McClendon’s American Energy Partners Shutting Down This Summer

AEP logoPerhaps it’s a good thing when one’s children leave the nest. As we’ve been reporting, even prior to Aubrey McClendon’s untimely death, the subsidiary companies he founded as part of his new venture, American Energy Partners, were running away from Aubrey as fast as they could (see McClendon’s New Empire Continues to Separate and Leave and McClendon’s Child Companies Continue to Run Away from AEP Parent). Aubrey died in a fiery car crash on March 2 that appears to have been (sorry to say) a suicide (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). Aubrey was leveraged to the hilt at the time (see WSJ: Aubrey McClendon was in Debt Up to His Eyeballs). So it’s no surprise to us to learn that his company, American Energy Partners, laid off 100 employees on Wednesday and announced it will permanently close its doors in the next three months. The children (i.e. subsidiary companies) will go on…
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Litigious Martians Cry Like Babies Over $500K Lawsuit Against Them

My Favorite MartianMDN previously reported on the injustice happening in Bulter County where a handful of anti-drilling parents from the Mars School District, backed by money from Philadelphia from Big Green groups Delaware Riverkeeper and Clean Air Council, filed frivolous lawsuit after frivolous lawsuit–denying landowners in Middlesex Township revenue from legally permitted drilling. The actions by these radicalized parents have cost the taxpayers of Middlesex Township over $80,000 in legal fees. So the landowners got together and sued them, to stop this miscarriage of justice (see Shoe Now on Other Foot: Landowners Sue Martian Anti-Drillers). And guess what? The litigious antis started crying like little girls, claiming it’s an abuse and an attempt to stifle free speech (see ACLU Asks County Judge to Toss Lawsuit Against Litigious Martians). Talk about hypocrites! They can sue, but our side can’t. That’s fair in their twisted world. The lawsuit against these radicals continues, and the radicals, with the help of the Pittsburgh Post-Gazette, continue to complain that everything is OK when they do the suin’, but when they get sued…that’s not so hot. In fact, some of the less-committed radicals are leaving the fight. Turns out they don’t like to get sued…
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Downeast LNG Puts Maine LNG Export Project Up for Sale

The main project of Downeast LNG is to construct a 3 million ton per annum liquefied natural gas export facility on Passamaquoddy Bay near the Canadian border. (PRNewsFoto/Downeast LNG)
Downeast LNG concept – click for larger version

One of the planned LNG (liquefied natural gas) export projects that would use Marcellus/Utica Shale gas to export to overseas markets is a project called Downeast LNG–to be built along the coast of northern Maine (see 2nd LNG Export Terminal for Marcellus Gas Advances – in Maine!). Downeast was originally planned to be an LNG importing facility, but later changed to be an import AND export facility. Last June the company, backed by New York City venture capital firm Yorktown Partners, hired an engineering firm to design the facility with the promise it would be ready in 2017 (see Downeast Plans to Begin Building ME LNG Export Facility in 2017). But then the bottom dropped out of the oil market, and oil/LNG prices are closely aligned. Downeast put the project on hold earlier this year, asking the Federal Energy Regulatory Commission (FERC) to hold up on reviewing its application until June 1st (see East Coast LNG Export Updates – Bear Head & Downeast). The second shoe dropped not long ago for Downeast. You see, the project was planning to source gas at Wright, NY and transport it via Kinder Morgan’s Northeast Energy Direct (NED) project that would run from Wright, NY to Dracut, MA. That’s no longer an option (see NED is Dead – Kinder Morgan Suspends $3.3B New England Pipeline). There are other pipes that can possibly serve the plant, but not as easily has NED could have. Given the low price and NED cancellation, it won’t surprise you to learn that Downeast has just put the project up for sale. They no longer want to build it. The real question is, will anyone else want to build it?…
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FMC Technologies & Technip to Merge, Create $13B Oilfield Giant

Technip-FMCThe ongoing low price for oil and gas is profoundly changing the drilling landscape under our feet. In what some might call a marriage of convenience we would call a marriage of desperation: U.S.-based oilfield services company FMC Technologies announced yesterday they will merge with their much larger quasi-competitor, France-based Technip, in an all-stock deal that will create a new company called TechnipFMC worth $13 billion. FMC had/has some operations in the Marcellus/Utica, hence this merger has implications for our region. The new venture would be bigger than Baker Hughes and would rival and compete with the world’s two largest oilfield services companies: Schlumberger and Halliburton. Technip specializes in engineering and construction, while FMC specializes in offshore equipment and systems. The immediate question becomes, will Europe, the U.S. and other counties that opposed the Halliburton/Baker Hughes merger also oppose this one? Prevailing thought by analysts is that this merger will have a much easier path because the two companies have very little overlap in the current services they offer…
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Another One Bites the Dust: Halcon Resources Filing for Bankruptcy

Halcon ResourcesFloyd Wilson, CEO of driller Halcon Resources, is a plainspoken kind of guy. Halcon “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill in any of that acreage. Their less-than-stellar acreage led Wilson to comment, in colorful language, that the company would no longer drill any “substandard” (our word) Utica wells (see Halcon CEO Says No More S***** Wells in Northern OH Utica). In early 2015 when asked by an analyst about the company’s plans for the Utica, Wilson quipped “What’s the Utica?” (see Halcon CEO Floyd Wilson: “What’s the Utica?”). So we found it interesting that Wilson, so outspoken, was uncharacteristically silent when the company announced it would “take one prepackaged bankruptcy to go.” On Wednesday Halcon announced that like Seventy Seven Energy, they’ve worked out a deal with current debtholders into stockholders, shafting current stockholders in the process. In the announcement we read a lot about restructuring–but the word “bankruptcy” appears just once…
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OH Court Sides with Town Against ODNR/Driller in Cleveland Suburb

court-gavel.jpgIn January 2015 MDN highlighted an ongoing squabble near Cleveland, in Cuyahoga County, OH, between the Ohio Dept. of Natural Resources (ODNR) and the Ohio Oil and Gas Commission (OOGC) (see ODNR Appeals Decision Overturning Drilling Permit Near Cleveland). The ODNR is responsible for evaluating and issuing permits to drill oil and gas wells in the Buckeye State. The OOGC is the body that hears appeals from people who disagree with a permit issued by the ODNR. Such an appeal was filed for what we believed was a conventional (vertical only) oil well to be drilled in North Royalton, OH to Cutter Oil Company. It now appears the permit is for a horizontal shale well. No matter whether the well is vertical-only or horizontal, if the OOGC is allowed to overturn the permit because of nebulous and unspecific “safety concerns,” it sets a legal precedence, which is likely what the ODNR is trying to prevent with their appeal. That appeal has gone through several courts and on Tuesday the 10th District Ohio Court of Appeals sided with OOGC against ODNR in saying the ODNR didn’t take safety concerns into consideration…
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Lebanon Cnty Commissioners Forwarding Anti’s 1K-Page Tome to FERC

Nattering NabobsWe wonder if the anti-pipeline/anti-fossil fuel zealots in Lebanon County, PA are trying to kill members of the Federal Energy Regulatory Commission (FERC) by boring them to death. The local antis–a small yet vociferous group of nattering nabobs–have hounded the Lebanon County Board of Commissioners into sending along a 1,000-page tome to FERC listing their concerns with two pipeline projects. Along with the bore-you-to-death document, the Commissioners have included a letter requesting FERC extend the comment period on the Atlantic Sunrise Project by an extra 30 days. Which sounds reasonable–except at the end of that 30 days the antis will ask for another extension, then another, and another. That’s the strategy. If you can’t dazzle them with brilliance, baffle them with, well, you know what…
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Most NatGas-Fired Power Plants are Built Near Major Shale Plays

EIAOne of the big stories of the past year is the conversion of coal-fired electric generating plants to natural gas, and the construction of brand new gas-fired electric plants. We’ve written plenty about it. Yesterday the U.S. Energy Information Administration (EIA) returned to that theme with a post observing that “many” (we’d say almost all) new gas-fired electric plants that are getting built in the U.S. are getting built in or close to major shale plays. The Marcellus/Utica represents some of the heaviest concentrations of new power plant projects…
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Duke U Study: Local Governments Benefit from Shale Drilling

Duke logoNew research from the once-great Duke University actually supports shale drilling for a change–instead of denigrating it. In the past researchers from Duke, using money from the odious Park Foundation, have been bought off in their research efforts. This latest research, which concentrates on the benefits to local governments from shale drilling, wasn’t funded by Park and appears to be objective for a change. Two Duke U researchers conducted a three-year research project (between 2013-2015) funded by the Alfred P. Sloan Foundation. They traveled far and wide, to 16 states and interviewed over 200 local government officials along with gathering data and facts. The conclusion: on balance oil and gas drilling benefit local communities…
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Marcellus & Utica Shale Story Links: Fri, May 20, 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: Can Range deal get approved?; Maryland needs its own lawsuit; Hawaiian LNG; FERC dumps public from meeting; Linn Energy bankruptcy won’t be pretty; rich liquids and crackers; Toronto backs away from natgas ban; and more!
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