a farm auction–equipment like tractors and balers and manure spreaders. Sometimes a livestock auction–cows and horses and pigs and goats. But most often it was attending the local bric-a-brac auction on Saturday nights in South New Berlin (NY)–at Toby’s Auction Center. If we close our eyes and imagine it, we can still “see” the sights and sounds (and smells!) of the auction, where everything from cassette players to zucchini squash to antique Japanese pottery was sold. You can tell a lot about economic conditions from the local auction–including equipment auctions in the oil and gas industry. At a recent o&g equipment auction in Indiana County, PA, a couple of things were apparent: (1) the conventional drilling industry in PA, NY and elsewhere is struggling, and (2) it’s still a buyer’s market for drilling equipment–which indicates the turnaround hasn’t arrived quite yet…
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Marcellus & Utica Shale Story Links: Wed, Jul 27, 2016

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Northeast gas vs. Gulf Coast gas; NY solar project wants to cut down 350 acres of trees!; OH rig count up to 16; Democrats don’t like natgas anymore; O&G companies are survivors; headwinds for natgas prices; and more!
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Atlas Resource Partners Filing for Bankruptcy Tomorrow

atlas-resource-partners-logoJust last week MDN predicted that Atlas Resource Partners (ARP), a publicly-traded exploration and production master limited partnership (“MLP”) with operations in basins across the United States including the Marcellus and Utica Shale plays, was heading for a bankruptcy (see Atlas Resource Partners Close to Chapter 11, NYSE De-lists Units). Yesterday ARP announced it has been working behind the scenes with the people it owes money (lenders and bondholders) on a deal to convert their debt into common units (in essence, shares of stock). The deal worked out will eliminate $900 million in debt ARP owes. The deal is like many others we’ve written about over the past six months or so–where a company waves the magic wand and turns debt into ownership. The problem with these plans, in our humble opinion, is that it punishes those who currently own equity in the company. The stockholders (in this case, since it’s a master limited partnership, called unitholders), find their shares are devalued to the point of being worth toilet paper. We live in a screwed up world where owning debt is better than owning equity. But we digress. Here’s ARP’s so-called pre-packaged bankruptcy plan to screw current owners, and turn debtholders into the new owners. ARP plans to file the paperwork in court tomorrow…
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Rex Energy Deal Converts $43.5M of Debt into Stock Ownership

Rex EnergyToday’s lead story on MDN is about Atlas Resource Partners’ plan to file a pre-packaged bankruptcy turning some $900 million of debt into ownership equity (see Atlas Resource Partners Filing for Bankruptcy Tomorrow). Another Marcellus/Utica company is doing something similar, but without filing for bankruptcy. In April MDN told you about Rex Energy’s plan to convert some outstanding debt into shares of stock (see Rex Energy Converts IOUs into Common Stock, Avoids Bankruptcy?). Rex is doing it again. Yesterday Rex announced they’ve cut an agreement with an unnamed investor to convert $43.5 million owed to that investor into shares of stock. By doing so, Rex not only saves paying back the $43.5 million, they’ll also save paying out an additional $11.1 million in interest payments that would have been due over the life of the loan. However, our understanding is that converting debt into equity (shares of stock) dilutes the ownership interest of all current stockholders. The only difference we can see between what Atlas is doing and what Rex is doing is that (so far) Rex has stayed out of bankruptcy court…
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Stone Energy Update on Marcellus Gathering Deal with Williams

Stone EnergyStone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 75,000 acres of leases. Last year Stone quit drilling in the northeast and actually shut-in part of their production due to low prices (see Stone Energy 3Q15: Shut Down 110 Mmcfe/d of Marcellus Production). As we pointed out in April, the company is in financial trouble and inching toward bankruptcy (see Stone Energy Appoints Special Liaison, Inches Toward Bankruptcy?). However, Stone has not, like some others, tipped into bankruptcy. Yet. And perhaps things are beginning to turn around for Stone. In June Stone cut a new midstream gathering agreement with Williams to return some of their shut-in Marcellus wells to full production (see Stone Energy Opens Marcellus Spigots Again; New Midstream Deal). Stone issued a production update yesterday. Part of the update addresses the Williams midstream deal–how it’s doing so far, and what to expect…
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S&P Overview of Northeast Power Market – NatGas & Electric Gen

KC_PGAT_250x125_2016Two weeks ago MDN invited you to join us for the upcoming Analyst Training in the Power and Gas Sectors, on August 8-9 in New York City (see Join MDN in NYC for SNL’s Analyst Training in the Power and Gas Sectors). Editor Jim Willis will attend the training. There are a number of MDN subscribers based in New York, Chicago, Pittsburgh and Washington who should attend this event. Today we have a small preview to share. German banking giant Deutsche Bank recently hosted a conference call with Steve Piper, Director of Energy Research at S&P Global. Steve is one of the seminar leaders/speakers for the upcoming Analyst Training in NYC. He had some great insights and this general overview of the Northeast power market…
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Constitution Pipeline Requests 2-Year Extension from FERC

Constitution Pipeline map

Constitution Pipeline map – click for larger version

For years now, MDN has tracked the ongoing sad, maddening, tragic saga of the Constitution Pipeline–a $683 million, 124-mile pipeline due to run from Susquehanna County, PA to Schoharie County, NY carrying Marcellus gas (see our stories here). The pipeline is full reviewed and authorized by the Federal Energy Regulatory Commission–it has been since 2014. The only thing left is a permit from the New York State Dept. of Environmental Conservation (DEC) to issue stream crossing permits. The DEC has, however, been corrupted by our corrupt governor, Andrew Cuomo. The Constitution worked with the DEC to meet ALL of their requirements, and in fact did meet all of their requirements, and in the end Cuomo said “nyet” and the servile “leaders” at the DEC did their master’s bidding and turned down the Constitution (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). So the Constitution sued (see Williams Sues NY Over Constitution Pipe – DEC May Lose Authority). However, the FERC clock is ticking. The Constitution has until the end of this year to get the pipeline built. With the glacial pace of the courts, that ain’t gonna happen. So the Constitution (i.e. Williams), last Friday, filed a request with FERC to extend the certificate to build by an additional two years…
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ExxonMobil, Saudis Plan to Build New Ethane Cracker on Gulf Coast

joint ventureYesterday ExxonMobil and Saudi Arabian petrochemical giant SABIC announced they have formed a joint venture partnership and are evaluating (and plan) to build yet another ethane cracker plant complex along the Gulf Coast–in either Texas or Louisiana. The Gulf Coast has numerous such plants already in operation. The northeast has (so far) none. Why the two companies are not looking to the northeast is beyond us. In their announcement the companies said they want to locate along the Gulf Coast “near natural gas feedstock.” Why is this an MDN story? Because (a) pipelines are planned from the Marcellus/Utica region to the Gulf Coast, and this cracker, if built, will be yet another new market for our gas, and (b) because it will likely compete with the crackers that do get built in the northeast. Shell has committed to building one in Pennsylvania, and PTT Global Chemical will make a final investment decision in 2017 on a planned cracker in Ohio. A new Exxon/SABIC cracker will compete for our gas supplies, we have no doubt. Here’s yesterday’s joint announcement…
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Former EPA Asst Admin Calls Frack Ban Supporters “Irrational”

J Winston Porter

J Winston Porter

J. Winston Porter is a former assistant administrator of the federal Environmental Protection Agency (EPA), appointed by and serving the great Ronald Reagan. Years ago Porter was a vice president at Bechtel, the world’s largest construction and civil engineering company. He also, at one time, owned his own engineering firm. But Porter has also served in the government and academe over the years. In addition to the EPA, Porter was manager of the environmental services department in San Francisco. He began his career as a professor in the chemistry department of the University of Petroleum and Minerals in Dhahran, Saudi Arabia in the mid-1960s. Porter is someone who’s been around and seen it all–from academe to government service to private industry. He has perspective. He has experience. He has wisdom. We spotted an editorial appearing in the Allentown (PA) Morning Call newspaper by Porter, an editorial in which he says a ban on fossil fuels, as is being called for by more extreme Democrats, would be a tragedy for Pennsylvania (and the rest of the country). He said that to “pretend that we could make a rapid transition away from fossil fuels is irrational.” Sound familiar? How many times have we stood on our soapbox to proclaim hatred of fossil fuels is irrational? Dozens, if not hundreds of times! Give Porter’s editorial a read, and learn something from someone who knows a thing or two about energy…
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