Atlas Resource Partners Filing for Bankruptcy Tomorrow

atlas-resource-partners-logoJust last week MDN predicted that Atlas Resource Partners (ARP), a publicly-traded exploration and production master limited partnership (“MLP”) with operations in basins across the United States including the Marcellus and Utica Shale plays, was heading for a bankruptcy (see Atlas Resource Partners Close to Chapter 11, NYSE De-lists Units). Yesterday ARP announced it has been working behind the scenes with the people it owes money (lenders and bondholders) on a deal to convert their debt into common units (in essence, shares of stock). The deal worked out will eliminate $900 million in debt ARP owes. The deal is like many others we’ve written about over the past six months or so–where a company waves the magic wand and turns debt into ownership. The problem with these plans, in our humble opinion, is that it punishes those who currently own equity in the company. The stockholders (in this case, since it’s a master limited partnership, called unitholders), find their shares are devalued to the point of being worth toilet paper. We live in a screwed up world where owning debt is better than owning equity. But we digress. Here’s ARP’s so-called pre-packaged bankruptcy plan to screw current owners, and turn debtholders into the new owners. ARP plans to file the paperwork in court tomorrow…
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Rex Energy Deal Converts $43.5M of Debt into Stock Ownership

Rex EnergyToday’s lead story on MDN is about Atlas Resource Partners’ plan to file a pre-packaged bankruptcy turning some $900 million of debt into ownership equity (see Atlas Resource Partners Filing for Bankruptcy Tomorrow). Another Marcellus/Utica company is doing something similar, but without filing for bankruptcy. In April MDN told you about Rex Energy’s plan to convert some outstanding debt into shares of stock (see Rex Energy Converts IOUs into Common Stock, Avoids Bankruptcy?). Rex is doing it again. Yesterday Rex announced they’ve cut an agreement with an unnamed investor to convert $43.5 million owed to that investor into shares of stock. By doing so, Rex not only saves paying back the $43.5 million, they’ll also save paying out an additional $11.1 million in interest payments that would have been due over the life of the loan. However, our understanding is that converting debt into equity (shares of stock) dilutes the ownership interest of all current stockholders. The only difference we can see between what Atlas is doing and what Rex is doing is that (so far) Rex has stayed out of bankruptcy court…
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Stone Energy Update on Marcellus Gathering Deal with Williams

Stone EnergyStone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 75,000 acres of leases. Last year Stone quit drilling in the northeast and actually shut-in part of their production due to low prices (see Stone Energy 3Q15: Shut Down 110 Mmcfe/d of Marcellus Production). As we pointed out in April, the company is in financial trouble and inching toward bankruptcy (see Stone Energy Appoints Special Liaison, Inches Toward Bankruptcy?). However, Stone has not, like some others, tipped into bankruptcy. Yet. And perhaps things are beginning to turn around for Stone. In June Stone cut a new midstream gathering agreement with Williams to return some of their shut-in Marcellus wells to full production (see Stone Energy Opens Marcellus Spigots Again; New Midstream Deal). Stone issued a production update yesterday. Part of the update addresses the Williams midstream deal–how it’s doing so far, and what to expect…
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S&P Overview of Northeast Power Market – NatGas & Electric Gen

KC_PGAT_250x125_2016Two weeks ago MDN invited you to join us for the upcoming Analyst Training in the Power and Gas Sectors, on August 8-9 in New York City (see Join MDN in NYC for SNL’s Analyst Training in the Power and Gas Sectors). Editor Jim Willis will attend the training. There are a number of MDN subscribers based in New York, Chicago, Pittsburgh and Washington who should attend this event. Today we have a small preview to share. German banking giant Deutsche Bank recently hosted a conference call with Steve Piper, Director of Energy Research at S&P Global. Steve is one of the seminar leaders/speakers for the upcoming Analyst Training in NYC. He had some great insights and this general overview of the Northeast power market…
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Constitution Pipeline Requests 2-Year Extension from FERC

Constitution Pipeline map
Constitution Pipeline map – click for larger version

For years now, MDN has tracked the ongoing sad, maddening, tragic saga of the Constitution Pipeline–a $683 million, 124-mile pipeline due to run from Susquehanna County, PA to Schoharie County, NY carrying Marcellus gas (see our stories here). The pipeline is full reviewed and authorized by the Federal Energy Regulatory Commission–it has been since 2014. The only thing left is a permit from the New York State Dept. of Environmental Conservation (DEC) to issue stream crossing permits. The DEC has, however, been corrupted by our corrupt governor, Andrew Cuomo. The Constitution worked with the DEC to meet ALL of their requirements, and in fact did meet all of their requirements, and in the end Cuomo said “nyet” and the servile “leaders” at the DEC did their master’s bidding and turned down the Constitution (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). So the Constitution sued (see Williams Sues NY Over Constitution Pipe – DEC May Lose Authority). However, the FERC clock is ticking. The Constitution has until the end of this year to get the pipeline built. With the glacial pace of the courts, that ain’t gonna happen. So the Constitution (i.e. Williams), last Friday, filed a request with FERC to extend the certificate to build by an additional two years…
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ExxonMobil, Saudis Plan to Build New Ethane Cracker on Gulf Coast

joint ventureYesterday ExxonMobil and Saudi Arabian petrochemical giant SABIC announced they have formed a joint venture partnership and are evaluating (and plan) to build yet another ethane cracker plant complex along the Gulf Coast–in either Texas or Louisiana. The Gulf Coast has numerous such plants already in operation. The northeast has (so far) none. Why the two companies are not looking to the northeast is beyond us. In their announcement the companies said they want to locate along the Gulf Coast “near natural gas feedstock.” Why is this an MDN story? Because (a) pipelines are planned from the Marcellus/Utica region to the Gulf Coast, and this cracker, if built, will be yet another new market for our gas, and (b) because it will likely compete with the crackers that do get built in the northeast. Shell has committed to building one in Pennsylvania, and PTT Global Chemical will make a final investment decision in 2017 on a planned cracker in Ohio. A new Exxon/SABIC cracker will compete for our gas supplies, we have no doubt. Here’s yesterday’s joint announcement…
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Former EPA Asst Admin Calls Frack Ban Supporters “Irrational”

J Winston Porter
J Winston Porter

J. Winston Porter is a former assistant administrator of the federal Environmental Protection Agency (EPA), appointed by and serving the great Ronald Reagan. Years ago Porter was a vice president at Bechtel, the world’s largest construction and civil engineering company. He also, at one time, owned his own engineering firm. But Porter has also served in the government and academe over the years. In addition to the EPA, Porter was manager of the environmental services department in San Francisco. He began his career as a professor in the chemistry department of the University of Petroleum and Minerals in Dhahran, Saudi Arabia in the mid-1960s. Porter is someone who’s been around and seen it all–from academe to government service to private industry. He has perspective. He has experience. He has wisdom. We spotted an editorial appearing in the Allentown (PA) Morning Call newspaper by Porter, an editorial in which he says a ban on fossil fuels, as is being called for by more extreme Democrats, would be a tragedy for Pennsylvania (and the rest of the country). He said that to “pretend that we could make a rapid transition away from fossil fuels is irrational.” Sound familiar? How many times have we stood on our soapbox to proclaim hatred of fossil fuels is irrational? Dozens, if not hundreds of times! Give Porter’s editorial a read, and learn something from someone who knows a thing or two about energy…
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Bloomberg News Compromised: Sponsors Dem Meeting on Global Warming

Bloomberg NewsIt’s not the place of a news organization, the “fourth estate” and watchdog of the government, to whore itself to a major political party. But that’s exactly what Bloomberg News has done. Shame on them. Yesterday in Philadelphia, at the Democrat National Convention, Bloomberg News sponsored a meeting of radicals in the Dem party to discuss the myth of man-made global warming–and how the Dems can force autocratic action down the throats of all Americans in the name of so-called climate change (the euphemism for global warming, something that hasn’t happened now for 20 years). Does anyone care anymore that our mainstream news services have sold their souls to the Democrat Party? Apparently not…
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Enviro-Nazis Say Marcellus Pipelines Equal Global Warming

enviro naziA group of rabidly left “environmental” groups–including Oil Change International, Appalachian Voices, Bold Alliance, Chesapeake Climate Action Network, Earthworks, Environmental Action, Sierra Club (national), 350.org, Blue Ridge Environmental Defense League, Protect Our Water/Heritage/Rights (Virginia & West Virginia), Sierra Club West Virginia Chapter, and Friends of Water (West Virginia)–recently published a piece of fiction titled, “A Bridge Too Far: How Appalachian Basin Gas Pipeline Expansion Will Undermine U.S. Climate Goals” (full copy below). As indicated by the title, these Nazi-like groups want to stop all new pipeline construction, repairs to existing pipelines, ANYTHING to do with a pipeline that flows natural gas or other fossil fuels. Why? They’re true believers that the earth is catastrophically heating up (it isn’t), and that mankind is causing it by burning fossil fuels (we aren’t). Their answer is to take the human race back to the Stone Ages when we burned cow dung and wood, apparently. One thing is for certain–you can’t even build windmills and solar panels without fossil fuels–so their so-called precious renewables aren’t an option. We wonder if they ever listen to themselves actually talk…
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Marcellus & Utica Shale Story Links: Tue, Jul 26, 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: Bullish on Antero Resources; Southwestern loses $1.8B, but still committed to WV; Cheniere’s 2nd LNG export plant progressing; fracklogging has stopped; US rig count jumps again; half of America’s LNG exports heading to Asia; and more!
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