The Cabot Rocket Ship Heads Out of the Solar System in 2013

rocketNo less than three press releases were issued by Cabot Oil & Gas yesterday. In fact, the news is coming so fast and furious from all corners, it’s hard to keep up! First, Cabot announced a deal with the Transco pipeline to ship up to 850,000 MMBtu per day on the Transco once a new section is built–estimated to go online in 2017. Second, Cabot announced proved reserves at the end of 2013 were up 42% from 2012–to 5.5 trillion cubic feet. And third, the company’s production for 2013 was up 55% over 2012 to 413.6 billion cubic feet equivalent (Bcfe)–virtually all of it in the Marcellus Shale–and all of that from a single northeastern PA county, Susquehanna County. Cabot is an incredible story. No wonder their fourth quarter 2013 profit soared 91%!

Here, in turn, are Cabot’s announcements about their deal with Transco, their proved reserves, and their 4Q13 and full year 2013 update…
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Evil Corporate Raiders Double Investment (& Control) in Williams

MDN warned you in December that corporate raiders have their sights set on Marcellus and Utica midstream company Williams (see Bad News: Corporate Raiders Take Aim at Williams). The apple doesn’t fall far from the tree. Carl Ichan acolyte Keith Meister has his hooks into Williams. Icahn, you may recall, is the puppet master pulling the strings of Chesapeake CEO Doug “the ax” Lawler, responsible for firing over 1,200 Chessy employees. That’s the kind of class act Ichan and Meister are.

As of last Friday, Meister’s hooks went deeper into Williams as Corvex Management and Soroban Capital Partners doubled their investment in the company. This is bad news for Williams. It’s good news if you’re a fat cat like Ichan or Meister–comfortable with firing hordes of employees and selling off key assets for the sole purpose of adding lots of zeros to your bank account. Here’s an unfortunate update on Williams and the evil corporate raiders with their hooks in deep:
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WV Forced Pooling Bill Dies in Committee, Yet Again

As MDN alerted you, the West Virginia House of Delegates took up HB 4558, a forced pooling/unitization bill for the third or fourth year running (see WV Legislature Makes Another Run at Forced Pooling/Unitization). Yesterday we alerted you that it appeared the bill may be in trouble (see WV Forced Pooling Bill Already in Trouble, Passage Doubtful).

Today we’re happy to report the bill is dead for another year…
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The Disgusting PR Mess in Ohio – No One Smells Pretty

You have to hand it to Democrats. As Rahm “the Godfather” Emanuel once stated, they never let a serious crisis to go to waste. And if there isn’t a serious crisis? They manufacture one, of course. And that’s what Dems are doing in Ohio. You know MDN is not a fan of RINO Gov. John Kasich and his penchant to raise severance taxes just to give it away to buy votes, and we’re certainly no fans of his jingoistic “foreigner” hunting. But Kasich is being unfairly targeted by Democrats over the recent “revelation” that the ODNR had a public relations plan cooked up to deal with nutjobs (mostly Dems) who would oppose drilling under (not on) one state forest and two state parks (see ODNR Ticks Off Anti-Drilling Sierra Club with Drilling PR Plan). The Dems are now calling for an investigation. (Funny how they never want to investigate our lawless President, isn’t it? But we digress.)

Kasich now says he doesn’t want any drilling under (not on) that one state forest and two state parks, and hasn’t wanted it for a year and a half–although he never publicly announced it. Translation: the Dems have already won the PR war on this issue and have made Kasich back down. Kasich should have, instead, thrown it in their faces by pushing forward with a plan. Here’s the sad story of a complicit media, hypocritical Democrats, and wimpy RINO Republicans (a disgusting mess)…
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DEP Sec. Abruzzo Praised for Quick Response to Chevron Well Fire

Pennsylvania Secretary of the Dept. of Environmental Protection, Chris Abruzzo, is getting high marks for the DEP’s handling of the recent Chevron well fire in Greene County, PA–by both Republicans and Democrats. You may recall that former DEP Sec. John Hanger, running for the Democrat nomination for governor, called Abruzzo’s appointment by Gov. Corbett “bizarre and irresponsible” (see Former PA DEP Sec. Hanger Blasts Interim Replacement for Krancer). MDN editor Jim Willis had the pleasure of interviewing Sec. Abruzzo last September at the Shale Insight conference (see Exclusive: MDN Interviews PA DEP Sec. Chris Abruzzo). Our impression then, as now, was that he is a sharp guy and a good leader. Although it took a sad tragedy, we were proven right–and Hanger was proven wrong. Hey, don’t forget to “pass a joint for John” to help him with his failing campaign for governor, k?

Meanwhile, here’s the story of politicians from both parties heaping praise on Abruzzo for a job well done:
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EPA Issues Final “Guidance” Defining Diesel Fuel re Frack Fluid

Ten days ago the federal Environmental Protection Agency (EPA) released a “guidance” to define what is and is not diesel fuel for the purposes of deciding (on a case by case basis) whether or not a driller can use that substance in their fracking fluid. In 2005 Congress passed a law that says diesel fuel can only be used as a component in fracking fluid if specifically approved, on a case by case basis. Very few (if any) drillers use diesel fuel in their fracking fluid. These days, the race is on to see how green fracking fluid can be made (see Fracking Fluids/Technology Getting Greener Each Year). However, the EPA feels duty-bound (we’d call it zealous) to ensure everyone knows exactly what is, and is not, diesel fuel for the purposes of complying with the law. The guidance just released establishes those boundaries.

Below is the EPA announcement making what was previously a draft guidance a final guidance, along with a copy of the guidance itself…
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EPA OIG Begins Project to “Evaluate” Water Threats from Fracking

MDN has warned you for years that the federal Environmental Protection Agency (EPA) has an earnest desire to take over (illegally, in our opinion) the role of regulating oil and gas drilling in this country. Regulation of oil and gas falls, Constitutionally, to the individual states–not the federal government. So meddling bureaucrats, like the EPA’s Office of Inspector General (OIG), have to use creative excuses to begin the process of a federal takeover–and they only have a few years left in Obama’s term to do it (we hope). What better excuse to use than fracking may, might, theoretically could, possibly, concerningly, disturbingly, maybe…threaten water supplies. And so of course the OIG needs to hurry up and take a look at that–before time runs out! It’s what comes after “taking a look” that concerns us.

Below is a memo from the Acting Administrator for Water saying she’s about to convene a project that will “determine and evaluate what regulatory authority is available to the EPA and states, identify potential threats to water resources from hydraulic fracturing, and evaluate the EPA’s and states’ responses to them.” Translation: We’re comin’ for ya states–and we’re really comin’ for you drillers. Hey OIG–your bosses in the EPA are already in the midst of a multi-year “study” of fracking with a final report due soon (see Big News: EPA Fracking Study Delayed 2 Years – Now Due 2016). Why do you need to meddle too? Here’s the OIG’s opening salvo in the fracking wars:
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Rex Energy 2013: Production, Revenue Up; 11 New Wells This Year

Rex Energy, our “little energy company that could (and is)” continues to chug along. A couple of days ago Rex issued their 2013 financial and operational year in review. The company, mainly focused on the Marcellus and Utica Shale region, continues to grow production (up 38% in 2013) and grow revenues (up 61% in 2013). As part of the update they give us their best guess (“guidance”) as to what lies ahead in 2014. Rex plans to drill 11 new wells and, along with a few wells already drilled, frack 17 wells in 2014.

Here’s the full Rex update for 2013/looking ahead to 2014, which includes detailed information on some of their recently drilled wells:
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PDC Energy 2013: Production Up 35%; 200 Utica Locations on Radar

PDC Energy is focused on shale drilling in three plays/regions: the Wattenberg Field in Colorado, the Utica Shale in southeast Ohio and the Marcellus Shale in West Virginia. The company owns roughly 125,000 acres of leases in the Marcellus Shale and 48,000 acres of leases in the Utica Shale. PDC issued their fourth quarter and year end results for 2013 yesterday and it was a good year for this growing company. Production was up 35% overall with oil and NGL volumes up 40% for the year.

Although they’ve only really just gotten started with their Utica drilling program, PDC reports they have 200 locations targeted for future Utica drilling. Not all of that will happen in 2014 of course. Even though PDC had substantially higher production, they experienced a net loss on the balance sheet due to risk pricing for natural gas–complicated financial trading of derivatives to hedge against price risk (trading which didn’t go the way they wanted it to). The net loss for 2013 was a lot less than the loss in 2012, so the trend is going in the right direction. Here’s the update issued yesterday, updating the financial and operational picture for PDC:
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Beaver County, PA – In the Marcellus/Utica Catbird Seat

In many ways, Beaver County, PA is in the catbird seat with respect to the Marcellus and Utica Shale. The county has seen some Marcellus drilling with 17 unique well permits were issued for Beaver for the last four months of 2013 according to the latest volume of the Marcellus and Utica Shale Databook. However, it is Beaver’s geography for reasons other than drilling that gives it its advantage: the Ohio River flows through Beaver; two interstate highways pass through; lots of railroads; and of course, close to the Pittsburgh International Airport.

Beaver is also the chosen location for Shell and their $2-$3 billion ethane cracker plant. It’s been a roller coaster of will they or won’t they build it? Lately, it certainly seems like Shell is favoring a green light for the project–but only when they finally buy the property on which a now closed zinc plant sits will everyone breath a sigh of relief that the project is a done deal. (See Shell to Begin Demolition at PA Ethane Cracker Site Early 2014 for the latest.) Even if Shell doesn’t build the cracker plant, Beaver County officials say there’s still a lot happening in the county and the future looks bright, because of the Marcellus…
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NGPL Launches Open Season to Expand, Carry NE Gas South

Two days ago Natural Gas Pipeline Company of America LLC (NGPL), a division of America’s largest midstream company Kinder Morgan, announced a 14-day non-binding open season to gauge interest in the potential expansion of its Gulf Coast mainline system. The expansion would increase NGPL’s flow capability up to 750,000 dekatherms per day of incremental volume from the Rockies Express Pipeline (REX) interconnection at Moultrie, IL. I would reverse the flow at several compressor stations, sending Marcellus and Utica Shale gas south on its pipeline system to Texas and Louisiana.

Here’s Kinder Morgan’s announcement of the NGPL open season, which runs through March 4th:
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