More Details on Tug Hill $100M Lease in WV Panhandle

Just One More Thing - ColumboWe have some more details about that lease deal for $100 million by Tug Hill Operating to lease land in Marshall and Ohio counties in the northern panhandle of West Virginia that we wrote about yesterday (see Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating). We know a bit more about Tug Hill and the person behind it, and we now know that the $100M deal is with about 500 families (average of $200,000 signing bonus per family), and that it’s not too late for others to get in on the deal…
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Rice Energy 3Q14: Production Up 93%, 2 Board Members Resign

Rice Energy, focused solely on the Marcellus and Utica region, released their third quarter report yesterday and reports adding another 10,000 acres to their Marcellus/Utica portfolio–now with 136,422 acres under lease in the northeast. The company keeps drilling at a rapid clip, operating two rigs in the northeast. Because of previously drilled wells, production is up 93% from last year at this time–to 247 million cubic feet per day (Mmcf/d) on average during 3Q14. On the P&L side, Rice narrowed its loss during 3Q14 to $6.9 million, or 5 cents per share, down from $33.7 million, or 38 cents per share in 3Q13. Below is the update for Rice’s Marcellus and Utica drilling program, including midstream operations. At the very bottom of the update are details about the resignation of two board members…
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Rice Energy Readies Midstream Subsidiary IPO – How Much?

Following in Antero’s footsteps, Rice Energy announced last week that they will launch an initial public offering (IPO) for stock in a new spun-off midstream subsidiary–Rice Midstream. You may recall Antero Resources, a company that concentrates on the Marcellus/Utica region, launched an IPO for their company a year ago that hauled in $1.57 billion (see Antero’s IPO Fetches $1.57B, Company Valued at $11B!). The much smaller Rice followed with their own IPO which did better than hoped, bringing in a cool $924 million (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Antero very recently floated an IPO for a midstream subsidiary and hauled in another $1B (see Antero Midstream IPO Hauls in $1B, Stock Trading High). Now Rice is floating an IPO for a midstream subsidiary. No, not to keep up with the Jones (we don’t think, anyway). But because it makes sense. How much is Rice looking to make?…
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Gastar Fracking Near WV Chemical Plant Halted Pending Court Review

Chemical manufacturer Axiall, with a plant in Natrium (Marshall County), WV, has successfully stopped Gastar from fracking several drilled shale wells located near the chemical plant. Why? They’re afraid that the fracking process will allow gas to travel underground and affect their previously drilled brine wells in the area. That exact scenario, according to Axiall, played out last year when Triad Hunter fracked wells nearby. The fracking, according to Axiall, led to a blowout at one of their brine wells and the well began emitting natural gas–an explosion hazard. A judge agreed with Axiall and put a stop to any fracking by Gastar pending a full hearing before the court…
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Hess Talks Utica at Investor Day – Predicts 40,000 Boe/d by 2020

Earlier this week Hess hosted an analyst/investor day to discuss the company’s plans and strategies now that it has shed its retail and transportation operations (Hess doesn’t own those green Hess gas stations any more, see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Two weeks ago we noted with interest that Hess said almost nothing about the Utica in its third quarter update (see Hess 3Q14: Says Almost Nothing About Utica Operations). That changed earlier this week. During the analyst/investor soirée, Hess had quite a bit to say about the Utica…
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Muskingum Watershed District Sells only 136M Gal of Water So Far

The Muskingum Watershed Conservancy District (MWCD), organized in 1933 to reduce the effects of flooding and conserve water for beneficial public uses, oversees 16 dams and reservoirs across 22 counties in Ohio, covering 20% of the state. It is a massive area under the oversight and control of the MWCD. We’ve previously covered their deals with Antero Resources to lease District property for drilling. We’ve also covered District deals to sell water to Antero and other shale drillers (see Muskingum Watershed Votes to Sell 209M Gals of Water for Fracking). Although the district has voted to sell 209 million gallons of water, so far in 2014 they’ve only sold 136 million gallons–or the amount of water used in four days by the city of Akron, OH. According to officials with the MWCD, water sales have had a “negligible” impact on the reservoirs–lowering the several reservoirs used by less than 3/4 of an inch. MWCD lowers reservoirs more than that each year for winter anyway–so actually there’s been no impact, especially since much of the water sold flows through pipelines instead of tanker trucks…
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UGI First Utility in PA with Direct Connection to Utica Shale

The next big story for the Pennsylvania Marcellus Shale is not the Marcellus…it’s the Utica Shale, a layer a few thousand feet below the Marcellus. Our first piece of evidence? In September we brought you the exciting news that Shell has drilled six Utica wells in Tioga County, PA, two of them going online with stellar production (see Shell Drills 2 Successful Utica Wells in NEPA Marcellusland). Our second piece of evidence? UGI, a major utility company in Pennsylvania, reports they’ve just hooked one of those Utica wells into their natural gas distribution system–making UGI the first PA utility to directly tap into a Utica Shale well for retail residential delivery…
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Bernstein: Marcellus Production Will Slow, Hit 25 Bcf/d in 2017

A fascinating pair of research reports from Sanford C. Bernstein & Co. LLC as been analyzed and summarized in a top notch article by SNL Financial. Historically the Marcellus has been divided into northeast Pennsylvania and southwest PA, the SW including WV and a tiny bit of eastern OH. Also historically, the NE portion of the Marcellus has produced more dry gas (methane only) than the SW, which is richer in wet gas (or natural gas liquids). However, because of lack of pipelines in the NE, researchers say dry gas production throughout the Marcellus–particularly in the NE–will slow over the next few years. Another juicy tidbit from the report: Bernstein researchers predict natgas production from the Marcellus will hit 25 billion cubic feet per day (Bcf/d) by end of 2017–just three years from now…
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LNG Facility the Crown Jewel in Scuttled PGW Sale

We find it interesting now that the corrupt Philadelphia City Council has torpedoed the deal to sell the Philadelphia Gas Works (PGW) to Connecticut utility company UIL Holding, the talk by council members has returned to the shiniest jewel in the PGW crown: their small LNG facility. You may recall that MDN previously warned of an ex-Enron employee, Boris Brevnov, who wanted to tank the sale to UIL so he could gain control of the LNG facility for himself (see Former Enron Exec Makes “Unethical” Play to Derail PGW Deal). With the deal now hosed, is Brevnov working in the background to get the LNG facility? We have no proof of that, but the thought has crossed our mind. The Philadelphia Inquirer has an article delving into the LNG facility and what may happen next in the ongoing saga of the PGW sale…
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Non-Destructive Testing Company Opens Branch in Pittsburgh

The depth and variety of companies that provide services for the shale industry never ceases to surprise us. Would you think that non-destructive testing (NDT) has a role in shale exploration and drilling? It does! And it has enough of a role that Applus RTD, a global energy service provider that delivers “technical assurance through non-destructive testing, inspection, and certification in every region of the world” has just opened a new branch office in Pittsburgh to service the demand for their services in the Marcellus/Utica region. One of their happy customers is Range Resources…
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