Seneca Res. Cuts Deal with IOG Capital to Fund Up to 80 PA Wells

Art of the DealYesterday National Fuel Gas Company, the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, announced that Seneca has partnered up with energy investor IOG Capital to essentially fund Seneca’s Marcellus drilling program in Elk, McKean and Cameron counties in north-central Pennsylvania. The outlines of the deal are thus: IOG will provide the cash and Seneca will do the drilling on up to 80 Marcellus wells on 10,500 acres in the Clermont/Rich Valley area of PA. IOG will get an 80% working interest in the wells. In addition to drilling the wells, National Fuel’s midstream subsidiary will connect the wells and get the gas to market. What this deal means is that Marcellus drilling activity in the Clermont/Rich Valley area will pick up over the few years. Here’s the details of this somewhat complicated deal…
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Marcellus Driller Cabot Oil & Gas Gets 2 New Board Members

Cabot Oil & Gas, one of the largest and one of the most important Marcellus drillers, has just added two more people to their Board of Directors. One of the two is Dorothy Ables, Chief Administrative Officer of midstream (pipeline) giant Spectra Energy. Cabot’s CEO Dan Dinges calls Dorothy a midstream expert that will help guide them as midstream becomes critical moving forward. The second new member is Robert Boswell, Chairman and CEO of Laramie Energy II, a privately held oil and gas exploration and production company headquartered in Denver. Boswell has started–and successfully sold–several previous drilling companies before starting Laramie Energy II, focused on the Piceance Basin in Colorado, in 2007. Boswell is there to replace board member Robert Keiser who is retiring from the board next year. Here’s the announcement…
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Rumor: NY Gov. Andrew Cuomo Will Be Indicted Jan 2 for Corruption

New York State, when it comes to our elected officials, is a corrupt as it gets. U.S. Attorney Preet Bharara has been on a mission to clean up corruption in the Empire State. Bharara is making a name for himself like another former U.S. Attorney–Rudy Giuliani. Bharara has been extremely successful so far: Both former Assembly Speaker Sheldon Silver (Democrat) and former Senate Deputy Majority Leader Tom Libous (Republican) have been convicted of corruption and removed from office. Currently the former Senate Majority Leader, Dean Skelos, is on trial in federal court in Manhattan and almost certainly will be convicted as well (see our story from yesterday, Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban). NY State’s politics has always been known as “three men in a room” because the Governor, Assembly Speaker and Senate Majority Leader are the power brokers who cut deals that then get adopted. With two of the three men in the room either convicted (or about to be convicted) as corrupt felons, it makes you wonder about the third man–Gov. Andrew Cuomo. Another bombshell revelation: sources are telling the Buffalo Chronicle (a blog site) what has long been rumored–that Preet Bharara will go after Andrew Cuomo next. In fact, three (!) sources have told the Chronicle that Bharara will file an indictment against Cuomo on Jan. 2, 2016. So what does this have to do with shale drilling?…
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Water Well Testing Near OH Injection Wells Comes Back Negative

Athens County, OH is infested with liberal Democrats who irrationally hate fossil fuels. Let’s just get the facts out there on the table, shall we? The ninny nannies in Athens finally (after years of agitation) browbeat their neighbors into voting for a frack ban last year (see 3 of 4 Frack Ban Ballot Measures in Ohio Fail – Athens Exception). Whatever. Athens County hosts eight wastewater injection wells and that drives the crazies every crazier. They’re doing their damnedest to get all eight shut down, and to deny a permit for a ninth well (see Athens County Asks Gov Kasich & ODNR to Stop New Injection Wells). One of their strategies is to prove that the existing wastewater injection wells are causing pollution of nearby water wells and groundwater supplies. So a study was done, testing nine different water wells for the presence of volatile organic compounds–a signal that wastewater is leaking into the wells. Guess what they found? Nothing. Nada. Zip. Zero. The injection wells are not contaminating groundwater and water well sources. What do the crazies want? More testing! More more more more more. They want to test until they find something–or rig the tests so something gets found…
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Top 20 NatGas Pipelines in 2015 – Ranked by Traded Volume

The amazing thing about this wonderful industry we’re in–the fossil fuel energy industry–is that you learn something new every day. Like there’s a service called the Capacity Center (CapacityCenter.com) that tracks flows of physical natural gas in every interstate pipeline in the U.S. Each year (for the eighth year running) the Capacity Center issues a report detailing the Top 20 Traders (buyers and sellers) of natural gas along those pipelines, and the Top 20 Pipelines by volume of natural gas flowing through the pipeline. We’re intrigued–particularly by the Top 20 pipelines, because a number of them operate in the Marcellus/Utica region. Below is the full Capacity Center Top 20 Capacity Traders & Top 20 Pipelines Report for 2015. If you’re like us, you’ll dig it too…
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NEPA Electric Plant Converted from Coal to NatGas a Huge Success

As MDN has previously chronicled, Chicago-based Invenergy hopes to build what will be the largest (to date) electric generating plant in the state of Pennsylvania powered by natural gas. Invenergy hopes to build the 1300-megawatt plant in the borough of Jessup (Lackawanna County), near Scranton. But there’s been quite a bit of opposition, most of it from anti-fossil fuelers (see our Jessup power plant stories here). The folks in Jessup might want to cast their eyes on another project not far away, in Luzerne County, where a former coal-fired power plant was recently converted to burn natural gas. That plant, owned and operated by UGI, reduced sulfur dioxide emissions by 99%, and reduced nitrogen oxide emissions by 95%. That is, natgas-fired electric plants are one of the lowest polluting ways to generate electricity–and far more reliable than alternatives like solar and wind…
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Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others

We’re not above admitting when we’ve been wrong. Last July MDN shared a rumor–and stressed it was a rumor–that CONSOL Energy was in talks to sell it’s CNX Gas division to Noble Energy (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A few days later we modified that rumor to say that Noble Energy would take over the joint venture acreage the two have together (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Neither of those things ended up happening–at least not yet. However, CONSOL’s largest single investor, corporate raider Mason Hawkins (who in league with corporate raider Carl Ichan have been screwing with Chesapeake Energy) told CONSOL to separate their coal business from the natural gas business, which they’ve begun to do (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Parent company CONSOL’s stock is traded as CNX. A new coal division (for investors) was created, CNX Coal (CNXC), although some (much?) of the coal assets are still part of the CNX entity. CONSOL’s midstream/pipeline business, called CONE Midstream (a jv with Noble Energy) is traded as CNNX. Yes, it’s all a mish mash. We mention all of this as background to an article by a trader commenting on CONSOL’s CNX stock which has literally crashed over the past year–down more than 80% in value. The trader calls the CNX stock a “widow maker”–meaning if you have the chops and can stick it out, there may be money to be had by investing in CNX stock. But, it’s a huge gamble, and not for the feint of heart, according to this trader…
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Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M

Yesterday MDN told you that Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, announced a stock offering of 51 million shares (see Columbia Pipeline Group Floats 51M Shares of New Stock). We speculated if they got the then-current price of $19.03 per share, they’d haul in close to $1 billion in new revenue. Of course stock offerings like this almost never receive the existing/going price. We also said if they got $15 a share, that would net them $756 million. We now know, a day later, what they’re aiming for: $17.50 per share, which will bring in $892.5 million…
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GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs

You may not think that computer software would have much to do with drilling holes in the ground and extracting natural gas and oil. But you would be wrong. If you ever visit a drilling rig and are fortunate enough to make a visit to “the dog house,” which is the equivalent of a jetliner cockpit where the rig is controlled by high-powered computers (and software), you’ll quickly understand how high-tech drilling has become. But it’s not just controlling a rig where computers are used in the oil and gas business–they’re used throughout the business. In fact there is software that, well, monitors other software. GE (nee General Electric) has a software offering that monitors drilling rigs and other equipment at drill sites. At least that’s how we understand it. GE issued a press release yesterday to tout the fact that GDS (Global Drilling Support) International is using GE’s “Equipment Insight” solution at rigs in both the Marcellus and Utica Shale in a six-month pilot program to squeeze ever more efficiency from the drilling process…
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Marcellus & Utica Shale Story Links: Thu, Dec 3, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Youngstown anti-frack vote recount shows antis still losers; PA budget impasse continues; VA antis call for tough drilling rules; 150 canceled big oil projects; $3.4 trillion in fossil fuel divestment; last shoe drops for Hi-Crush; the party is over for oil; and more!
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