Chesapeake’s Doug Lawler Talks About ‘Frightening’ NatGas Prices

Jason Friday the 13thDoug “the ax” Lawler, CEO of Chesapeake Energy, was the keynote speaker on Tuesday at the Louisiana Gulf Coast Oil Exposition (LAGCOE). Lawler became CEO after corporate raiders Mason Hawkins and Carl Icahn, the two biggest investors in Chesapeake, forced Aubrey McClendon out–out of the company he co-founded. That’s what happens when you take other people’s money. You lose control. Lawler embarked on massive layoffs and selling everything but the kitchen sink. How’s it worked out? Lawler claims the company now has $1.5 billion in cash, giving them some breathing room. Lawler had some very interesting comments at LAGCOE on the price of natural gas–where he sees it going over the next five years, and at what price his company (and other companies) can’t make money. Lawler also talked about the price of oil, oil production and Saudi Arabia’s rather bizarre behavior with respect to oil production…
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Update on Panda Power’s Huge Marcellus-Powered PA Electric Plant

Panda Power’s Rendering of New Hummel Plant – click image for larger version

In February MDN told you that Panda Power Funds, a private equity firm located in Dallas, TX already committed to building two 829-megawatt electric generating plants in Pennsylvania, was partnering with Sunbury Generation to build a whopping 1,000-megawatt plant on the site of a recently retired coal-fired plant near Shamokin Dam in Snyder County, PA (see Panda Power Building 3rd Marcellus-Fired Electric Plant in PA). It is, by all accounts, one of the largest coal-to-gas conversion projects in the country. Yesterday Panda released more details about the project. It will actually be 1,124 megawatts. Panda has contracted with Bechtel and Siemens Energy to build the plant, which, when up and running, will provide enough electricity to power 1 million homes. Here’s the latest on Panda’s “Hummel Station” project that will be fed by Marcellus Shale gas, including the tech being used to build it…
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UGI Completes Auburn Loop Pipeline in NEPA, Benefits Cabot O&G

project completeWay back in May 2014 MDN told you that UGI Energy Services, a subsidiary of UGI (a utility company in northeast PA) would build two new pipelines in northeast PA for $80 million that will allow them to transport cheap, abundant, locally extracted natural gas from Cabot Oil & Gas in Susquehanna County to residents in the greater Scranton/Wilkes-Barre area (see UGI Energy Building 2 New Pipelines in NEPA for Cabot O&G). One of those two projects was completed last November (see UGI Turns on New Pipeline for Cabot in NEPA). Earlier this week UGI completed the second project, called the Auburn Loop–9 miles of new pipeline that parallels existing pipeline and, along with compressor upgrades, allows UGI to pump an additional 270 million cubic feet per day (Mmcf/d) of Marcellus Shale gas from Susquehanna County, PA to the Scranton area…
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Range Resources 3Q15: Marcellus Prod Up 27%, but $301M Net Loss

I love quarterly reportsRange Resources, the driller that started it all in the Marcellus when they drilled the very first Marcellus Shale well in 2004, released their third quarter 2015 update yesterday. There is a LOT in this very readable and informative update. For example: Marcellus production volumes averaged 1.3 billion cubic feet equivalent per day (Bcfe/d) in 3Q15, an increase of 27% over 3Q14. During the quarter Range brought online their second Utica well drilled in Washington County, PA–the Claysville Sportsman’s Unit 9H. By all accounts Range expects it will be even more productive than the first Utica well they drilled (also in Washington County). A third Utica well is being drilled now and will be completed in early 2016. Range drilled a total of 25 wells in 3Q15, and brought 31 wells online. They are on target to spend $870 million on drilling in 2015–most of it in the Marcellus/Utica. Range reports the Mariner East 1 pipeline will be, according to Sunoco Logistics, fully operational by the end of the year–with ethane beginning to flow “within the next month.” Costs are down and Range gets more than many others for the gas and NGLs they sell. But amidst all of the good news, you can’t miss the fact that they lost $301 million in 3Q15…
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Range Resources Oct 2015 Investor Slide Presentation, Our Favs

presentationAlong with releasing their third quarter update yesterday, Range Resources also released an updated investor PowerPoint presentation. There’s a lot of interesting slides in the deck, and we didn’t want it to get lost with the other Range news in their update, so we’re bringing you this second, separate post. Below we have the presentation embedded, along with a listing of our favorite slides and brief description of what they show/why the slides are notable…
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Antero Resources 3Q15: Bucks the Trend, $237M in the Black!

I love quarterly reportsAntero Resources, perhaps the largest driller completely focused on the Marcellus/Utica (by acreage), is also one of the few drillers that separates their operational updates from financial updates. Two weeks ago Antero published their third quarter 2015 operational update–the “good news” if you will (see Antero 3Q15 Operational Update: Production Up 39%, Gets $3.99/Mcf). There was, justifiably, plenty to crow about in their operational update. With yesterday’s financial update, this is normally where you might expect to the see “the bad news.” So far every driller we’ve covered lost money in 3Q15. But not, it seems, Antero! They made money in 3Q15. If we’re reading the financials correctly, it looks to us like Antero’s net revenue was $237 million in 3Q15. While net revenue is down slightly from 3Q14, Antero stayed in the black, which is no small feat. How did they do it? Some of it may be accounting maneuvers–selling their water business to their midstream subsidiary for $794 million. However, it appears Antero’s ace in the hole was their ability to hedge and get more money for their gas than others (an average of $3.99/Mcf). Antero’s production increased dramatically in 3Q15 over the previous year–up 39%. And they got more money for their gas. And they didn’t spend as much money in 3Q15, scaling back on their drilling budget. Combine it all together and it’s big news indeed that Antero did well financially in 3Q15. Perhaps the only dark cloud (a seriously dark cloud) is that the company continues to swim in debt. Antero’s debt increased from $4 billion to $4.5 billion in 3Q15 (the company’s stock is only worth $5.7 billion)…
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Antero Resources Nov 2015 Investor Slide Presentation, Our Favs

presentationAlong with releasing their third quarter financial update yesterday, Antero Resources also released an updated investor PowerPoint presentation. There’s a lot of interesting slides in the deck, and we didn’t want it to get lost with the other (big) Antero news in their update, so we’re bringing you this second, separate post. Below we have the presentation embedded, along with a listing of our favorite slides and brief description of what they show/why the slides are notable…
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Williams Partners 3Q15: Revenue Up 21%, but Paper Loss of $194M

I love quarterly reportsWilliams Partners issued their third quarter 2015 earnings and operating update yesterday. Williams, you may recall, is in the process of being taken over (bought out, merged, whatever you want to call it) by Energy Transfer Equity, the same company that owns Sunoco Logistics and Regency Energy (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Perhaps one reason Williams decided to accept ETE’s offer is that although revenue was up $193 million (21%) in 3Q15 over 3Q14, the company lost $194 million in 3Q15, vs making $233 million in 3Q14. To be fair, the “loss” was a paper loss–mostly due to accounting machinations whereby the value of some assets was lowered. Below are some of the financials, and much of the narrative, which includes a great deal about the Marcellus/Utica were Williams has a huge presence…
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Seventy Seven Energy 3Q15: Still Losing Money, But Not as Much

I love quarterly reportsSeventy Seven Energy (SSE), an oilfield services company with major operations in the northeast, is the old Chesapeake Oilfield Operating division of Chesapeake–spun off into its own company on July 1, 2014 (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). Every quarter we bring you SSE’s financial and operational update, and every quarter seems like the news gets worse. In 1Q15 SSE lost $37.6 million. Last quarter they lost $74.7 million. What about 3Q15? They lost again–$48.5 million. To be fair, they lost less money than they did last quarter, so there’s that. But the reason they lost less is because revenues are down 28% from 2Q15. They just aren’t drilling as much. Less work. Was there any good news? Not much, but perhaps this…
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Hess 3Q15: Utica is Now Just an Afterthought for Hess

afterthoughtIt’s obvious that Hess has pretty much given up on its Utica Shale drilling program. Just last week we told you that Hess is shopping the rest of its remaining Utica acreage (see Hess Quietly Shops the Rest of Their Ohio Utica Acreage). In releasing their third quarter 2015 financial and operating update yesterday, we were interested to see what Hess was saying, on the record, about the Utica. We found four references in their extensive update, which we’ve extracted out below…
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Donald Trump to John Kasich – Fracking Saved Ohio’s Economy!

Trump - Kasich
Credit: Columbus Dispatch

Did you watch last night’s Republican presidential debate on CNBC? Confession: We did not. We kicked the TV habit long ago. However, this is one we wish we had seen! The news coverage today about last night’s debate is highly entertaining. In fact, fracking came up in the debate last night when Donald Trump spoke a little truth to RINO John Kasich–telling him fracking is the only thing that saved Ohio’s economy since Kasich became governor. By all accounts, the moderators didn’t even pretend to be impartial–all three are liberal Democrats and as the night wore on they lost control of the debate and took incoming fire themselves. One news report called last night’s debate a “cage match.” Wow! This story is a little off topic for MDN, but since fracking was raised as an issue, we’ll include some of the coverage we’ve seen about last night’s debate, for your reading pleasure…
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Marcellus & Utica Shale Story Links: Thu, Oct 29, 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: Equitrans files with FERC to build Marcellus pipeline; PennLive’s repackaged hit series on shale; Philly keeps pushing energy hub concept; Spectra exec says ignore the antis, pay attention to FERC instead; Duke turns its attention back to natgas; midstream dominates M&A; Big Data comes to water management; Saudis trying to torpedo climate talks; and more!
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