NED is Dead – Kinder Morgan Suspends $3.3B New England Pipeline

Children of the CornAnti-fossil fuel nuts in Massachusetts and other northeastern states are euphoric, actually orgasmic, at Kinder Morgan’s announcement yesterday that the company has suspended (not necessarily canceled) any further spending/time/effort on the Tennessee Gas Pipeline expansion from NY through MA, otherwise known as the Northeast Energy Direct (NED) project. Here’s what Kinder Morgan’s announcement means for natural gas customers, at least in certain parts of Massachusetts: If you build a new house, or a new business, and want to connect it to the natgas system in your community, forget about it. You can’t. There’s not enough gas. And if you’re an existing customer and want to convert your electric stove or electric hot water heater or oil furnace to a natgas alternative–don’t do it. If the local utility finds out, they’ll shut you off completely. Why? Not enough gas. So here’s something you anti fossil fuel freaks can really celebrate–you’ve just screwed yourselves, AND your neighbors too! A 2-for-1 deal…
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Talisman Gets a New Thai JV Partner for Marcellus Drilling in NEPA

BanpuThailand’s largest coal miner, Banpu Pcl, has spent $112 million to buy a 29.4% stake in the Chaffee Corners Joint Exploration Agreement (JEA). JEA is a Marcellus shale drilling joint venture 65.4%-owned and operated by Talisman Energy. What it means is that Talisman has a new partner in their northeast PA Marcellus drilling program. Banpu has hired the former CEO of PTT Exploration and Production Pcl, Thailand’s largest oil and gas explorer, as a director and to advise Banpu on JEA and on the company’s new and developing upstream gas strategy. PTT Exploration and Production is a subsidiary of Thailand’s state-owned PTT Public Company Limited. PTT Global Chemical is another subsidiary of PTT Public Company Limited–and the company proposing to build a $5B+ ethane cracker complex in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Conclusion: The government (and companies) of Thailand are investing in American shale energy in a major way. Here’s the news about Banpu becoming a new partner with Talisman in the Marcellus…
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Dela. Court Approves Magnum Hunter Bankruptcy Restructuring Plan

mhrThe long, slow process of “reorganizing” and emerging from bankruptcy just sped up for Magnum Hunter Resources (MHR). The Marcellus/Utica driller filed for bankruptcy protection in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Two weeks later the Delaware court, where MHR filed, approved MHR’s initial plan (see Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions). Now, four months later, that same court has given its full approval for the restructuring plan. What is the plan? Essentially MHR will convert outstanding debt held by lenders in a series of “notes” or what we call IOUs, into ownership equity. Noteholders will not be reimbursed the money they invested–instead they will be given shares of stock that they can later cash in to recoup their investments. What about existing common stockholders? MHR doesn’t say, but going by our story yesterday about Seventy Seven Energy’s plans to do the same thing, the value of common stockholders’ shares become essentially worthless (see Seventy Seven Energy Filing for Bankruptcy, Converting Debt into Stock). Here’s the MHR announcement about the court approving their plan…
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2 Wolf Pipeline Task Force Members Reveal Broken Process

pullcurtainback.jpgTwo shale industry members of last year’s ill-fated Pennsylvania Pipeline Task Force have pulled the curtain back to reveal what went on behind the scenes. The sausage-making. And it’s not pretty. Two important facts emerge for their disclosures: (1) most of the members of the task force didn’t (and still don’t) know their heads from their rear-ends when it comes to how the natural gas industry actually works, and (2) nothing useful will come from the 658-page report and its 184 recommendations. We previously predicted that outcome when we said, “Silly libs–they never learn. This initiative was never about actually getting anything done. It was always about the optics–to show that radical leftist Tom Wolf (and his lackey John Quigley) actually care about the hoi polloi” (see 2 NEPA Members of Pipeline Task Force Want to Know, What’s Next?). It’s about showing how much you “care” when it comes to lib Dems–never about actual results. And so it was with this exercise in utter futility known as the Pipeline Task Force…
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2 Experts’ Best Guess: PA NatGas Production Returns in 18 Months

David Spigelmyer
David Spigelmyer

Dave Spigelmyer, president of the Marcellus Shale Coalition (MDN friend and all-around great guy) along with Nathan Snyder, an analyst with investment firm Snow Capital Opportunity Fund, both predicted on Tuesday that “normal” natural gas production from the Marcellus/Utica region will resume in about 18 months. The two were speakers at “The Future of the Marcellus and the Utica” sponsored by the MSC at the Tri-County Oil & Gas Expo in Washington County, PA. The audience was primarily landowners interested in shale drilling and when it may resume on their land…
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ETE Tries New Tactic to Scuttle Williams Takeover Deal

shotgun weddingThe proposed takeover/merger of Williams by Energy Transfer Equity (ETE) is better than a daytime soap opera. It was a long courting period before ETE 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). But things changed. Prices for natural gas (and oil) went into the basement, and ETE/Kelsy Warren had second thoughts (see ETE Wants Out of Williams Merger/Takeover, Offering $2B Breakup Fee). Williams, however, isn’t backing down. “You wanted us? You’re going to take us.” That’s the sentiment. So ETE has been doing funky things to scuttle the deal, like issuing private shares to insiders so they come out on top. Williams took note and sued (see Merger Turns Sour: Williams Sues ETE/CEO Kelcy Warren). The latest action taken by ETE to disrupt the deal is by filing a document with the Securities and Exchange Commission that says if the closing stays on schedule the whole thing may be taxable, when before it was thought they would qualify for exemptions. Williams once again disagrees…
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Kinder Morgan 1Q16: Despite “Strong Headwinds,” Doing OK

Kinder MorganYesterday Kinder Morgan provided a first quarter 2016 and rest-of-2016 update. It contained this earth-shattering news: “We reduced our growth capital backlog from $18.2 billion at the end of the fourth quarter 2015 to $14.1 billion at the end of the first quarter 2016. The reduction in our backlog was driven primarily by the removal of the Northeast Energy Direct (NED) Market project due to insufficient contractual commitments from customers in the New England market, and the removal of the Palmetto Pipeline project following unfavorable action by the Georgia legislature regarding eminent domain authority and permitting for petroleum pipelines.” See our lead story today about Kinder’s decision to mothball the NED project. As part of the update, Kinder brings us up to speed on the pipeline (and other infrastructure) projects currently being built, including several in the northeast U.S. that will impact takeaway capacity for Marcellus and Utica Shale gas…
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OH Prof Explains Why Obama Regs on Flaring Will Backfire

natural-gas-well-flaring.jpgThe Obama administration is trying to kill the oil and gas industry. Whether it’s intentional or not (we think it is), recently proposed new regulations from the lawless Environmental Protection Agency are bad news. Particularly the EPA’s quest to force drillers to capture every last molecule of methane so it doesn’t escape (see Anti-Drilling Groups Weigh in on Lawless EPA Methane Rule). In its brilliance, one of the ways the EPA intends to clamp down on so-called fugitive methane and prevent air pollution in general, is to outlaw flaring. What is flaring and why is it necessary? Dr. Robert Chase, a professor at Marietta College and a recent recipient of the The Ohio Oil & Gas Energy Education Program, explains…
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Columbia Pipeline Shareholders to Vote on TransCanada Deal June 22

vote early vote oftenIn March MDN told you that Canadian midstream giant TransCanada is making a play to buy American Columbia Pipeline Group for $10 billion/C$13 billion (see Rumor Comes True: TransCanada Buying Columbia Pipeline for C$13B). Columbia is a major Marcellus/Utica midstream (i.e. pipelines and processing plants) company. Yesterday Columbia set the date for when its shareholders will vote on the deal. The magic date is June 22…
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Marcellus & Utica Shale Story Links: Thu, Apr 21, 2016

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Antero Midstream one of the best; PA oil drillers challenge new regs; watch the fireworks at today’s PA meeting to approve (or not) new regs; WV Senators support energy bill; Cheniere ships LNG to Europe; and more!
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