Leatherstocking Moves Forward with Pipeline System in Windsor, NY

By Andy Leahy (see MDN note at end)

exclusiveNew applications filed Feb. 20 and 27 with the New York State Public Service Commission show that built-up areas of Windsor, NY (Broome County) are in line to be the first in a sequence of small town conversions to natural gas previously announced by Leatherstocking Gas Company, LLC. Assuming the Windsor application doesn’t hit any hitches with the state, Leatherstocking’s target date for installation is Fall 2015, according to Town Supervisor Carolyn Price. “It’s one of the most frequently asked questions I get,” Price told MDN Monday morning. “When am I going to get natural gas?” Price also said a number of Windsor residents, while they wait, have needed to replace furnaces, and they’ve been installing propane-fueled burners–because those are reported to be more easily switched over to natural gas, down the road…
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Magnum Hunter Drills 53 NE Wells in 2014, Plans Just 5 in 2015

Magnum Hunter Resources (MHR) released its full year and fourth quarter 2014 update yesterday (selected portions below). MHR is a small-to-medium sized, but growing, driller focused almost totally on the Marcellus and Utica Shale. They own 80,000 net acres in the Marcellus and 120,000 net acres in the Utica. In 2014, the company drilled a combined 53 wells and achieved an average daily production of 101.3 million cubic feet equivalent. However, 2015 is a different matter. They plan to drill just 5 wells (and maybe not even those). They’re actively seeking joint venture partners who will give them a total of $500 million to drill in the Utica. The chief problem that we see is that MHR is swimming in debt…
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Magnum Hunter Investor Call Transcript + Slide Deck

In addition to releasing their 2014 update yesterday, Magnum Hunter Resources also held an analyst/investor conference call including CEO Gary Evans and other top MHR managers. Below we’ve included a transcript of the prepared remarks on that call (with highlighted passages of interest to MDN readers). We’ve also included their brand new PowerPoint presentation. We indicate our favorite slides from the new presentation…
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Prejudice in Washington, PA – Judge Says No Marcellus Boarding House

Discrimination and prejudice have finally won in Washington, PA–and a dilapidated eyesore will continue to exist because of it. We’re speaking about plans to renovate a former, run-down convent into a boarding house for Marcellus Shale workers in Washington, PA. We’ve previously chronicled City Council’s opposition to the project (see Washington, PA Votes to Reject Marcellus Boarding House). We’ve also chronicled the shameful opposition of Rev. William Feeney and the Immaculate Conception church across the street from their denomination’s abandoned convent–opposed to the plan because it might attract “transients” to the neighborhood (see Marcellus Prejudice on Display at Washington, PA Church). The reverend and parishioners may want to re-read Matthew 25:31-40. The developer looking to create Marcellus housing at the old convent, Robert Starr, took the matter to court. Yesterday he lost…
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Dr. Terry Engelder Says Utica the Best Bet in Potter County, PA

At a recent meeting in Coudersport (Potter County), PA, Dr. Terry Engelder of the Dept. of Geosciences at Penn State University and one of the leading experts on the Marcellus spoke to a packed room of more than 100 people about the Marcellus, the Utica, and the prospects for drilling in Potter County. Engelder said Potter County’s best bet is likely the Utica Shale layer…
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WPX Energy Axes 8% of Its Workforce, Consolidates Offices in Tulsa

axedAs we’ve previously mentioned, WPX Energy is now largely out of the Marcellus and Utica region. They sold off their most developed leased acreage–46,700 acres and 63 operational wells–to Southwestern Energy earlier this year (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). WPX still has some acreage in southwest PA they’re looking to unload–but they’ve mostly exited stage left. We’ve also previously mentioned the company has rotten luck–they decided they didn’t like the low price of natural gas in the northeast and so they retooled the company to drill for oil instead–just in time for the price of oil to tank (see WPX CEO Riffs on Company Strategy Change from Gas to Oil Drilling). WPX’s CEO, Rick Muncrief, was installed by a corporate raider. You know what that means. When times get tough, the little guys get axed from the payroll. And that’s just what’s happened. Yesterday WPX announced they’re “trimming” (that’s what firing is called these days) 8% of the workforce…
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Dramatic Budget Cutbacks in Marcellus Budgets for 2015

It’s not an understatement to say that drillers in Pennsylvania are in a fight for their very existence. Socialist Gov. Tom Wolf has convinced a great many PA residents in the state that it’s perfectly fine to steal money from drillers and landowners and redistribute it to Big Education. What Wolf and those who blindly follow him don’t realize is that Wolf’s nosebleed severance tax is the equivalent of a butcher knife to the neck of the goose laying Marcellus golden eggs–those eggs being jobs and current tax revenue. If Wolf & company pull the trigger on the tax, it will be catastrophic for the drilling industry in the state. Drilling is already decreasing–by huge numbers. Capital budgets for 2015 have been slashed–typically in one-third to one-half of 2014 levels. New drilling may all but stop with such a new tax–denying the tax and spend Democrats the revenue they seek “for the children.” What will they do then? The Marcellus Shale Coalition is blowing the trumpet to warn people of the coming train wreck that is Tom Wolf’s severance tax. One of the ways they are doing it is with an emailed newsletter called Marcellus Moments. Yesterday’s edition contains an excellent table showing Marcellus drillers and how much they’ve announced they are cutting back on their capital budgets for 2015. When you see it table form (below), it’s rather shocking. Do the Dems really think drillers will just keep on drilling when their already-squeezed profits disappear into a socialist tax black hole? Although the Marcellus is the biggest, it’s not the only shale play around. Rigs can be moved…
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Beaver County Officials Don’t Think Wolf’s Tax Will Kill Shell Cracker

Let’s do some simple arithmetic and use some basic logic. If you drill less Marcellus and Utica Shale wells, you get less natural gas and gas liquids–like ethane. If you have less ethane, and if there’s already several pipelines flowing that lesser amount of ethane out of the region, you don’t have much left over to feed a big ethane cracker plant–like the one Shell is considering for Beaver County, PA. Make sense? It does to PA’s new Senate Majority Leader, Jake Corman, who said a proposed severance tax–that would cause drilling to drastically be scaled back–may kill the Shell project (see New PA Senate Leader Says Severance Tax Could Kill Cracker Plant). Although Democrats like PA Gov. Tom Wolf don’t like the fact that actions (and not good intentions) have consequences, they do. And a severance tax will drastically reduce the number of new Marcellus wells drilled in the state, and cause a decrease in the amount of ethane being extracted. Local business and political leaders in Beaver County don’t quite see it that way though…
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REX Pipeline Zone 3 East-to-West Project Gets FERC Approval

A big announcement yesterday from Tallgrass Energy Partners, owners of the Rockies Express Pipeline (REX). REX has received approval from the Federal Energy Regulatory Commission (FERC) to modify “certain facilities” along the REX pipeline from Monroe County, OH all the way to Moultrie County, IL–something they call the Zone 3 East-to-West Project. When complete, it means REX will flow an additional 1.2 billion cubic feet of natural gas per day from the Utica and Marcellus to Midwest markets. A second important announcement: The Seneca Lateral of the REX (Noble County, OH) is now fully operational. REX upgraded compressor stations along the Seneca Lateral which has boosted available capacity on the pipeline to 600 million cubic feet per day…
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Latest Anti-Drilling Attack on Constitution Pipeline: “It’s Illegal”

We’ve noticed a renewed effort on the part of anti-drillers to stop the already FERC-authorized Constitution Pipeline, slated to run from Susquehanna County, PA–where they can actually drill for natural gas–through upstate New York to Schoharie County (see FERC Issues Final Approval for Constitution Pipeline in PA/NY). New York State’s Dept. of Environmental Conservation (DEC) must grant what’s called a 401 Water Quality Certificate that allows the Constitution to lay pipe through and under swamps, creeks and other bodies of water. The DEC held a series of public hearings on the Constitution (see Pro-Drillers Out in Force at Constitution Pipeline Hearing in Binghamton). Last week the time for public comment closed–which is why we’re now seeing anti-drillers launching a coordinated attack, as a last-ditch effort to stop the Constitution. Their attack includes sympathetic (and sycophantic) media stories and an attempt to re-brand the Constitution as “the Keystone XL pipeline of natural gas.” What a joke! Bobby Kennedy Jr. went on MSNBC (a network virtually no one watches) to make some outrageously false claims about the Constitution pipeline and FERC. It all adds up to a well-coordinated, well-funded attack by Big Environment trust funders…
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