Where are Big Marcellus/Utica E&Ps Beginning to Drill Again?

whereThe answer to the question posed in the headline of this article, asking where drillers are starting to drill again now that they are starting to drill again, is–it depends on the driller. There is no particular geography in the Marcellus/Utica, nor is there a preference for a given layer (Marcellus or Utica) across the major players. Each of them is following their own strategy. Here’s a rundown for several major players and their strategies…
Continue reading

Millennium Pipe Asks FERC to Approve Eastern System Upgrade in NY

millenium_pipeline_map
Millennium Pipeline Map – click for larger version

The Millennium Pipeline stretches ~244 miles from Independence in Steuben County, NY to Buena Vista in Rockland County, NY. The Millennium, which is supplied by local production and storage fields and interconnecting upstream pipelines, serves customers along its route in New York’s Southern Tier region and helps meet the energy needs of northeast markets. Earlier this year, the Millennium pre-filed an application for what it calls its Eastern System Upgrade (ESU). The ESU would add 7.8 miles of extra looped pipeline in Orange County, upgrade a compressor station in Delaware County, build a new compressor in Sullivan County and make some minor tweaks to metering stations in Rockland County (see Millennium Pipeline Files with FERC to Upgrade Eastern Region). The ESU will pump another $275 million into the New York economy with the end result of increasing the flow of natural gas for New York and beyond by fall 2018. Last Friday the Millennium officially filed and asked the Federal Energy Regulatory Commission (FERC) for permission to move forward and build. That’s despite the best efforts by THE Delaware Riverkeeper to stop this (and all other) pipeline project…
Continue reading

Trump’s Disappointing Position on State & Local Frack Bans

poopWe will confess it up front: We voted for Donald Trump in the primary. We think he stands the best chance of defeating Hillary Clinton. Clinton would, in our opinion, be very bad for the oil and gas industry (as well as bad for the country in general). To each his own, right? We will not extensively cover the election–that’s already being done everywhere else. Most everyone has a strong opinion one way or the other. Trump has given some bang-up speeches supporting the fossil fuel industry (see Trump’s Energy Speech Hits a Home Run: Regulate Less, Drill More). There’s even talk that a President Trump would nominate fracker Harold Hamm as his Secretary of Energy (see Fracking Legend Harold Hamm – Next Secretary of Energy?). All very positive signs. But then he goes and puts both of his feet in a big pile of doo-doo. Last week Trump was interviewed by a Denver television station (watch it below). It was a brief 45 seconds of that interview that we take issue with. In it, the reporter asks Trump about fracking–whether towns and states should be able to ban it. Trump said “Yes.” He said he supports fracking–but that “if the voters” want to ban it, they should have that right. Which is, quite frankly, mob rule. Voters should not have the right to trample on other voters’ Constitutional rights. That is what is at stake here–whether or not a simple majority (mob rule) will take away the property rights of other citizens. Trump has failed to grasp that–and we sincerely hope he gets his head right on the issue before the election…
Continue reading

Antero Resources Production Up 19% in 2Q16, but Loses $596M

antero resourcesAntero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update yesterday. Antero has one of, if not THE best, hedging programs in the entire Marcellus/Utica region. Hedging means they get a higher price for selling their gas than just about anyone else through prearranged financial/trading contracts. But Antero’s famed hedging program wasn’t enough to keep the company from losing $596 million in 2Q16. By comparison, Antero lost $145 million in 2Q15. However, it wasn’t all doom and gloom. Antero’s production was up a healthy 19% in 2Q16–to an average 1.762 billion cubic feet per day (or 1,762 MMcf/d, a new record for the company). If you mix in oil, natural gas liquids and hedging, Antero got $3.95 per thousand cubic feet (Mcf) for their hydrocarbons, while the actual spot sale price averaged $1.93/Mcf–which shows just how savvy Antero’s hedging program is. Lately the company has been snapping up more Marcellus acreage, mostly in WV (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres; Antero Resources Picks Up Another 13K Marcellus Acres for $108M; and Statoil Sells Another 11.5K WV Marcellus Acres to Antero for $96M). Obviously Antero is bullish on the Marcellus! Here’s their latest update…
Continue reading

Rex Energy Production Up 2% in 2Q16, Bleeding Slows w/$55M Loss

Rex EnergyRex Energy released their second quarter 2016 update yesterday. While production was up a small 2% over the same period last year, both operating revenue and profits were down. Operating revenue in 2Q15 was $35.8 million, revenue in 2Q16 was $31.2 million. The good news is that the bleeding is slowing. In 2Q15 Rex lost $153 million, while in 2Q16 Rex lost $55 million. At least it’s heading in the right direction. In Rex’s Moraine East Area (Butler County, PA) Rex drilled 5 gross (1.8 net) wells in 2Q16. Due to a delay in a gathering line, Rex did not (as previously expected) put the 4-well Fleeger II well pad online last quarter. In Rex’s Warrior North Area (Carroll County, OH), Rex placed the 3-well Goebeler pad and the 2-well Perry pad online. Below is the full update…
Continue reading

Stone Energy Ramps Up Marcellus Again in 2Q16, Loses $196M

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 90,000 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). 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). Although threatened with de-listing by the New York Stock Exchange and under threat of bankruptcy, Stone has (so far) managed to avoid both fates. They’re scrappy! And they continue to impress. Yesterday Stone issued their second quarter 2016 update, in which they confirm bringing their “Mary” field in the Marcellus back online in June. Stone has worked out deals with several major debtors to keep them out of bankruptcy court and they live to fight another day. Hats off to Stone. The company did, however, lose $196 million in 2Q16 (versus losing $153 million in 2Q15). While they live to fight another day, there are still storm clouds on the horizon…
Continue reading

Eclipse Resources Loses $73M in 2Q16, Resumes Utica Drilling

Eclipse_logo_hiresIn July Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released their operational update but not their financial update (see Eclipse Resources 2Q16: Drilling Resumes, 2 New Utica Wells). Yesterday we got “the rest of the story”–Eclipse’s financial results from 2Q16, as well as an updated operational report. The numbers show Eclipse lost $73 million in 2Q16 (versus losing $42 million in 2Q15). Production, as noted in July, was up and operating expenses were down. During 2Q16 Eclipse resumed drilling with one rig, allocated a drilling budget of $196 million, and began completing previously drilled but uncompleted (DUC) wells in their portfolio. Here’s the full update from Eclipse–including finances and operations…
Continue reading

Williams 2Q16: Everything Old is New Again, Except for $90M Loss

Williams logoMidstream giant Williams released their second quarter 2016 financial and operating update on Monday. After the deal by Energy Transfer Partners to buy Williams fell apart, some stockholders in Williams were waiting (agitating) to see what new strategy or direction the company might take. However, the “new” strategy is to keep doing what they’ve always done, according to CEO Alan Armstrong. What do we glean from the Williams 2Q16 update? For one thing, they lost $90 million in the second quarter, versus making $300 million in profit in 2Q15. That’s not so good. However, there are some promising projects on the way for Williams, including the Constitution Pipeline (once the courts slap New York around and force the state allow it), and the Atlantic Sunrise project in PA. Atlantic Sunrise is an expansion of one of the largest interstate pipeline systems in the country–the mighty Transcontinental Gas Pipeline (Transco). Below is the update from Williams, along with links to a transcript of their quarterly earnings phone call with analysts, and a link to their latest PowerPoint slide deck. We’ve also included analysis from Bloomberg on Williams’ “everything old is new again” strategy…
Continue reading

Laid Off Workers Say “No Thanks” to New Oil & Gas Jobs

cutting jobsOne of NGI’s ace reporters, Carolyn Davis, got her hands on a new report/survey conducted by Evercore ISI that looks at attitudes and behaviors of displaced workers in the oil and gas industry. The results are quite interesting. You may recall that something like 300,000+ o&g workers were laid off over the past several years. Many of them worked for oilfield services companies (OFS), like Halliburton, Baker Hughes and Schlumberger. In fact, our back-of-the-envelope tally says the vast majority of those layoffs came from just a handful of companies, namely those three. The Evercore survey found that many (most?) workers are not returning to the oil and gas industry, now that hiring has begun again. And that’s a problem. It means that there aren’t enough bodies to do the work. It seems the laid-off workers didn’t appreciate getting canned, tossed overboard like a piece of trash at the first sign of trouble–and many of them have gotten jobs in other industries. Who can blame them?! Here’s a few highlights from the survey…
Continue reading

Bear Head LNG Export Plant: Bad News & Good News

Bear Paw Pipeline mapFor some time now we’ve been tracking progress with an LNG export plant planned for the eastern shore of Nova Scotia, the Bear Head LNG project. Of all the Canadian LNG export projects that will export Marcellus gas, Bear Head seems to have the most momentum. The project has received most (if not all) of the necessary permits it needs to proceed. The most recent regulatory hurdle was a greenhouse gas approval from Nova Scotia, issued in July (see Bear Head LNG Gets GHG Plan Approval from Nova Scotia). However, there are a few troubling signs. The already-small parent company, LNG Limited, laid off 13 workers in July (see Bear Head LNG Parent Lays off 13 People, “LNG…difficult market”). We have two updates for you. Another key player has left LNG Limited–the founder of the company. That’s the bad news. The good news is that a new 62.5 kilometer (~39 mile) pipeline has been approved to connect Bear Head LNG to the Maritimes and Northeast Pipeline–the pipeline that will carry Marcellus gas from south to north, once the pipeline reverses its flow. So today it’s a bad news/good news day for Bear Head…
Continue reading

Marcellus & Utica Shale Story Links: Wed, Aug 3, 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: Gas-fired powergen boom in the Marcellus; OH rigs now at 15, drilled Utica wells at 1,764; natgas prices coming down for OH consumers; Shell buys 2 more properties near cracker site; Southwestern Energy cleans up a coal mess; second LNG train working at Cheniere facility in LA; Facebook & Amazon pass ExxonMobil in market cap; which way is the price of oil heading?; and more!
Continue reading