Laurel Mountain Drilling First Well in Western PA – It’s a Utica

Laurel Mountain Energy logoOne of our ace tipsters alerted us that Laurel Mountain Energy, a relatively new E&P (exploration and production) company is firing up a drilling rig to drill one, possibly two new Utica wells in Pennsylvania. You may recall MDN brought you the news one year ago that Laurel Mountain, essentially a reborn Vista Resources with big money backing from TPH Partners (Tudor, Pickering, Holt & Co.), had formed and set up headquarters in Pittsburgh (see “New” Pittsburgh Company Forms to Target Marcellus/Utica in W PA). Since that time we’d not heard anything about Laurel Mountain Energy–until now. Below we’ve pieced together information from our tipster and from the forthcoming edition of the Marcellus and Utica Shale Databook
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Chesapeake Energy Suspends Preferred Stock Dividends, Saves $170M

Last Friday MDN told you that Rex Energy, a small pure play driller focused totally on the Marcellus/Utica has suspended paying dividends on their preferred stock in order to conserve cash and not be forced to keep borrowing money to keep the doors open and the drill bits turning (see Rex Energy Suspends Preferred Stock Dividends to Conserve Cash). A company 54 times bigger than Rex (by market capitalization, as of this morning), Chesapeake Energy, is now using the same strategy. On Friday Chessy announced they are suspending quarterly preferred stock dividends. Shares of those stocks plunged to 13 cents on the dollar on the news, rebounded some, and plunged back down again. Doug “the ax” Lawler, CEO of Chesapeake, said suspending the dividends will let the company keep $170 million in the bank…
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Con Edison Becomes a Partner in Mountain Valley Pipeline

The $3.5 billion Mountain Valley Pipeline (MVP) stretching from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA filed an official application with the Federal Energy Regulatory Commission last October (see Mountain Valley Pipeline Files FERC Appl, Now Just Matter of Time). It’s now working its way through the process. Along the way, the number of project partners expanded from the original EQT and NextEra Energy to include WGL Holdings, Vega Energy Partners, and RGC Resources. You can now add one more partner: Consolidated Edison. Con Edison is purchasing a 12.5% interest in the pipeline and at the same time signed a 20-year deal to buy/move 250,000 dekatherms per day of natural gas on the pipeline. In a related deal, Con Edison also agreed to a 20-year firm transportation agreement for 250,000 dekatherms per day on the Equitrans system, located in northern West Virginia and southwestern Pennsylvania, providing more direct access to supply resources upstream of MVP…
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John Hanger Says Gov. Corbett “Cooked the Books” re Marcellus Jobs

What is it about Democrats that they blame current problems on the last Republican administration. They NEVER blame themselves or their own policies. Ever notice that? Some national Dems still blame George W. Bush for today’s bad economy–even though Obama has owned this economy for seven years now. John Hanger, former Secretary of the Pennsylvania Dept. of Environmental Protection and a former Democrat candidate for governor in PA (someone who wants to legalize pot smoking in PA) blames the Corbett administration for a lack of Marcellus jobs. According to Hanger, currently PA Gov. Tom Wolf’s Policy Secretary, in speaking about the number of rapidly-dwindling drilling-related jobs in the state: “Governor Corbett’s office cooked the books. Everyone knows Corbett was in bed with the Marcellus Shale industry.” Right. John Hanger is perhaps the biggest partisan hack in the Wolf administration, after Wolf himself…
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Ascent Resources Offers to Trade IOUs Due 2021 with IOUs Due 2021

Last week Ascent Resources, which is formerly American Energy (Aubrey McClendon’s company), targeting the Utica Shale, launched a note swap. Ascent is offering to exchange 3.50% Convertible Subordinated Notes due 2021 with two sets of new notes, another 3.50% Convertible Subordinated Notes due 2021 and incremental junior secured loans due 2019. We have no clue what it all means–perhaps a sharp MDN reader can elucidate for us? What it looks like to us is some sort of shell game, and in such games the dealer always comes out the winner. Note the phrase in the announcement below: “The New Convertible Notes are not and will not be listed on any securities exchange”…
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US Forest Service Blocks Atlantic Coast Pipeline in National Forests

Cow Knob Salamander
Cow Knob Salamander

In the end it was the cow nobs and red spruce that have slowed down Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project from West Virginia through Virginia and into North Carolina. Specifically, the U.S. Forest Service (USFS) has refused to grant Dominion a special permit to cross teeny tiny sections of the Monongahela and George Washington national forests in West Virginia and Virginia. Why? Because of concerns about cow knob salamanders, northern flying squirrels and red spruce trees. Just last November MDN told you that Dominion and ACP were bending backwards, forwards and sideways to avoid running through cow nob salamander territory (see Dominion Files Pipeline Route Change to Avoid Salamanders, Swamp). Apparently the USFS doesn’t think Dominion’s plan is good enough. It’s now back to the drawing board to see where, in those regions, ACP can safely be run to avoid radical environmentalist demands. Of course the answer is “no where” as they are always unreasonable about these things. There is no “how can we work this out to your satisfaction” when it comes to nut cases. The antis simply demand, like petulant children, that you not do it at all. Which is just what the other side is now saying about ACP…
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OH Landowners, Politicians, Businesses Want Drilling in Wayne NF

As we reported a couple of weeks ago, there has been some progress on finally allowing drilling in the Wayne National Forest (WNF) in Ohio (see Small Progress with Drilling in Ohio’s Wayne National Forest). WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. The federal government has delayed drilling in WNF for nearly 10 years, and is finally moving. Like a glacier, but at least there’s movement. Landowners and others in that region are keeping up the pressure. Last week a group called Landowners for Energy Access and Safe Exploration (LEASE) issued a press release to detail just how much support there is (it’s a lot) to get moving with drilling in WNF…
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FERC Takes it Time with 5 Marcellus/Utica Pipeline Projects

“Your wait time is 12-18 months, please hold.” That’s what the Federal Energy Regulatory Commission (FERC) is telling midstream companies anxious to build new pipelines in the Marcellus/Utica. Five major pipeline systems representing $15 billion of investment are currently on hold while FERC runs through it’s sloooooow process of approval. FERC’s response/excuse is that it takes 12-18 months, period. Like it or lump it. The five pipelines now on hold in the southwest PA/eastern OH/WV area include: Atlantic Coast Pipeline, Rover Pipeline, Nexus Pipeline, Leach Express Pipeline and the Mountain Valley Pipeline. Rover filed its application with FERC last February, so they’re not even a full year into the process yet. The others filed later. Although industry groups are trying to pressure FERC (via publicity) FERC isn’t moved by calls to speed up the process…
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Real Property Bill in OH Legislature has Big Implications for O&G

A bill in the Ohio Senate, SB 257 (copy below), would have a “substantial effect” on determining whether or not you have a good title in a real property transaction. Which may sound rather boring, like watching paint dry. Except in this case, the changes to the real property law may have a profound impact on oil and gas interests in Ohio–impacting mineral rights that are part of a property. The changes being proposed under SB 257 expand the scope of what kinds of “defects” in a title that can be “cured,” and reduces the amount of time a title can be contested from 21 years down to 4 years…
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OSU Prof “Optimistic” that OH Ethane Cracker Will Get Built

There’s not much new news to report on any of the three ethane cracker plants announced as being thought-about for the Marcellus/Utica. Those three are Shell’s project planned for Beaver County, PA, Odebrecht’s project announced for Wood County, WV, and PTT Global’s project announced for Belmont County, OH. Both the Shell and PTT projects appear to still have a pulse. WV’s does not. Hey, just keeping it real. One professor at Ohio State University says he is an “optimist” regarding the PTT project, for a number of reasons. When an OSU prof is optimistic, it gives us reason to be optimistic too! Here’s the reason our OSU prof believes the PTT Global ethane cracker will get built…
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Obama’s Interior Dept. Sneaks in New Rule to Limit Methane

Once again our Dictator in Chief, Barack Hussein Obama, is acting like a tinpot despot ruling a Middle Eastern country, not like the President of the United States. Last Friday, lost amid the Friday afternoon document dump and news about the blizzard in DC, Obama’s Dept. of Interior posted a new rule (i.e. should be a law, but they’re doing another end-run around Congress) that will make it all but impossible for oil and gas drillers to drill on federal lands. The new 298-page rule requires companies to use expensive equipment to capture every last molecule of methane, the stuff these companies already capture so they can sell it, to prevent any “fugitive” methane from escaping into the atmosphere where it contributes to mythical global warming. Obama has also hiked the price drillers will pay to drill on federal lands. The aim is, of course, to shut down drilling on all federal lands…
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Marcellus & Utica Shale Story Links: Mon, Jan 25, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus drillers’ stock price goes up; fracking lawsuit in NY; more opposition to New England pipeline; FERC losing its last Republican commissioner; post mortem on the low price of oil; Saudi Arabia in the fight of its life; Japan importing less LNG first time in 6 years; and more!
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