Coast Guard Caves to Political Pressure, No Wastewater Barging

Ohio River bargeWhat a major shame and disappointment. The Obama bullies have gotten to the U.S. Coast Guard (USCG) and convinced the once-proud protector of our waterways to withdraw a proposed policy they previously floated in 2013 to allow frack wastewater to be shipped on barges down rivers, like the Ohio. The USCG has officially withdrawn their previously published draft policy–a policy that never went into effect–and says drillers and barge operators can still potentially barge wastewater–but it will be on a case by case basis (they’ve yet to approve a single case). Lots of red tape and hoops to jump through, making it virtually impossible to get a shipment approved. It was one year ago this month that a controversy erupted when GreenHunter Resources said an existing USCG regulation from 1987 already grants them the right to barge produced water–i.e. brine, or the water that comes out of the hole long after frack wastewater or flowback is done coming out. The USCG disagreed (see GreenHunter/Coast Guard War of Words — MDN Explains It). GreenHunter kept up the pressure and said they would begin brine shipments without authorization from the USCG (see GreenHunter to Coast Guard, We’re Barging While You Fiddle Around). It is unclear to MDN whether or not that ever happened–we don’t believe GreenHunter ever did send a brine shipment via barge. What happens now? Can GreenHunter and others potentially barge brine “case by case”?…
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Atlas Energy Update – 125 Layoffs Companywide

On Tuesday, after receiving ongoing tips that layoffs had occurred at Atlas Energy (a company with assets in the Marcellus/Utica), we published a post with an unconfirmed rumor that Atlas had laid off 30 or more people in its Waynesburg, PA location (see Atlas Energy – Rumored Layoff of 30+ People in PA). We later received another tip that indicated the layoffs may have been more “surgical” than “mass” in nature. Since that time, we’ve received a fifth tip–this one from a highly place source that we trust implicitly. This new tipster could not verify the 30 layoffs in Waynesburg, but the tipster does have knowledge that recently the company laid off ~125 people companywide. Atlas has still not responded to our requests for comment. We’ll continue to update when/if we learn more.

Chesapeake Loses $14.9B, Suspends New Utica/Marcellus Drilling

Hats off to Chesapeake Energy CEO (and Carl Ichan lackey) Doug Lawler for pulling a rabbit out of his hat. Everyone has thought for weeks that Chesapeake is headed for bankruptcy, given that it’s stock value has plunged nearly 90% over the past year and it faces a big debt repayment soon. But the latest quarterly (and full year) report, released yesterday, shows the company is holding its own and will live to fight another day. That good news sent CHK stock soaring, to close up 22% (if you call “soaring” going from $2.19 to $2.67 per share, when those same shares traded at ~$20/share a year ago). The big news coming from Chesapeake’s release yesterday of their fourth quarter and full year 2015 update is this: The company experienced a paper loss (not an out of pocket money loss) of $14.9 billion–a staggering number that’s hard to get your head around. The largest loss of any oil and gas company we’ve heard of–ever. But most of that “loss” was Chesapeake devaluing their assets due to low commodity prices. As we said, it wasn’t money out of pocket. The other big news (for MDN) is that Chesapeake is halting their drilling program in both the Ohio Utica and Pennsylvania Marcellus in 2016. Chessy is Ohio’s #1 driller–has been since Aubrey McClendon declared the Utica was the biggest thing to hit Ohio since the plow. Chesapeake is also Pennsylvania’s #1 driller, depending on how you measure it (they produce more natgas in PA than any other driller). Below is Chesapeake’s 4Q15 and full year 2015 update, along with other bits and bobs we found commenting on Chesapeake’s update (including a reference that Chesapeake’s stock rise of 22% yesterday is a “dead cat bounce”)…
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Dimock Resident Scott Ely Takes the Stand in Lawsuit Against Cabot

Yesterday the lead Dimock plantiff in the lawsuit against Cabot Oil & Gas, Scott Ely, was on the witness stand to talk about how Cabot destroyed his water supply. Except when you read even biased news sources like PBS’ StateImpact Pennsylvania, it appears Ely didn’t do a lot of talking about his water but about his own tenure in working for Cabot. Ely attempted to smear Cabot’s reputation by making wild claims about the reckless nature of their operations. Of course Ely’s attorney hopes the jury will infer that if Cabot was reckless in other activities, they were likely reckless when they drilled near Ely’s home and caused his water to become contaminated with methane–a problem that is fixable (although Ely wouldn’t allow Cabot to fix it). In addition to Ely’s testimony, his attorney asked the judge, yet again, to allow 300 new pieces of “evidence” that she tried to slip in at the last minute, an ambush of Cabot’s attorneys. And once again the judge said “no” to her request…
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Guest Post: 7 Important Points to Know About Dimock Trial

By Phelim McAleer

The Ely and Hubert families of Dimock, Pennsylvania are suing Cabot Oil & Gas for allegedly polluting their water. The case is hugely significant because Dimock has been characterized as “Ground Zero” for water allegedly contaminated by fracking. It was featured in the documentaries Gasland 1 & 2 and has been the subject of national and international news reports. Countless celebrities have also pushed the lie that Dimock’s water was contaminated with fracking fluid. But the case has thrown serious doubts on the narrative being spun by activists. The plaintiffs’ case is looking very shaky, indeed. Here are seven key points that have emerged as the case enters its second day.
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Guest Post: Dimock Plaintiff Exposed Under Cross Examination

By Phelim McAleer

The Ely family in Dimock, Pennsylvania is suing an oil and gas company alleging they contaminated their water well through fracking. Dimock has become a focal point for anti-fracking activists with many calling it “Ground zero” for pollution. Dimock and the Ely’s have been featured in national and international news reports and documentaries. Celebrities such as Mark Ruffalo, Yoko Ono, and Susan Sarandon have visited the tiny community to sympathize. But yesterday in the first day of the trial, facts started to emerge that show the truth is much different from the previously reported stories. Questioned under oath, Scott Ely’s claims look a lot less certain and he looks a lot less credible. Below are five facts that emerged during the first day that expose serious problems with Ely’s claims that his water was contaminated by fracking.
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Antero Resources Stands Above the Rest – Nets $941M in 2015

There’s at least one driller that’s figured out how to continue making money in one of the worst down markets in two generations: Antero Resources. Antero released their “good news” operational update back in January (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). Earlier this month the company issued an update for 2016 that they will cut back spending by 23% (far less than others) with plans to drill 110 wells this year in the Marcellus/Utica (see Antero Resources 2016: Spending 23% Less, Drilling 110 Wells). We thought for sure when they finally got around to sharing their financial numbers it would be red as far as the eye can see. Nope! Yesterday Antero, one of the biggest and best drillers in the Marcellus/Utica, released their fourth quarter and full year 2015 financial update. And guess what? They made more money last year than the year before! Three years ago Antero lost $18.9 million. Two years ago, after expenses, Antero made $674 million. Last year, in 2015, Antero made, after expenses, $941 million. That’s nearly $1 billion in profit! Other drillers need to study Antero closely to see what they’re doing right…
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Rice Energy 2015: Lost $291M, Production Up 101%

Rice Energy issued their fourth quarter and full year 2015 financial and operational update yesterday. The company stumbled in 4Q15, losing $281 million, which made last year’s total year loss $291 million (i.e. most of the loss came in 4Q15). That’s the bad news. The good news is that production was up 57% in 4Q15 over 4Q14 and production for the entire year was up 101% over 2014, an average of 552 million cubic feet equivalent per day (Mmcfe/d). Also good for Rice is the price they’ve been getting for their gas. They averaged $3.39/Mcf in 4Q15 and $3.19 for all of 2015. Proved reserves are up 30%. The company also released details for 2016 yesterday. Rice, which is a pure play driller focusing on the Marcellus and Utica Shale region, will spend 14% less this year than they did last year–which is far less of a cut than most drillers. Below are both the 2015 update and the 2016 forecast, with lots of details about their Marcellus and Utica programs…
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Cheniere Finally Ships First Sabine Pass LNG Export – to Brazil

Seems like it’s been forever in coming, but finally (!) Cheniere Energy has shipped their first LNG tanker of exported shale gas from the Sabine Pass facility on the border of Texas and Louisiana. We don’t know if any of the gas liquefied at the facility was from the Marcellus/Utica, but we do know that at some point it will be, which is why we’re excited about this new market opening up. This first tanker full of LNG (liquefied natural gas) set sail for Brazil yesterday and will dock in a few days at the regasification terminal in All Saints’ Bay, Bahia…
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Marcellus Ethane Export Sets Sail “Within a Week” from Philly

We’ve been predicting for some time, but the day is almost here when the first export shipment of Marcellus and Utica ethane will leave the Marcus Hook terminal in Philadelphia and head to Norway. Genscape, which monitors pipelines and trucks and ships and uses really cool technology to alert them of when these things are about to happen says the first ethane export from Philly will happen “within a week”…
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Marcellus & Utica Shale Story Links: Thu, Feb 25, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Time to release U of Cincinnati’s research; permits slow down in OH; oil apocalypse – Range Resources; DEP and well site restoration push; Cabot’s high standards; Shell Oil co president retiring; EIA says shale will rebound; Saudis declare war on shale; and more!
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