Atlas Energy Issues 2015 Update + More Details on Company Layoffs

cutting jobsYesterday Atlas Energy issued its fourth quarter and full year 2015 update. Atlas, as we’ve pointed out in the past, has sold most of its Marcellus assets in two huge deals: a $4.3 billion deal with Chevron in 2011 and in a $7.7 billion deal with Targa Resources in 2014. Atlas operates mostly conventional (some unconventional) oil and gas wells in a number of states: New York, Pennsylvania, Ohio, West Virginia, Virginia, Tennessee, Indiana, Alabama, Colorado, Oklahoma, Texas and New Mexico. Sizable company. Recently, as MDN has exclusively reported, the company laid off a number of its employees (see Atlas Energy Update – 125 Layoffs Companywide). We’ve since learned, from a highly placed source with knowledge of the layoffs, that the number of companywide layoffs is closer to 150–approximately 20% of the Atlas workforce. There’s no mention of that in yesterday’s update. So what does the update show? Atlas lost $240 million in 2015–but if you back out the paper losses of impairments and depreciation, the company actually made money. In the update Atlas mentions they shut in their prolific Marcellus wells in Lycoming County, PA during 4Q15 due to low prices. Below is the Atlas update, and more details about how many Atlas employees were laid off–and where…
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ETE Wants Out of Williams Merger/Takeover, Offering $2B Breakup Fee

indecent proposalIt was a long courting period before Energy Transfer Equity finally cajoled, harangued, and eventually forced the board of Williams to agree to a merger/takeover. ETE’s billionaire CEO Kelsy Warren revealed he had been propositioning Williams for over six months–offering Williams $64 per share to buy the company, totaling $48 billion (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). Williams resisted, but eventually they caved and agreed to the deal–although the deal price went down $10 billion by the time they accepted (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Like a lover who finally had his way and then finds out it wasn’t “all that”, it seems Warren is having second thoughts. The New York Times is reporting that the deal “has become a nightmare” and Warren wants out and is offering to pay Williams a $2 billion break-up fee…
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Sunoco LP Delays Construction of Mariner East 2 Pipeline

On a quarterly analyst phone call yesterday, Sunoco Logistics Partners CEO Mike Hennigan admitted applying for and receiving “hundreds of permits” has delayed construction of the Mariner East 2 pipeline. There is no worry that the project won’t happen–it will. It’s just that the timetable for when construction begins (and ends) has changed from a year ago when they first announced the project. In prepared remarks, and then later under questioning from several analysts, we have discovered that Sunoco LP will not make a definitive go/no go decision on whether to build a second pipeline as part of the Mariner East 2 project, until the backhoes begin to dig for the original Mariner East 2 pipeline. When will that be? Hennigan was hard to pin down. One analyst made a reference to ME2 being ready in either first or second quarter 2017–but Hennigan would not verify that timeline. Below are select portions of the phone call transcript where Hennigan and others are talking about Mariner East 1, 2, 2X and the Marcus Hook refinery…
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Southwestern, Chesapeake Negotiate Lower Midstream Rates from Williams

Used to be when a driller signed a contract with a midstream company to gather, process and transport the company’s gas (or oil) to market, the driller was locked in for a minimum of 15-20 years. The rates NEVER change. Midstream companies will build expensive pipeline systems and all of the associated infrastructure only if they’re guaranteed a certain return. Which is why investors love midstream companies–it’s like investing in an annuity, a guaranteed rate of return for 15-20 years to come. And then the bottom fell out of the market. As we wrote about Wednesday, some bankrupt drillers are seeking court action to dissolve those contracts (see Shock: Judge May Allow Drillers to Cancel Gathering Pipeline Deals). We have another new development to tell you about: drillers not in bankruptcy are renegotiating once sacrosanct, set-in-stone contracts, to reduce the amount they pay midstreamers. Southwestern Energy and Chesapeake Energy have both recently negotiated lower rates with Williams. The beginning of a trend?…
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Dimock Trial Update: Scott & Monica Ely’s Testimony Destroyed

There was a ton of news coming out of the trial two Dimock families have brought against Cabot Oil & Gas in Scranton, PA yesterday. But you wouldn’t know it if you read the Democrat-controlled (and anti-drilling) Scranton Times-Tribune–the newspaper of “record” in the very place where the trial is being held. They’ve quit writing about the trial because the news is so bad for anti-drillers. Both Scott and Monica Ely testified and under cross examination their testimony was obliterated–their claims exposed as lies. Here’s the latest from FrackNation filmmaker Phelim McAleer who has been following the trial from the beginning, and from Natural Gas Now
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Lordstown, OH May Get Second Utica Gas-Powered Electric Plant

An $800 million electric generation plant planned for Lordstown (Trumbull County), OH that will be powered with Utica Shale gas won village approval last summer (see Lordstown $800M Gas-Powered Electric Plant Gets Village Approval). The Lordstown plant then won state approval in the fall (see Lordstown $800M Gas-Powered Electric Plant Gets OH State Approval). Now comes word that the company planning to the build the plant–Massachusetts-based Clean Energy Future–is considering building a second plant at the same location. Here’s an update on the first plant, scheduled to break ground on April 1, and the rumors swirling about a second plant…
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EPA’s McCarthy Addresses O&G Industry: Arrogant, Clueless, Both?

Federal Environmental Protection Agency (EPA) Administrator was invited and to her credit showed up at IHS’ annual CERAWeek conference earlier this week–a gathering of energy companies (particularly oil and gas companies). She gave the opening plenary speech and following that speech she was interviewed by IHS Vice Chairman Daniel Yergin. In response to a question about EPA regulation of the oil and gas sector, she said the EPA, “doesn’t regulate the oil and gas sector the way we do other sectors.” Does she REALLY believe that? If she does, she’s even more clueless than we thought. The Gas Processors Association isn’t having any of it. They responded with a prime statement…
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Range Resources 2015: $714M Loss, Sells Non-Operated Marcellus

Range Resources released their fourth quarter and full year 2015 financial and operational update yesterday. Some interesting items of note. The company lost $714 million for the year, much of that a paper loss of impairments and depreciation. Also of note, the company sold non-operated wells and leases in the Marcellus in Bradford County, PA for $112 million. Range has reduced the 2016 drilling budget by 45% over 2015, down to just $495 million. Hey, it’s better than not spending at all. Below is the 2015 update…
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Southwestern Energy 2015: Record Production, Big Paper Loss

Southwestern Energy, one of the largest drillers in the Marcellus (and Utica) issued their fourth quarter and full year 2015 update yesterday. The company reports hitting a new record in production: 976 billion cubic feet equivalent, up 27% compared to 2014. A lot of that was driven by a huge 42% increase in their northeastern Marcellus production (they purchased new acreage in NEPA from WPX last year). The new acreage they acquired in West Virginia from Chesapeake is also a big factor in the production spike. Southwestern was one of the few companies that counterintuitively increased drilling in 2015. How did it work out financially? Nnnnnot so good. On paper the company lost $4.6 billion in 2015–but like other large drillers, most of that was a paper loss (not out of pocket money loss). Here’s the update from Southwestern, with lots of details on their Marcellus/Utica operations…
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Marcellus & Utica Shale Story Links: Fri, Feb 26, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH wells cost Chesapeake average $7.2 million to drill; OH State Sen. calls on U of C to release study; EQT gets $430 for new stock offering; WV DEP opposes bill to relax drilling permit standards; CT’s last coal plant converting to natgas; Chesapeake partners want cash up front before cutting deals; Halliburton laying off another 5,000; natgas hits 17-year low price; research proves global warming isn’t happening; Canada’s oil industry threatened by US & Mexico; and more!
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