Hess Quietly Shops the Rest of Their Ohio Utica Acreage

for sale signIn January 2014 Hess Corporation sold 74,000 of its 95,000 100%-owned Utica Shale acreage leases to Aubrey McClendon’s American Energy Partners for $924 million (see Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer). After the sale, Hess still owned 21,000 acres of leases plus a 50% share of a joint venture with CONSOL Energy in another 65,000 acres. In January of this year, Hess (like other drillers) cut way back on their budget for Utica drilling (see Hess Cuts Utica Drilling Budget 42% for 2015). It appeared that Hess was still in love with the Utica as recently as August when Hess’ top managers said some flattering things about their Utica acreage (see Hess Says Harrison County, OH “Truly the Sweet Spot” of the Utica). Perhaps that was a buildup to selling their remaining position–because that’s exactly what they’re now doing. According to unnamed sources who have seen an offering document being circulated, Hess is shopping all of their remaining Utica acreage, including the jv with CONSOL…
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Federal Power Grab: Natl Park Service Creates New Drilling Regs

stop the power grabThere are some 408 parks that are part of the National Park System in the United States. The National Park Service (NPS) is the government agency charged with managing those parks. The NPS has just put everyone on notice that new regulations for oil and gas drilling on and under those parks is coming. In some cases mineral rights are not owned by the government and drilling does happen on or under the parks. Oil and gas drilling currently happens in 12 of the 408 parks, including drilling operations in the Cuyahoga Valley National Park between Akron and Cleveland in Northeast Ohio. Just over half of the drilling operations happening in those 12 National Parks is exempt from NPS regulations. In an annoucement (below), the NPS said (1) we’re about to make drilling regs more strict, and (2) the new regs will apply to all drilling in all National Parks, including the places where it’s currently exempt from NPS rules–even if the mineral rights are not owned by the NPS. It is another power grab by the federal government. The Bureau of Land Management (BLM) tried this tactic with non-park federal lands–a move that landed it in court (see Federal Judge Blocks BLM Rules for Fracking on Federal Lands). Will the same thing happen to the NPS?…
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Quigley Changes Story, “Reactivating” Enviro Justice Office at DEP

riffingIn a sit-down in September with the editors of the Washington Observer-Reporter (near Pittsburgh), the PennFuture Secretary of the Pennsylvania Dept. of Environmental Protection, John Quigley, was reported to have said the following: “He [Quigley] is proposing to create an office of environmental justice within the department and hire “the right individual” to advise him on policy” (see PA DEP Sec. Quigley Wants to Create “Environmental Justice” Office). A sharp MDN reader pointed out to us that such an office already exists inside the DEP (see Quigley Faux Pas: DEP Already has Office of Environmental Justice). Oops. Time to engage in some CYA and cover up that embarrassing error. It’s the Pittsburgh Post-Gazette to the rescue! The Post-Gazette, cooperating with Quigley to try and repair his already-fading reputation, is reporting Quigley knew that the Office of Environmental Justice existed and is “reactivating” the office which had become “moribund” under former Gov. Tom Corbett because, well, because Corbett just hates poor people and libs like Quigley just love poor people. That’s the gist of the article…
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Halliburton 3Q15: $54M Loss, Cut 18,000 Jobs Over Past Year

red inkIt continues to be tough times at Halliburton. Although the company is in the process of buying smaller competitor Baker Hughes, Halliburton themselves are having a hard time keeping their proverbial nose above water. In the third quarter of 2015 the company lost $54 million and laid off another 2,000 employees. Earlier this year Halliburton laid off 10% of its workforce–some 9,000 people (see 3rd Shoe Drops: Halliburton Lays Off Additional 2,600). In September, an internal company document surfaced saying the company has plans to lay off a total of 20,000 people. They’re almost there. According to an email from a Halliburton spokesperson, the company has now laid off 18,000 people since last year–a number much higher than previously confirmed by the company. In a phone conference yesterday, Halliburton officials said first quarter of next year will likely be the lowest point they hit with respect to a decrease in business/revenue, and after that things will improve. From their lips to God’s ears–we hope they’re right. Below is the earnings update along with select comments by Halliburton’s muckety mucks as reported by Bloomberg…
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PA Superior Court Rules on Important Surface/Mineral Rights Case

Gavel fallingA complicated court case just decided by Pennsylvania Superior Court has implications for all land and mineral rights owners in PA. The case is called Wright v. Misty Mountain Farm LLC. This is how we understand it. In 1950 Fred and Jeanetta Buck sold some property in Bradford County, PA to Robert and Marjorie Wright. However, the Bucks kept the oil/gas/mineral rights for themselves, having already leased the mineral rights for the property. The mineral rights lease eventually expired in 1971. At that time, Robert and Marjorie Wright, the surface owners, figured with the expiration of the lease, the mineral rights reverted to them–so they signed a lease to allow oil and gas drilling. In 1988 the Wrights signed over the property and the lease to David and Patricia Wright (we’re assuming son and daughter-in-law). David and Patricia signed new leases on the property in both 2001 and again in 2005. Eventually Jeanetta Buck died and in 2010 while reviewing her estate and its assets, Shirley Matthews, administratrix of the estate, discovered/claimed the mineral rights still belonged to the Bucks. So Matthews conveyed the subsurface mineral rights to Misty Mountain Farm LLC. Patricia Wright argued that the when the original lease made by the Bucks in 1950 expired, ownership of the mineral rights also expired–in 1971. A lower court and then the Superior Court disagreed and ruled that unless there is specific language saying that when a lease expires so too do the mineral rights, then the mineral rights still belong to the original rights owner. Whew. Get all that? Bottom line: Just because a lease expires it doesn’t mean the party who owns the mineral rights loses their claim on those rights…
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Global LNG Demand is Going Down – What Does it Mean for the U.S.?

if you build it will they comeMDN editor Jim Willis still remembers the thunderclap of understanding he experienced while attending the Platts Global Energy Outlook Forum in New York City in December of 2013 (see Energy Industry Leaders Gather at Platts Forum in NYC). As we wrote at the time: “The one thing Jim learned (honest admission) is how much he doesn’t know about the wider energy industry. We who toil away in the shale gas and oil industry are, according to those at the Forum, a bit myopic. I think that’s probably true. Our heads are down and we’re fighting crazies every day and forget to look up and take stock of how our piece of the energy puzzle fits with the rest of the puzzle. The Forum helped provide some of that perspective for Jim.” In many ways that statement remains true–that the oil and gas industry is working hard and treading water and doesn’t stop to consider the global interconnection between not only oil and gas, but all energy sources. We can produce lots of gas in the U.S., but where and how will it get used? With all due respect to the great actor Kevin Costner, if you build it, they don’t necessarily come! As in, if we continue to pump out enormous quantities of natural gas and think that exports will save the day–that other countries will soak up our extra capacity–well, it’s a nice thought, but not necessarily true. Case in point: Platts is out with a sobering assessment of LNG going to Japan and Korea (and even China)–and the picture is not pretty for exporters here in the U.S….
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81 Big Companies Sell Out U.S., Support Obama’s Climate Madness

climate change insanityIn December President Obama will travel to Paris to sign a climate treaty that forfeits the sovereignty of the United States of America–the country he swore to protect. The Paris climate treaty is another in a long line of attempts (like Kyoto) to convince stupid Americans to give up the right to control their own country and destiny–to sell ourselves out and let non-American, un-elected socialists from other countries determine how we will live in the future. They use the bogeyman myth of global warming to do it. They are all aiming to commit mass energy suicide by outlawing fossil fuels–but it won’t work if we don’t play along. We pray Congress stops this madness, but now we despair. You see, big business is in bed with big government and funds the political ruling class in Washington and in return the politicians pass laws favorable to them. Some 81 of the biggest big businesses (who contribute heavily to Congress and receive preferential treatment in return) have signed on to a pact to support Obama’s climate madness. They actually want him to sign the treaty that gives up our national sovereignty. Without these 81 big businesses (full list below) you literally could not live–from Walmart to Hershey to Nike to Apple to Google to Kellogg’s to American Express…the list goes on. Sadly, even some in our own industry have signed on, including Invenergy. Shame on them. If we were to boycott them (as should happen) we’d have to live like hermits in the wilderness. No one can live without the goods and services provided by this list of 81 mega corporations. And each and every one of them have sold us out. It’s truly a sad and depressing day…
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Marcellus & Utica Shale Story Links: Tue, Oct 20, 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: flood agency wants details from PennEast Pipeline; royalties down in Washington County, PA; MSC remains vigilant against severance tax; recent grads still getting jobs in WV shale; ETE/Williams deal; possible coup in Saudi Arabia; and more!
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