Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres

M&ALast week MDN reported that Vantage Energy, a Colorado company with major operations in the Marcellus, was once again attempting to float an initial public offering of stock (see Vantage Energy Tries New IPO After Striking Out 2 Yrs Ago). Must be that was a clever fake-out move because yesterday Rice Energy announced they are buying Vantage in a deal worth $2.7 billion. Included in the deal are 85,000 acres of Marcellus leases in Greene County, PA. Also included, another 52,000 acres of Utica Shale leases. Oh! And 37,000 acres of leases in the Texas Barnett Shale–meaning Rice is about to lose its laser focus on the Marcellus/Utica and will no longer be a “pure play” company. The deal instantly elevates Rice’s production predictions for 2017 by 70% over the previous guidance given. In order to pay for the deal, Rice also announced they are floating a new massive round of stock, 40 million shares, which they hope will bring in something over $1 billion in cash. Here’s the details…
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DTE Energy Buys Marcellus/Utica Pipelines for $1.3B

ags3

Click for larger version of AGS System map

The buyouts keep on rolling in. Detroit-based DTE Energy announced yesterday they are buying 100% of M3 Midstream’s Appalachia Gathering System (AGS), located in Pennsylvania and West Virginia, and 40% of M3’s Stonewall Gas Gathering (SGG), located in West Virginia. In addition DTE is buying another 15% of SGG owned by Vega Energy Partners. The combined deals will cost DTE $1.3 billion. Whew! Lots of moving parts in this story. Let’s sort it out. In April 2015 MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time, plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans came to fruition and the Stonewall Gathering System was built and now gathers 1 billion cubic feet of Marcellus Shale gas per day (see Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec). Why does DTE want these two pipeline systems? Because they will provide a reliable source cheap, abundant, clean-burning Marcellus/Utica natural gas to DTE’s utility customers in the Midwest. These gathering systems already connect to the Columbia Gas Transmission and the Texas Eastern Transmission pipeline systems. They will also connect to the NEXUS Gas Transmission pipeline once it’s built…
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Status Update for 5 Important Bills Affecting PA Fracking Industry

update.jpgThe legal beagles at the Norton Rose Fulbright law firm recently issued a post on their Hydraulic Fracking Blog with updates on five important bills currently before the PA House and Senate that will affect the Marcellus industry (drillers, midstreamers and landowners)–with details for what’s in the bills and the status for each bill. Likely the most controversial of the bills is House Bill (HB) 1391, which would guarantee PA landowners a 12.5% minimum royalty regardless of post-production costs. That bill is due for a procedural vote today. Other bills are in bottled up in various committees where they may or may not make it out for a full vote. The PA House is in session today, tomorrow, and then Oct 17, 18, 19, 24, 25, 26, and Nov 14, 15. That’s it–just 10 more days in session before the end of the year. The PA Senate is in session today, tomorrow, and then Oct 17, 18, 19, 24, 25, 26. Just 8 more days for the Senate. So whatever is going to happen must happen quickly. Here’s a rundown on the five important bills, including HB 1391 (“Amendments to Oil and Gas Lease Act”), HB 2275 (“Changes to Environmental Quality Board membership”), HB 2277 (“Amendment to Oil & Gas Act related to bonding requirements”), HB 2319 (“Amendment to Oil & Gas Lease Act”), and HB 2361 (“Pennsylvania Turnpike Right-of-Way Act”)…
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$900M Utica Gas-Fired Electric Plant Coming to Harrison County, OH

emberclearSeveral news sources are reporting that EmberClear has committed to fund and build a new $900 million, 1,000-megawatt electric generating plant in Harrison County, OH. The new plant will be fed by Utica Shale gas. Officials in the county have been working on a deal to lure the plant to the county since December of last year and stress it is a “long-term project” and “not a slam-dunk” because of extensive regulatory hurdles. If the project happens, it will generate 500 temporary construction jobs and 30 permanent jobs and use a huge amount of natural gas to power it (good for drillers!). MDN did some checking and found one potential cloud over the deal. EmberClear was, until July, a Canadian-based company. But it went bankrupt and after emerging from bankruptcy it changed its name to Ember Partners, now based in Houston, TX. Apparently the bankruptcy hasn’t slowed them down–but it does raise a question about the financial stability of the company and its ability to fund a big-money project like the Harrison Power Project. However, these projects are typically funded by one or several investors and not by the company that builds and operates the facility…
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Obama’s Disastrous Clean Power Plan Goes to Court Today

court-houseWe’ve written plenty about President Obama’s so-called Clean Power Plan (CPP), introduced last summer, a plan to force electric generators to convert to using more “renewable” sources of energy–and less fossil fuels (see Obama Stabs Natural Gas Electric Plants in Clean Power Plan). The CPP outright assassinates coal powered generation, and wounds (but doesn’t kill) natural gas. It is Obama’s attempt at picking winners and losers in who and how we get our energy. We all saw how that worked out with Solyndra. Earlier this year 29 states and state agencies, including Ohio and West Virgina, filed an application with the U.S. Supreme Court seeking an immediate stay of the CPP (see 29 States Ask Supreme Court to Stop Obama Clean Power Plan ASAP). In a shock decision, the Supreme Court did just that (see Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan). Today the enormously complex CPP gets its day in court. The Court of Appeals for the District of Columbia Circuit will hear arguments from 16 lawyers (egads!) in a marathon session that will run for nearly four hours. Here’s a bit more about what to expect today, and in the days ahead, for this disastrous regulation forced on the American population by a dictatorial El Presidente…
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Radical Enviros Beg FERC to Pull Plug on PennEast Pipeline

bamboozleYet another desperate attempt by radical environmentalists to stop the much-needed PennEast Pipeline from getting built. Yesterday the New Jersey Conservation Foundation (NJCF) and Stony Brook-Millstone Watershed Association (SBMWA) asked (more liked begged) the Federal Energy Regulatory Commission (FERC) to withdraw the PennEast application, something called a “no alternative” action, and just let it die a stillborn death. Their argument to FERC seems to rely on the old tactic of “if you can’t dazzle them with brilliance, baffle them with bull$#@!.” Because a few sympathetic rads exist within government agencies like the EPA and Fish & Wildlife Service, and because those agencies were co-opted into sending negative comments about the project to FERC, the radicals at NJ Conservation and Stony Brook Watershed tell FERC it’s best just to scrap the whole thing. No sense in continuing. Move along–nothing else to see here. A nice try at bamboozling FERC, but it’s an agency wise to such deceptions…
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More Board Shakeups Coming to Williams

As the World TurnsWilliams continues to face challenges with its board of directors–the people hired to oversee the company and the path it will chart into the future. Nearly half of the Williams board (6 of 14 board members) were part of a cabal that tried to force the company to sell itself to Energy Transfer Equity–a deal that went horribly wrong. Following the aborted merger, six of Williams’ board members tried to engineer a palace coup to depose current CEO Alan Armstrong. The coup failed and the board members quit in July (see Half of Williams Board, Including 2 Corporate Raiders, Quit). In August, Williams appointed three new members of the board, all of them well-qualified (see Williams Appoints 3 New Board Members, Confounds Corp Raider). Williams is continuing with what it calls its “Board refreshment plan.” The latest: the company has just appointed two more new board members, effective immediately. Williams also announced that three current board members who were on the board prior to the big shake-up (three who didn’t quit in July) will be gone by the next annual meeting on Nov. 23. Here’s the latest in our ongoing soap opera, As the (Midstream) World Turns…
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Williams Completes Sale of Canadian Assets for $1B

soldIn August, Williams announced a deal to sell its Canadian businesses and assets to Inter Pipeline for $1 billion (see Bold Move – Williams Selling Canadian Assets for $1B). Williams CEO Alan Armstrong has been under extreme pressure to step down following the aborted attempt by Energy Transfer Equity to buy his company. Armstrong wants to stick around and selling off the Canadian assets was his first big, bold move since the palace coup against him failed. Armstrong says the Canadian asset sale will help fund major capital projects in the second half of 2016. Good news: the deal is now done and Williams is $1B richer…
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Guest Post: HB 1391 Will Restore What Bradford Landowners are Owed

guest postLast Friday MDN ran a guest post from an executive who works for a Pennsylvania exploration and production company (E&P, what we call a “driller” here on MDN). In the post, titled Why PA HB 1391 Bill is Bad for the Marcellus, MDN invited those with an opposing view to send us a guest post on the other side of the issue. A landowner from Bradford County has done just that (read it below). We also include a recent AP article highlighting other landowners in Bradford who have been wronged by Chesapeake Energy (according to the landowners interviewed). With the highest amount of respect to the Bradford landowner writing the guest post, we must point out that in a way his post “makes the case” for the industry’s view as posted last Friday, a case *against* HB 1391. How?…
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PennEast Tweaks Pipeline Route in 26 PA, 7 NJ Locations

penneastContrary to irrational fossil fuel haters and the lies they spread about pipeline companies, those companies do listen and work with local communities and individual landowners to tweak the route of a proposed pipeline in an effort to minimize impacts. Case in point: PennEast Pipeline is a $1 billion, 118-mile, primarily 36-inch pipeline that will get built from Dallas (Luzerne County), PA to Transco’s pipeline interconnection near Pennington (Mercer County), NJ. It’s being vigorously opposed by anti-drillers including THE Delaware Riverkeeper, the Sierra Clubbers and others. Last Friday PennEast filed 33 changes to the proposed route with the Federal Energy Regulatory Commission (FERC), to accommodate landowners and communities. This is how adults behave, unlike the childish, petulant, spoiled children who run organizations like Riverkeeper and the Sierra Club. PennEast listened, reflected, and changed. The response from the antis? “You can’t build it. CAN’T CAN’T CAN’T CAN’T CAN’T.” There is no reasoning with people who are un-reasonable. Here’s a description of the changes PennEast made to the route through PA and NJ…
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Militant Enviros Turn Ugly at Trump Protest Following Speech

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Click for larger version

MDN editor Jim Willis attended the Marcellus Shale Coalition’s Shale Insight conference last Wednesday and Thursday in Pittsburgh (see Highlights from 2016 Shale Insight, Day One and Highlights from 2016 Shale Insight, Day Two – Trump!). We had heard, via media reports, that protesters would be present to try and disrupt The Donald’s talk on Day Two of the event (last Thursday). But we didn’t hear or see anything–at least during the conference. Trump’s keynote address was the closing talk at the conference. After he finished speaking, Jim made a beeline back to the MDN booth to get started packing it away since the conference was essentially over (officially ended at 1 pm). After shipping the booth and returning to the place where Jim was staying, he decided to change and, being a fantastically sunny and warm day, head several blocks away to a Starbucks for latte and to sit and get some work done on stories for last Friday. Literally around the corner from where Jim was staying, on Sixth Avenue in Pittsburgh, is an exclusive members-only club called The Duquesne Club. In walking past the club Jim noticed a large police presence, along with a remnants of what looked like the usual suspects he sees at protest rallies–a mix of college kids and old hippies with long gray hair tied back in a pony tails. Jim also saw PA House Speaker Mike Turzai walking on the sidewalk in front of the Club. So he wondered if perchance The Donald had gone to the club for lunch following his speech. Sure enough, in checking the news, Trump held a fundraising dinner at the Club immediately following his speech at Shale Insight. Since the protesters weren’t even noticed (by the press) at the mammoth David L Lawrence Convention Center where Trump spoke, they figured they would get noticed if they jammed the street in front of The Duquesne Club instead. And sure enough, it worked. Police were there in riot gear, and it’s a good thing, because some of the protesters were borderline violent–threatening to break into the private club…
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PA’s New Article 78a Drilling Regs Go into Effect Oct 8

Scott Perry, PA DEP

Scott Perry, PA DEP

Some important news came out of a session held last week at the Marcellus Shale Coalition’s Shale Insight event. During one of the sessions, Pennsylvania Dept. of Environmental Protection (DEP) Deputy Secretary of the DEP’s Office of Oil and Gas Management, Scott Perry, said that the very long awaited new Article 78a shale drilling rules will go into effect on Oct. 8th. You may recall the last time MDN covered the issue, in August, there was some controversy and question over whether or not the final new rules would get published in the Pennsylvania Bulletin (see New PA Drilling Regs Closer to Reality, Questions Remain). We can now lay that question to rest. On Oct. 8, according to Perry, the rules as they are (no further tweaks) will get published and then, immediately, become law…
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EIA: Utica Shale Turned Out to be a NatGas (Instead of Oil) Play

EIAWhen Aubrey McClendon first trumpeted his find in the Ohio Utica Shale, he famously said the Utica Shale could be worth $500 billion, and the “biggest thing economically to hit Ohio, since maybe the plow.” Not quite as famous, but on the same day at the same event, McClendon also said the Utica “is likely most analogous, but economically superior to, the Eagle Ford Shale in South Texas.” That one turned heads and got tongues flapping. McClendon made those remarks five years ago this month at the Ohio Governor’s 21st Century Energy & Economic Summit in Columbus, OH. The reason Aubrey was so excited was because of the oil potential in the Utica. But fate is a funny thing. As it turns out, it is natural gas that’s turned out to be the big story in the Utica. Last Friday the U.S. Energy Information Administration (EIA) published an article that chronicles the development of the Utica and illustrates, with charts and graphs, how the Utica has turned out to be a gas rather than an oil play–at least so far…
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NY NatGas-Fired Electric Plant an Inside Job for Corrupt Cuomo Aide

bribery.jpgU.S. Attorney Preet Bharara is about to claim another high-level scalp in corruption that seems to pervade New York State. Bharara has already brought cases that convicted both the Speaker of the Assembly Sheldon Silver (a Democrat) and Senate Majority Leader Dean Skelos (a Republican) for corruption and bribes. With each case Bharara gets closer to Gov. Andrew Cuomo. Last week he got REALLY close. A former close Cuomo aide was indicted on bribery charges. The unfortunate aspect of this story is that he was bribed in connection with a project MDN has lent moral support to–a $900 million natural gas-fired electric generating plant in Orange County, NY (see Orange County, NY Marcellus-Fired Electric Plant OK’d by Judge). The power plant is being opposed by local anti-drilling ninny nannies, including Hollywood star James Cromwell. Yeah, that plant. According to charges filed by Bharara, Joseph Percoco, a 47-year-old former executive deputy secretary to Cuomo sought and got $280,000 in bribes from Competitive Power Ventures, the company building the power plant, and Percoco’s wife got a $90,000/year job from CPV to do nothing, all connected to getting the project approved and built. Crony capitalism is always disgusting–whether it’s for a good cause or not. The CPV plant planned for Orange County will be fed by Marcellus Shale gas, piped to it via the Millennium Pipeline. Is that project now in doubt?…
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$1.1B Utica-Powered Electric Plant in Columbiana Gets State Approval

approvedNatural gas-fired electric plants are a really big deal throughout the Marcellus/Utica region. Each time one of these plants gets built, it injects upward of $1 billion (or more) into the local and regional economy, creates 500 or more temporary jobs and 25-30 permanent jobs. And the gas it uses…oy vey! They are an important new customer for the abundant supplies of natural gas we have. So it’s a big deal when a new plant gets announced, and then, when that plant gets officially approved. Last October (nearly a year ago now) Advanced Power Services announced they want to build a second mega-electric generating plant that taps into and uses Ohio’s Utica Shale. The new plant will generate a whopping 1,100 megawatts of electricity and be located in Columbiana County, OH (see New $1.1B Utica-Powered Electric Plant Coming to Columbiana County). Good news: the Ohio Power Siting Board has given the project its blessing. Construction will begin in January 2017…
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Ohio Appeals Court: NEXUS Can Enter Private Property for Surveys

Gavel-falling.jpgOhio’s Ninth District Court of Appeals has upheld the right of NEXUS Gas Transmission to enter onto private land in order to conduct surveys for a potential pipeline route. Ohio’s Sixth District Court previously made a similar ruing in favor of NEXUS. Top energy law firm Bricker & Eckler argued for NEXUS in both cases and turns in the following report:
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