Chesapeake Energy 2017: Less New Drilling in M-U, More DUC Work

Yesterday Chesapeake Energy provided a glimpse into their plans for 2017. In Chessy’s “gudiance” for 2017, we learn that the company plans to up the number of active drilling rigs (nationwide) from 10 to 17. We also learn that last year Chessy spent ~$1.75 billion to drill 213 new wells, and place 428 wells into production–the difference between the two numbers being they finished up already-drilled wells, or DUCs. This year? They will spend ~$2.5 billion to drill ~400 new wells–essentially doubling the number of wells drilled–and place ~450 into production. The only problem (from our perspective) is that most of the drilling will happen in places other than the Marcellus/Utica. Of the new wells they plan to drill, only 10-15 new wells will get drilled in the Marcellus, and 40-50 new wells in the Utica. Chessy says they will complete and turn into production 50-60 Marcellus wells in 2017, and 70-80 Utica wells. Translation: Not a lot of new drilling in our neighborhood, with more of an emphasis on completing already-drilled wells…
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Maya & Friends Sue (Once Again) to Stop Mariner East 2 Pipe

Mariner East 2 map – click for larger version

Well that didn’t take long. On Monday the Pennsylvania Dept. of Environmental Protection (DEP) issued their final water and erosion permits to Sunoco Logistics to build the 306-mile Mariner East 2 natural gas liquids (NGL) pipeline (see Finally! PA DEP Issues Final Permits for Mariner East 2 Pipeline). Even though anti-drilling radicals, like Maya van Rossum (THE Delaware Riverkeeper), the Philadelphia-based Clean Air Council and the Mountain Watershed Association have repeatedly sued (and lost) to stop the project, they sued again on Monday following the DEP announcement. The three groups filed an appeal with the Pennsylvania Environmental Hearing Board, a special type of court set up to hear appeals of decisions by the DEP. In an interview, Miss Maya lashed out at her own party, blaming Democrat Gov. Tom Wolf for supporting the pipeline project. She is, of course, on the leftmost fringe of the environmental movement–no pipeline anywhere for any reason is acceptable because pipelines flow evil fossil fuels. But you can’t just file a lawsuit to stop a pipeline because you have batty beliefs about them. You need an excuse, something a liberal judge can use as justification to grant your wish. In the case of Miss Maya & friends, they claim Mariner East 2 provided an “incomplete and deficient” application, and that by granting the permits, the DEP is covering up and/or ignoring the deficient application…
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Williams Creates COO Position for Former Warren Buffet Exec

Midstream (i.e. pipeline) giant Williams has just created a brand new executive position–Chief Operating Officer (COO). The position was created for Micheal G. Dunn, formerly president of Questar Pipeline and executive vice president of Questar Corporation. Does Questar ring a bell? It should. Questar is, or rather was, a Rockies-based integrated natural gas company operating through three principal subsidiaries. In an attempt to diversify out of the northeast, Dominion bought Questar in September for $4.4 billion (see $4.4B Dominion-Questar Merger Happens Tomorrow). Somehow Dominion let Dunn, who once worked for Warren Buffet’s Berkshire Hathaway Energy, slip through their fingers when buying Questar. Dominion’s loss is now Williams’ gain…
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FTS Intl, NA’s Largest Private Well Completion Co, Going Public

FTS International is the largest private (no publicly traded stock) well completion company in North America. In 2015 FTS fracked EQT’s ginormous Scotts Run 591340 dry Utica well in Greene County, PA producing an initial production (IP) of 72.9 million cubic feet of natural gas per day (see Private Company Fracked EQT’s Monster Utica Well, Working on More). That well is still the reigning champion for highest initial production. However, a year ago FTS sold off their sand hauling business and laid off over 40 people (see FTS Intl Fires All Drivers & Mechanics in Sand Hauling Business). FTS euphemistically called it “adjusting head count.” If you’ve ever been “adjusted,” you know how it lousy it feels. We mentioned that FTS is the largest *private* well completion company in North America. That’s about to change. Last week FTS filed with the Securities and Exchange Commission, declaring its intent to raise $100 million via an initial public offering…
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Calif. Microturbine Company Sells More Units in the Marcellus

A California company that manufactures small electric-generating plants that run on natural gas, has just sold three more of their “microturbines” to midstreamers in the Marcellus Shale play. This is not the first time Capstone Turbine Corporation has sold their devices to pipeline companies in the Marcellus (see Calif. Microturbine Company Lands More Marcellus/Utica Customers). Capstone’s technology uses natural gas coming from the pipeline itself to power the generator that produces electricity used by compressor stations. That way, long and expensive-to-install electric lines don’t need to be run to compressor stations, which are mostly sited in rural locations, away from residential areas. It is a win/win for everyone! Here’s the exciting news that Capstone has just sold three more microturbines, with a combined capacity to produce 2.8 megawatts of electricity, to an unnamed midstream company in the Marcellus…
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Anti-Fossil Fuel Hatred Metastasizes in Tompkins County, NY

Anti-pipeline insanity has metastasized in Tompkins County, NY (i.e. Ithaca). Members of the Tompkins County Energy and Economic Development Task Force object to building seven miles of 10-inch natural gas pipeline in the Lansing area (suburb of Ithaca)–because the pipeline flows a fossil fuel. They have objected to the point that the local utility company wanting to build it, NYSEG (New York State Electric & Gas), has floated an alternative plan: Build a compressor station for existing customers, and no new customers are allowed to receive natgas service. Ever. Period. Talk about nuts! The tinfoil hat folks on the Task Force instead want NYSEG (or someone else) to invest in so-called alternative energy projects to meet the energy demand for new customers. That is, the Task Force is prejudiced against the type of energy residents prefer to use–to the point of forcing another choice on them. Only in the Communist Paradise of Ithaca…
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Important Shell Ethane Cracker Webinar on Feb 27

We want to alert you to an upcoming webinar that will be worth your time. On Feb. 27 at 2 pm, NGI (Natural Gas Intelligence) will host a webinar titled, “Cracking the Ethane Code in Appalachia,” all about the Shell ethane cracker. NGI’s ace reporter Jamison Cocklin (MDN editor Jim Willis knows Jamison and has the highest regard for his reporting and writing) will moderate. On the call will be an all-star cast: Don Rush, VP of CONSOL Energy; Jim Cooper, American Fuel & Petrochemical Manufacturers; Denise Brinley, PA Department of Community and Economic Development; and Danielle Sandusky, Level 2 Energy. The webinar will help answer questions about the size and scope of the cracker, whether (and how) the cracker will impact drilling decisions, what about competition from other crackers along the Gulf Coast, and more. Below is more information, and a link to register for this FREE webinar
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Editorial: No University of Pittsburgh, Period

We have a concern about the kind of education being offered by the very high-priced University of Pittsburgh. What are the professors actually teaching to those young skulls full of mush? Judging by the kinds of editorials coming from the student-run Pitt News newspaper, we’d have a big concern about the education (or rather, miseducation) coming from Pitt, especially if we were parents of students at Pitt. In today’s editorial, titled “No Mariner East II pipeline, period.”, the writers actually, fantastically say this: “But as our levels of dependency on oil combined with estimates of what’s left in the earth come to a head in the next few decades, investing in infrastructure to increase our fossil fuel consumption is both unwise and irresponsible.” Are these young people just really stupid? Or have they been miseducated? Do they not know that the same flawed, “We’re going to run out of fossil fuels any decade now” thinking has been around for the past 40+ years? And that we have MORE supplies of fossil fuels today than we thought possible just a decade ago? The entire editorial is a rail against Mariner East 2, and against all pipelines, because they flow fossil fuels. This is nuttery. And frankly, it’s not acceptable from so-called “educated” students at a reputable university. We think an investigation should be launched into how this sort of obviously flawed thinking can happen at a place like Pitt…
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Marcellus & Utica Shale Story Links: Wed, Feb 15, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Another round of NGL infrastructure for the Marcellus/Utica; ODNR issues 8 permits in the Utica; DiClaudio takes the helm of Energy Innovation Center in Pittsburgh; Indians ask judge stop DAPL, even though the pipeline will be done in 60 days; Chesapeake settles with McClendon family; 10% of new big rigs will run on natgas by 2025; the solution for U.S. energy policy is really simple; oil exports rising; and more!
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