Bankrupt Alpha Natural Resources Offered $500M for Assets

AlphaLogoLast August MDN told you that Alpha Natural Resources, one of the largest metallurgical coal producers in the world, had filed for bankruptcy. We also told you that Alpha is a driller in the Marcellus Shale–drilling on its own land and as part of a joint venture with Rice Energy (see Alpha Natural Resources in Bankruptcy – What about Marcellus?). Alpha owns 30 producing Marcellus Shale gas wells in PA. We mused at the time: What does the Alpha bankruptcy mean for its Marcellus drilling program? Bankruptcy proceedings have proceeded and it appears most of the company’s assets, including the shale wells, are on the auction block. A group of “unspecified lenders” have offered $500 million. Others can now make their bids by March 28…
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Mirror Mirror on the Wall, Who’s the Best Driller of Them All?

Determining who the best driller is depends on what criteria you use. Biggest driller? Most profitable driller? Driller with the most production? There are a lot of different criteria for ranking the “best driller” in the Marcellus. An accounting professor from Susquehanna University has created a formula to rank PA Marcellus oil and gas companies based on their environmental impact. He uses an interesting formula: Divide the amount of hydrocarbons produced (total fuel output) by the number of violations assessed against the company. Envelope please. The winner of the Best “Environmentally Friendly” Driller award in the Marcellus goes to…
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Philly Judge Says Case Against Mariner East 2 Can Proceed

A Philadelphia judge for the Court of Common Pleas (low-level court in PA) has ruled in favor of the anti-drilling Clean Air Council against Sunoco Logistics Partners and their Mariner East 2 pipeline. The ruling is nothing more than “this case has merits” (in the eyes of the judge) and can proceed. The case itself is challenging the right of Mariner East 2 to use eminent domain against landowners in building the new pipeline. The Clean Air Council’s argument is that since most of the natural gas liquids that will flow through the pipeline will get exported or otherwise not used in PA itself, that moves Mariner East from being a public utility with eminent domain power to an interstate pipeline more properly reviewed and permitted by federal authorities. It’s a delay tactic, because if Mariner East 2 were to come under the aegis of the Federal Energy Regulatory Commission and eventually permitted, they would also be entitled to use eminent domain. But a FERC review would take years. Which is what the Clean Air Council wants. Here’s the latest minor setback for Sunoco, whose eminent domain has been upheld in other PA courts and who is beginning to clear trees for the Mariner East 2 pipeline right now…
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Report: Benefits of a Second American Shale Boom

A fascinating new research paper just published by conservative think tank Manhattan Institute says there IS an antidote to being manipulated by America’s enemies, many of them members of OPEC. There IS an antidote to wild price swings in oil and gas prices. There IS an antidote to the poor economic conditions we experience here in the U.S. under Barack Obama. Know what it is? A second shale boom. IF the U.S. were to become the dominant exporter of energy around the world, we reap economic and geopolitical benefits like you can’t believe. In “Expanding America’s Petroleum Power: Geopolitics in the Third Oil Era” (full copy below), the author notes that the number of cars in use worldwide has risen threefold, aviation miles have gone up sevenfold, and maritime shipments increased threefold in the last 40 years. What powers 95% of that transportation? Oil and its derivatives. We need a second American shale boom and we need it soon. Read about it below…
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The One Part of the Marcellus/Utica Industry Still Booming

There’s one part of the Marcellus/Utica shale industry that is still booming–and will continue to boom as long as the wells drilled flow oil and gas. What it is? Wastewater injection wells. Sometimes called SWDs, or salt water disposal wells. How can that be? If rigs are being laid down and fracking is vastly reduced–even ceased–how is there any wastewater to dispose of? Good question young padawan. Flowback is the water coming out of the hole right after fracking. But long after flowback is done, a well will still bring up what is called produced water–water from the depths that is very salty with minerals. Hence, salt water disposal wells. As long as wells are producing and not shut in, they produce varying amounts of produced water. Until now, drillers in the Marcellus would typically recycle the produced water and use it for fracking the next well. If they aren’t fracking, what do they do with all of that produced water? It must go to an SWD well. A company called Sourcewater has cooked up a clever service, an online exchange where SWD operators can list their wells and drillers who need to find new places to dispose of their produced water can find someone to take it…
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BP Energy Outlook 2016: NatGas Surpasses Coal by 2035

UK oil and gas giant BP released the 2016 edition of their BP Energy Outlook on Wednesday. BP, being a European company, lards the Outlook up with flowery talk of renewable this and sustainable that. But there are a few facts from the Outlook that slap you in the face: (1) By 2035, across the entire world, 80% of all energy will come from fossil fuels. So much for renewables riding in to the save us all “any day now.” (2) Natural gas is the largest-growing fossil fuel and by 2035 it will have replaced coal as the #2 source of energy in the world. (3) The U.S. will achieve overall energy self-sufficiency by 2021, and oil self-sufficiency by 2030. Another fun fact from the BP Energy Outlook: shale gas will account for 20% of total global gas output by 2035. Read the full report below…
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Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash

The last major hurdle has been scaled in the Shell buyout of BG–the largest such oil and gas deal since Exxon bought Mobil in 1999. Yesterday the High Court of Justice in England and Wales approved the merger. Previously Shell stockholders approved the $69.7 billion deal (see Shell Shareholders Vote in Favor of BG Buyout/Merger). Not long after BG stockholders approved it too (see It’s a Deal – BG Shareholders Approve Shell Buyout). Shell canceled a loan it previously arranged, for $14.4 billion to help with the purchase. Instead, the company will use its own hefty piles of cash for the buyout. The unfortunate news is that Shell intends to layoff 10,000 people after the merger is complete–to save money…
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Water Recycler with NE Operations Expanding with $40M Investment

Fountain Quail Water Management, a Texas-based wastewater recycler with operations in the Marcellus/Utica, announced earlier this week that the company has a new investor who has ponied up $40 million so they can further expand in North America. As MDN pointed out in a companion story today (see The One Part of the Marcellus/Utica Industry Still Booming), treatment of produced water is booming in all shale plays and likely to continue, even though drilling and fracking has tapered off. Why? Because long after a hole is drilled, water from the depths (water a mile or more below the surface) continues to come out of the hole. Water with a high concentrate of minerals (i.e. “salty”, hence salt water injection wells). You can dispose of such water via injection wells, or you can use a technology like Fountain Quail’s to recycle it…
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U.S. Silica Introduces New Resin-Covered Sand for Fracking

A key ingredient in fracking is a “proppant” like sand. But not just any old sand. The sand used in fracking typically used in fracking is silica and comes from the Midwest–Wisconsin and other states. U.S. Silica is one of the largest sand companies in the world. Strangely enough, it’s headquartered in Maryland. Proppants are so-named because after being washed into fractures the sand stays behind to “prop open” the cracks, allowing oil and gas to escape from shale. Always looking for an edge, particularly against competitors that manufacture ceramic proppants, U.S. Silica recently announced a new resin-covered sand product line…
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MDN Off Monday for President’s Day

presidentsdayMDN will take a day off on Monday, the President’s Day Holiday. It’s a stock exchange and bank holiday, and we figured quite a few will not be in, so we figured what the heck. We hope you enjoy the day!

Jim Willis, Editor

Marcellus & Utica Shale Story Links: Fri, Feb 12, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Why Marcellus production fell for 4th month in a row; tax revenues in Monroe County, OH up 340% thx to Utica Shale; UPS & Clean Energy expand deal; rigs would roaring back with $60 oil; utilities abandoning coal for natgas; Fed chief Yellen says oil bust good for U.S. economy; what does Aubrey McClendon see in Argentina?; and more!
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