Chesapeake’s Rorschach 1Q15 Update – Seeing What You Want

rorschach testChesapeake Energy is the second largest natural gas producer in the United States and the largest producer in both the Marcellus and Utica Shale. Yesterday the company released their first quarter 2015 results and held an earnings call with analysts to discuss how things are going for the company. Depending on which media account you read today, you’ll find that Chesapeake is scaling back operations in the Utica Shale while at the same time looking to lease more land in the Utica; their rig count has been decimated and yet production rose 14% year over year; and one source says the company posted a big loss and is burning cash like crazy while another says it isn’t really losing money, costs are dropping and the outlook is improving. Yes, it runs the gamut. Apparently anyone can find about anything to love or hate about Chessy’s latest update. Kind of a like a rorschach test…
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DRBC Makes a Play to Slow/Block the Penn East Pipeline

The Delaware River Basin Commission (DRBC), currently under investigation by pro-drilling groups for its collusion (possibly illegal) with groups like THE Delaware Riverkeeper, appears to be making a play to block the Penn East Pipeline. The Penn East Pipeline will be 114 miles of 36-inch diameter natural gas pipeline that will run from Luzerne County, PA to Mercer County, NJ–running through the DRBC’s “territory.” The DRBC has contacted the Federal Energy Regulatory Commission (FERC)–the only agency empowered to approve or not approve the project–declaring DRBC’s interest in being part of the process to approve it. How convenient that the DRBC is in bed with the virulent anti-drilling Delaware Riverkeeper–and the main focus of Riverkeeper right now is to stop the Penn East…
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Penn State Uses Anti-Drilling Trout Unlimited for Marcellus Monitoring

More than a year ago MDN pointed out that a group begun with good intentions but later co-opted by anti-drillers, Trout Unlimited, has been outted as a radical so-called green group (see Trout Unlimited, Other Groups Outted as Radical Green Groups). So it was surprising to read that Penn State researchers, apparently desperate for volunteers for a stream monitoring project, are turning to the anti-drilling “volunteers” of Trout Unlimited to help them collect “scientific” samples from streams located near Marcellus Shale drilling. Anyone else here see a big red flag and potential conflict of interest?…
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Eclipse Resources 1Q15: Impressive Bump Up in Production & Revenue

Eclipse Resources, a relatively new driller formed by a group of former Rex Energy people, is headquartered in State College, PA but does most of its drilling in the Ohio Utica. Just a few weeks ago Eclipse announced they are cutting their 2015 drilling budget by 57% (see Eclipse Resources Nixes Joint Venture Idea, Cuts Capex 57% in 2015). Even with the cuts, Eclipse had by anyone’s measure, an impressive first quarter in 2015. Yesterday Eclipse issued their 1Q15 update showing net production is up 316% from 1Q14. During the first quarter they brought 20 new wells online and began drilling 10 more. Revenue was up a huge 77% in 1Q15, but because of interest payments, taxes and other expenses, the company, overall, experienced a loss of $34.1 million during 1Q15. Here’s the update…
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MarkWest 1Q15: Life is Good in the Marcellus/Utica Midstream

MarkWest Energy is perhaps the biggest midstream player in the Marcellus/Utica region. Of course they have operations in other parts of the country too–but the northeast remains their primary focus. MarkWest issued their first quarter 2015 update yesterday. Below we’ve selected out a brief portion focusing on the northeast. Life is generally pretty good in the midstream, as evidenced by the new processing plants MarkWest has recently brought online in the northeast. However, if you look at MarkWest’s financials, you’ll notice that revenue for 1Q15 was down a bit from the same period in 2014 ($467 million in 1Q15 vs $512 million in 1Q14). That can almost certainly be chalked up to driller curtailing some of their production, waiting for prices to go higher once again. Below we have excerpts of the update, a portion of the analyst phone call with lots of talk about the Marcellus and Utica, and a copy of MarkWest’s latest PowerPoint presentation…
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Summit Midstream – Update on Mountaineer, Floats Another 6.5M Units

A couple of pieces of news today about Summit Midstream. Compared to midstream giants like MarkWest Energy, Williams and Access Midstream (now part of Williams, formerly Chesapeake Midstream), Summit has a pretty modest presence in the northeast. Their Mountaineer Midstream gathering system is 49 miles long, operating in Doddridge and Harrison counties in WV (see the map below). Last December Summit announced they’ve been hired by XTO Energy to build a new 115-mile pipeline gathering system in the Utica Shale in Belmont and Monroe counties in OH (see XTO Gets Serious in OH Utica, Hires Summit for Gathering System). The news today? Summit issued their first quarter 2015 update which includes a brief update on the Mountaineer Midstream system. They’ve also just floated another 6.5 million “units” (think shares of stock) looking to raise more cash–perhaps to help build the XTO project?…
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Crestwood Midstream – NGL Volumes Up Thanks to Marcellus/Utica

Crestwood Midstream is a pipeline company with operations in several shale plays, including the Marcellus and Utica. They are, like Summit Midstream, another smaller but meaningful player in the northeast. Crestwood has 65 miles of natural gas gathering pipelines in Harrison and Doddridge counties in WV–along with eight compressor stations (see the map below). Another major initiative by the company is to convert a depleted salt cavern along the shore of Seneca Lake in New York into an underground storage facility for liquefied propane (see Crestwood Execs on Radio to Promote Propane Storage @ Seneca Lake). Like fracking in New York, so far that facility has been blocked by the efforts of anti-drillers (really fossil fuel haters). The state Dept. of Environmental Conservation recently held a hearing about the facility–but from what we can tell, the process to issue a permit remains stalled. At any rate, Crestwood issued their first quarter update yesterday and they report, among other good news, that natural gas liquids (NGL) volumes are higher in 1Q15 vs a year ago mainly due to an increase of NGLs flowing in the Marcellus/Utica…
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PA Fracktivist Permanently Banned from Cabot Property

A little-known (outside of northeast Pennsylvania) anti-driller, Vera Scroggins, has been permanently banned from trespassing on Cabot Oil & Gas well sites according to a recent court order. Vera had previously agreed to the restrictions that don’t allow her to get near Cabot’s many sites in Susquehanna County, PA. Then she got the trespassing itch again and re-offended, according to court records, in January 2015 (see PA Anti-Driller Fined $1K for Trespassing on Cabot O&G Site, Jail?). Until now it had been a temporary injunction. Now it’s a permanent injunction, something Vera says she’s going to continue fighting…
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Study: If You’s Po’ and Lives in Rural PA, You’s Gettin’ Fracked

If you’s po’ and lives in Penns’vania, ‘hio or West Gini, you’s gettin’ polluted by that evil, nasty frackin’. And chances are, you’s too stupid to knows it.” That’s the essential conclusion of a highly discriminatory and inaccurate “study” called “Spatial distribution of unconventional gas wells and human populations in the Marcellus Shale in the United States: Vulnerability analysis,” recently published in the so-called journal Applied Geography by so-called researchers from Clark University. The “researchers” don’t bother with fundamental research, like reviewing health records of people who live near active Marcellus Shale drilling areas. That would take waaaay too much work. Instead, they just assume that if you live near drilling, you’re getting polluted. The focus of the “research” is on the cockamamie theory of environmental justice. The “researchers” found that people living out in the country–where this activity typically takes place–by and large are poorer than those living in towns and cities (and on elite college campi). Wow–such a brilliant insight! “Because they po’, they don’t read all that much…they can’t figure out theys gettin’ polluted.” Yes, its disgustingly prejudiced–but that’s what passes for scholarship these days…
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