Range Says Forget Utica, Our Focus “Totally on the Marcellus”

total focusYesterday we brought you Range Resources’ third quarter update (see Range Resources 3Q15: Marcellus Prod Up 27%, but $301M Net Loss) and Range’s newly revised PowerPoint slide deck (see Range Resources Oct 2015 Investor Slide Presentation, Our Favs). As is typical, the top brass from the company, including CEO Jeff Ventura, held a quarterly analyst/investor phone call to go along with the release of the quarterly update. These phone calls are often treasure troves of additional information–and yesterday’s call was one of the richest troves we’ve seen in a while. What we learned from that call is this: Although early Utica Shale results in southwestern PA have turned the head for some companies, like EQT, who is refocusing on the Utica for 2016 (see EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016), it’s just the opposite for Range. Jeff Ventura said yesterday that while his company is interested and still testing their first three Utica wells, Range will focus exclusively on the Marcellus in 2016 as being the best/most productive option for them. We find it fascinating when two heavy weights like EQT and Range come to opposite conclusions…
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Gateway Royalty’s Latest Appeal to Buy Eastern OH Royalty Rights

good idea bad ideaIn March 2014 MDN alerted you to a pitch being made by Gateway Royalty to purchase royalty rights from landowners in eastern Ohio (see Company Targets OH Landowners – Buy Future Royalties for Cash Now). Gateway pays landowners a lump sum now in return for the right to receive that landowner’s future royalty payments for years to come. You (the landowner) get your money now, they (Gateway) get the money you would have gotten dribbled out over time. Of course the money you receive now is discounted and in all likelihood far less than you would have gotten if you had waited just a few years (the bulk of royalty payments come in the first four years). It’s a bit of a gamble by both parties because no one really knows how much a well will produce–nor what price the gas/oil will be sold for. Gateway is back with another appeal. We received the following email notice from an MDN subscriber, alerting us to Gateway’s renewed offer…
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DEP Board Votes to “Not Endorse” Sec. Quigley’s New Drilling Regs

slap across the faceIn a big metaphorical slap across the face, the Pennsylvania Dept. of Environmental Protection’s Oil and Gas Technical Advisory Board (TAB) has voted to not endorse re-worked drilling regulations proposed by the PennFuture Sec. of the DEP, John Quigley. We told you two days ago the DEP was meeting with TAB to get the group’s rubber stamp of approval (see New Drilling Rules for PA Take One Big Step Closer to Reality). Looks like Quigley’s hand-picked new board members are not yes men (and women) after all. This is the second DEP advisory group packed with Quigley appointees that has rejected his onerous proposed re-worked regulations. Previously the Conventional Oil and Gas Advisory Committee (COGAC) also told Quigley nyet (see PA DEP Sec Quigley’s Own Committee Appointees Turn Against Him). Which means both conventional and now unconventional drilling advisors, appointed by Quigley himself, don’t believe Quigley’s rejiggered regulations are good. Do we see a pattern developing here? Seeing that two boards of experts are telling him there’s a problem, does that mean Quigley will pause and reflect and perhaps consider changing his proposed rules? Are you kidding! Don’t make us laugh. Oh no no no. Quigley plans to ramrod these new regs through as fast as he can regardless…
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PA DEP Sec. Quigley Defends DEP, Criticizes Patriot-News Series

backstabberWow. We didn’t think it possible. The PennFuture Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), John Quigley himself, is sticking up for the honor and reputation of his agency. Last week the Democrat-run Harrisburg Patriot-News ran an attack series against shale energy. We told you about it by reprinting Tom Shepstone’s excellent critique (see Harrisburg Newspaper’s Attack Series on Marcellus Exposed). Tom followed it up with another excellent article with a clip of the vapid lead author’s Twitter feed showing her outright bias against not only shale in general, but against the DEP in particular (see Natural Gas Now, PennLive Shale Series: “Erin” Go Bragh?). Quigley had fully cooperated with the Patriot-News and lead series author Candy Woodall, and now feels betrayed and stabbed in the back (welcome to the club John). So Quigley wrote a response to the profoundly biased attack series–and wonder of wonders, the Democrat Patriot-News actually published his response! Here it is…
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PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”

misinformedAbout 20 hippie retreads showed up in Harrisburg, PA on Wednesday to protest outside of the Dept. of Environmental Protection (DEP) regional office in Harrisburg to protest the fourth meeting of Gov. Tom Wolf’s Pipeline Infrastructure Taskforce. In May Gov. Wolf announced he was forming a taskforce to study and make recommendations on how the state can better work with (i.e. control) where local gathering pipelines are installed (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). DEP Secretary John Quigley packed the task force with 42 members, most of them government employees (beholden to Wolf/Quigley for their jobs) as well as some from the “environmental” community and a few from the pipeline industry (see PA Gov Wolf Packs Pipeline Task Force with His Own Minions). The gang of 42 was meeting for the fourth time in an effort to complete a draft report by mid-November. Some of the best and brightest gathered outside, including THE Delaware Riverkeeper, Maya van Rossum, to protest. Quigley called the assembled antis “badly misinformed”…
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EXCO’s Top Mgmt Talks About Shutting in Production in Marcellus

shutdownEarlier this week MDN brought you EXCO Resources’ third quarter update, with the news that they have a “strategic plan” to turn things around at the troubled company (see EXCO Resources 3Q15: $42M Loss, Plan to Turn Things Around). EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells. However, with natgas prices in the northeast the lowest in the country, EXCO is not drilling any new Marcellus wells save one appraisal well earlier this year. On Wednesday EXCO’s top management hosted a quarterly earnings call with analysts. We went fishing through the call transcript to find references to the Marcellus/Utica–to see if there was anything new in their thinking about the northeast. Here’s what we found…
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French Co. Gets Contract for Key Components in Belmont Cracker

puzzle pieces falling into placeAnother piece of the puzzle slides into place with respect to the $5.7 billion ethane cracker project in Belmont County, OH planned by Thailand-based PTT Chemical and financial partner Marubeni Corp. from Japan (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). The quickly got serious when PTT’s CEO Supattanapong Punmeechaow visited the proposed site last month to announce they are spending the first $100 million on engineering work for the cracker plant over the next 9-12 months with two companies–Bechtel Enterprises and Fluor Corporation (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). The project is truly taking on an international flavor. A third company has stepped forward to say they’ve now been contracted to design and build the furnaces and other key components of the cracker. That company is the Paris, France-based Technip. Below is their announcement with details about what, exactly, they will provide for the project…
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Anti Groups Try to Convince EPA They Got it Wrong with Water Study

wrongHoping to get one more squeeze and a few more drops of juice out of news that’s now years old, the odious Earthworks and equally odious Food & Water Watch organized a protest rally in Washington, D.C. on Wednesday and trotted out the same old tired, lying anti-drillers from Dimock, PA, Pavillion, WY and Parker County, TX to “demand” that the federal Environmental Protection Agency (EPA) simply dump the findings of their four-year study that concluded fracking doesn’t pollute water supplies (see EPA Draft Report Says Fracking Doesn’t Pollute Groundwater Supplies). Anti-fossil fuel organizations like Earthworks and FWW about had a conniption fit when the EPA announced that after turning over every stone, pebble and spec of sand, they couldn’t find proof that fracking contaminates groundwater supplies. So the only thing they could do was to condemn the EPA. But therein lies the problem–because the EPA colludes with these same groups on sue-and-settle court cases all the time. They’re friends. They’re buddies. So falling out with the EPA leads to being conflicted. The planets are not properly aligned. How to resolve it? Convince the EPA with protests and pressure that they were wrong. They did it wrong. They ignored some of their own research and reseachers and came to the wrong conclusion. “Just admit you were wrong and everything will be OK. We’ll forgive you.” That’s what the “rally” was about on Wednesday in DC…
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Marathon 3Q15: Closing on MarkWest Merger “Later this Year”

coming soonBelow is the third quarter 2015 update from Marathon Petroleum Corporation (MPC). Headquartered in Findlay, OH, MPC is the nation’s fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Increasingly the oil that MPC refines comes from the Marcellus/Utica. You may recall that MPC is in the process of buying MarkWest Energy for $20 billion, arguably *the* premier midstream company operating in the Marcellus/Utica region (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). In their 3Q15 update, MPC says they hope to close on the MarkWest buyout “later this year.” That’s the primary reason to bring you MPC’s update. The secondary reason to bring you the update is because MPC owns the Speedway convenience store chain spanning 22 states. Speedway (at least some of them) used to be called Hess. MPC purchased the Hess gas stations/convenience stores from Hess last year this time for $2.8 billion (see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Has your local Hess station been renamed to Speedway yet? Ours have in upstate New York…
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Marcellus & Utica Shale Story Links: Fri, Oct 30, 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: Magnum Hunter’s outlook dimming with low gas price; EQT’s stock drop; 50 cranes arriving to build Cove Point LNG terminal; PA DEP feels pinch from lack of budget; surplus gas equals low prices this winter; Halcon keeps $850M line of credit; companies trading big offshore projects for smaller onshore shale projects; Shell scaling back in North America; fracking causes firewood prices to spike is ‘nonsense’; and more!
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