Coal Co. Murray Energy Sells 5,900 OH Utica Acres – Who Bought?

silhouette questionYesterday Murray Energy, which operates coal mines in Ohio, Illinois, Kentucky, Utah, and West Virginia, announced it had sold the leases for 5,900 of the acres it owns in Belmont and Monroe counties (in eastern Ohio) to an unidentified shale driller for $63.6 million. That works out to be ~$10,800 per acre. According to Murray officials, the sale will allow the company to focus on its core activity–coal mining. The money will also help the company stay out of bankruptcy court. The sale, which is slated to close “in the coming weeks” doesn’t ID the buyer. But we have a guess as to who bought…
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Judge “Shocked” MSC Didn’t Present Witnesses @ Chapter 78a Hearing

shockedTwo weeks ago the Marcellus Shale Coalition (MSC) filed a court challenge to the Pennsylvania Dept. of Environmental Protection’s (DEP) onerous new Marcellus drilling regulations (see Marc. Shale Coalition Files Lawsuit to Block PA Chapter 78a Regs). The MSC lawsuit, filed in PA Commonwealth Court, does not object to the entire canon of new regulations–only those regulations that are “vague or are unsupported by authorizing legislation.” Just yesterday we brought you an excellent editorial outlining the justified reasons the MSC is pushing back against the DEP’s new regulations (see PA DEP Declares War on Shale Gas – a.k.a. Chapter 78a). On Tuesday and Wednesday a judge conducted hearings in the case, to accept testimony. The DEP put forward Scott Perry, the DEP deputy secretary for oil and gas. Perry spent most of Tuesday outlining the new rules for the judge, along with the (tortured) process that produced the rules. Wednesday was the MSC’s day. However, the MSC only put forward their own lawyers and did not call any witnesses–no drillers to testify how the rules will harm them. On that score, the judge said he was “shocked” that there were no witnesses for the MSC. We’re not lawyers, but a judge offering a comment like that doesn’t, in our book, bode well for the MSC’s case…
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More Marcellus/Utica Gas Begins to Flow to Chicago Area via NGPL

NGPL Chicago Market Expansion Project
Click for larger version

More Utica/Marcellus natural gas will begin flowing to the Chicago area beginning next Tuesday, Nov. 1. In June 2014 MDN brought you the news that the mighty Rockies Express (REX) pipeline was reversing the flow on the eastern end of the pipeline, to send Utica/Marcellus gas from Ohio all the way to points in Indiana and Illinois (see Rockies Express Pipeline Reverses Flow from Utica to Midwest). In October 2014 MDN reported Kinder Morgan’s subsidiary Natural Gas Pipeline Company of America (NGPL) announced plans to expand their Gulf Coast mainline pipeline from the REX pipeline interconnection in Moultrie County, Illinois, to points north on NGPL’s pipeline system, called the Chicago Market Expansion Project (see Kinder Morgan Plans Chicago Pipeline Expansion for Marcellus/Utica). In March of this year, the Federal Energy Regulatory Commission (FERC) approved it (see FERC Approves Pipeline to Move More Marcellus/Utica Gas to Chicago). Great news! The work is done, and FERC has just granted permission to NGPL to start up the compressor station next Tuesday that will deliver more gas to Chicagoland…
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Antero Resources 3Q16: Production Up 25%, Averaged $3.96/Mcf

antero resourcesAntero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update in August which showed natgas production was up 19% over 2Q15 (see Antero Resources Production Up 19% in 2Q16, but Loses $596M). However, the company also reported production was essentially flat (the same as) production during the first quarter of 2016. But in September the company revised its 2016 production estimates–up–because they are using more sand in their fracking (see Antero Feels Good, Increases Production Estimates for 2016). How’s that working out? Yesterday Antero released their third quarter 2016 results. Production is up 25% in 3Q16 over 3Q15, and up 6% over 2Q16. In other words, more sand is working. The other important thing to note about Antero is that the company is perhaps the top Marcellus/Utica driller that makes use of hedging–locking in long-term prices for the gas it produces. Instead of having to sell its gas at whatever the daily market price is (right now averaging $1.35 per thousand cubic feet, or Mcf, in the Marcellus/Utica), they sell it at a locked-in price that’s much higher. For 3Q16, Antero’s average sale price was a whopping $3.96/Mcf! Smart financial folks working at Antero. Here’s the full Antero update…
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2nd NatGas Electric Plant Proposed for Lackawanna County, PA

emberclearMDN has extensively covered the story of what will become the largest natural gas-fired electric generating plant in Pennsylvania, being built by Invenergy in Jessup Township in Lackawanna County (see these MDN stories). The Invenergy plant, dubbed the Lackawanna Energy Center, will produce 1,480 megawatts of electricity. What we have not covered, until now, is news that a second Marcellus-fired electric plant has been proposed two miles away from the Jessup plant–in Archbald Township. The second plant is being proposed by Archbald Energy Partners, a collaboration between Canada-based EmberClear Corp. and New Jersey-based DCO Energy. The Archbald plant would be much smaller, producing 485 megawatts of electricity. Last night residents of Archbald got their chance to “sound off” about the project at a PA Dept. of Environmental Protection hearing at the local high school. By all accounts many residents are resistant to the plan. Below is what information we could scrounge on the second plant, along with reaction from local residents at last night’s hearing…
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FERC Tells Dominion to Flip Switch on Clarington Expansion Project

dominionIn June 2014 Dominion filed an application with the Federal Energy Regulatory Commission (FERC) to construct and operate new compression facilities at existing compressor stations in Marshall County, WV and Monroe County, OH, and certain other facilities, collectively called the Clarington Project (see Dominion Asks FERC for New Compressors in Upstate NY, WV). The Clarington project, costing a modest $76.5 million, will allow Dominion to provide 250,000 dekatherms (Dth) per day of firm transportation service for CNX Gas, otherwise known as CONSOL Energy. Last August, FERC approved Dominion’s request (see FERC Approves Dominion WV/OH Compressor Project, Rips Anti Group). FERC gave Dominion a year to complete the project, but Dominion filed a request in July requesting more time. FERC agreed and has extended the project completion date an extra year (see FERC Grants Dominion Clarington Project a 1-Year Extension). Looks like Dominion didn’t need the extra time after all. Yesterday FERC granted Dominion permission to begin service for the expansion project…
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Analysis: EQT Paying $9K-$10K per Acre for WV/PA Acreage

researchYesterday MDN reported that EQT is buying another 60,000 Marcellus/Utica acres (along with buying out Trans Energy) in transactions totally $683 million (see EQT Buys Trans Energy + 60K Marc/Utica Acres in 2 Deals for $683M). One of our favorite Seeking Alpha analyst/authors, Richard Zeits, has done a deep dive into the deal. Zeits reports the deal works out to be $9-$10,000 per acre on average, which is in line with other recent deals of this type. Here is some of Zeit’s insightful research commentary…
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Magnum Hunter Rebuilds Executive Team, Gets New CFO

mhrMagnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). As we observed at the time, we were surprised to read that MHR’s flamboyant CEO, Gary Evans, was gone from the company. In his place MHR named two of Evans’ lieutenants to serve as co-CEOs while the new board of directors looked for a permanent replacement for Evans. The search ended with the hiring of John K. Reinhart in September (see Magnum Hunter Finds New CEO to Replace Forced-Out Gary Evans). Reinhart and the board have continued to rebuild the company. Their latest addition will come next Monday when Michael R. Koy will join the company as Executive Vice President and Chief Financial Officer. Koy was most recently CEO of Denali Energy…
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Evercore ISI Predicts O&G Capital Spending Up 25% in 2017

trending-upAs we near the end of this year, analysts and consultants inevitably turn their attention to next year, 2017. Will oil and gas drillers spend more money next year on their drilling programs? The consensus appears to be a resounding “Yes!” The question is, how much more? Anyone’s guess. But analysts like to guess. One those analyst firms is Evercore ISI, an investment banking advisory firm founded in 1995. Evercore’s smarties are predicting drillers will spend 25% more next year than they did this year on drilling–with a total collective spend across the industry of ~$110 billion. Here’s their thinking…
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FERC Not Caving to EPA Bullies – So Far

no bullyingThe bullies at the rogue, out-of-control federal Environmental Protection Agency (EPA) are leaning hard on the Federal Energy Regulatory Commission (FERC) over FERC’s approval for two Marcellus/Utica projects–Leach Xpress and Rayne Xpress Expansion projects. The EPA thinks FERC should consider man-made global warming flummery as part of their evaluation process. FERC is resisting. So the EPA bullies are demanding a meeting, to help FERC get it’s head straight (see Warning: EPA Attempting to Take Over FERC’s Job in Pipe Approvals). So far FERC has let the EPA eat static, not responding. The question is, will FERC courageously resist EPA’s call to shoot down the two projects? Or will FERC cave to EPA bullies? The EPA admits this isn’t just about two pipeline projects–they want FERC to change the way it evaluates ALL projects, to consider idiotic global warming emissions as part of the process…
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