Southwestern Energy Cuts Workforce 44%, 200 Marcellus Jobs Gone

cutting jobsWe have some very sad news to share today. Yesterday Southwestern Energy Company, one of the largest drillers in the Marcellus/Utica and the third largest independent natural gas driller in the U.S., announced it will lay off 1,100 people and pause its drilling program. That 1,100 is out of 2,500 employees–or 44% of the company. It was just a few weeks ago that Southwestern got a new CEO, Bill Way (see Southwestern Energy Gets New CEO – What’s Ahead for 2016?). We mused at the time: “When there’s a change in leadership, it has the potential to impact company strategy. So we’re always interested when changes of this type come along. The question now is, what’s ahead for 2016 with Bill Way at the helm?” Indeed. We can see what kind of changes Mr. Way is bringing. In October 2014 Southwestern announced a deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Then in December 2014, Southwestern bought 46,700 net acres of leases in northeastern PA from WPX for $300 million (see First Shoe Drops: WPX Sells 1/2 Marcellus Assets to Southwestern). Southwestern holds about 755,000 acres total in the Marcellus/Utica region. When everyone else was slowing down, Southwestern was doubling down on their drilling program (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). It seems that the wind has finally gone out of Southwestern’s sails. The company did not post an official press release on their website, so we’ve pieced together coverage from a number of sources to try and give you a complete picture of what they said yesterday…
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7 Antis Arrested at Final PA Pipeline Task Force Meeting

Yesterday we reported on the very last Pennsylvania Pipeline Infrastructure Task Force meeting, held in Harrisburg on Wednesday (see PA Pipeline Task Force Wraps Up – Did We Worry for Nothing?). Once again anti-fossil fuelers disrupted the meeting, which is nothing new. Last October a group of 20 or so antis showed up and behaved badly (see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”). At Wednesday’s final Task Force meeting, seven protesters behaved badly enough that they got themselves arrested. To their credit, the Democrat-run PBS StateImpact Pennsylvania is the only “media” outlet that covered the news of the arrests…
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WV Gov. Tomblin Proposes to LOWER Oil & Gas Severance Tax

Ohio Gov. John “foreigner hunter” Kasich has been hellbent on raising Ohio’s oil and gas severance tax–for years. As recently as last June Kasich predicted his 6.5% proposed severance tax would get adopted (see Kasich Predicts Severance Tax Deal Will Happen, Others Say No). Last fall OH Republicans continued to flirt with the idea (see Ohio Legislators Continue Dalliance with Kasich Severance Tax). The state still has not raised it, even though Kasich has lobbied hard for over three years. Pennsylvania, on the other hand, continues to consider converting their better impact fee for a less better severance tax. Republicans there are getting weak-kneed too (see Some PA Republicans Beginning to Cave on Severance Tax). It seems the severance tax is like the mythical siren song attempting to lure states onto the rocks of less drilling. But hold on to your hat. In contrast to OH and PA, there’s one state, and one governor, who’s not falling for higher severance taxes. PA Democrats trot out West Virginia as their shining example of how severance taxes don’t chase drillers away–to bolster their argument that PA should adopt a severance tax. Guess what? WV figured out high severance taxes DO chase drillers away, and WV’s Democrat governor, Earl Ray Tomblin, is proposing the state LOWER its oil and gas severance tax in 2016! It’s a devastating blow to PA Gov. Tom Wolf and his obsessive-compulsive insistence on a severance tax…
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OH Supreme Court Upholds Victory for Beck Energy in Lease Case

A major victory for oil and gas drillers in Ohio was just handed down by the Ohio Supreme Court. You may recall MDN brought you the news in October 2014 that the Seventh District Court of Appeals in Ohio overturned a lower court ruling in the case of Hupp v. Beck Energy Corp (see Major OH Court Victory for Beck Energy & XTO in Lease Case). Brief background: three landowners filed suit claiming that their leases with Beck Energy Corp. were void and should be terminated because Beck never drilled wells on their property and that a provision allowing Beck to pay a nominal delay fee was against public policy. The lower court agreed and granted summary judgment. The court then granted class certification to the lawsuit brought by the three landowners–meaning between 600-700 landowners would also be able to invalidate their leases. On appeal to the Seventh District Court, the case was overturned and decided in favor of Beck Energy (and XTO Energy who had purchased the leases from Beck). It was appealed again, to the OH Supreme Court, and the high court has sided with Beck/XTO…
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Some Give Up, Others Continue to Oppose WV Forced Pooling Law

The fight for a forced pooling law in West Virginia continues. Some who have opposed such a law in the past are now changing position and attempting to get as favorable terms as possible. They’re throwing in the towel. Others are still hoping to stop the bill, for a fifth time. So far the forced pooling bill has not been introduced, even though the WV legislature began its 60-day session last Wednesday, Jan. 13…
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MA Town Plans to Raise Taxes to Oppose 1 Mile of NED Pipeline

Part of the Kinder Morgan expansion of the Tennessee Gas Pipeline in New England, called Northeast Energy Direct (NED) is due to go through the Town of Warwick, MA. Warwick sits on the Massachusetts/New Hampshire border. Town leaders are opposed to the pipeline running through their town. In order to fight it, the town has opened a voluntary fund that residents can contribute to, to help with legal fees. Apparently the town “fathers” (and “mothers”) don’t have much hope anyone is going to contribute, because they want to allocate money from the town–and raise residents’ taxes in order to do it. Some Warwich residents aren’t thrilled with the prospect, since they’re already taxed up to the eyeballs. Here’s the kicker: Only about one mile of pipeline will traverse the Town of Warwick. They want to soak taxpayers to oppose a project that’s one mile of pipeline. Really? Are they really that radicalized against fossil fuels?…
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Seventy Seven Energy’s Stock Threatened with Delisting from NYSE

Last week we told you that Seventy Seven Energy, the former Chesapeake Oilfield Operating division of Chesapeake, spun off into its own company on July 1, 2014, had hired a “turnaround” company to help it, well, turnaround…financially (see Seventy Seven Energy Hires Turnaround Expert, Hopes to Stay Afloat). Perhaps we now know why. Yesterday Seventy Seven notified the world that the New York Stock Exchange has sent them a warning that their stock has fallen below minimum standards for continued listing on the exchange–unless they turn it around, fast. We’re not sure whether or not that will happen. Last week when we told you the company had hired a turnaround expert, their stock was trading at 60 cents per share. As of end of trading yesterday, that number was 48 cents per share. Last week the company’s market capitalization (how much the company is worth on paper) was $45.4 million. As of yesterday, the company’s marketcap was $21.13 million…
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Could Oil Go as Low as $10/Barrel? Yes, Says Jim Cramer

Lately we’ve highlighted several articles about the price of oil (and gas). We ask, once again, just how low could the price of oil go? Jim Cramer on Mad Money addressed that question yesterday. His answer may shock you. Using research sent to him from Rusty Braziel, whom Jim recently interviewed and whom he calls “the smartest man in the oil patch” (see The Smartest Man in the Oil (& Gas) Patch: Rusty Braziel), Cramer says it’s not inconceivable that oil may go as low as $10 per barrel. You read that right! Here’s his reasoning…
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Blat Session to Oppose Upstate NY NatGas-Fired Electric Plant

Last September Hollywood actor James Cromwell, who lives in Manhattan and keeps a summer home in upstate–Orange County, NY–banded with some of his anti-fossil fuel neighbors and sued to stop the Competitive Power Ventures (CPV) $900 million natural gas-fired electric generating plant planned to be built near his home. The frivolous lawsuit was tossed out (see Orange County, NY Marcellus-Fired Electric Plant OK’d by Judge). What’s a spoiled rich kid from Manhattan who wants to keep upstate pristine as his own private playground going to do? Get a bunch of easily-impressed neighbors to stage a sit-in and illegally block construction at the site. Which they did, and promptly got arrested for (see Actor James Cromwell Arrested Protesting NY Power Plant Site). This is the story that keeps on giving. Another has-been like Cromwell, former Congressman Dennis Kucinich (left of Bernie Sanders, if that’s possible), showed up at a blat session on Wednesday to lend his voice in opposition…
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Rex Energy Suspends Preferred Stock Dividends to Conserve Cash

Drillers continue to deal with the downturn in the market in different ways. Different companies, different strategies. Yesterday Rex Energy, a pure play Marcellus/Utica driller headquartered in State College, PA announced they are suspending dividend payments on their preferred stock, to conserve capital. It won’t make preferred stockholders happy, but at least the company can continue to live to fight another day…
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Rally to Support Constitution Pipeline in Afton, NY Tomorrow

comejoinus.jpgAs we’ve previously mentioned, a few times, there will be a meeting tomorrow in Afton, NY to support the Constitution Pipeline. The Joint Landowners Coalition of New York (JLCNY) is sponsoring this rally to support the Constitution. MDN editor Jim Willis plans to be there–and we hope you do too. Meeting details are listed below. It’s time–in our opinion long past time–to sue the state and force the issue. It’s time to build the Constitution Pipeline!…
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Marcellus & Utica Shale Story Links: Fri, Jan 22, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Stuffing the CELDF back in its bottle; NY comptroller asks Exxon about climate change risk; Moundsville electric plant still on sked; NJ residents hire DC firm to oppose PA pipeline; EPA continues out of control, wants FERC to change its charter; Obama vetoes attempt to block his Clean Water power grab; Obama uses CA catastrophe to advance his own agenda; group proves NASA is lying about climate change data; appeals court declines to block Obama dictatorship on carbon emissions; some o&g drillers can’t give their assets away; and more!
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