Seventy Seven Energy Filing for Bankruptcy, Converting Debt into Stock

77 energy“We’ll take one prepackaged bankruptcy to go.” That was the upshot of an announcement yesterday from oilfield services company Seventy Seven Energy (SSE)–the old Chesapeake Oilfield Operating unit that was spun into its own company a few years ago. In February MDN reported that for 2015 SSE revenue was down 45% and the company lost $221 million (see Seventy Seven Energy 2015: Revenue Down 45%, $221M Loss). In January SSE was threatened by the New York Stock Exchange with de-listing its stock (see Seventy Seven Energy’s Stock Threatened with Delisting from NYSE). One of SSE’s ongoing problems is that Chesapeake Energy, itself not in all-that-great-a-shape, provides nearly three-fourths (70%) of SSE’s revenue. In January SSE hired the “restructuring” experts at Lazard Freres to figure out how to stay in business (see Seventy Seven Energy Hires Turnaround Expert, Hopes to Stay Afloat). Their solution, as we learned yesterday, is a prepackaged bankruptcy where SSE gets the vast majority of debtholders to agree to converting the debt into stock ownership in the company. So SSE is giving away much of the company to its current debtors, hoping they can keep the doors open…
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Construction Begins on $780M SWPA NatGas-Fired Power Plant

Tenaska Westmoreland Generating Station
Tenaska Westmoreland Generating Station – artist rendering

“It’s a go” for a long-delayed $780 million natural gas-fueled power plant in South Huntingdon (Westmoreland County), PA being built by energy giant Tenaska. So said a Tenaska spokesperson following an announcement that the Tenaska Westmoreland Generating Station, a 925-megawatt (MW) natural gas-fueled power plant project near Pittsburgh, has secured $780 million in funding. The project was first proposed in 2009 and since that time has secured all of the necessary permits. The project has also faced some local opposition. According to the Tenaska announcement, construction began “earlier this year” at the project site. Black & Veatch is doing the engineering work and acting as the contractor for the project. And yes, Marcellus/Utica gas will feed the plant when it goes online in 2018…
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Stone Energy Appoints Special Liaison, Inches Toward Bankruptcy?

Stone EnergyThere’s no way to sugarcoat the fact that Stone Energy–an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana that drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 75,000 acres of leases–is inching toward a bankruptcy filing. That’s our take anyway. Last week Stone issued an update for 1Q16 in which they disclose their line of credit with the banks has been reduced from $500 million to $300 million (see Stone Energy 1Q16: Most Marcellus Production Still Closed Down). That’s a big hairy problem, because there is now a “borrowing base deficiency” of $175.3 million–meaning the company may go into default on its loans. Stone outlined various repayment options last week, none of them good. So it was no surprise that yesterday Stone announced one of its board members is becoming a “Special Liaison” to management to help the company “with assessing strategic alternatives and restructuring alternatives.” The word “restructuring,” as we’ve seen with other producers, is a euphemism for bankruptcy…
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EXCO Resources – Personnel Changes & Prospects for the Future

EXCO.jpgAs MDN pointed out earlier this month, EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point (see EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%). Even so, they remain a major player in our region and will return to drilling when the price (one day) goes up again. So we keep an eye on them. Recently there was a personnel change at EXCO to update you on. Also, one of our favorite energy analysts, Richard Zeits (writes for Seeking Alpha), has done a deep dive into EXCO and its prospects for emerging from the current down market intact. He provides some key insights…
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Coverup & Collusion: NY AG Tried to Conceal Role of Antis re Exxon

Eric-Schneiderman.jpgIs this the smoking gun that proves collusion and corruption between Democrat New York Attorney General Eric Schneiderman and radical Big Green groups? In March, AG Schneiderman and a handful of other Democrat Attorneys General, along with climate huckster Al Gore, gathered in New York City to discuss a coordinated legal attack against oil and gas companies (see Climate Change Hucksters, Incl. NY AG & Al Gore, Threaten O&G). MDN has been shouting since last year that Schneiderman, himself a corrupt politician occupying the state’s highest legal office, has begun a witch hunt targeting companies like ExxonMobil, a company Schneiderman has slated for trial and execution (see NY AG Targets/Accuses ExxonMobil of Lying about ‘Climate Change’ and NY AG Schneiderman Launches the Climate Witch Trials). It’s obscene and beyond words. Schneiderman wants to prosecute legitimate corporations for not publicly saying “I believe in man-made global warming.” Back to the NYC meeting a couple of weeks ago. At that meeting was Matt Pawa, a Massachusetts lawyer and radical “green” who launches lawsuit after lawsuit on climate change (what a stupid phrase, of course the climate changes!). AG Schneiderman’s office asked Pawa to keep his participation in the March meeting in NYC a secret. We have it in an email. Can anyone say cover up? Collusion? Fraud? Corruption?…
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Green Groups Ask DC Judge to Stop Construction at Cove Point LNG

court-gavel.jpgBig Green groups, including the nutty Sierra Club, the left-leaning Chesapeake Climate Action Network and the odious Earthjustice continue to pump money and lawyers and time into an effort to stop progress on Dominion’s construction of an LNG (liquefied natural gas) export facility in Cove Point, Maryland. As of March the Cove Point project was already a quarter done (see Cove Point LNG Export Plant Now 24% Complete, Rapid Progress). Last June Earthjustice and its co-conspirators filed a lawsuit against the Federal Energy Regulatory Commission claiming that FERC was wrong to issue a permit for the facility (see Earthjustice Asks Court to Stop Construction at Cove Point LNG). Yesterday the nutjobs got their day in the D.C. Circuit Court of Appeals, once again asking the judges to stop construction at the site so they can litigate it into eternity…
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Dem PA Attorney General Candidates More Anti-Drilling than Kane!

vote early vote oftenBefore Kathleen Kane took office as Pennsylvania’s Attorney General, we warned you that she’s an anti-driller out for blood (see Will New PA AG Go After the Marcellus Drilling Industry?). Over the past 3 1/2 years she has repeatedly done just that (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO; Minuteman Enviro Says PA AG Office “Terrorized” Family Members, Filing Lawsuit; and PA Attorney Gen. Kane Abuses Office Again, Arrest Warrant for EQT). Kane hung herself with her own hubris–she’s going to trial for committing felonies (plural) while in office–not related to the o&g industry. The PA Supreme Court suspended her license to practice law (see End is Near: PA AG Kane’s Law License Suspended by Supreme Court). It’s no surprise she’s not running again this November. However, the Democrats running in the primary to replace her are just as viciously anti-drilling as she is. Even more so! One of them says Kane was a wimp when it came to targeting oil and gas companies. Will our PA friends PLEASE LISTEN TO US this time and not vote any of these idiots into office?…
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Obama Administration Launches “Well-Planned Attack” on O&G

IPAAA recent meeting organized by the Independent Petroleum Association of America (IPAA), called a Congressional Call-Up, was truly eye opening. People attending the meeting were briefed on key federal issues impacting the oil and natural gas industry. Here’s the startling news: There are currently 44 separate actions by various executive branch (Obama) agencies targeting the o&g industry–meant to cripple it. It is breathtaking in scope. Those doing the briefing called it a “well-planned attack on virtually every aspect of oil and natural gas planning, production and use.” Depressingly, no one in Congress or the media seems to even notice–or if they do, they don’t care…
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Brookings Institute Turns Fractivist Whore re Severance Tax Report

BrookingsTalk about intellectual dishonesty and academic incest…The Rockefellar family, behind the latest initiatives to force investors to divest from so-called fossil fuel companies and funders of numerous wacko Big Green initiatives, along with former members of the radical PennFuture organization who now work for far-left PA. Gov. Tom Wolf (PA Secretary of Conservation and Natural Resource Cindy Dunn, and PA Secretary of the Dept. of Environment Protection John Quigley), funded and contributed to a new report from the Brookings Institution that calls on PA to adopt a severance tax. Brookings is a once-proud organization that has stooped to pimping itself out like a cheap whore to anyone with money. They have the nerve to call it a new “study”–like it’s somehow an academic pursuit, beyond questioning–when in fact it’s nothing more than propaganda meant to pressure PA into adopting a Marcellus-killing severance tax. There’s nothing scholarly about it…
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Fossil Fuel Insider to Receive Honorary Doctorate from Dartmouth

Daniel YerginThis will not sit well with anti-fossil fuel eggheads in the elite halls of Ivy League institutions. One of their own, Dartmouth College, will confer an honorary doctorate in June on one of the oil and gas industry’s consummate insiders–Daniel Yergin. Yergin is vice chairman of consulting powerhouse IHS, and the author of the bestselling book “The Prize: the Epic Quest for Oil, Money and Power,” for which he won a Pulitzer Prize. Yergin’s most recent bestseller is “The Quest: Energy, Security and the Remaking of the Modern World.” The New York Times calls Yergin, “America’s most influential energy pundit.” He is unabashedly pro-oil and gas. And now he’s going to be honored at the Darmouth graduation ceremony where he will (even worse!) deliver the commencement address…
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Marcellus & Utica Shale Story Links: Wed, Apr 20, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Check your lease for “implied requirement”; pipeline award given to Marietta prof; energy slowdown for rail suppliers; PA at low risk from induced earthquakes; FERC allows feed gas for Sabine Pass Train 2; gas buyers brace for new challenges; LNG exports sop up 35 Bcf from US gas glut; and more!
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