Dominion Warns Investors to Reject “Mini-Tender” by TRC Capital

just say noDominion Resources, a midstream (pipeline) company and energy producer with major operations in the Appalachian region is warning investors about a parasitic play for their stocks from a company called TRC Capital Corporation. TRC is floating what’s called a “mini-tender” in which they attempt to buy up to 5% of a company’s stock. Why only up to 5%? Because over 5% and certain Securities and Exchange Commission rules kick in to protect/alert investors. Under that limit and there’s far more wiggle room. What does TRC plan to do with the Dominion stock they buy? Their modus operandi is to purchase stock for a price below market value now, or what they think will be the market value in the near future. They lock it up, wait until the price rises, and then sell it at the higher price. They prey on people’s fears that stock prices will eminently crash, profiting from those fears, or they leverage investor ignorance. Sleazy? You bet. Illegal? Unfortunately, no. That’s why Dominion is warning shareholders to “just say no” to TRC’s below-market offer…
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Small Progress with Drilling in Ohio’s Wayne National Forest

There’s been some progress on the now nearly 10-year delay in drilling in the Wayne National Forest (WNF) in Ohio. WNF is the only national forest in Ohio and portions of it are found in Athens, Gallia, Hocking, Jackson, Monroe, Morgan, Noble, Lawrence, Perry, Scioto, Vinton, and Washington counties. WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. Those mineral rights owners have been denied the use of their property rights going on a decade. It’s a travesty. The federal Bureau of Land Management (BLM) controls drilling on federally-protected lands like WNF. Last November the BLM held a series of hearings about finally beginning to drill in WNF. The hearing held in Marietta (Washington County) was civil and orderly, with landowners respectfully asking questions and getting answers (see Overwhelming Support for Wayne Natl Forest Drilling @ BLM Mtg). The hearing held in Athens, OH, a hotbed of lefty lunatics, got out of control when they didn’t have a microphone to throw up on (see Anti-Frackers Out of Control at Athens Mtg on Wayne Natl Forest). Athens antis can breathe easy. The BLM has decided to wait on pursuing drilling in the “Athens Unit” until 2017. However, the BLM is taking the next step in the “Marietta Unit” now…
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McClendon Signs Deal with Argentina to Drill in “Dead Cow” Shale

One has to marvel at how Aubrey McClendon has done, and keeps doing it. The “it” being raising money for drilling holes in the ground. McClendon, as we and others have chronicled over the past several years, was unceremoniously dumped as CEO of the company he co-founded, Chesapeake Energy, by corporate raiders Carl Ichan and Mason Hawkins. Chesapeake is still in the crapper, financially, so we see how that’s turned out. McClendon went on to found American Energy Parnters (AEP), raising billions of dollars of investments for various drilling programs, notably in the Utica Shale. McClendon is about to pull another $500 million rabbit out of his hat. McClendon has just inked a deal with Argentina’s YPF SA to drill 20 wells in Argentina’s Vaca Muerta (translated “dead cow”) shale formation, located in the Patagonian Province of Neuquén. Argentina is the biggest shale gas producer outside of the U.S. In order to seal the deal, McClendon has to raise $500M in the next three months. If anyone can do it, Aubrey can!…
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US Gasoline Prices Lowest Since 2009 – Thx to Fracking

The average price for gasoline in the United States is now $1.99 per gallon. That’s the lowest price it’s been since 2009, the year Barack Hussein Obama was coronated as our dictator-in-chief. After Obama took office the price of gasoline steadily went up, until 2012. Since that time (Obama’s second term) the price of gas has remained steady and, recently, has dropped. Why? The miracle of fracking and horizontal drilling. Because of a new abundance of crude oil being produced in the United State, which caused Saudi Arabia to pump oil like there’s no tomorrow to defend their own market share, the world is now awash in oil, driving the price down. Gasoline is refined from crude oil, so eventually the price of gasoline followed the price of oil down. And it’s all because of fracking and the private sector–nothing to do with the government policies or Our Dear Leader…
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PA Gov Wolf’s Pathological Need for a Severance Tax

We suspect that Pennsylvania Gov. Tom Wolf may suffer from OCD–obsessive compulsive disorder. What else could explain the fact that even though PA doesn’t have a completed 2015 budget, he’s about to introduce a 2016 budget that once again calls for a severance tax on oil and gas–when the industry in his state has gone nearly dormant because of low prices? Shale drillers are struggling to stay solvent and to keep drilling at least a few new wells. And Wolf is, once again, insisting on a severance tax, that will essentially stop all drilling. Perhaps a better word for it is pathological…
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4 Biggest Marcellus Gas Drillers Cutting Budgets 53% This Year

We spotted a mention of “the four largest U.S. independent gas producers” (meaning natural gas producers) in an article about the challenges drillers are facing in cutting their spending while getting less money for the gas they produce. The article is a somber look at just how hard it is to not spend more than you make, if you’re a gas driller. Oh, and those four largest gas producers in the U.S.? Yep, everyone of them is a major player in the Marcellus/Utica…
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Wood Mackenzie Says Cuts in Drilling Projects “Brutal”

Global research firm Wood Mackenzie has just released an update to their July analysis on the continuing impact of low oil and gas prices on upstream (drilling) projects. The new analysis finds that in the last six months of 2015 an additional 22 major projects and seven billion barrels of oil equivalent (boe) of commercial reserves have been put on hold, on top of the 46 developments and 20 billion boe of reserves identified previously. The “good news,” if you can call it that, is that deepwater projects have been hit the hardest, more so than shale projects. One Wood analyst calls the impact of lower oil prices “brutal” for new projects. He says, “What began in late-2014 as a haircut to discretionary spend on exploration and pre-development projects has become a full surgical operation to cut out all non-essential operational and capital expenditure”…
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Will Oil Hit $60 by Year’s End? Shale Giant Harold Hamm Says Yes

The price of natural gas is somewhat tied to the price of oil. They don’t track exactly together, but we think it’s a fair statement to say as goes the price of oil so goes natgas. One of the pioneers of drilling for oil and gas in shale deposits is Harold Hamm, CEO of Continental Resources. What Hamm thinks and says about the price of oil is of keen interest to everyone. He is, perhaps, the closest thing to an oracle our industry has. Hamm was interviewed on Wednesday and asked where he thinks the price of oil is headed in 2016. This is what he said…
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Marcellus & Utica Shale Story Links: Fri, Jan 15, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Energy slump bleeds into housing marketing in PA; should wastewater be used for crop irrigation?; Tom Steyer won’t answer funding questions; the year ahead for LNG; climage exaggeration; drillers facing $102B in cash shortage this year; and more!
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