Activist Investor Threatens Magnum Hunter with Takeover Unless…

Dallas Salazar
Dallas Salazar

We’re still trying to process this bit of news. One of the Seeking Alpha blog writers we’ve enjoyed following over the past year or so is Dallas Salazar. Dallas is the CEO of Austin, TX-­based Atlas Consulting. He specializes in “private company lifecycle management, up to and including taking companies public, and in helping consult publicly traded companies ranging in market cap from $100 million to $500 million.” That is, Salazar helps companies raise money to go public, and helps public companies get profitable. He’s just stepped up his game. Salazar said in a letter to Gary Evans (CEO) and the board at Magnum Hunter Resources (MHR) two days ago that he, Salazar, is close to having enough shareholder support to take over the company–unless. Unless what? Unless MHR responds to his demands, which include selling Eureka Hunter posthaste, stop doing some of the things they are now doing that put the company at financial risk, and unless they start talking to him, now. Some might view it as a form of blackmail. Some might say Dallas is transforming himself into a corporate raider, like Carl Ichan. Many call it being an “activist investor.” We’re not sure what to call it or think of it, quite frankly…
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Is Tuesday’s Harrison County, OH Earthquake Tied to Fracking?

snoozingA small earthquake that nobody felt (2.1 on the Richter scale) hit Harrison County, OH Tuesday evening. There was immediate speculation about whether or not the earthquake is tied to Utica Shale drilling in the area. Aubrey McClendon’s Ascent Resources is drilling near where the quake originated. It’s WAY too early to even speculate on whether or not the quake is tied to a fracking operation. IF (a very big IF) fracking did cause this quake, it would be the sixth known time that fracking itself (instead of an injection well) has caused an earthquake–out of millions of wells drilled and fracked. Statistically zero…
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New Study: Fracking Does Not Affect Water Wells in Marcellus/Utica

researchIn March of this year, Syracuse University Professor Dr. Donald Siegel published the results of an extensive research study that found fracking of Marcellus Shale wells in Pennsylvania does not cause methane in water wells (see Syracuse U Study: Fracking Doesn’t Cause Methane in PA Water Wells). It was an enormously important work because it’s real science, based on the largest known database of well water samples, over 11,000 of them, taken by Chesapeake Energy both before and after drilling happened. Siegel has used Chessy’s enormous data set once again–this time over 20,000 samples–to conduct a second study. Siegel has just published that study in the peer reviewed journal Applied Geochemistry. The new study is titled “Pre-drilling water-quality data of groundwater prior to shale gas drilling in the Appalachian Basin: Analysis of the Chesapeake Energy Corporation dataset” (abstract below). The new study finds that the quality of water in private water wells near fracked shale wells in Pennsylvania, Ohio and West Virginia–across the entire Marcellus/Utica region–is the same after shale drilling as it was before shale drilling. That is, shale drilling has no effect on the quality of water in private water wells close to shale drilling activities…
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PA DEP Issues Notice of Violation to JKLM Energy for Spilled Soap

Dawn dish soapOn Monday MDN told you about an accident in Sweden Township (Potter County), PA where JKLM Energy released soap into a water aquifer while trying to fish out a broken drill bit from a Utica Shale bore hole (see JKLM Energy Accident Contaminates 5 PA Water Wells with Soap). The soap migrated into five nearby water wells. JKLM promised to provide daily updates on the situation and their progress with correcting the soap leak, and they’ve kept their word. Our previous post brought you all of the updates through Sept. 27. This post brings you the updates from Sept. 28 through yesterday, Oct. 1. We also have more news about the accident: the PA Dept. of Environmental Protection has issued a notice of violation because of the accident. No word yet on how much money spilling 55 gallons of soap into a water aquifer is going to cost JKLM, but you can be sure it won’t be cheap. Here’s the latest on the accident…
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NGSA Research: Price of NatGas This Winter Same as Last Winter

crystal ballThe price of natural gas isn’t going anywhere fast during winter 2015-2016. That’s the takeaway MDN gets from an analysis just released by the Natural Gas Supply Association (NGSA). The NGSA’s 15th annual Winter Outlook assessment (full copy below) says we have record production on the way, record amounts of gas in storage, and according to the National Weather Service, a winter that will average around 7 degrees warmer than last year. NGSA also says demand for natgas from electric generating plants and other users will tick up a bit. So on balance, NGSA says there will be “neutral pressure” on this winter’s natural gas prices compared to the winter of 2014-2015. In other words, the price isn’t going anywhere–likely to stay in the same neighborhood of last winter’s average Henry Hub price of $3.21 per thousand cubic feet (Mcf). MDN points out the price of gas varies widely depending on what part of the country you’re in. Although gas sold at the Henry Hub delivery point for an average of $3.21/Mcf last winter, gas selling at the Tennessee Gas Pipeline Zone 4 Marcellus delivery point was less than half that–around $1.50/Mcf last winter. NGSA is saying: What you saw last winter for prices is what you’re likely to see this winter…
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Fed Judge Tosses VA Landowner Lawsuit to Stop Pipeline Surveys

gavelOne reason why it takes so long to build a pipeline is the litigation necessary to make it happen. In September 2014, Dominion committed full force to building a 550-mile, $5 billion natural gas pipeline that will run from West Virginia, through Virginia and into North Carolina (see Dominion Commits to Major New Marcellus/Utica Pipeline Project). The project, called the Atlantic Coast Pipeline, will transport Marcellus and Utica Shale gas to the southeast. In November 2014, Dominion asked the Federal Energy Regulatory Commission (FERC) to begin an environmental review of the project (see Dominion Asks FERC to Start Environmental Review of SE Pipeline). In order to do a proper review and to finalize plans for the route, Dominion surveyors need to get on property of landowners in Virginia, some of whom blocked access–so Dominion had to sue them to gain access (see Dominion Sues VA Landowners to Allow Survey for Pipeline). Virginia landowners in Nelson and Augusta counties counter-sued to block Dominion and on Wednesday, a federal judge dismissed the landowners’ lawsuits, clearing the way for Dominion to enter their properties and complete survey work…
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MVP Cuts Deal to Deliver Marcellus Gas to Roanoke Gas Customers

handshakeEQT and NextEra US Gas Assets plan to build the Mountain Valley Pipeline (MVP), a 330-mile pipeline from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. There’s been plenty of pushback from landowners who won’t allow MVP access to survey (see Mountain Valley Pipeline Sues 103 WV Landowners for Survey Access). Perhaps some of the people along the pipeline’s route will be a tad more favorable to the idea knowing that some of the gas flowing through it will heat their homes. Yesterday MVP and RGC Midstream (Roanoke Gas) announced a deal to provide some of the Marcellus/Utica gas in the MVP pipeline to Roanoke Gas customers…
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PA Utility’s Plan to Deliver Marcellus Gas Approved by PUC

love it when a plan comes togetherLast November, MDN told you about an innovative plan by PECO, a utility company based in Philadelphia serving some 500,000+ natural gas customers in southeastern PA, to allow customers to sign up for its natural gas service and spread the cost over 20 years (see PA Utility’s Innovate Plan to Deliver Marcellus Gas to Customers). It costs a lot of money to install new gas mains through an area–$500,000 – $1,000,000 per mile–and PECO needs a lot of customers along a route to sign up to make it profitable. So they innovated a plan to make it possible. But the plan needed approval from the Pennsylvania Public Utility Commission (PUC). Yesterday the PUC approved PECO’s plan citing the goal of getting more Pennsylvanians using more of the home-grown Marcellus Shale gas produced in the state…
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Cabot’s Top Lawyer Sells Some of His Company Stock for $81K

buy sell holdFrom time to time we bring you news of top management at drillers (upstream) or pipeline companies (midstream) who either buy or sell large blocks of their own company’s stock. It’s always hard to divine what someone’s motivation is when buying or selling. We typically take it to be a good sign when top management or board members buy stock–it shows they believe in the company they run, enough to put their own money on the line. We have another case–this time a company’s top lawyer selling stock in one of the top drillers in the Marcellus. Cabot Oil & Gas’ General Counsel, George Kevin Cunningham, sold 3,623 shares of Cabot stock in a transaction dated Tuesday, September 29th. He got $81,046.51. But lest you view the transaction negatively, consider this: Cunningham still owns 42,210 shares worth nearly a million bucks. Looks to us like maybe he’s sending a kid off to college or remodeling the house with this sale…
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Cabot Hosts Sporting Clays Tourney, Raises $110K for Local College

sporting claysOnce again the great people at Cabot Oil & Gas have done it again. Back in 2012 the company helped raise $4.4 million for a local hospital in Susquehanna County, PA, with half of the money contributed by Cabot (see Cabot Effort Raises $4.4 Million for PA Physicians Clinic). Last year Cabot donated a $2.5 million gift to northeast PA’s Lackawanna College (see Cabot Oil & Gas Does it Again – $2.5 Million Gift to Lackawanna College). Cabot remains very active in the NEPA community as a vital, contributing member of the community. Last week Cabot hosted their 2015 Fall Classic Sporting Clay Tourney and raised ANOTHER $110,000 for the Lackawanna College School of Petroleum & Natural Gas. Kind of obliterates the antis lies about evil Big Oil & Gas companies arriving to rape and pillage Mother Earth and damage the communities where they operate…
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Marcellus & Utica Shale Story Links: Fri, Oct 2, 2015

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: breakeven prices in the Marcellus; OH severance tax study late; is the Utica shrinking?; natgas price hits 3-year low; EPA tightens ozone standards; shale drilling in 2016 will be down, but production up; House committee passes natgas export law to speed it up; and more!
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