Half of Williams Board, Including 2 Corporate Raiders, Quit

Williams logoNearly half of the Williams board (6 of 14 board members) were part of a cabal that tried to force the company to sell itself to Energy Transfer Equity–a deal that went horribly wrong. Following the aborted merger, six of Williams’ board members tried to engineer a palace coup to depose current CEO Alan Armstrong. The coup failed and the board members were either forced out, or resigned in disgust (we’re not sure). Either way, it’s good news for Williams and their operations in the northeast. Among the board members pushing for a sale to ETE (and pushing for the ouster of Armstrong) was Keith Meister, a disciple and student of evil corporate raider Carl Icahn (see Bad News: Corporate Raiders Take Aim at Williams). Another corporate raider who was dug in like a chigger, Eric Mandelblatt, was also pushing to replace Armstrong (see Evil Corporate Raiders Double Investment (& Control) in Williams). On Friday Williams announced the chairman of the board, Frank MacInnis, is stepping down for “personal reasons” and that another five board members are leaving with him. Among those leaving are corporate raiders Meister and Mandelblatt. Good riddance…
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Chesapeake Energy’s $10 Billion Gamble – Bets the Whole Company

Chesapeake EnergyIn April MDN told you about Chesapeake Energy’s deal with bankers to reaffirm their $4 billion line of credit (see Lifeline: Chesapeake’s $4B Line of Credit Reaffirmed by Banks). Everyone was happy and Chessy’s stock price spiked up. What we didn’t understand, at that time, is that Chesapeake essentially mortgaged (used as collateral) the entire company to guarantee that the company will pay back that $4 billion in debt. In essence, Chesapeake created a $10 billion mortgage, pledging almost all of the company’s assets. The mortgage includes Chesapeake’s Marcellus and Utica Shale acreage. What does that mean for northeast landowners signed with Chesapeake? What if Chesapeake defaults?…
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WV Drillers Sue Dominion over Long-Term Pipeline Contract

lawsuitIn 2008 Dominion approached oil and gas producers in West Virginia, before the Marcellus Shale was a household word, looking to build a pipeline for “several hundred million dollars” (ended up costing $750 million). Dominion held several meetings and told West Virginia’s independent natural gas producers that the producers would need to commit to firm transportation if they wanted to sell their natural gas. At those meetings Dominion handed out forms asking producers to write down how much production they might have for firm commitment. Following the meetings, producers received contracts in the mail “out of the blue” with a very short deadline and a not-so-subtle threat that if they wanted to sell their gas, they would sign on the dotted line. The producers say they were pressured into signing a 10-year deal. Dominion’s Appalachian Gateway Project, with 110 miles of new pipeline and upgrades to several compressor stations, went online in September 2012 (see Dominion Turns On Appalachian Gateway Project Pipeline). Now some 37 of the producers that signed that deal are suing Dominion looking to break the contract and receive “compensatory and punitive damages”…
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PA Budget Battle Continues, Marcellus Severance Tax Off the Table

tax revenuePennsylvania legislators went home for the long Fourth of July holiday weekend without a final budget in place. The clock is ticking. The spending part of the budget–some $31.5 billion (a massive amount) has been agreed to by both the Republican-controlled legislature and Democrat Gov. Tom Wolf. However, the budget needs to find another $1.5 billion to fund it–the shortfall in the current plan. Wolf wants “sustainable revenue”–by which he means permanent tax increases on something. Wolf’s preference is to slap a Marcellus Shale-killing severance tax on the natural gas industry. That’s a non-starter for the Republican-controlled legislature–people who actually know how economics work. It does appear the two sides are close to getting the budget passed. This week should tell the tale of how the state plans to raise enough money to bridge the shortfall…
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Bill Would Prevent PA DEP from Adopting Methane Emissions Rules

regulationA new bill in the Pennsylvania legislature, Senate Bill (SB) 1327 looks to undo some of the damage done by the now departed anti-drilling Secretary of the Dept. of Environmental Protection, John Quigley. The federal Environmental Protection Agency (EPA) recently introduced draconian new rules to govern methane emissions from oil and gas drilling (see EPA Does it Again: Tries to Destroy O&G with New Methane Rule). Hard to believe, but PA under Quigley wanted to go even further (see Quigley Expounds on Methane Emissions Plan: Drillers to Get Hosed and More on Wolf/Quigley 4-Point Plan to Reduce Methane Emissions). Republican legislators have had enough of that. SB 1327 will prevent the DEP from creating new regulations more stringent than the federal EPA’s new rules…
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OH Gov. Kasich Signs Bill Forcing ODNR to Pool DOT Land for Drilling

kick them outRelief is on the way for some Ohio landowners who want to see drilling on or under their land, but have been held up because their land border state-owned land belonging to the Ohio Dept. of Transportation (DOT). Apparently the DOT (and/or the Ohio Dept. of Natural Resources, or ODNR) has been reluctant to pool or unitize land under DOT control to allow shale drilling. OH Gov. John Kasich has just signed House Bill (HB) 390 into law–a new law that gives the the ODNR 45 days to pool DOT-controlled land into units so drillers can begin drilling under it. Although the bill forces units to be issued, it allows drillers up to two years to begin their drilling after the units are issued, given the low prices in the market right now…
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Statoil Wants Millions in Refunds from Tax Overpayments in WV

StatoilStatoil, based in Norway, is a big player in the West Virginia Marcellus Shale. Statoil paid property taxes to Marshall County, WV in 2015 and later found, during an audit/review, that they had overpaid the county by some $300,000. Ouch. So Statoil politely asked for their money back. Marshall County has said “nei.” The WV Tax Department argues that Statoil “acted negligently” and exercised “poor judgment” in not finding the mistake sooner. At least that’s how we read it. So Marshall and WV intend to keep the overpayment. Apparently Marshall isn’t the only county where Statoil says it overpaid on taxes. The company is also seeking refunds in Wetzel, Ohio and Brooke counties as well…
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Columbia Pipeline’s Top Leadership Quits After Sale to TransCanada

I QuitLast Friday MDN told you that TransCanada completed its $10 billion purchase of Columbia Pipeline Group (see TransCanada and Columbia Pipeline Tie the Knot Today). Promptly following the deal’s close, most of Columbia’s top management, including the CEO, president, executive vice president/chief financial officer and the company’s top lawyer quit. Although the announcement doesn’t say, we suspect they had golden parachutes of some kind. Given the timing of the announcement, immediately following the deal’s closing, it was no doubt in the works for months…
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Marcellus & Utica Shale Story Links: Tue, Jul 5, 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: Southwestern Energy, out of the woods or just another dilution story; Cuomo’s lost Marcellus opportunity (and lost jobs); everyone wins in the cracker war; Texas royalty owners sue Chesapeake Energy; EIA says U.S. a net energy exporter by 2017; natgas fills the hole left by coal; petroleum product exports riding high; Shell wants Aramco to pay $2B in bustup fee; Obama’s climate policy is a hot mess; and more!
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