Master Stroke: Trump Selects OK AG Pruitt to Lead EPA

OK Attorney General Scott Pruitt

We could not be more jazzed with the news that President-Elect Trump has selected Oklahoma Attorney General Scott Pruitt to drain the swamp that is called the Environmental Protection Agency. Make no mistake: Pruitt will gut onerous regulations and programs like the Clean Power Plan. And we can tell from hearing Pruitt in person a few years ago at an Oil & Gas Awards event, so-called “sue and settle” where the agency colludes with Big Green groups is now over and done. We cannot overstate how dramatic, how sweeping, is the appointment of Pruitt to run the EPA…
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Gulfport Picks Up 12,600 Utica Acres in Monroe County, OH for $87M

Gulfport Energy reports they have just snagged another 12,600 net undeveloped Utica acres located dry gas window of northern Monroe County, Ohio for $87 million. When you run the math, that works out to be $6,905 per acre–far less than the recent $10,000/acre prices we’ve seen. Half of the acreage is “held by production,” meaning wells have either been drilled or are already producing. Analysts figure the land, which is located next to land already leased by Gulfport, will yield something like 105 new wells for the company. Gulfport is head over heels in love with the Utica and plans, as we noted in November, to run an average of six drilling rigs in the Utica in 2017 (see Gulfport 3Q16 Fin. Update: $157M Loss, 6 Utica Rigs Coming in 2017). Oh, who’s the seller? Gulfport doesn’t say, but we do have a thought…
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PA DEP Fines Rice Energy $3.5M for Multiple Well/Pipe Violations

It’s certainly not THE highest, but it is certainly one of the highest fines we’ve seen assessed by the Pennsylvania Dept. of Environmental Protection (DEP). Yesterday the DEP fined Rice Energy $3.5 million “for multiple violations of environmental laws at 10 well sites and 6 pipeline locations.” The violations, spanning “several years,” occurred at sites in Washington and Greene counties. Here’s the details…
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Baker Hughes Nov US Rig Count Up by 36; M-U Count Up 4

The worldwide Baker Hughes rig count was up by 5 in November, from 920 in October to 925 in November. That reverses a brief slide back in October when rigs worldwide slide back by 14. However, the rig count in the U.S. went up for the fifth month in a row. The average U.S. rig count for November was 580, up 36 from the 544 counted in October. That’s a two month increase of 71! The Marcellus/Utica rig count was up for the fourth month running. In November the M/U rig count went up by 4 (second month in a row it’s gone up 4) with 2 additions in PA (now 27 rigs) and 2 in OH (now 16 rigs). WV stayed even running with an average of 10 rigs…
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Report Sums Up 2016 Northeast Pipe Projects in One Word: Delayed

The Northeast Gas Association (NGA) is a regional trade association that focuses on education and training, technology research and development, operations, planning, and increasing public awareness of natural gas in the Northeast U.S. NGA represents natural gas distribution companies, transmission companies, liquefied natural gas importers, and associate member companies. These companies provide natural gas to over 10 million customers in nine states. The NGA has just released a 96-page report called the 2016 Statistical Guide (full copy below)–a sort of “year in review” for the gas industry in the northeast. If you could boil it all down, the word that appears prominently throughout is “delay” with respect to important natgas pipeline projects. From the Constitution, which should have already been built by now, to smaller projects, delays were the prominent trend for 2016…
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Short-Term Energy Outlook: NatGas Price Will Avg $3.27/Mcf in 2017

Once a month our favorite government agency, the U.S. Energy Information Administration (EIA), issues a Short-Term Energy Outlook (STEO). The EIA issued their latest edition on Tuesday. We have a full copy below. We’ve grabbed out the section on natural gas because it includes a couple of key points: (1) EIA predicts that natural gas production in the U.S. for 2016 will see a healthy decline over 2015 levels–1.3 billion cubic feet per day (Bcf/d) less in 2016. That’s the first annual production decline since 2005! (2) The EIA predicts the average price for natural gas at the benchmark Henry Hub will climb from $2.49/Mcf (thousand cubic feet) in 2016 to a whopping $3.27/Mcf in 2017. Why the jump? Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas exports. Here’s the natgas section of the STEO, along with a copy of the full report…
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Chesapeake Offers to Buy Back $1.2B of Outstanding Debt

Chesapeake Energy is leveraged up to its neck with elaborate loans up loans and notes (IOUs) upon notes. We don’t know how they keep it all straight. Must take an entire department full of CPAs to track it all. No doubt the CPAs escaped CEO Doug Lawler’s ax when he was chopping 1,500 jobs from the company (see Chesapeake’s Doug Lawler Gave Himself a Raise After Firing 1,500+). But we digress. Back to the notes. On Tuesday Chesapeake announced a plan to purchase back up to $1.2 billion of outstanding notes. They actually issued four different press releases to describe all of the various notes they’re attempting to buy back. Keep in mind there’s still more than $6.2 billion in outstanding debt–this buyback is just 19% of the outstanding debt owed. Still, the company is making progress, we’ll hand them that…
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Penn State Goes Methane Migration Hunting – Using Big Data

We’re always leery when we read about scientists doing data mining instead of real in-the-field research. So our radar was on alert when we read about the latest data mining project now under way at Penn State. Using a $1 million grant from the National Science Foundation, a cross-disciplinary team of Penn State computer scientists and geoscientists will study methane concentrations in the Pennsylvania’s streams, rivers and private water wells. They will look to see if wells and streams and rivers close to fracked Marcellus Shale wells have higher concentrations of methane than those not close to shale wells. In other words, does fracking cause methane to migrate into nearby water sources? That’s what they’re trying to prove, or disprove. The problem, from our perspective, is whether or not the data being analyzed contains readings of methane levels present in those wells, streams and rivers BEFORE any kind of shale drilling happened. If you don’t have the before and after, the data is useless. Drillers have discovered where the best locations are to drill–so that’s where they drill. (Brilliant, we know.) So it stands to reason naturally occurring methane already exists in those locations. Just because a nearby well or stream has higher levels of methane does not prove a shale well caused it. The methane may have already existed in the same quantities long before any shale drilling. You see the problem? At any rate, here’s the lowdown on another million dollar research project to give the Marcellus yet another anal exam…
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The (Un)Civil Disobedience of Anti-Fossil Fuel Extremists

With the election of Donald Trump, climate change radicals became unhinged. They’ve always been liars–predicting the end of Mom earth “in the next 10-15 years” for the past 40 years or so. Their predictions never come true. First it was global cooling–we’re all going to freeze. Now it’s global warming–we’re all going to toast. And of course it’s always mankind’s fault. If you deign to disagree and ask them for objective, science-based (not theoretical model-based) evidence, they call you “climate denier” and run around to gather up kindling to burn you at the stake. Their rabid and irrational beliefs are now leading to violence–witness the “protests” in North Dakota over a simple pipeline. Enough is enough. Robert Bradley Jr., founder and CEO of the Institute for Energy Research, recently published a great column on the Forbes website in which he skewers climate change radicals, calling them out for their outrageous accusations and their (un)civil disobedience. Give it a read–we promise it’s worth the time…
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Marcellus & Utica Shale Story Links: Thu, Dec 8, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Pipeline-killers hate people; rig count stays steady in Ohio Utica at 19; Energy Transfer asks court to rule on Dakota Access Pipeline; Democrat Senator admits “keep it in the ground” sunk Dems in election; Trump plan to privatize Indian lands; new market to trade natgas more like oil; and more!
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