Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind

It appears to us as if Magnum Hunter Resources, which was founded by former CEO Gary Evans, is shedding the last vestiges of Evans by changing its name. “Wildcatter” Evans grew the company to be worth $1.4 billion in 2013 by borrowing heavily to drill in the Marcellus and Utica shales in West Virginia and Ohio, while at the same time financing the Eureka Hunter Pipeline that gathered and processed its production. Magnum Hunter has/had a number of subsidiary companies, like Eureka Hunter (pipelines), Alpha Hunter (drilling), and GreenHunter (wastewater). But then the price of gas (and oil) crashed, and although Magnum Hunter treaded financial water for a time, they eventually succumbed to bankruptcy in December 2015 (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Five short months later, in May 2016, Magnum Hunter emerged from bankruptcy–without Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Apparently the new owners of the company (the former debt holders converted into equity holders) didn’t want Evans running the company. So Evans departed and a short time later started a new drilling company not focused on the Marcellus/Utica (see Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company). Must be Evans likes the “Hunter” name, because he named his new company Energy Hunter Resources. In what appears to be a bid to shed its former image and association with Evans, Magnum Hunter Resources has just changed its name–to Blue Ridge Mountain Resources…
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PA Gov Wolf Signals his Support for Mariner East 2 Pipeline

PA Gov. Tom Wolf

PA Gov. Tom Wolf has been, to be frank, a disaster as a governor. On many issues. But the issue that primarily concerns us is the oil and gas industry. Wolf will soon introduce his third budget and for a third straight year he will call for a Marcellus-killing severance tax. He still owes the teachers unions payback for supporting him and getting him elected. Wolf pretty much screwed up the Dept. of Environmental Protection (DEP) when he installed an anti-driller as its head, John Quigley. He later fired Quigley when it was discovered Quigley was colluding with Big Green groups. Given Wolf’s treatment of the industry, it was with some surprise to read that Wolf, in comments made to a Chamber of Commerce group last week, mouthed his support for the Mariner East 2 NGL (natural gas liquids) pipeline that will traverse the state. The pipeline is opposed by a few anti-fossil fuel zealots and some townships along its route. The DEP is reviewing permits for the project and the hints coming from Wolf and the DEP are that the project will receive its approvals soon. Which is really good news…
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EIA Jan Drilling Rpt: Marcellus Production Continues to Climb

Yesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. For the past three reports, estimating production for November, December, and January, Marcellus natgas has increased. The trend continues in this latest report, which forecasts production for the coming month of February. Last month the EIA predicted natgas production in the Marcellus would zoom up by 160 million cubic feet per day (MMcf/d). This month EIA predicts in the coming month Marcellus production will go up another huge 188 MMcf/d. The #2 gas-producing basin behind the Marcellus is the Permian (in Texas). That basin will also see a big increase in natgas production–an additional 103 MMcf/d–largely because of “associated gas.” The Permian is an oil play and is, by all accounts, the hottest shale play right now because of oil. But when drillers sink holes in the ground, other hydrocarbons come out of the ground along with oil–i.e. natural gas. Ergo, the more oil you drill for and extract, the more natural gas you get along with it. Here are the latest numbers for the major shale plays in the U.S….
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Italian Co. Building $9M Natgas Valve Manufacturing Plant in WV

Italian company Pietro Fiorentini has been, since 2013, warehousing and selling pressure regulators and valves for the natural gas industry out of rented office space in Wheeling, WV. Pietro Fiorentini actually manufactures the equipment they sell and for the past four years has held an option to purchase land in the Weirton, WV Three Springs Business Park. The company has just gotten off the pot and on Tuesday officials signed the paperwork to buy the land. Pietro Fiorentini will build a $9 million factory on Weirton site to manufacture the equipment they sell. Eventually the manufacturing plant will employ 150 people…
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US Supreme Court Rejects Appeal of Ohio Dormant Mineral Act Case

MDN has reported on the Ohio Dormant Minerals Act (DMA) for years. In a nutshell, there are two DMAs in Ohio–one passed in 1989 that went into effect in 1992, and another in 2006 which added certain additional procedural requirements to the 1989 version. The DMA in its various versions provides for mineral rights that had previously been separated from surface rights to transfer back to the surface owner under certain conditions. The problem, for drillers and for landowners in Ohio, is in knowing which set of DMA rules to use (1989 or 2006) in determining who owns the mineral rights. A number of DMA cases went before the Ohio Supreme Court. In September the Ohio Supreme Court ruled in three cases, saying all of the other cases come under those three (see Important: OH Supreme Court Finally Rules on Dormant Mineral Act). The three cases receiving full opinions were: Corban v. Chesapeake Exploration, L.L.C.; Walker v. Shondrick-Nau; and Albanese v. Batman. The Walker in Walker v. Shondrick-Nau didn’t like the outcome and appealed his case to the U.S. Supreme Court, asking for a “writ of certiorari”–which is essentially a request to review the case. The U.S. Supremes rejected the request–which means the Ohio Supremes’ rulings last September stand and are Ohio law with respect to the DMA…
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Kinder Morgan Asks FERC to Approve Orion Pipe Project by Jan 31

In October 2015, Kinder Morgan’s Tennessee Gas Pipeline (TGP) filed their official, full application with the Federal Energy Regulatory Commission (FERC) seeking approval for their Orion Project (see Tennessee Gas Pipeline Files PA Orion Project with FERC). The project will cost $143 million and construct 13 miles of “looping” pipeline in Pike and Wayne counties, Pennsylvania. The project will boost capacity on the TGP by another 135 million cubic feet per day (MMcf/d), allowing TGP to pump more Marcellus Shale gas to Mid-Atlantic and New England states. According to the original plan, the TGP Orion upgrade will be complete and in-service by June 2018. They still want to meet that timetable–but can’t unless FERC gets off their rear-ends and approves the project. So TGP filed an official request with FERC to get Orion approved by January 31st. Otherwise, all bets are off for a June 2018 in-service date…
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RINO PA Senator from Philly Introducing 5% Severance Tax Bill

Why doesn’t it surprise us that a Republican-in-Name-Only (RINO) State Senator from the 6th District (Bucks County, Philadelphia suburbs) is not only in favor of, but sponsoring a bill to levy a Marcellus-killing severance tax? PA State Senator Robert “Tommy” Tomlinson, an establishment lifer who has been in the state legislature since 1991 (first as a Representative, later as a Senator), sent around a “Co-Sponsorship Memoranda” yesterday asking Democrats, and along with any suckers from the Republican Party, to co-sponsor a bill he plans to introduce calling for a new severance tax on Marcellus drilling. Tommy wants to tax Marcellus drilling an extra 5%, on top of the existing impact fee, which is a severance tax under a different name, to give the money to (you guessed it) teachers unions. Tommy wants transfer millions of dollars out of the pockets of landowners and drillers and into the sinkhole of the failing “unfunded” pension system for state workers and teachers. The instantaneous effect of Tommy’s tax would be to kill all drilling in the state, which apparently doesn’t bother Tommy in the least…
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Fat Lady Sings – Technip & FMC Now TechnipFMC

In May, U.S.-based oilfield services company FMC Technologies announced they will merge with their much larger quasi-competitor, France-based Technip, in an all-stock deal that will create a new company called TechnipFMC worth $13 billion (see FMC Technologies & Technip to Merge, Create $13B Oilfield Giant). FMC had/has some operations in the Marcellus/Utica, hence the merger has implications for our region. The Obama Dept. of Justice approved the deal in June (see FMC Technologies/Technip Merger Approved by Obama DOJ/FTC). Apparently it’s A.O.K. for a French company to buy an American company, but when one American company (Halliburton) wanted to buy another (Baker Hughes), that wasn’t OK with the Obamadroids (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). But we digress. Following months filling out “Mother May I?” forms, the deal is now done. Yesterday the two companies consummated their merger and the former Technip and FMC Technologies have now become TechnipFMC…
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Rex Energy’s 2-Year Plan: Scale-up in 2017, Scale-down in 2018

Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), has had its share of financial challenges (see our stories here). Even though in some respects the company has been on the ropes, it’s never gone down and continues to hang in there. Yesterday Rex issued a two-year operational and financial plan, no doubt to address investor concerns. Rex says in 2017 they will spend $80-$90 million on drilling. The company will run one drilling rig and with that rig drill 21.0 gross (11.1 net) wells, complete 26.0 gross (12.7 net) wells and place into sales 23.0 gross (11.2 net) wells. That’s all in 2017. For the year 2018, things are a bit more fuzzy. Rex says it thinks it will spend $20-$40 million (a big reduction) and use one rig to drill 4.0 gross (2.8 net) wells, complete 6.0 gross (3.8 net) wells and place into sales 9.0 gross (5.3 net) wells. Here’s Rex’s road map for the next two years…
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Gulfport Energy 2016 Operational Update – Production Up 31%

Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company (“driller”) that is a “top 5” driller in the Ohio Utica Shale, released their fourth quarter 2016 and full year 2016 operational (not financial) update yesterday. Gulfport is part of the growing trend to drop one shoe first, then the other. The first shoe is almost always production and operational information (the good news). That doesn’t mean that the financial information is bad news–but sometimes that’s the case. For now, let’s revel in the good news! Gulfport’s net production during 4Q16 averaged 787 million cubic feet equivalent per day (MMcfe/d), a 7% increase over 3Q16 and a 22% increase versus 4Q15. Net production for full-year 2016 averaged 719.8 MMcfe per day, a whopping 31% increase over full-year of 2015. Below is the update, along with the newest investor PowerPoint presentation with lots of useful details…
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Marcellus & Utica Shale Story Links: Wed, Jan 18, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Michigan backs DTE electric contract with NEXUS, doesn’t back cost recovery; EPA & FERC at odds over Leach XPress pipe; Ohio’s Chart buys Hetsco; Range Resources donates $50K to hospital ER; big deals go down in Permian for Exxon and Noble; natgas production goes up in Oklahoma plays; reworking Obama’s dreadful environmental rules; Linde Engineering gets a new CEO; 2017 natgas outlook; corporate raiders take aim at NRG Energy; and more!
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