Big News: Halliburton in Talks to Buy Baker Hughes

Big NewsThe biggest news to hit the oil and gas industry in recent memory happened yesterday. The financial press lit up (and ran HUNDREDS of stories) about the leak/announcement/news that oilfield services company Halliburton is “in talks” to buy out rival Baker Hughes. The largest oilfield services company in the U.S. (and in the world) is Schlumberger, followed by Halliburton (again, in both the world and in the U.S.). Baker Hughes (BH) is the fifth largest oilfield services company in the world, but #3 in the U.S. Halliburton’s market capitalization this morning–price per share times outstanding number of shares–is $47.65 billion. Baker Hughes’ market cap is $26.59 billion, up $5 billion since yesterday afternoon when the news broke. Combined, the two companies would be worth $74.24 billion and employ (if there are no layoffs) 144,000 people. Schlumberger’s market cap, by comparison, is $127.62 billion with 126,000 employees. Both Halliburton and BH are heavily involved in providing all sorts of services (rigs, fracking, logistics, etc.) for exploration & production companies in both the Marcellus and Utica, as well as every other major shale play in the U.S. AND in every conventional play around the world…
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Blue Racer Midstream Explosion Kills One Worker in OH

There was an explosion and fire at a Blue Racer Midstream condensate pumping skid (equipment that moves natural gas liquids through the stabilizer process) in Noble County, OH. An electrical contract worker from Virginia, Norman Butler (48 years old), sadly, was killed. The pump station is located next to a CONSOL Energy drill pad in northwest Marion Township, about 50 miles west of Wheeling, WV, between Interstates 70 and 77. A CONSOL spokesperson said none of the equipment at their site was affected and everything has been shut-in for now…
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GASFRAC Begins Waterless Fracking Job in OH Utica

In May 2012 Canadian GASFRAC, a company that has pioneered waterless fracking by using liquefied petroleum gas (LPG, or propane) said they had contracted with an unnamed company to use their LPG fracking technology on two Utica Shale wells, as an experiment (see GASFRAC Waterless Fracking Technology Debuts in Utica Shale). How did it go? As far as we can tell, it never happened. Until now. According to the company’s third quarter update, released today, they’ve just begun to fracture their first well in the Utica. GASFRAC has been a company in trouble. They fired the CEO and COO in September 2012 (see Waterless LPG Fracking Company GASFRAC Fires its CEO, COO). The current CEO, according to today’s announcement, is still listed as being “interim”–meaning they still haven’t settled on a new long-term leader for the company. Revenues have tanked in the past year. Reading between the lines, the finances of the company look pretty bleak. According to interim CEO, Mark Williamson, all options are on the table for the company: soldier on and hope to improve the bottom line (not likely in our humble opinion), merge with someone else, or sell bits and pieces or the whole thing to someone else…
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2 New USGS Studies Show Naturally Occurring Methane in NEPA Water

Yesterday the U.S. Geological Survey released two studies of groundwater–one for Pike County, PA and the other for Wayne County, PA (both studies embedded below). The studies looked at well water samples in 2012 and 2013. In Wayne County 65% of the wells tested had detectable methane (i.e. natural gas) in the water. In Pike County, 80% of the wells had detectable methane in the water. Five alarms! Shale wells are polluting the water!! Oh wait…neither county has any shale drilling because both are in the Delaware River Basin and the DRBC (Delaware River Basin Commission) has so far not allowed shale drilling in the watershed. Methane can be either thermogenic (deep down methane found in shale) or biogenic (closer to the surface methane). Evidence of BOTH types were found in the survey. You can’t blame shale drilling, so what’s an anti-driller to do to when pesky scientific evidence rears its ugly head?…
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EnLink’s Quest for Cash: Floats 10.5 Million Units to Raise $300M

EnLink Midstream, a pipeline and processing plant company that operates in the northeast and other regions, is on a mission to raise cash. The company is actually two companies on paper: EnLink Midstream LLC (stock ticker ENLC) and EnLink Midstream Partners, LP (ticker ENLK). The later is a master limited partnership, or MLP, meaning they don’t issue shares of stock but something called “units”–which are roughly the same thing as shares of stock. EnLink’s units are publicly traded on the New York Stock Exchange. It was just last week that EnLink floated notes hoping to raise around $400 million (see EnLink Midstream Floats Notes, Hopes to Raise $400M for Expansion). Yesterday the MLP announced they are issuing another 10.5 million units. At this morning’s unit price of $29.43, that would represent another $309 million of cash. Hence our comment that they’re on a mission to raise cash…
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Altoona Politicos Say 5% Severance Tax a Marcellus “Killer”

State Sen. John H. Eichelberger Jr., a Republican from Blair County (Altoona area) in Pennsylvania, had some tough words for incoming Democrat Gov. Tom Wolf: Forget about a 5% severance tax on the Marcellus industry. Eichelberger figures such a tax, while sounding “small” actually represents the snatch and grab of 50% of the profit companies now make in the state–and if you take away half of the profits they earn, most of them will stop drilling and leave. Hello! Anybody home at Democrat HQ? Anybody home at REPUBLICAN HQ? Are you listening?? Eichelberger is exactly right…
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Phila. City Council’s 6-Hour Hearing on PGW Sale, UIL Appearance

More on the drama of the corrupt Philadelphia City Council’s scuttling of the sale of the municipal-owned Philadelphia Gas Works (PGW) to Connecticut utility UIL Holdings. Yesterday City Council held hearings on alternatives to selling PGW and made a representative from UIL wait until the very end of six hours of hearings to give him 10 minutes to speak…
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