Analyst Richard Zeits Reveals Why Marcellus Production has Soared

pull curtain backOne of our favorite Seeking Alpha author/analysts, Richard Zeits, has just published another sterling piece analyzing the profound impact the Marcellus/Utica has had on the natural gas market in the United States. In January 2014, Zeits wrote a piece predicting the Marcellus/Utica would hit 20 billion cubic feet per day (Bcf/d) of production “within 3-4 years,” which at the time seemed wildly ambitious (see Marcellus Shale: A 20 Bcf Per Day Natural Gas Tsunami). In October 2014, Zeits revised his estimate up by another 10 Bcf/d (see Natural Gas: Marcellus Pipeline Boom Sets Stage For A 30 Bcf A Day Tsunami). Bombshell: According to the U.S. Energy Information Administration, Marcellus/Utica production passed 20 Bcf/d in late August. Zeits’ newest article points out the Marcellus tsunami came 10 years early! What really piqued our interest about Zeits’ latest article is the reason why Marcellus/Utica production has increased faster than everyone, including Zeits, thought it would…
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Scores of “Nuisance” Lawsuits Against WV Drillers Combined

piranhaWe have a troubling development to report about the future of drilling in West Virginia–something that has happened largely under the radar, until now. More than 200 residents in WV (likely those who don’t own the mineral rights under their land) began filing “scores” of “nuisance” lawsuits over the past couple of years against Antero Resources and Hall Drilling, in places like Doddridge County. The lawsuits claim excessive traffic, odors and noise from nearby drilling make it “impossible” for them to enjoy their homes. Each lawsuit has its own unique circumstances and should be handled separately–one size does not fit all. The troubling development is that all of these lawsuits (dozens? hundreds?) have been rolled up into one mega lawsuit that sits before the WV Mass Litigation Panel…
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Bentek: August NatGas Production Nearly as High as July Record

Marcellus Shale map
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Even though active drilling rigs have been decreasing, dramatically, for months, natural gas production is holding steady. Which is an amazing feat. Platts’ analytics firm Bentek Energy is reporting natural gas production in the lower 48 United States averaged 72.1 billion cubic feet per day (Bcf/d) in August, which is nearly flat, compared to the July average (down less than 1%). Bentek previously reported that July natgas production was a new record high (see Bentek: U.S. Hits Record High for Natgas Production in July). August production was just a shade lower. Bentek is predicting a new average high for natgas production in 2015. Why the continued strong production numbers given rigs laying down left and right? One word: Northeast…
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Kinder Morgan Sabotages Itself with Some Kentucky Landowners

shoot yourself in the footIn June MDN updated you on Kinder Morgan’s plans to repurpose part of the existing Tennessee Gas Pipeline that currently runs south to north, reversing the flow to send natural gas liquids (NGLs) southward (see KM’s SECOND Binding Open Season for Utica/Marcellus NGL Pipeline). One of the biggest pockets of resistance are landowners in Kentucky. One such landowner/farmer, who has had five pipelines crisscross his property over the years, relates a story about talking with a pipeline rep a few years ago who essentially threatened to bury him in lawsuits. We don’t like hearing these kinds of stories…
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PA Landowners Can’t Cancel Lease for Delayed Payments

sign leasePennsylvania landowners Andrew and Sally Dewing signed a 10-year lease for 493 acres of land in Bradford County, PA with Central Appalachian Petroleum in April 2001. The lease was later sold to a consortium including Abarta Oil & Gas Co., Talisman Energy USA and Range Resources. The terms of the lease require rent payments of $5 per acre per year ($2,465) for each year when their property has not be drilled on or under. After not receiving payments on time in 2010, the Dewings served the drillers notice of nonpayment. Eventually the three partners figured out who was supposed to pay and made the payment–but because the payment was late (more than 60 days late), the Dewings claimed the lease was terminated under the original terms of the lease. To make a long story short, Pennsylvania Superior Court ruled last Friday that no, the terms of the lease do not allow the Dewings to get out of the lease because the payment was late…
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Research: New Englanders Save Billions if NED Pipeline Gets Built

researchKinder Morgan has just released a study that they commissioned (paid for), but researched by the independent ICF International. The study, titled “New England Energy Market Outlook: Demand for Natural Gas Capacity and Impact of the Northeast Energy Direct Project” (full copy below), finds that New Englanders would have saved $3.7 billion in wholesale electricity costs during the 2013-2014 ‘Polar Vortex’ winter had the proposed Northeast Energy Direct Project (NED) been in service at the time. The study also finds the additional gas capacity that NED would provide will generate $2.1 billion to $2.8 billion in annual savings going forward for New England electric consumers, under normal weather conditions. Plus there are many other benefits (aside from cost savings) from building NED, including lower air pollution throughout New England…
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New Waterless Frack Tech – Using NatGas to Frack for NatGas

Millennium Stimulation Services Ltd. (CNW Group/Millennium Stimulation Services Ltd.)

Canadian oilfield services company Millennium Stimulation Services has just introduced a new fracking process that claims “a virtually complete replacement of water” used in fracking. The new tech uses what they call Energized Natural Gas (ENG) as a fluid solution. We find it kind of cool that they’re using natural gas in order to frack for natural gas. Here’s the Millennium announcement…
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Minor Setback: Fed Court Tells States “No Delay, Yet” re Obama CPP

saying not yetOhio and 15 other states sued the federal Environmental Protection Agency (EPA) to stop implementation of Obama’s draconian coal and natural gas-killing Clean Power Plan while their larger lawsuit challenging the entire CPP winds its way through court (see Ohio and 15 Other States Ask EPA to Delay Clean Power Plan). Those states were dealt a minor setback yesterday when a federal court refused to stay the CPP plan…
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Rex Energy’s Bankers Recommit to $350M Credit Line

good newsPennsylvania-based Marcellus driller Rex Energy, which we’ve long called our “little energy company that could, and does,” has had a string of bad news this year. Even though production was up 61% in the second quarter of 2015, revenue was down 37% (see Rex Energy Financial Update for 2Q15: Rev Down 37%). Rex’s stock is down more than 80% over the past year, down 37% in just the past 3 months (see Analyst Says Don’t Worry Even Though Rex Energy’s Stock Down 80%). It should be pointed out that Rex is not the only company facing tough times since the price of oil and gas crashed a year ago. Even with plenty of bad news, here is a spot of good news for Rex: the company’s bankers aren’t throwing in the towel just yet…
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