Cove Point LNG Now 67% Complete, Atlantic Coast Pipeline on Track

Dominion Cove Point Terminal
Dominion Cove Point Terminal – click for larger version

Last week utility and midstream giant Dominion issued their second quarter update and held an earnings/analyst call to discuss the update. Sometimes those earnings calls are a treasure trove of information you don’t see in the prepared quarterly update, especially in the unscripted Q&A that follows prepared remarks. Such was the case last week. Dominion’s CEO and President, Tom Farrell, along with other top brass from the company, offered up key insights into the Cove Point LNG export project, the Atlantic Coast Pipeline project, Blue Racer Midstream (a Dominion’s joint venture project), and the status of leased acreage for which the company owns Marcellus/Utica drilling rights. A smorgasbord of yummy updates! Here they are…
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US Rig Count Up Against in July, Marc/Utica Steady for 3rd Month

North American rig countLast month when Baker Hughes released their venerable rig count numbers, we cracked a smile that things are beginning to turn around with an increase in U.S. rig counts (see US Rig Count Up by 9 in June, Marcellus/Utica Holds Even at 36). This month we have a full-on smile. Baker Hughes released their July rig count numbers on Friday and the average number of rigs working in the U.S. was 449, up 32 from the 417 counted in June 2016. Cool! Was there also good cheer for the Marcellus/Utica? Er, well, maybe “no cheer” is the best way to put it. PA’s rig count went up by one in July, Ohio stayed the same, and West Virginia’s count went down by one. Once again in July we had a Marcellus/Utica rig count of 36, same as June and the same as May. Hey, at least it didn’t slide backward! That’s progress of a sort…
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EXCO Still Hammering Midstreamers re Contracts, Bleeding Slowed

EXCO.jpgEXCO Resources, a Dallas, TX-based driller with drilling operations in Texas, North Louisiana and the Marcellus/Utica, has been inching toward bankruptcy. So far the company has stayed out of bankrutpcy and hopes they can continue to do so. Their strategy, as we reported in May, is to hire new board members and try to wiggle out of long-term pipeline contracts (see EXCO Restructuring Plan: New Board Members, Hammer Midstreamers). How’s that working out? Last week the company released its second quarter 2016 update and CEO Harold Hickey said the company is “diligently working…[on] the consensual restructuring of our gathering and transportation contracts, noting the significant negative impact these contracts have on our cash flow, borrowing base and liquidity.” What if they can’t get midstream companies to buckle to their demands? They’ll sue: “If the efforts are not successful, the Company may seek alternatives to reject the contracts consistent with recent court decisions.” On the positive side, at least the bleeding is slowing down. In 2Q15 EXCO lost $454 million. In 2Q16 they lost $111 million. Here’s the EXCO update, including details on their Marcellus/Utica program…
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WVU Effusive Over “Green” Drilling Fluid Used in Test Wells

effusiveIn July MDN told you about exciting new publicly-financed research at West Virginia University that finds waste from Marcellus/Utica drilling (“frack waste”) is not radioactive or hazardous (see Independent Research @ WVU Concludes Frack Waste is Safe). Anti fossil fuel nutters would have you believe frack waste is an environmental holocaust–but such is proven to not the case. It’s been our observation that when Big Green groups don’t finance (i.e. purchase) research, you get honest, real science results. Like the results coming out of WVU’s 5-year study (financed by the U.S. Dept. of Energy). WVU, along with partner Ohio State University, is in the midst of drilling two Marcellus wells near Morgantown, WV. They are testing and measuring all sorts of things–air, noise, light and water and frack waste (see Drilling for WVU/OSU’s $11M Study Gets Underway in Morgantown). One of the key areas researchers are testing is the use of “green” drilling fluid–fluids that are environment and human friendly, even if they get accidentally released. According to WVU researchers, their experimentation will lead to Marcellus industry adopting greener drilling fluids…
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Corporate Raiders Hassling Williams Split Up

Keith Meister
Keith Meister – corporate raider

Nearly 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. 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 (see Half of Williams Board, Including 2 Corporate Raiders, Quit). 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. Another corporate raider investor who had joined forces with Meister was Eric Mandelblatt, from Soroban Capital Partners. We have an update. Meister is still pushing Williams to get a new board and get rid of Armstrong–as evidenced by a recent filing with the Securities and Exchange Commission. However, there’s been a split among the corporate raiders. Mandelblatt/Soroban is no longer colluding with Meister to push for board changes…
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More on Trump’s Wrong Position on Local/State Frack Bans

Donald TrumpLast week we pointed out the inconsistency of Donald Trump in his public comments during an interview in Denver on frack bans. Trump said he believes local municipalities and even states should be able to ban fracking if they don’t want it–even though he personally supports fracking (see Trump’s Disappointing Position on State & Local Frack Bans). Disclaimer: We feel we need to assert our support for Donald Trump. He is a vastly superior choice to Hillary Clinton. We are not a “bash Trump” website. However, when “our” candidate makes a misstep, we don’t look away and we don’t pretend it isn’t there. We have to deal with it honestly–and Trump is 100% wrong in his view on local bans. We explained why in our post last week. However, Paul Driessen, a senior policy adviser for the Committee For A Constructive Tomorrow (CFACT), which is sponsoring the All Pain No Gain petition against global-warming hype, writes about Trump’s inconsistent view on frack bans far more eloquently that we do. Driessen says Trump’s comments reflect “common misperceptions” about fracking and its supposed harms. Here’s what Driessen said in a recent column…
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Hillary Clinton’s War on Fracking

Hillary ClintonSince we’re taking Donald Trump to task over his wrong-headed thinking on local frack bans, we’d like to be an equal opportunity basher. Hillary Clinton’s position on fracking is far worse than The Donald’s position. If Hill has her way, she’ll end the practice. Oh, not with an Executive Order banning fracking, as Crazy Bernie promised he would do if he got elected. No, Hill is promising to enact new regulations (either via Congress or via Executive Orders) so strict, that “By the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.” Her words. Although Hillary is a known and proven liar, we happen to believe those words coming from her mouth. First up for Hill, “fix” the so-called “Halliburton loophole.” In 2005 Congress passed new environmental standards for the Safe Drinking Water Act (managed by the out-of-control Environmental Protection Agency) and chose not to include the oil and gas industry in those standards because the EPA has no right to regulate the oil & gas industry–only the states can regulate the o&g industry under the U.S. Constitution. The proper recognition of not expanding the EPA’s authority (illegally) somehow has been twisted into a “loophole” for the industry, and Halliburton’s name was applied to the loophole in an attempt to smear then-Vice President Dick Cheney, who was previously the CEO of Halliburton. Hillary has resurrected the same old Democrat lie and smear campaign from years gone by. She says if she becomes Prez (God forbid), she’ll jam the EPA right up the o&g industry’s….operations….as far as she can…
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EIA: O&G Production Jobs Today are 26% Lower Than 2014

EIALast week MDN highlighted a survey from Evercore ISI looking at attitudes and behaviors of displaced workers in the oil and gas industry (see Laid Off Workers Say “No Thanks” to New Oil & Gas Jobs). Many laid off workers have already found jobs in other industries, and they aren’t tempted to return to an oil & gas job due to the cyclical nature of the industry. We quoted a number we spotted from Evercore that there have been over 300,000 layoffs in recent years. We thought that a bit high, but they’re the experts. On Friday the U.S. Energy Information Administration (EIA), our favorite government agency, ran an article saying the job loss is closer to 142,000. We suppose it’s all in how you count jobs directly or indirectly related to the o&g industry. There are many jobs (hotel workers, restaurant workers, etc.) that can be highly dependent on the o&g industry, yet aren’t actually an o&g job. But when drilling gets cut, so too does eating at restaurants, staying in hotels, etc. The EIA is looking at direct jobs–those related to oil and natural gas production. What have (below) is the EIA’s reckoning that direct employment in the o&g industry today is down 24% from its high in 2014, just prior to the collapse of oil prices. That’s a drop of 142,000 and any way you slice it, it’s a lot of lost jobs…
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EQT Foundation Awards $1.3M During First Half of 2016

money-bag.jpgKudos to EQT for being a good corporate citizen. EQT, through its charitable subsidiary the EQT Foundation, doled out $1.3 million to 43 non-profit organizations located in Pennsylvania, West Virginia and Kentucky during the first half of 2016. During one of the worst downturns in the oil and gas industry in a generation. The Foundation, established in 2003, has donated a cumulative $37 million since it was founded. Astonishing! Here is a partial list of the very-worthy organizations receiving money in 1H16…
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