NY DEC Com. Martens Says No NY Fracking Until 2015 Earliest

litigationIn what is sure to be a bitter disappointment to New York’s landowners, Dept. of Environmental Conservation Commissioner Joe Martens said yesterday in testimony to lawmakers that he’s not going to issue any permits for shale drilling before 2015. Unless, of course, he’s forced to by a court (see Norse Energy Sues Gov. Cuomo to Force Release of Fracking Regs). Martens’ comments came as he gave testimony about the DEC’s budget for the next fiscal year, which begins on April 1st. Martens is not including anything in the DEC budget for shale drilling oversight and told lawmakers it would be “extremely unlikely” that permits would be issued before the end of March 2015, hence no need to bulk up his budget for it.

Are we surprised? Not really. The decision of whether or not to allow fracking in New York has been a political and not a scientific one for a long time now–we’d say for years. Gov. Andrew Cuomo continues to push off the decision–not Health Commissioner Nirav Shah, not Joe Martens, but Cuomo. Shah and Martens are just foot soldiers that do their master’s bidding. This latest revelation of no fracking until 2015 further validates landowners’ resolve in pushing forward with lawsuits on various aspects of the drilling issue at various levels of the court system. It’s now obvious we will have to litigate for our freedoms–or loose them forever…
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Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer

Looks like the end of 2014 came in January of 2014 for Hess. On Oct 30, 2013 Hess’ Executive VP and President of Worldwide Exploration & Production, Greg Hill, said that Hess was working on figuring out their Utica Shale acreage and where the wet gas area is located so they could make decisions about where they will and won’t drill. Hill said they would make their final decision “at the end of 2014 once we finish delineation” (see Hess Officials Talk About the Utica on 3Q13 Earnings Call). Yesterday Hess announced they have struck a deal to sell to sell 74,000 Utica Shale dry gas acres to an unnamed buyer for $924 million. End of 2014 (and Christmas) came early for Hess. Why sell now? And, who was the buyer? MDN thinks we know (we speculate below).

Hess owns a 100% interest in 95,000 Utica Shale acres, and a 50% interest (in a joint venture deal with CONSOL Energy) for another 65,000 Utica acres. In consulting the Hess map of their Utica acreage below (from a November 2013 investor presentation), you can get a pretty good idea of where the acreage they’ve sold is probably located. Much of Hess’ 100%-owned acreage is in the “dry gas” area on the map–our money is that most of that acreage is what got sold. No doubt landowners will soon receive notifications if they are among those being traded to another drilling team. Below is the Hess announcement (which is brief), the map we located which helps shed light on the brief announcement, and our speculation on why they sold now, and who purchased…
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McClendon’s New Company Gets Another Half Billion $ for Utica

Former Chesapeake Energy CEO Aubrey McClendon’s new company, American Energy Partners, keeps the money rollin’ in. Last fall AEP lined up a big pile of cash to be used to purchase leases in the Utica Shale (see McClendon Gets a Little Help ($1.7B) from His Friends in OH Utica). In December, Aubrey floated 100 million “units” (i.e. stock) in an effort to raise up to $2 billion more (see McClendon Plan to Raise Additional $2B in “Unit” Offering). No word on how that effort is going.

In the meantime, time’s a wastin’, so Aubrey has raised another $500 million in private equity to help fund Utica Shale ventures (see the story below). MDN wonders, is it just coincidence that AEP’s brief announcement was issued yesterday, on the same day that Hess announced their sale of 74,000 Utica Shale acres to a mystery buyer? Interesting, no?…
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Antero Resources Will Spend $2B+ in Marcellus/Utica in 2014

Antero Resources continues to be in the news. Over the past couple of days MDN has reported on Antero’s recently released production results for their Utica Shale wells (see Another Antero Utica Well Top of the Heap: IP Rate of 40.2 Mmcf/d! and More on Antero’s Record Shattering Utica Shale Wells). On the heels of their 4Q13 update from a couple of days ago, Antero yesterday released their 2014 capital expenditure budget. The company plans to spend $2.6 billion in 2014. Of that, they will spend $1.8 billion for drilling and completion, $600 million for expanding midstream facilities and $200 million for core leasehold acreage acquisitions.

Get this: All of the $1.8 billion drilling budget will be spent on drilling in the northeast–75% of it in the Marcellus, and 25% of it in the Utica. And the $200 million for new leases will be spent in both the Marcellus and Utica as well. It’s a massive amount of money flowing into the northeast ($2 billion or more)–all from a single driller. Here’s the Antero budget update issued yesterday:
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Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO

Gulfport Energy announced yesterday that CEO James Palm will retire as of February 15 (just two weeks from now). Gulfport is one of the most important (and increasingly prolific) drillers in the Utica Shale. In 2013 Gulfport stole many headlines with their southeastern Ohio Utica shale wells breaking records left and right (see Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d).

Palm has been CEO of Gulfport for the past eight years. Was he pushed? No indications of that. It appears he’s simply exiting while Gulfport, under his expert guidance, is at a high point. No doubt he leaves the company as a very wealthy man. Here’s the brief Palm retirement announcement from Gulfport:
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Williams CEO: Transco Pipeline will Double Capacity by 2017

Williams President & CEO, Alan Armstrong, addressed the Hart Energy’s annual Marcellus-Utica Midstream Conference & Exhibition at the David L. Lawrence Convention Center in downtown Pittsburgh yesterday. He said several interesting things, but the one that caught our attention was this: Williams is going to spend $5 billion expand their Transco methane pipeline. Transco runs from the Gulf Coast to New York. Armstrong said they will be adding more mainline to the Transco–making it longer, by about 9%. Which doesn’t seem like much, but it will nearly double the capacity of the entire pipeline. That’s a big hairy deal with lots of implications: More gas can get to market for consumers (bringing down prices for consumers), more gas can be shipped from drillers (more revenue for drillers), and more Marcellus gas will make it’s way into northeastern markets (great for drillers and landowners).

A summary of Armstrong’s speech:
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Former Mainstream Reporter Sees the Fracking Light

Is there any hope that mainstream media reporters will ever tell the truth about the miracle of fracking? You may despair, but every now and again there’s hope. We spotted a column written in the more-or-less conservative Washington Times by a former reporter for the Associated Press, someone who also has worked for Newsweek, ABC News and “20/20”. That’s mainstream media cred if we’ve ever heard it! Not only that, but this reporter was once funded (in a professorship) by the rabidly anti-drilling Park Foundation. Fait accompli–a dyed in the wool mainstream media guy.

And yet, this mainstream media guy was able to see through the lies of the anti-drillers and come to the conclusion that yes, fracking is indeed a miracle and does not destroy the environment. Hallelujah! A mainstreamer who saw the light. Maybe there is hope?…
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New SW Ohio Electric Generating Plant to be Powered by Natgas

Middletown, OH, located on the border of Butler and Warren counties in southwestern Ohio, is about to get a new $500 million natural gas-fired electric generating plant. That is, they will if NTE Energy’s plan is approved. The new plant will generate enough electricity to supply 400,000 homes. Although the story we found about the plant doesn’t say where the gas will come from, you can bet your bottom dollar it will be fueled by Utica and Marcellus Shale gas…
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