Big McClendon News: Sells 35K Utica Acres, Creates New Company

Big-news.jpgWe have major news coming from Aubrey McClendon’s American Energy Partners (AEP). A lot of news. So buckle in. First we’ll tell you the news, then we’ll give you our take on that news–what it means. In brief, the news coming from AEP HQ in Oklahoma City is this: (1) AEP’s Marcellus/Utica AEP subsidiary, American Energy Appalachia Holdings, has been spun out into a 100% standalone company and has changed its name to Ascent Resources; (2) the CEO of Ascent is the same guy who was the CEO of American Energy Appalachia Holdings–trusted McClendon lieutenant Jeffrey A. Fisher; (3) Ascent has cut a deal with Gulfport Energy to sell 35,000 prime Utica Shale acres for $407 million; and (4) Ascent has just sold shares in the company and taken out new loans for $977 million, giving them $700 million in cash after they pay off certain other loans. Whew! Here’s the details, along with a little news of our own about AEP…
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Details on Gulfport’s Purchase of 35K AEP Utica Acres + New Stock

As we report in our lead story today, Aubrey McClendon’s American Energy Partners has decided to spin out it’s Marcellus/Utica operation into a brand new, 100% independent company. That new company, formerly called American Energy Appalachia Holdings, is now called Ascent Resources. Ascent has turned around and immediately sold 35,325 net acres in prime Utica Shale country–Monroe, Belmont and Jefferson counties in Ohio–to one of AEP’s chief competitors in the Utica, Gulfport Energy. In addition, Gulfport has just announced they are floating another 10 million shares of stock. If the new shares sell for anything close to today’s current share price, that will net the company another $440+ million. Below we have the details (from Gulfport) on the deal with AEP to purchase prime Utica acreage complete with four drilled wells and a pipeline gathering system, along with Gulfport’s announcement about the new stock offering…
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A Sad First: EIA’s June DPR Reports Marcellus Production Slips

This is a sad milestone in the Marcellus Shale. The U.S. Energy Information Administration (EIA) issued their latest Drilling Productivity Report (DPR) on Monday. We thought last month’s edition would show production in the Marcellus Shale would contract–but surprisingly it did not (see EIA DPR May 2015: Shale Production Slips, But Not in Marc/Utica). Overall production of natural gas in the U.S. did slip in May, but in the Marcellus and Utica natgas production went up. But the June edition of the report brings us the sad news that production in the Marcellus will decline from last month–by 28 million cubic feet per day (Mmcf/d). Also of note in the June report: There was a single shale play in which natural gas production will increase from the previous month. Can guess which one? It was the Utica!…
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Chevron Lists Another 6,630 Marcellus Acres for Sale in Central PA

Chevron continues a slow bleed of selling Pennsylvania Marcellus Shale assets in 2015. In February the company put up for sale 12 tracks of Marcellus acreage in Bedford, Blair and Cambria counties in PA–just over 17,000 acres total (see Chevron Selling 17K Marcellus Shale Acres, More Sales Coming). In May, Chevron posted another 11,700 acres for sale in Clearfield and northern Cambria counties (see Chevron Shops Another 11,700 Marcellus Acres in Central PA). In June the company has just listed another 6,630 acres along with four drilled wells–all of it in Centre County…
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Drillers Hope to Get Forced Pooling Law Passed in WV This Year

Supporters of the forced pooling bill that failed to pass in the 60-day regular session of the West Virginia legislature this year are not done. MDN previously reported on House Bill (HB) 2688 which was “a sure thing” for passage earlier this year. But at literally the eleventh hour the bill died in a tie vote (see The Real Story of Why Forced Pooling Bill Failed in WV). It seems the bill died because Democrats got their knickers in a twist over other legislation they couldn’t get passed, so they denied the Republican-controlled legislature a win on this bill. Politics. We’ve previously covered the various aspects of this bill of which we are aware (see our stories here). We also predicted the bill may get another chance this fall (see WV Forced Pooling Bill HB 2688 May Get Another Vote This Fall). Seems that was prescient. WV media is reporting that forced pooling was once again front and center at an interim meeting of the Joint Committee on Energy in the WV legislature on Monday. The West Virginia Oil and Natural Gas Association is on a mission to educate and promote forced pooling with the hope of getting a compromise bill passed this year…
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PennEast Pipeline Hands Out Another $70,000 in “Grants”

Another round of “largesse” has just been served up from the PennEast Pipeline (see PennEast Payola? Buying Support One Community at a Time). Don’t get us wrong–the organizations receiving the latest round of $70,000 in “grants” from PennEast are exceptionally worthy organizations–volunteer fire departments, after school programs, etc. We just a have a problem with the timing of it all (see our thoughts here: Will Companies Continue Making Grants after Pipelines are Built?). Here’s the list of the 14 organizations that each received a $5,000 check from PennEast this week…
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Marcellus Slowdown Causes Pittsburgh Pipe Plant to Close for 1 Mo

The slowdown in drilling in the Marcellus (and Utica) continues to reverberate and affect supply chain companies that depend on the industry for part or all of their livelihood. The latest example is TMK IPSCO, a pipe manufacturing plant located near Pittsburgh. Last year the company laid off 10% of its workforce. This year? They’re going to “take advantage” of the slow down by shutting the plant down for an entire month, to perform upgrades. The upgrades will allow the plant to do even better when drilling activity picks up again, but in the meantime, a one-month forced/unpaid “vacation” for workers will hurt…
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Carrizo CEO Chip Johnson Sells Another 6K Shares of Stock

Last week MDN told you that four of Carrizo Oil & Gas’ top managers had sold a cumulative 49,689 shares of company stock valued at $2,476,038 (see 4 Top Carrizo O&G Officers, Incl CEO, Sell 50K Shares of Company Stock). Carrizo’s CEO Chip Johnson sold 24,661 of those shares–about half of the total. This week Johnson just sold another 6,000 shares, netting himself another $308,760 to add to the $1,228,858 he got last week. Also selling 1,000 shares of Carrizo stock this week is a member of the board of directors, Roger Ramsey. Makes us wonder what’s going on–why the top brass in the company is selling some of their stock. Of course, it may be no big deal since Chip Johnson after selling 30,661 shares of stock still owns 631,843 shares worth $32.5 million. We suppose his stock sales thus far amount to little more than a rounding error!…
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BP’s Annual Energy Report: Smallest Demand Increase since 1990s

BP (what used to be known as British Petroleum) is, and has been for years, North America’s top natural gas marketer. Although first quarter 2015 marketer rankings aren’t out just yet, if you look at fourth quarter 2014, BP sold (i.e. marketed) twice as much natural gas on a daily basis as the next nearest company, which happens to be Shell (see NGI’s 4Q14 NatGas Marketer Rankings). Like other oil “majors,” BP issues a yearly outlook on worldwide energy consumption and trends. BP calls their version of this report the BP Statistical Review of World Energy. The company released the 64th edition of that review today (full copy below). BP themselves say this edition, “highlights the continuing importance of the US shale revolution, with the US overtaking Saudi Arabia as the world’s biggest oil producer and surpassing Russia as the world’s largest producer of oil and gas.” Readers of MDN already know those two facts: that the US years ago dethroned Russia as the #1 natural gas producer, and that more recently we’ve dethroned Saudi Arabia as the world’s #1 oil producer. What else do we learn from this year’s report?…
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