“Independent” Fiscal Office Says PA Impact Fee Revenue Drops 17%

ifo logoThe Pennsylvania Public Utility Commission (PUC) is the organization charged with assessing and collecting the state’s impact fee on Marcellus drillers–PA’s equivalent of a severance tax. But that doesn’t stop the the extremely partisan, Democrat-controlled, so-called “Independent” Fiscal Office, or IFO from trying to steal the PUC’s thunder when it comes to announcing revenue from the impact fee. Each year the Dems at the IFO release their estimates for how much revenue will be collected for the impact fee months ahead of the PUC. The IFO doesn’t disappoint this year. Yesterday the IFO released their estimates for the fees to be collected from 2015 drilling (full report below), and the IFO estimates revenues will go down by $38 million over 2014 revenue–to $185.5 million. That’s a 17% decrease, even though the number of wells drilled in 2015 versus 2014 went down 43%. And that’s IF the IFO’s numbers are accurate, which is questionable given their extreme bias…
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FTS Intl Fires All Drivers & Mechanics in Sand Hauling Business

On Tuesday MDN told you that FTS International, the largest private well-completion company in North America with offices and employees in the Marcellus/Utica, has laid off workers in Eighty Four and Venetia, both sites in Washington County, PA (see FTS International Lays off PA Workers – Won’t Say How Many). We now have a few more details on what is happening at FTS–and what’s happening is that FTS is in the process of selling their sand-hauling business, which is located in Eighty Four and Venetia. The company still won’t say how many people they’ve laid off, but an inside source told the Washington Observer-Reporter that 34 sand-truck drivers and seven “coordinators” were let go at Venetia last Friday. A company memo from FTS CEO Michael Doss says they laid off all of the truck drivers and mechanics involved in their sand hauling business. Here’s an update on FTS “adjusting head count,” as they euphemistically put it…
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PA’s 2015 Production Numbers Show Slight Gain, 4.18 Tcf for Year

There were 653 more producing shale gas wells at the end of 2015 than there were at the end of 2014 in Pennsylvania. By year end 2015, some 6,618 producing wells were online and pumping. However, because the pace of drilling slowed down (older wells don’t produce as much as newer wells), and because drillers began “shutting in” some wells, overall production in PA from shale wells increased a minuscule 2.7% in 2015 over the year before. Still, overall production in PA was extremely impressive: 4.18 trillion cubic feet for the year. The top five producers remained the same in 2015 as 2014, but top producing counties shifted a bit…
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Antero Resources 2016: Spending 23% Less, Drilling 110 Wells

In January Antero Resources, one of the biggest and best drillers in the Marcellus/Utica, released their fourth quarter and full year operational (not financial) update for 2015 (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). Antero still hasn’t released their 4Q15 and full 2015 financial update, but yesterday the company did release their 2016 capital budget and guidance. Lots of interesting details, like this: Antero will spend $1.4 billion in 2016 on drilling, down 23% from the $1.8 billion they spent in 2015; they plan to complete a staggering 110 wells in 2016 and by the end of the year they will have 70 wells drilled but not completed (DUCs); of the $1.4 billion they’re spending in 2016, $1.3 is for drilling and completions, and $100 million is for new or renewed lease deals. Here’s the full 2016 looking forward update from Antero…
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Gulfport Energy 2015: $1.2 Billion Loss, Most of it in 4Q15

Earlier this month MDN reported on Gulfport Energy’s operational update, which was impressive (see Gulfport 2015 Update: Reserves Up 83%, NatGas Production Triples). That was the good news. Late yesterday the company released fourth quarter and full year 2015 financials–and that’s the bad news. There’s no way to sugarcoat the fact that Gulfport lost $1.2 billion in 2015. A full two-thirds of that loss came in the fourth quarter as oil and gas prices crashed in the later part of last year. In 2016, Gulfport plans to spend $425-$475 million, down 36%-43% from 2015 levels. With that money they plan to drill a total of 21-24 Utica Shale wells. Here’s yesterday’s Gulfport 2015 financials update…
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Noble Energy Loses $2.4B in 2015; Marcellus Scale-Back in 2016

Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in January the company was cutting its stock dividend and 2016 capital budget (see Noble Energy Cuts Stock Dividend 44%, Lowers 2016 Capex 50%). Yesterday Noble released its fourth quarter and full year 2015 update, along with details about their plans for 2016. What do we learn? Noble lost $2.4 billion in 2015, with $2 billion of the loss coming in 4Q15. Ouch. Of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 Noble plans to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (they have 85 DUCs–drilled but uncompleted wells). Here’s an update on Noble’s performance last year, and plans for this year…
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Williams 2015: $1.6B Loss in 4Q15, $1.4B Loss Full Year 2015

Drillers (the “upstream”) are not the only companies being negatively affected by the crash in oil and gas prices and the resulting slowdown in drilling. Midstream companies (pipelines and processing plants) are also affected. If drillers drill less and shut-in wells, that means less gas flowing through pipelines. Although certain minimums are charged, contracts with pipeline companies are complex and involve many factors, among them the price received for the gas flowing through them. Williams, which is in the process of being sold to/merged with Energy Transfer Equity (see Williams Board “Unanimously” Committed to Selling to ETE), rivals MarkWest Energy (which was sold to Marathon Petroleum) as the biggest midstream company in the Marcellus/Utica. Williams released their fourth quarter and full year 2015 financial update yesterday. The company lost $1.6 billion in 4Q15 alone, but because they made money in other quarters, Williams “only” lost $1.4 billion for the entire year in 2015. Here’s yesterday’s 2015 financial update…
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CONE Midstream 2015: Operates in the Black, No Losses

Perhaps the smaller the better when it comes to midstream companies. Today we shared with you the news that Williams, perhaps the largest midstream company operating in the Marcellus/Utica, lost $1.6 billion in fourth quarter 2015 and lost $1.4 billion for full year 2015 (see our companion story). However, for one of the smallest midstream companies operating in our neck of the woods, CONE Midstream, the opposite was true. Yesterday CONE, a joint venture between CONSOL Energy and Noble Energy, released their financials for fourth quarter and full year 2015. Not a loss in sight on their income statement. Granted, compared to Williams, CONE is tiny, but hey, maybe the mighty Williams can learn a thing or two about operating in the black from CONE. Here’s the CONE update issued yesterday…
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Seventy Seven Energy 2015: Revenue Down 45%, $221M Loss

Last week MDN told you that Seventy Seven Energy, the old Chesapeake Energy Oilfield Operating unit that was spun into its own company a few years ago, had released some selected 2015 financial numbers with no context (see Seventy Seven Energy Releases Cherry-Picked Numbers). Which led us to speculate, “It must be worse at oilfield services company Seventy Seven Energy (SSE) than we thought.” SSE released their fourth quarter and full year 2015 financials yesterday, and our speculation was spot on. SSE lost $221 million in 2015 (with $61 million of that loss coming in 4Q15). In 2014 SSE had $2 billion in revenue. In 2015, they had $1.1 billion in revenue–nearly cut in half. Which we suppose should not come as a surprise, that a company which supplies the rigs and people to drill and frack has seen business disappear since energy companies pulled way back in 2015. Still, you have to wonder how long they can hold on with losses like this. SSE has a large operation in the Marcellus/Utica, which is why we track them. Below is SSE’s 4Q15 and full year 2015 update…
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Lower 48 NatGas Production Rose 0.5 Bcf/d in January

Bentek Energy, the energy analytics arm of Platts, released their prediction for total natural gas production in the lower 48 states yesterday. The U.S. Energy Information Administration (EIA) won’t release their final numbers until the end of February. What did Bentek find? Natural gas production went UP in January, over December, by about one-half a billion cubic feet per day (0.5 Bcf/d). The leading reason was an increase in output from the Utica/Marcellus region, but other regions increased slightly too. Here’s the low down on how/why natgas production rose last month…
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Marcellus & Utica Shale Story Links: Thu, Feb 18, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FirstEnergy goes after the shale industry with electric lines; why Utica natgas production rose 54% in January; PA coal town excited to get natgas; the social impacts of frac sand mining – new study; Cheniere on the cusp of exporting first LNG shipment; Anadarko’s “brand ambassadors”; Sierra Club sues again; which pipelines at most risk of Chesapeake bankruptcy?; taxpayer program funds anti-pipeline activists; Iran won’t play along with OPEC/Russia production freeze; and more!
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