PA Senator Predicts Chesapeake Energy Goes Bankrupt Within a Year

drugs.jpgThe failed Governor of Pennsylvania, Tom Wolf, “100 percent guarantees” an oil and gas severance tax will be part of next year’s state budget. That’s the claim made by Wolf’s inept Policy Secretary, John Hanger, last Friday. What hubris. Wolf and Hanger can’t even get THIS YEAR’S budget done! Nearly six months late!! And already they’re trying to grab money for next year. Democrats have a heroin-like addiction to OPM–Other People’s Money. (Coincidentally, when John Hanger ran for governor himself, he ran on a platform of legalizing marijuana, see Pass One Last Joint for John Hanger.) The problem (for Wolf and Hanger) is this: the shale industry in PA is in retrograde. It’s receding, not expanding. Drilled wells are either not being hooked up in the first place, or they’re being turned off, called being shut-in. When that happens, less gas flows–less gas to tax. Another lesson Dems never learn: You ALWAYS get less of what you tax, not more. It’s simple economics. A Republican State Senator from York, PA (Wolf’s home town) wrote Wolf a little love letter to school him in the economic realities of his bogus claim that “next year” he’ll get a severance tax. State Sen. Scott Wagner predicts, among other things, that Chesapeake Energy, PA’s largest natural gas producer, will file for bankruptcy within a year…
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EQT’s Change of Heart: Drilling 72 Marcellus, 5 Utica Wells in 2016

On Monday EQT released a preliminary 2016 operational forecast. The company plans to spend $1 billion on drilling next year, which is half of what they spent this year. Although EQT’s top brass previously said they were dumping the Marcellus and concentrating on the Utica Shale instead (see EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016), it seems they’ve had a change of heart. Yesterday’s forecast says EQT will drill 72 Marcellus wells in 2016 and just 5 Utica wells. What happened? We don’t know–but we suspect EQT is finding it more of a challenge than they thought to get the price of a deep Utica well down to the $12.5 to $14 million range they predicted they could get it to. Here’s the details on what EQT plans to do in 2016…
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Baker Hughes Nov. Rig Count Decline Slows; Marc/Utica Lose Just 2

The number of active drilling rigs worldwide was down by just 2 rigs according to the November Baker Hughes rig count report. But active rigs in the U.S. fell by 31 month over month in the U.S. There were 791 active drilling rigs operating in the U.S. in October, and 760 rigs operating during the month of November. Ouch. What about active rigs in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. This month’s chart is heartening. Although the count declined by another 2 rigs from October, the it appears like we may be hitting bottom with respect to the number of active rigs. Both rigs lost in November were from one state. Which one?…
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FirstEnergy Working Like Crazy to Clean Up Future OH Cracker Site

In June FirstEnergy Corp. kind-of, sort-of confirmed that their now-closed R.E. Burger power plant site in Belmont County, OH would be the location for the future PTT Global Chemical ethane cracker plant (see FirstEnergy Confirms Their Site is Future Home of OH Cracker). FirstEnergy has gone from being cagey and reticent to admit theirs is the site that will be used, to frenetic activity/can’t get it cleaned up fast enough. They are hauling out old coal power plant equipment and working to turn the brownfield site into a greenfield site within a year–to have it ready to sell to PTT sometime in 2016. Here’s what they’re currently doing at the site to get it ready…
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PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells

PDC Energy, with leased acreage in the Ohio Utica Shale, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC issued their preliminary drilling budget for 2016 yesterday. As in 2015, the company’s focus will largely focus on the Wattenberg Gas Field, part of the Denver Shale basin in central Colorado. PDC plans to invest $440 million to drill somewhere between 135-160 Wattenberg wells in 2016. However, they also will un-pause their Utica program. PDC says they will spend $34 million to drill and bring online five new Utica wells in 2016…
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Columbia Pipeline Sells 20M Shares More Than Forecast, Nets $1.4B

Whoa, we didn’t see this one coming! It seems there’s a big appetite on the part of investors for midstream (i.e. pipeline) companies. MDN told you just last week that Columbia Pipeline Group was floating 51 million shares of new stock, with an option to add another 10 million shares–at a price of $17.50 per share (see Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M). We estimated if they sold the 51 million shares they were aiming to sell, they’d bring in $892.5 million. But what’s this? Columbia reports they actually sold 71.5 million shares, and after expenses, they brought in $1.4 billion!! What it means is that Columbia won’t have to borrow any money until 2017 at the earliest…
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Inflection Energy Defeats Delaware Riverkeeper in Lycoming Co.

It doesn’t happen often enough, which is why we make a big deal of it when it does: An energy company (in this case Inflection Energy) completely, utterly, and humiliatingly defeated THE Delaware Riverkeeper in an important court case in Lycoming County, PA. Less than a month ago we brought you the news that a Lycoming County judge had told an anti-driller, backed by Delaware Riverkeeper and Riverkeeper attorney Jordan Yeager, that the case they had filed to prevent Inflection Energy from drilling a legally permitted well was frivolous. The judge said he would allow the case to go forward, but only if the anti (and Riverkeeper) put up big bucks as collateral for the eventuality that they would likely lose (see PA Judge to Antis Seeking Drilling Delay: Put Up $5.69M or Shut Up). Turns out making these sleazeballs put their money where their mouth is, is good medicine. Riverkeeper and its “client” (the local anti-driller) have bowed out. The case is now closed and can’t be re-opened–and it sets a precedent for similar cases. In other words, the good guys won this time!…
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DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well

Another “Range Resources impoundment leak polluted my water well” case was quietly resolved just a few days ago. You may recall that for some time we’ve been following the back and forth between Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who is suing Range in civil court. The problem is, the DEP found that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing just came back and closes the door, once and for all, on the case…
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Velocys Makes Progress with Tech Used in Ashtabula GTL Plant

The Ashtabula, OH GTL (gas-to-liquids) plant being developed in Ashtabula County, OH is one step closer to reality, according to a press release recently issued by Velocys, the company building the plant. Velocys announced the successful completion of pilot plant tests. Velocys, a UK-based company, maintains a pilot plant in Ohio where they experiment with GTL designs. According to the release, the results of these latest tests are being incorporated into the design of the Ashtabula GTL plant. We’d be remiss if we also didn’t remind you that earlier this year Velocys suspended its CEO, Roy Lipski, for potential misconduct (see Velocys GTL Company Suspends CEO for Possible Serious Misconduct). Velocys said at the time there was no financial misconduct involved (which makes you wonder just what did happen), and a month later, in August, Lipski left the company for good (see Energy Voice, Velocys parts company with suspended chief executive). Apparently the company has recovered from that mishap and is now pushing forward with all speed. It’s great to see them making progress with their technology and with the Ashtabula project…
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The Unsettled Issue of Home Rule in Ohio

A law professor from Cleveland State University, writing a guest viewpoint in Crain’s Cleveland Business, does an excellent job in outlining the precarious and unsettled issue of so-called home rule in Ohio with respect to the right of local municipalities in layering on their own zoning regulations that control oil and gas drilling. In early 2015 the Ohio Supreme Court ruled that Munroe Falls could not add to or otherwise layer on their zoning regs that interfere with state regulations that govern oil and gas drilling (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). As we later wrote, Beck Energy, the driller in the case, asked the Supreme Court to essentially strike down Munroe Falls’ entire zoning scheme as being unconstitutional. In November the Supremes declined to do that, leaving everyone scratching their collective heads (see OH Supreme Court Sends Mixed Signal on “Home Rule” Issue). Law prof Heidi Gorovitz Robertson takes it from there…
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Marcellus & Utica Shale Story Links: Tue, Dec 8, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Upstate NY utility wants say in Kinder Morgan pipeline; towing companies in the Utica; PennEast will benefit NJ for years to come; everything you need to know about upstream energy companies; EPA’s McCarthy at it again; oil price in a free-fall after OPEC does nothing; natgas prices stay low due to warm weather; and more!
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