Lights Turned Off, Door Closed – Good Night, Norse Energy

light switch offIt’s a sad day for New York landowners–for everyone really. Norse Energy has converted from Chapter 11 bankruptcy, which means the courts protect you while you regroup, to Chapter 7, which means break it all up and sell off the pieces to the highest bidder. Norse has now literally, as well as figuratively, shut off the lights and closed the door behind them. The remaining eight employees of Norse have just been let go.

For years MDN has been writing about the plight of Norse and their inability to tap shale deposits under 130,000 acres of leased land in New York. The signs have been there for some time that Norse may face extinction if NY does not open up for shale drilling (see Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’). Thanks Gov. Andy! You sure know how to make NY “business friendly.” Norse announced the change to Chapter 7 last week in a very brief press release. Buffalo Business First reports about the final employees being shown the door…
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Atlas Update: Finding Alternatives to Blue Racer Natrium Plant

Atlas Resource Partners (ARP), a driller working in several plays–including the Marcellus and the Utica–issued a financial and operations update yesterday. Included in the update are details of Atlas’ recent activities in the northeast–number of wells drilled, etc. Pretty standard stuff–the “normal” kind of periodic press release issued by drillers, except…

It’s interesting to MDN that in Atlas’ update they mention, rather prominently, the ongoing issue that Blue Racer Midstream’s Natrium processing plant has been shut down since an explosion and fire occurred on Sept. 21st (see Natrium, WV Fractionation Plant Still Closed After Explosion/Fire). The shut-down is having a significant negative affect on Atlas’ ability to get gas to market. So Atlas, like other drillers in the Ohio Valley area, is seeking alternative sources to process their gas. They’ve located a partial solution and continue to look.

Blue Racer has a growing problem on their hands with the continued shut-down of Natrium if their customers continue to find other solutions…
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Does Chesapeake Deduct PA Act 13 Impact Fee from Royalties?

Does Chesapeake Energy deduct PA’s Act 13 “impact fee” as an expense before paying royalties? The answer depends on whom you ask. Chesapeake says they do not, but at least one of their contracts, reviewed by the National Association of Royalty Owners (NARO), includes the Act 13 fee in the list of deductions.

So, do they or don’t they?…
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Rice Energy Rumored IPO – Dan Rice Gets Last Laugh

Looks like Dan Rice, who had been the single most successful mutual fund manager in the United States for the past decade until he was fired from BlackRock last year, will get the last laugh. As we told you in June 2012, Dan was upfront about investing in and founding a Marcellus/Utica shale drilling company for his boys to run–Rice Energy. Even though BlackRock knew about Rice Energy and seemingly didn’t have a problem with Dan’s side venture, they never told investors and so when “word got out” they fired Dan instead of fessing up to their own error (see BlackRock’s Screw-up with Dan Rice & Rice Energy). Dan was transparent about Rice Energy, BlackRock was not.

Reuters has learned that Dan and the boys are about to take the company public with an initial public offering (IPO). Antero Resources’ recent IPO shows the market is hungry for shale energy companies to go public (see Antero’s Stock Climbs 18% on First Day of Trading). The timing Rice’s IPO is impeccable. It’s thought that Rice Energy may be valued as high as $2.5 billion at IPO. Looks like Dan will be laughing (at BlackRock) all the way the bank…
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Range Resources Nears 1 Bcf/d of Production in 3Q13

Range Resources announced today they are very close to joining the 1 Bcf/d (billion cubic feet per day) Club. Production of natural gas, gas liquids and crude reached an all-time high for Range in the third quarter–960 million cubic feet per day (Mmcf/d), which is a 21% increase from a year ago. Where is all that gas coming from? Mostly the Marcellus Shale.

Here’s the good news from Range:
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Final Appeal? Court Says Drilling in Allegheny Natl Forest Legal

When the federal government digs in its heels and is intent on obstructing justice, it can take a long time to remedy via the courts. But (sometimes) justice does prevail in the end. We now have–hopefully–a final resolution in the ongoing series of cases known as Minard Run Oil v. United States Forest Service. We wrote about this case back in 2011, but it goes back much further, to 2009 (see Drillers Sue US Govt over Allegheny National Forest Delays). As a brief background, the federal government purchased a number of parcels of land in 1923 that became the Allegheny National Forest (ANF) in northwestern Pennsylvania. However, the government did not purchase the mineral rights under most of the land–seems that back in 1923 the government didn’t just print the money it wanted (“quantitative easing” anyone?).

Even though they don’t own the mineral rights, in 2009 the U.S. Forest Service (federal agency managing the ANF) entered into what was an illegal out of court settlement with environmentalist groups stipulating that the National Environmental Policy Act (NEPA) will govern all oil and gas drilling in the ANF. It effectively shut down any new drilling in the forest, denying private citizens the ability to benefit from their private property (mineral) rights. The drilling industry sued and the case has now gone through three appeals. The most recent appeal was heard by the federal U.S. Court of Appeals Third Circuit. The court ruled, once again, in favor of private property rights…
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Halcon Drilling 2 More Wells Near Lordstown, OH

Lights! Action! Noise! … No, it’s not the set of a Hollywood movie, but the resumption of drilling at a Utica Shale well site near Lordstown (Trumbull County), OH. Halcon Resources drilled one well at the “Kibler” site earlier this year, and during the drilling, neighbors complained about the nighttime noise and lights. That first Kibler well was so successful for Halcon, they’re back to drill two more on the same pad. This time, however, they double-dog promise to reduce the noise and lights by erecting a sound barrier and using directed lighting.

Still, some of the neighbors are not impressed and say they’d feel better if Halcon just walked over and talked to them about their plans…
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Hess Will Challenge OH Court Decision to End Lease

A few weeks ago MDN told you about the court case Hess lost where they tried to tie up the leases for Ohio landowners beyond the initial 5-year term (see Hess Loses OH Court Case, May Owe Big Bucks to 300 Landowners). What it amounts to is that Hess doesn’t want to pay them more money. The landowners who sued and won–Stephen and Melissa Griffiths from Jefferson County, OH–received an initial $6,500 in bonus payments in 2007 for their 228 acres. If they were signing a lease today they would get something like $1.5 million! Hess didn’t drill on the property during the 5-year term called for in the lease, but instead claim some cockamamie extension in the lease terms allows them extra time before they drill. Sorry Charlie, the judge said no.

Hess is miffed and says they will “vigorously challenge” the court decision, tying up the Griffiths’ lease for perhaps another year while this works its way through yet another court…
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Youngstown Hypocrites “Adjust” Language in Frack Ban Measure

In a transparently hypocritical move, anti-fossil fuel agitators who are placing a referendum on the ballot in Youngstown, OH for a second time this year have removed language that would have prevented one of the city’s biggest employers and businesses, Vallourec Star (manufactures steel pipes) from selling its pipes to the drilling industry. All other businesses that sell to the natural gas industry–you’re toast under the ban.

You see, it’s OK to profit from the drilling industry, it’s OK to use the cheap natural gas that comes from the drilling industry to heat homes and use for cooking–just don’t drill anywhere near me for that gas. It’s called “good for thee but not for me.” It’s hypocrisy on glorious display. If the dunderheads prevail in hoodwinking enough voters to pass the ban, we hope and trust Vallourec will still make good on their threat to move outside of the city limits–denying the city millions in tax revenue. And we trust the anti-frackers will turn off the natural gas spigot heating their homes–after all, it comes from fracking. Throw another log on the fire Wilma!…
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When Do/Don’t Municipal Frack Bans Violate the U.S. Constitution?

When do (and when don’t) municipal bans on natural gas drilling violate the U.S. Constitution? It’s a sticky question and it takes an ace legal mind to tackle this broad and complex topic. An ace attorney has done just that. MDN friend and litigator Ken Kamlet from the Binghamton law firm Hinman, Howard & Kattell (HHK) does a deep dive on the topic of when town bans violate the Constitution. This is not a theoretical exercise for Kamlet. The lawyers at HHK are currently suing (on behalf of landowners) the village of Sidney, NY (Delaware County) over a ban they passed in February 2013 (Exclusive: Sidney, NY Sued by Landowners over Fracking Moratorium).

HHK is also the law firm that sued the City of Binghamton, NY over their illegal frack moratorium and won (see NY Judge Throws Out Binghamton Fracking Moratorium). HHK knows the law, knows the Constitution, and is well-equipped to write about when bans do, and do not, violate the Constitution…
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How Much Wastewater Does Chesapeake Recycle in the Utica Shale?

According to a story from top notch reporter Bob Downing at the Akron Beacon Journal, Chesapeake Energy is being a bit cagey about how much fracking wastewater they actually recycle in their Utica Shale drilling operation. Chesapeake is the #1 driller in the OH Utica Shale. How much they actually recycle is important.

In previous statements Chesapeake has said they are recycling 88% of their Utica Shale wastewater. Is that accurate? And where are they recycling all of their wastewater? Inquiring minds want to know…
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Marcellus Credited with 90% of New Jobs in PA 2005-2012

Does Marcellus Shale drilling generate real jobs? You bet it does. Try this statistic on for size: Of all the new jobs created in Pennsylvania from 2005-2012, 90% of them were created by the drilling industry. No, that’s not a misprint. Those numbers come from analysts at Raymond James, a highly respected financial services firm. In addition, new hires in core Marcellus Shale industries were up 35% in the second quarter of 2013 compared to the second quarter of 2010. As one RJ analyst said, “unconventional oil and gas is not just a flash in the pan.” It will be a job-creating engine for decades to come.

When someone tells you drilling doesn’t create jobs, tell them to go fly a kite…
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