WPX Energy Abandoning the Marcellus? Sure Looks That Way

bye byeWPX Energy, the drilling division of Williams that was spun off into its own company just two years ago, continues to “bump along the bottom” according to an unflattering article on The Motley Fool investor’s website (see WPX Energy Still Lacks Growth, Leading to Low Valuation). MDN told you about the shakeup in WPX’s leadership in December (see CEO Shake-up Explained: Taconic Capital Jerking WPX’s Chain). New CEO Jim Bender released WPX’s 2014 plan of action and capital spending budget on Monday. Although the company had 33 unique drill permit locations for the last four months of 2013 in PA according to the recently published Marcellus and Utica Shale Databook, it appears to us that for 2014 WPX plans to drill precisely zero new Marcellus wells, which of course is a disappointment–especially for landowners signed with WPX who haven’t yet seen drilling on their land.

Looking at WPX’s 2014 budget (see below), there is a paltry $20-$30 million budgeted for the Marcellus (i.e. “Appalachia”), likely being used to finish wells started at the end of 2013. There’s a big fat goose egg for the number of rigs they plan to operate in the Marcellus this year. Our conclusion: WPX is saying bye-bye to the Marcellus. Is this yet more chain-jerking by Taconic and corporate raiders? Is it really the wisest course for WPX to abandon the northeast? Below is their announcement about 2014 plans, and the forecast of where they will spend $1.47 billion this year…
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Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M

Rice Energy, one of our favorite newer drilling companies, announced yesterday they’ve put some of that IPO money to good use (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Rice has purchased a 28-mile pipeline gathering system already up and running in Washington County, PA from M3 Midstream for $110 million cash on the barrel head. The deal also includes rights of way to build more gathering pipelines in both Washington and Greene counties. Rice Energy owns leases and is conducting active drilling in both counties.

The Marcellus and Utica Shale Databook, Vol. 3 (just out) shows Rice with 28 unique well location permits in Washington County, PA for the last four months of 2013, and 9 unique well location permits in Greene County (via Alpha Shale Resources, which Rice recently picked up in a deal with Alpha Natural Resources). Makes perfect sense Rice would want to buy the pipelines that connect to their wells and get a piece of the midstream action in the white hot Marcellus region of SWPA. Here’s yesterday’s announcement:
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Update: Chevron Well Fire in Greene County Still Burning

Yesterday MDN told you of the explosion and well fire at Chevron’s Lanco 7H well pad, in a remote area of Greene County, PA, northwest of Bobtown. The explosion/fire began around 6:45 am Tuesday (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). The update is that the fire still burns–out of control–although it hasn’t spread to several other wells on the same well pad, yet. The specialists brought in to put the fire out, a company called Wild Well Control, are evaluating and planning and apparently getting ready to go into action. The one missing contract worker, which we have learned is from Cameron International, a Fortune 500 company that specializes in completing wells (flow control), is still missing.

Below are a few more select bits of information along with the four updates provided thus far from Chevron itself about the accident:
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JLCNY Prepares to File Lawsuit Against Gov. Cuomo Tomorrow

The Joint Landowners Coalition of New York, a 70,000-member strong confederation of landowners who want to move forward with shale drilling, is slated to file an Article 78 lawsuit tomorrow against Gov. Andrew Cuomo, Dept. of Environmental Conservation Commissioner Joe Martens, and State Health Commissioner Nirav Shah. As MDN previously explained, an Article 78 essentially forces recalcitrant (and perhaps inept) elected officials to perform their sworn duties (see JLCNY Lawsuit Imminent – But Not the One You Thought).

The JLCNY is being given an assist with their lawsuit by the Mountain States Legal Foundation. Just two weeks ago the JLCNY put out the call to raise another $18,000 for legal expenses, and by golly, they got it…
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Q-Poll Shows NYers Think Cuomo is Foot-Dragging on Fracking Issue

foot draggingThe latest statewide Quinnipiac University poll of New York residents finds a majority of NYers believe Cuomo is indecisive–that is, he’s intentionally dragging his feet on making a decision about whether or not to allow shale drilling in the state. A smaller percent still buy his line about “carefully evaluating” the situation. Translation: There are 32% of us living in NY (who don’t smoke pot) who know that nearly 6 years is long enough for a decision to be made. We can see through the transparently pathetic attempt at stalling for political purposes. Some 23% think Andy’s jest bein’ xtra careful (that’s the hippie greenies). Then there’s the 42% who don’t have an opinion either way–yet. Our best hope is to swing those people to the truth side of the debate.

Here’s the latest Q-poll results on the topic of shale drilling in NY:
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Marcellus Gas to the Rescue: WNY Customers Avoid Step Price Jump

National Fuel Gas Company is a large, integrated energy company with its HQ in Buffalo, NY. They have operations spanning from upstream (Seneca Resources, a major Marcellus Shale driller) to midstream pipelines to a downstream utility company serving customers in western New York State and northwestern Pennsylvania. A story from the NFG utility company caught our eye today. NFG is putting the word out to its hundreds of thousands of customers that they might want to consider hopping on the budget plan–to spread out their winter heating bill payments. Why are NFG’s customers paying a lot more this winter to heat with natural gas? Simply because this is one of the longest and coldest winters we’ve had in decades.

The interesting part of the NFG “you ought to get on the budget plan” story is that, according to the company, it could have been a lot worse than it is. The price of NFG’s natural gas is steady and has not gone up. What’s helping to save western NY (and NWPA) gas customers from huge price spikes being experienced elsewhere? PA Marcellus Shale gas…
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New England Pipeline May Reverse Flow & Pump Marcellus Gas

If there’s a silver lining to the misery of this long, cold, hard winter, it’s that the energy shortage this winter has precipitated an attitude change in New England–a place with a dearth of natural gas even though there’s plenty to be had. Gone are the snotty, haughty attitudes of anti-fracking New Englanders that they don’t want any of that filthy, nasty, fracked natural gas. Not only do they now want it, they can’t get it fast enough because of price spikes up to 10 times the norm. That’ll grab your attention. Maybe fracking ain’t so bad after all, eh?

The latest about face comes from the State of Maine. They need more natural gas and they need it bad. There’s a pipeline that comes down from Nova Scotia into Maine that’s supposed to carry natural gas produced offshore. Problem is, the offshore wells aren’t producing all that much and the pipeline isn’t delivering all that much. So there’s now talk that Spectra Energy, owner of the Maritimes and Northeast Pipeline, is willing to reverse the flow (which takes equipment and time) so that the pipeline will be bi-directional and can begin to carry cheap Marcellus Shale gas from PA up into Maine. We’re trying not to dance up and down and yell “Love it! Told’ya so!” Well, maybe just a little jig…
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Anti-Drilling Site Daily Kos Runs Keystone Pipeline Ad [Screen Shot]

Our daily trawl of the news takes us far and wide. Every day MDN editor Jim Willis wades through the mental equivalent of manure up to his neck–so you don’t have to. Sometimes it takes him to the far-out, left of Korean dictator Kim Jong-Un website, The Daily Kos. If an article appears on Daily Kos, you know it’s a) false, b) wacko, and c) anti-drilling. We usually skip on by such articles in an effort to control our blood pressure.

But what’s this? It seems Daily Kos has no problems running ads for evil “big oil & gas” companies. We thought it funny when we started to read yet another rant on Kos and spotted an ad from TransCanada for the Keystone Pipeline, right there on the Kos website (see it below). We guess Kos has no problem making money from those nasty, horrible “big oil” companies they love to rail against so much…
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