Corp Raider Carl Icahn Sells Half of His Chesapeake Stock

wizard-of-oz-curtain“Pay no attention to that corporate raider behind the curtain! I am the great and powerful Oz!!” Carl Icahn is an evil corporate raider who buys just enough stock in a company to fire a bunch of people and force the company to sell key assets–all so the stock price will pop up and he can then sell his shares at a tidy profit. Icahn has been doing it for years. He tried it with Chesapeake, firing co-founder Aubrey McClendon back in 2013 (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). Bad move because Icahn’s raider strategy at Chesapeake failed miserably. He’s just sold half of his 9.4% stake in the company at a loss–and we’re being told it’s “for tax purposes.” Yeah, right. We can tell you with 100% certainty when Icahn bought his Chessy stock it wasn’t so he would end up losing a bunch of money. He screwed up and now the whole world knows–and Chesapeake’s stock has taken a nosedive…
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PA DCNR Recovers $1.3 Million in Shorted Gas Royalties

paybackThe Pennsylvania Dept. of Conservation and Natural Resources (DCNR) used to, once upon a time, lease a small fraction of the land under its oversight to allow Marcellus Shale drilling. And like any private landowner, the DCNR received bonus payments when leasing, and royalties when the gas began to flow. In fact, when Marcellus drilling had hit its peak in 2013, the DCNR received almost enough just from bonuses and royalties they were nearly self-funding (see PA DCNR Nears Total Self-Funding from Marcellus Leases/Royalties). All good things must come to an end. When Democrat Tom Wolf assumed the governorship in PA, he banned any new leases/drilling on state-owned land, plunging the department deeply into the red (see PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget). However, even before the Wolf disaster, the DCNR felt like some landowners–that they may be getting screwed out of royalty payments by some of the drillers who have leased state land (see DCNR Says PA May be Getting Shorted on Royalties for State Land). Seems that DCNR’s feeling was correct. The agency got themselves a new accountant and went over the books with a fine-toothed comb, and over the past year, they’ve collected $1.3 million in royalties they had been shorted…
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Maryland Will Miss Important Fracking Deadline on Oct 1

deadlineMaryland is supposedly working on revisions to revisions of revisions of fracking regulations that will allow the state to begin fracking on or about October 1, 2017. At least, that’s the theory. There has been some evidence that work is actually getting done to revise the revisions already released by former Gov. Martin O’Malley. In June the Maryland Dept. of the Environment held public hearings where anti-drilling nutjobs paraded around spreading lies about how fracking will kill ya (see Maryland Holds Hearings on Fracking, Crazies Turn Out to Complain). In order to meet the deadline of Oct. 1, 2017 (the date when the current two-year moratorium expires), newly revised regulations need to be published a year in advance–by Oct. 1, 2016. According to “officials” who spoke to the very liberal Baltimore Sun, that isn’t going to happen. So what now? If the two-year moratorium runs out, can drillers begin drilling–without the revised revisions of the revisions of the regulations? Theoretically, yes they could. The better question is: Will anyone try to drill even if they could?…
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Landowners Go to Harrisburg to Pressure Lawmakers on Royalty Bill

Mr. Smith Goes to Washington
Mr. Smith Goes to Washington

Pennsylvania landowners are, as we recently pointed out, in a civil war with the Marcellus industry over the issue of royalties (see Deep Dive: PA Royalties Civil War Between Landowners & Drillers). Landowners want House Bill (HB) 1391 passed–a bill guaranteeing landowners will receive a minimum 12.5% royalty payment regardless of post-production costs. Drillers, being represented by the Marcellus Shale Coalition, are pushing back by saying landowners must live under the contracts they’ve signed. It’s complicated–read our previous articles about it here. With a short time left in this legislative session, landowners continue to press their case with lawmakers. The latest in the skirmish is that landowners have set up a table in the Capitol Rotunda in Harrisburg to lobby (i.e. pressure) lawmakers into taking action on the bill…
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NatGas Trades Above $3/Mcf 1st Time in > 1 Yr, Still Low in M-U

natgas-priceWe’ve just hit a milestone worth mentioning. Yesterday the price of natural gas as traded at the benchmark Henry Hub delivery point (in southern Louisiana) closed at over $3 per thousand cubic feet (Mcf). It’s an important psychological barrier that gives traders (and drillers) hope for higher prices. However, before we begin popping the champagne corks here in the Marcellus/Utica, you should understand that there is no “the price” in natural gas. Gas is traded at hundreds of locations along major gas pipelines. The venerable Henry Hub is important because it is the benchmark, setting prices that many gas contracts are tied to. But the reality of natural gas prices for the Marcellus and Utica is one of low prices due to lack of pipeline capacity to move our oversupply to other markets. So while the price of gas trading at the Henry Hub yesterday closed at $3.08/Mcf (according to price experts Natural Gas Intelligence), the price of gas trading at the Tennessee Gas Pipeline Zone 5 300L in northeastern PA closed yesterday at $1.26/Mcf (NGI). Here’s more on yesterday’s important Henry Hub breaking through $3 story, and why the price is going higher right now…
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Cheniere Energy Upsizes IOU Offering from $1B to $1.5B

friskyCheniere Energy operates the only liquefied natural gas (LNG) export facility in the United States–currently. There are others planned, like the Cove Point, Maryland facility currently under construction. We keep tabs on Cheniere, even though it’s located in Louisiana, because the pipelines that serve it either are or soon will have Marcellus/Utica natural gas flowing through them–to the Cheniere plant. It’s potentially a very important market for our natural gas. We’ve had plenty of Cheniere news lately. Earlier this week we told you about a major restructuring at the top of the company, and the news that Train 2 at the plant is about ready to rock and roll (see Cheniere Restructures Management Team, Finishes Train 2). We have more news. The company had planned to float a big $1 billion of new “notes”–what we call IOUs. The news is that Cheniere is feeling frisky and has upsized the note offering. They’re now floating $1.5 billion of new senior notes…
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IPAA Launches Campaign to Defeat EPA Methane Regs

Yesterday MDN reported on the scorching remarks by two U.S. Congressman with regard to the federal Environmental Protection Agency’s rogue actions to try and regulate oil and gas drilling by imposing new methane emissions regulations (see Congressmen Blast EPA Over New Methane Regulations). Let’s keep the heat on. The premier organization representing independent oil and gas drillers is the Independent Petroleum Association of America (IPAA). The IPAA is at the forefront in fighting the EPA to defeat these draconian new regulations. According to the IPAA (quoting the EIA), these new regulations would make marginal oil and gas wells unprofitable to operate. Those so-called marginal wells represent 15% of all the natgas produced in the U.S., and 20% of the oil produced. Can you imagine what would happen to prices if you suddenly shut down that much production? No, the Obama EPA doesn’t think of things like that–and that’s the problem. Or if they do think about it, they certainly don’t give a fig. The IPAA sent around a letter outlining their game plan for fighting the EPA’s draconian methane emissions regs. Huddle up–here’s the plan…
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Shale Insight Starts Today – Visit MDN in Booth 208

Shale InsightWelcome to Pittsburgh! MDN editor Jim Willis always enjoys the City of Bridges. Today begins Shale Insight. If you’re attending (and a number of MDN subscribers do attend), please stop by Booth 208 and say hello. There will be a number of top notch speakers both today and tomorrow. The person grabbing most of the headlines is Donald Trump, who will speak tomorrow. However, there are many other noteworthy speakers on the agenda. Harold Hamm, CEO of Continental Resources is one of them. Gary Heminger, CEO of Marathon Petroleum is another. Other standouts for MDN: Stacey Olson, the new president of Chevron Appalachia; Gladys Brown, chairwoman of the PA Public Utility Commission; Keith Burdette, Secretary of the West Virginia Department of Commerce; Camera Bartolotta, PA Senator; and Alex Epstein, author of the book, “The Moral Case for Fossil Fuels” (great book, Jim has read it). For the list of speakers and a full agenda, visit: //shaleinsight.com. See you in Pittsburgh!

Marcellus & Utica Shale Story Links: Wed, Sep 21, 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: Utica Shale rigs drop by 2; Maine regulators seek proposals for LNG storage; rigs not ever going over 800 again says Raymond James; global natgas prices will key off Henry Hub; wind generation and price volatility in natgas; new acoustic service from Halliburton; oil at $70? not a chance!; electronic LNG auction starting up in October; and more!
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