Chesapeake Sells Close to 25% of Marcellus/Utica Operation

fire saleThe Chesapeake Energy fire sale continues–and this time it’s cut right into the bone and sinew of the company. The beneficiary of Chesapeake’s ongoing divestiture, this time, is Southwestern Energy. Southwestern has signed a deal to pick up 413,000 (!) Marcellus/Utica acres, most of it in West Virginia with some of it in Washington County, PA. Much of the land is in prime wet gas areas (see the map below). The deal includes 256 (!) operating and producing Marcellus and Utica Shale wells and another 179 (!) non-operated, non-producing wells–a total of 435 drilled wells. Southwestern is paying Chesapeake $5.375 BILLION for the deal–which will make Chesapeake’s real boss, corporate raider Carl Icahn, very happy…
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Major New Player in the Marcellus Emerges: Mountaineer Keystone

Earlier this week Mountaineer Keystone, a shale driller headquartered in Pittsburgh, announced it had bought out PDC Mountaineer for half a billion dollars ($500 million). Who are these two players? Mountaineer Keystone is backed by the money of investment firm First Reserve. PDC Mountaineer is a joint venture between PDC Energy and investment firm Lime Rock Partners. The deal means Mountaineer Keystone picks up a huge 131,000 net acres in the Marcellus/Utica region, boosting the company’s position to a new 181,000 net acres. Also part of the deal is a small gathering pipeline operation. Here’s the details…
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Study Says Series of Unfelt Earthquakes in OH from Utica Fracking

Another day, another “study” that says fracking causes earthquakes–this time in Ohio’s Utica Shale. In typical and now predictable fashion, mainstream media does a “drive-by” with the information–like a drive-by shooting–and then continues on its merry way. Here at MDN we’ll break it down and explain it so you have ALL the facts and not anti-drilling “impressions” of what the data says. First off, an admission that we don’t (yet) have a full copy of the newly published study, which has reportedly been published in the journal Seismological Research Letters (but which we can’t find on their website). We’ve requested a full copy of the paper and are awaiting it and hope to share it with you when we get it. The study is titled, “Characterization of an earthquake sequence triggered by hydraulic fracturing in Harrison County Ohio” and looks at a series of “400 earthquakes” that were so tiny as to be unfelt by anyone–but detectable by finely tuned equipment. The earthquakes happened in Harrison County, OH and are thought (but not proven) to be the result of fracking several Utica wells over top of a previously unknown geologic fault. The author of the study himself says the earthquakes couldn’t even be felt by anyone…
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New PA Legislation SB 1499 Would Stop Many Pipeline Projects

In a cleverly disguised move to stop Marcellus drilling, two Philadelphia-area state senators–Andy Dinniman (Democrat, Chester) and John Rafferty (RINO, Montgomery)–have teamed up to introduce legislation, Senate Bill (SB) 1499 (full copy below) that would assess an “impact fee” on new pipelines and possibly existing pipelines re-purposed for a different use. The pipelines getting this new fee are pipelines that specifically carry natural gas, NGLs or oil (other pipelines don’t count). The fee would only be assessed on pipelines in what they define as “high-consequence areas” like, you know, the Philly area. Places with lots of residences and businesses. You live in the sticks? They don’t care. You don’t get nuthin. You live someplace “important” like Philly? Soak ’em. Similar to the current drilling impact fee part of Act 13 (this is what’s clever), the money raised stays local–50% of it to the county, 40% to the town/city where the pipeline runs, and 10% to the state Public Utility Commission. How much of this new “impact fee” does the landowner get–the people who are most inconvenienced by having the pipeline? 0%…
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Odebrect Cracker Aims to Attract Chemical/Plastics Manufacturing

David Peebles, Odebrecht’s vice president of business development and the guy working to make the $4 billion ethane cracker and petrochemical plant project in Parkersburg, WV a reality, gave some great insights into just how vast and complex a process building that plant is. Speaking yesterday at the Penn State Natural Gas Utilization Conference in Southpointe, PA, Peebles said…
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Kinder Morgan 3Q14 Update: NED and UTOPIA, Etc.

Yesterday the largest pipeline company in America, Kinder Morgan, issued its third quarter 2014 update. The big news during 3Q14 was, of course, that Kinder has decided to shed its MLP (master limited partner) structure whereby the company is carved into different pieces for the sake of investors–and rejoin all of the pieces into one. Also bubbling along at Kinder is the massive Tennessee Gas Pipeline through Massachusetts, called the Northeast Energy Direct (NED) project, that will bring abundant supplies of Marcellus Shale gas to New England; and the Utica to Ontario Pipeline Access (UTOPIA) project that will pipe ethane to Canada. The Kinder press release with the update was massively long with teeny tiny type. We’ve waded through it to pull out just those bits that will be of most interest for those of us in the northeast…
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IL Study Finds Marcellus Shale Created 45K Construction Jobs

The director of the labor education program at the University of Illinois at Urbana-Champaign, Dr. Robert Bruno, recently published recently published a new study titled, “Study of Construction Employment in Marcellus Shale Related Oil and Gas Industry” (full copy embedded below). The study looks at natural gas/Marcellus Shale employment data from 2008-2014 for parts of OH, PA, and WV. The study found that the number of jobs for electricians, plumbers, welders, equipment operators and laborers–skilled people who work with their hands–went through the roof because of the Marcellus Shale. Over 45,000 new construction jobs linked to the Marcellus were created. In one year, from 2012-2013, spending in the Marcellus area on construction and maintenance grew over 60%!…
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EIA Says Marcellus Prices Often Swing $1 Mcf Below Henry Hub

An article published by the U.S. Energy Information Administration (EIA) on their online Today in Energy publication from yesterday highlights the ongoing struggle for prices in the Marcellus Shale region to keep pace with the benchmark Henry Hub in southern Louisiana. As MDN pointed out just a few weeks ago, it’s not inconceivable that a delivery point in the Marcellus will one day replace the venerated Henry Hub as the new benchmark price (see Will ‘Dominion South’ Replace ‘Henry Hub’ for Natgas Pricing?). The EIA story points out an obvious truth that bears repeating: When you have more production than you have in pipeline capacity to get that production to markets that want it–you get a surplus of supply and much lower prices. Sometimes those prices can, on a dime, swing to a dollar or more lower than the Henry Hub price…
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