NY AG Targets/Accuses ExxonMobil of Lying about ‘Climate Change’

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Eric Schneiderman, NY AG

We’ve written before about the lawless Attorney General from New York–Eric T. Schneiderman. He attacks his own constituents like landowners in the state (see NY AG Schneiderman Files to Dismiss JLCNY Lawsuit Against Cuomo), threatened the Delaware River Basin Commission that he would sue them if they allowed fracking (see NY AG Schneiderman Threatens New DRBC Lawsuit over Fracking), and he regularly bullies oil and gas companies (see NY Attorney General Schneiderman Subpoenas Shale Drillers and More on NY AG Schneiderman’s Bullying of Anadarko & EOG Resources). Schneiderman has just performed a breathtaking act of chutzpah: He’s launched an investigation and subpoenaed ExxonMobil, the largest oil company in the United States (4th largest in the world), accusing them of making false statements about so-called man-made global warming. He’s saying they contribute to global warming and they’re lying about their role in it–that they’ve made false statements to the public that contradict what their own internal research has found. That is, he is using the same strategy used against tobacco companies 20 years ago…
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Magnum Hunter Refinances Again, Dodges a Bullet…Just Barely

Magnum Hunter Resources (MHR) issued an interesting press release yesterday to notify investors that they dodged a bullet–for the moment–by refinancing certain loans and getting a new $60 million loan which will let them make their $29 million bond payment on Nov. 15 (see Magnum Hunter’s Latest Woes: More Investor Unrest, $29M Payment Due). The statement also said in light of “ongoing discussions regarding its capital structure” they won’t issue a press release on third quarter financials, and they won’t hold a conference call with investors. Not a good sign. One analyst we read rhetorically asks, Does this mean they avoid bankruptcy? “The short answer is NO,” was his reply. He maintains “working on capital structure” means they are headed for a prepackaged bankruptcy. The only question is, when will it happen? Here’s the latest MHR statement in what (sadly) feels like a death watch…
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Rice Energy 3Q15: $59M Profit, $750M LOC, Selling Gas Outside NE

Rice Energy, a very young but important pure play driller in the Marcellus/Utica, released its third quarter update yesterday. Bucking the trend of other northeast drillers, Rice earned $119 million in profit before interest, taxes and all that jazz (called EBITDAX), and they earned $59 million after all that jazz. In the black. No paper loss. It’s all good. One of the secrets to Rice’s success is that they’re selling their gas for an average of $0.38 higher per Mcf than others because of deals with the REX and Texas Eastern pipelines that carry Rice’s gas to markets outside of Appalachia. Production was 609 million cubic feet equivalent per day (Mmcfe/d) in 3Q15. The company reports expanding their line of credit at the bank to $750 million and transferring ownership (called a “drop down”) of their water services business from Rice Energy the driller to Rice Midstream the subsidiary, netting Rice Energy a nifty $200 million on paper. In essence they transferred money from one pocket to another. Here’s the full update from one of our favorite Marcellus/Utica drillers…
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Gastar 3Q15: Production Up but Still Shopping Marcellus/Utica

Yesterday Gastar Exploration, with active drilling programs in the Marcellus/Utica and in the Midcontinent region, issued their third quarter 2015 financial and operational update. What do we glean from it? The company lost $191.8 million for the quarter–but almost all of it was a paper loss and not actual money out the door (from writedowns). As we’ve previously noted (see Gastar Puts All Marcellus/Utica Assets (Leases/Wells) Up for Sale), Gastar continues to shop their Marcellus/Utica assets and said as much in this update. Net production in the northeast rose in 3Q15–8,000 barrels of oil equivalent per day, or Boe/d in 3Q15 vs 5,300 Boe/d in 3Q14. They didn’t drill a single new well in 3Q15 nor will they drill any in 4Q15 and for the foreseeable future. They’re trying to sell it…
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Carrizo O&G 3Q15: No New Drilling in the Utica/Marcellus

Carrizo Oil & Gas, a Houston-based driller, issued their third quarter 2015 financial and operational update on Wednesday. Carrizo actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Utica Shale in Ohio, the Niobrara Formation in Colorado, and the Marcellus Shale in Pennsylvania. Carrizo reports losing $708.8 million in 3Q15, but like other drillers, it was a paper loss–a requirement to reevaluate and write down the value of their holdings based on low oil and gas prices. According to the update, Carrizo didn’t drill or complete any new wells in the Utica or Marcellus during 3Q15, nor do they plan to any time soon. They’re concentrating their time and effort in oil plays like the Eagle Ford. Below are select portions of yesterday’s update applicable to the Utica/Marcellus…
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Spectra Energy 3Q15: Pipeline Project Updates, $20B+ in Development

On Wednesday, Spectra Energy, a large midstream (pipeline) company released its third quarter 2015 update. The interesting part for us is an update on their various pipeline projects in the northeast–projects that will haul Marcellus and Utica Shale gas out of the region to other markets. It’s noteworthy that Spectra Energy made $243 million in 3Q15, down just a hair from 3Q14’s $254 million. Also noteworthy: the first segment of Spectra’s OPEN project (Ohio Pipeline Energy Work) was placed into service six weeks early. Here’s selected sections from Spectra’s 3Q15 update…
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NFG Update: Seneca Paper Loss, Production Shut-in; New Pipes Done

National Fuel Gas Company, parent of driller Seneca Resources and also an important midstream (pipeline) company, issued their quarter update yesterday. We always have to explain this. NFG counts their quarters different. Everyone else counts July through September as a calendar year third quarter. For NFG, it was their fourth quarter fiscal year. The company had a big $188 million loss for their 4Q15, vs a $57 million gain in 4Q14. However, like many others, NFG’s was a “paper loss” and not an actual money-out-the-pocket loss. The decrease is largely due to a $241 million writedown of the value of Seneca’s oil and natural gas reserves. Other news: Seneca’s production was down in 4Q15 because they decided to voluntarily shut-in 13 billion cubic feet (Bcf) of production they otherwise could have sold–due to the low price of natural gas they receive in the Marcellus. Seneca’s proved reserves (available to drill) went up 27% for fiscal year 2015. On the pipeline front, as of Nov. 1 NFG put the Westside Expansion & Modernization and Tuscarora Lateral projects into service, and they’re close to completing the Northern Access 2015 expansion project, a joint project with Tennessee Gas Pipeline’s Niagara Expansion. Here’s the full update with plenty of interesting news for the Marcellus/Utica…
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Williams/Atlantic Sunrise Pipeline Award $375K in Local Grants

MDN brings you updates on pipeline companies that spread around money with very worthy organizations in an attempt to show them they “care” (and to encourage adoption of their pipeline). We previously told you that Williams and their Atlantic Sunrise pipeline project had doled out $2.5 million to 17 conservation organizations in June (see More Pipeline Payola: Williams Doles Out $2.5M in PA Grants). What we had missed was prior to that, the Atlantic Sunrise project had issued $350,000 in grants to 49 first responders and other organizations back in April (list below). What made us go looking was news that Williams made a second round of grants, this time $375,000 to 43 organizations, just this week. Here’s the list of who got what from Williams and the Atlantic Sunrise pipeline project…
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Patterson-UTI Rig Counts Continue to Slide in October

Since March MDN has been watching the active number of rigs operated by Patterson-UTI Energy as a proxy for whether or not we’ve “turned the corner” on falling rig counts in the Marcellus/Utica. Patterson is a major drilling contractor with operations in the Marcellus/Utica region. Month after the month it’s the same story: Patterson is operating less rigs in the U.S. than it was the month before. The numbers are now out for October. What do they show? We’ve hit a new low. Here’s a recap of the numbers rigs Patterson was operating in the U.S. over the past eight months: March – 142; April – 131; May – 122; June – 112; July – 111 (seemed like it was turning the corner! but it wasn’t); August – 106; September – 99; and now in October – 92. Kerplunk…
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Southwestern Energy’s Stock Sees Spike Up in Short Selling

From time to time MDN notices and highlights “short selling” stories. What’s short selling? In essence, it’s when traders borrow and sell a stock so they can turn around and buy it back at a lower price, returning it to the party they “borrowed” it from, making a tidy profit. It is a trader betting that a stock’s price will go down and not up (see our explanation here: “Short Selling” – An Important Signal for Marcellus-Related Companies). On average, short selling of stocks for all companies in all industries is typically 5-6% of trading volume. Recently, oil and gas stocks, as an industry, have seen an average of 12% short selling of their stocks. When a company’s stock sees a spike in short selling, it’s a signal that “the market” believes that stock price is heading lower, which can mean trouble for the company. Southwestern Energy is the latest Marcellus/Utica driller to see a spike up in short selling of its stock. How much?…
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PA Gov. Wolf Lectures Dem Reporter: Yes I Can Govern, I Can I Can!

Several weeks ago MDN highlighted a story that the stubborn, obstinate, in-over-his-head Pennsylvania Gov. Tom Wolf can’t govern. That was the title of an article running in Philadelphia Magazine: “No, Tom Wolf Can’t Govern Pennsylvania” (see our story PA Budget/Severance Tax Talks Resume Today – Without Gov. Wolf). Wolf refuses to compromise on a nosebleed shale severance tax, which has held up the state budget since the end of June. The man can’t compromise, and frankly, he can’t govern either. The Philly Magazine article had it right. Like a petulant child, first a Wolf spokesman and then Wolf himself phoned up that reporter to tell him to get his Democrat head screwed on straight and to quit telling the truth…
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Marcellus & Utica Shale Story Links: Fri, Nov 6, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: management change at National Fuel Gas Co.; gas industry continues to push Philly as energy hub; natgas prices tick up; diesel’s low price stealing truck sales from natgas; what will a warm winter mean for gas prices?; and more!
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