Corp Raider Pressures Marathon to Split Itself into 3 Companies

1017_1Not even a year go–in December of last year–one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). We wondered at the wisdom of such a move, but who are we? What’s done is done. Ironically, an “activist investor” hedge fund (i.e. corporate raider) by the name of Elliott Management yesterday disclosed to the world that they have taken a 4% stake in Marathon. Corporate raiders target companies they can bully by buying enough shares to force those companies to fire people and sell assets. It “unlocks value for shareholders” you see–meaning it will boost the per share price of the raider’s stock so they can turn around and sell that stock and line their already-fat pockets. Disgusting. True to form, Elliott is targeting Marathon. They sent a letter to the Marathon board with the “suggestion” that the company split itself (after buying MarkWest less than a year ago) into three separate companies (retail, refining, midstream) in an effort to “unlock $14 – $19 billion for shareholders.” Unfortunately there are at least two other raiders lurking in the background with small stakes in Marathon who may join Elliott to pressure Marathon…
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ETE Merging Sunoco Logistics and Energy Transfer Partners

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Energy Transfer Equity (ETE) is a big and (on paper) complex company with a number of subsidiaries. Roughly speaking, ETE is the mother ship/parent, and under it are two subsidiaries–Regency Energy Partners and Energy Transfer Partners (ETP)–the company building the Dakota Access Pipeline. Under Energy Transfer Partners are other divisions and subsidiaries–notably Sunoco Logistics Partners, which is the builder of the Mariner pipeline projects. (Click on the org chart to view how the company is arranged.) Yesterday ETE announced that Sunoco LP is swallowing up ETP in a ~$20 billion, stock-swap deal. The confusing part is that although Sunoco LP is buying ETP, the new company will be called ETP and will be run by ETP’s current management…
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PA DEP Plans to Hassle Marcellus Industry with New Methane Rules

high-cost-low-benefitIn May of this year, the federal Environmental Protection Agency issued more shale-killing regulations. The EPA issued 600 pages of new regulations that require drillers to install expensive new equipment to locate so-called fugitive methane that may or may not be leaking from wells, pipelines, etc. (see EPA Does it Again: Tries to Destroy O&G with New Methane Rule). If the industry finds such microscopic amounts of methane, they need to capture it. All in the name of preventing non-existent man-made global warming. Not long after, 15 states sued the EPA to block the new rule (see 15 States File Lawsuits to Block EPA O&G Methane Rule). Some Congressman are not happy either (see Congressmen Blast EPA Over New Methane Regulations). Even though the court case and a new incoming administration that has pledged to drain the EPA swamp casts doubt as to whether the new methane rule will ever go into effect, Pennsylvania (under Democrat Tom Wolf) is pushing forward with plans to comply with the disastrous EPA methane rule. Wolf’s Dept. of Environmental Protection (DEP) will soon unveil new permit requirements for Marcellus drillers that are sure to raise the cost of drilling and consequently cut down on drilling in the state, just at the time the state needs more drilling. The next election for PA governor can’t come quick enough…
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4 Utica Shale Pipeline Projects with Another 6.8 Bcf/d Coming

EIAIt’s always nice when our favorite government agency, the U.S. Energy Information Administration, says nice things about the Marcellus/Utica. Today the EIA, publishing in its Today in Energy online publication, highlights the Utica Shale and the very necessary pipeline projects that promise to bring more “takeaway” capacity from the ever-expanding Utica. EIA looks at four key pipeline projects: Rover, NEXUS, Leach Xpress and Rayne Xpress. If you add them all together, those four new projects (all due to be completed by end of 2018 or before), will add an additional 6.8 billion cubic feet per day (Bcf/d) of takeaway capacity out of the Utica…
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TransCanada Raising Money Hand Over Fist to Pay for Columbia Pipe

TransCanadaIn early November Canadian midstream giant TransCanada announced they were going on a fundraising bender to get money to pay for their recent $10 billion acquisition of Columbia Pipeline (see TransCanada Raising Big $ to Complete Buyout of Columbia Pipeline). At the time, TransCanada announced the company would float another $3.2 billion (Canadian) in new stock and sell off their electric power assets in New England (mostly hydropower) for $3.7 billion (U.S.). In just the past couple of weeks, the company has floated new common stock, raising $3.5 billion (Canadian), and preferred stock, raising an additional $1 billion (Canadian). Here’s the latest on how to raise money fast to buy a big pipeline company…
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VA County Planners Approve Atlantic Coast Pipeline Compressor Stn

behave-like-adultSomething noteworthy has happened in Buckingham County, VA. Planning Commission members in the county worked hard to evaluate a request by Dominion for their Atlantic Coast Pipeline project, a request to build a compressor station in Buckingham County. Residents expressed concerns–over noise, air pollution, explosions–you name it. Planning Commission members listened, and in the end, voted to recommend that Dominion be allowed to build the compressor station, as long as they adhere to 40 conditions set forth in the Commission’s recommendation. You see, this is how adults do things. They are reasonable (able to be reasoned with). They listened, closely. They heard the concerns. They devised a plan that will allow Dominion to build the compressor station, but at the same time protect the residents that live near it. Of course that wasn’t good enough for the children-in-adult-bodies who chanted a threat to shut down the pipeline…
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New Head of NatGas at Dominion, Other Reshuffling

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Diane Leopold – President & CEO – Dominion Energy

Dominion is, we’re not quite sure–rearranging a few seats at the table? Firming up reporting lines? Consolidating power in its subsidiaries? Perhaps all of the above?! Yesterday the company announced it is making Diane Leopold, currently president of Dominion Energy, the president and CEO of Dominion Energy. As part of the upgraded role Leopold will be responsible for all of Dominion’s natural gas businesses–so she’s an important person to the Marcellus/Utica region. Also in the announcement: Robert Blue, who currently serves in a dual role as both senior vice president for their Law, Regulation and Policy division and as president of the Dominion Virginia Power business unit will become president and CEO of Dominion Virginia Power, giving up his role overseeing the Law division. There’s a few more changes in personnel too…
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MDN Taking a Short Thanksgiving Break – Off Weds-Fri

Happy ThanksgivingMarcellus Drilling News typically takes Thanksgiving and the day after off. This year we will add Wednesday to the mix, so no daily MDN this Wednesday through Friday. We will be sure to keep an eye on the news and if there is anything earth-shattering, we will bring you that news. Otherwise, we’ll see you next Monday. Have a great Thanksgiving! – Jim Willis, editor

Marcellus & Utica Shale Story Links: Tue, Nov 22, 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: Dela. Riverkeeper throws a fake parade; Trump will roll back Obama’s climate craziness; Trump to boost US shale industry; Rusty’s lessons from five years of crude, gas & NGL forecasts; Russia & Saudis on shaky common ground.
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