Guest Post: A Possible Solution for the PA Royalty Issue

ChrisAcker.jpgMDN is pleased to bring you another guest post from our very good friend Chris Acker. Chris is a geological engineer with an MBA. He grew up in the oil fields of Venezuela where his father, a petroleum engineer, was a drilling contractor for all the major players, onshore and off. Chris’ interest in energy economics and policy found him working for Exxon, Petroleum Industry Research Associates and Petroleos de Venezuela. He bought a parcel of land in the PA countryside twenty-five years ago and later semi-retired to work on antique pianos (see www.PianoGrands.com). A few years ago, it was established that Chris’ property in Susquehanna County sits atop one of the Marcellus shale’s most prolific areas. He leased with Cabot Oil & Gas and has a well sitting off his front porch not more than 200 yards away. Chris is now happily engaged once again in energy economics, with an emphasis, naturally, on gas. Chris is MDN editor Jim Willis’ right arm when it comes to scanning for stories, something Jim is profoundly grateful for. Chris sent Jim a note about the royalty issue, just a couple of paragraphs–and Jim found more wisdom in his few sentences than he has seen to date. So Jim asked Chris for permission to post his pearls of wisdom, and Chris decided to expand it. Below is a very thoughtful, intelligent, useful post on the royalty issue currently causing a schism between landowners and drillers in the Keystone State. We encourage everyone with an interest in this issue to read it. It contains a few new ideas we’ve not heard either side float–ideas that may help us find a way out of the current mess…
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Why Did Rice Energy Pay $2.7B for Vantage Energy? It’s Simple…

whyYesterday MDN reported the big story that Rice Energy is paying $2.7 billion to buy the assets of Vantage Energy (see Rice Energy Buys Vantage Energy for $2.7B, 85K Marcellus Acres). Why did Rice go for the deal? It’s really quite simple. According to Rice Energy, it’s because of the 85,000 acres of Marcellus leases in Greene County, PA. That acreage is located next to Rice’s acreage in the county. The opportunity to essentially double their acreage, in their own back yard, was too good to pass up…
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OH Transload Facility Sits in Catbird Seat Between the Crackers

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Wellsville Intermodal Facility – click for larger version

November 2012 was the first time we wrote about the transloading facility in Wellsville (Columbiana County) Ohio (see Drilling Mud Manufacturer Opens Plant in Wellsville, OH). A transloading facility is a place where things like pipes and grain and oil and gas and whatever comes in on one form of transportation, say a train or a barge–and gets unloaded and then is sent out via a different form of transportation, typically a truck. The Wellsville Intermodal Facility is one such transloading facility smack in the middle of Utica Shale country. The second time we wrote about the facility was January 2013 (see Columbiana Port Authority Close to Final Deal with Marathon). The third time we wrote about it was October 2013 (see Progress for Arrowhead NGL Transload Facility in Wellsville, OH). Today is the fourth time. Pier 48 Stevedoring operates a crane at the facility to load and unload barges. Pier 48 has been operating a 60-ton bridge crane used to move cargo containers (think truck trailers). However, Pier 48 just cut the ribbon on a brand new bucket crane, which can grab loose materials–even liquids–and hold it without leaking, to move whatever it is from a hold in a barge into a tank on land (or the reverse). The comment made during the ceremony that caught our eye is that this new crane has come at “an incredibly opportune time” because of the Shell ethane cracker plant being built 25 miles away, and a second potential cracker that may get built not far down the river in Belmont County. This new crane, and the transloading facility, sit in the catbird seat. With the coming cracker plants, manufacturers will locate in the region and need bulk shipping services for the materials they handle and the products they make…
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MPLX/MarkWest Working to Send NGLs to Canada, Gulf Coast

Cornerstone Pipeline Route Map
Cornerstone Pipeline Route Map – click for larger version

MPLX (i.e. Marathon Petroleum) has not just been sitting on its hands after buying MarkWest Energy last year for $15 billion (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). One of the plans from the beginning of the merger was/is to ship natural gas liquids (NGLs) produced in the Marcellus/Utica out of the region, particularly to the Gulf Coast where there are numerous processing plants that would pay a good price for it (see Marathon Hints MarkWest Merger Plan May Include NGLs to Gulf). Those plans, according to MPLX’s Executive Vice President of Corporate Planning and Strategy Pamela Beall, who spoke last week at the Shale Insight conference in Pittsburgh, are beginning to come together…
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TransCanada Makes Play to Buy “the Rest” of Columbia Pipeline

i-want-it-allLast July Canadian-based TransCanada, famously known for wanting to build the Keystone XL oil pipeline from Canada to the Gulf Coast (a plan that Obama obliterated), didn’t want to be left out of the most important midstream story of the century, so they bought Columbia Pipeline Group this year, closing on the sale in July (see TransCanada and Columbia Pipeline Tie the Knot Today). At least, that’s what everyone thought. Little known fact: third party investors still own a piece of Columbia. TransCanada has just made an offer to those third party investors to buy them out–so TransCanada can own 100% of the Columbia. The original deal cost TransCanada $10 billion (U.S. dollars). The offer just made to the investors to buy out the rest is for $848 million U.S….
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Radical Enviros Ask EPA to Lie About Facts in Fracking Report

would-you-lie-for-me2 Corinthians 6:15: “What harmony can there be between Christ and the devil? How can a believer be a partner with an unbeliever?” The obvious answer to the Apostle Paul’s hypothetical question in that passage is, “There is no harmony. A believer can’t partner with an unbeliever.” Yet that’s just what is happening among the ranks of anti-fossil fuel fools. We’ll explain. On Monday the usual suspects, namely the misnamed and odious Food & Water Watch and 200 or so of their closest “friends”–including the Sierra Clubbers, Natural Resources Defense Council, et al ad naseum (people who never think for themselves)–sent a letter (full copy below) to Environmental Protection Agency Administrator Gina McCarthy asking her, begging with her, pleading with her, to pretty-please change the results of the EPA’s own scientific study, performed by dozens (hundreds?) of scientists who analyzed 950 studies on fracking, conducting nine of their own primary studies, and concluding that fracking doesn’t contaminate ground water supplies (see EPA Draft Report Says Fracking Doesn’t Pollute Groundwater Supplies). Such a conclusion is heresy for the nutters at FWW and their buds. Ever since the EPA’s finding last year leftists have been agitating (what they do best) to try and get the EPA to change (lie about) the science-based conclusions in the report. Real scientific conclusions make no difference to this bunch. Why the Bible verse at the opening? Two of the 200 groups signing this latest letter to McCarthy were (a) Franciscan Response to Fracking, which is part of St. Mary’s Catholic Church in Pompton Lakes, NJ, and (b) The God is Dead Theology Movement. Pretty strange bedfellows, wouldn’t you say?…
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Ohio’s Likely Next Gov Loves Utica/Marcellus

mary_taylorAt last week’s Shale Insight conference, MDN editor Jim Willis had the opportunity to listen to three top legislators, one each from PA, WV and OH. We reported on their panel discussion, titled “Pennsylvania, Ohio and West Virginia Legislative Leaders: The Future of the Industry” (see Highlights from 2016 Shale Insight, Day Two – Trump!). The subsection in that post where we talk about the panel is called “3 Future Governors (?)” The person representing WV was William Cole, President of the WV Senate and the Republican candidate for governor in WV. The person representing PA was House Speaker Mike Turzai. While we haven’t heard that he’s considering a run for governor, it would not surprise us in the least. Finally, the person representing OH was Lt. Gov. Mary Taylor. While we had not heard that she may be interested in seeking the governor’s chair, since that talk she has confirmed that yes, she is interested. The good news? She’s very pro-shale and knows that too many regulations (and taxes) can stifle this important industry…
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Penn State’s Marcellus Center Gets New Co-Director

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Andrew Nyblade

Penn State has given us some of the best research (and personnel) we’ve ever seen when it comes to the Marcellus Shale. In particular we’re thinking of Penn State’s Marcellus Center for Outreach and Research (MCOR). Great people. Super research. One of the co-directors of MCOR, Michael Arthur, is stepping down from his position (no reason stated in the announcement). In his place will be Andrew Nyblade, professor of geosciences. Here’s an updated/fresh look at MCOR and at one of it’s two leaders…
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Atlas Energy’s CEO Edward Cohen – Right Place at Right Time

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Edward Cohen

Last week news broke that the Securities and Exchange Commission (SEC) has charged a big-time New York hedge fund manager, Leon Cooperman, with violating insider trading laws stemming to deals done back in 2010. The insider trading allegedly happened when Cooperman, a big investor in Atlas Pipeline Partners (part of Atlas Energy) sold its Oklahoma natural gas processing operations. Cooperman vigorously denies the allegation and said he’ll defend himself in court. While not exactly close friends, Cooperman was a large investor in Atlas Energy and its subsidiaries. The CEO of Atlas was/is Edward Cohen, so Cooperman is well acquainted with Cohen. As part of a series of articles covering the Cooperman/SEC story, Bloomberg News wrote an article about the relationship between Cooperman and Cohen–mostly about Cohen. We found the article interesting, providing color and background on a very complex man who was at the right time and the right place (the PA Marcellus) to make an incredible amount of money…
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Souki’s Revenge Against Cheniere Continues, Snags 2nd Exec

revenge-dish-coldYou may recall that evil corporate raider Carl Ichan fired the CEO of Cheniere Energy, Charif Souki, in December 2015 (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Souki founded the company but he was unceremoniously dumped. Same thing Icahn did to Aubrey McClendon at Chesapeake Energy. Cheniere is the first company to begin exporting LNG (liquefied natural gas) from the U.S. to other countries. Some of the gas they ship either already comes, or soon will, from the Marcellus. One of the drillers under contract with Cheniere is Antero Resources. Anyhow, just like McClendon, Souki started up a new company to compete with his former company (see Revenge: Fired Cheniere CEO Starts Competing LNG Company). That new company, Tellurian Investments, established a subsidiary called Driftwood LNG. Driftwood has begun the pre-filing process with the Federal Energy Regulatory Commission (FERC) to build an LNG export facility in Louisiana to compete with Cheniere (see Fired Cheniere Energy CEO Charif Souki’s Revenge: Driftwood LNG). As we reported earlier this month, Souki hired away one of Cheniere’s top executives, Meg Gentle, to become president and CEO of Tellurian (see Souki’s Revenge Continues – Tellurian Lures Cheniere Exec as CEO). Now comes yet another high level defection from Cheniere to Tellurian. Keith Teague is the newly minted executive vice president and COO of Tellurian and Driftwood…
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Marcellus & Utica Shale Story Links: Wed, Sep 28, 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: Pipeline companies worried about what people think; Eric Schneiderman’s #ExxonKnew coalition crumbling from within; Shale Crescent gains steam; stay skeptical about oil prices bouncing back; Congress quizes White House on strange climate change impacts claims; Mexico may open to U.S. drillers next year; and more!
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