Williams Files with FERC to Expand Transco Pipeline to NYC, NE

In May 2016, Williams’ Transcontinental Gas Pipe Line Company (Transco) pre-filed with the Federal Energy Regulatory Commission (FERC) for a project called the Northeast Supply Enhancement project (see Williams Pre-Files with FERC to Expand Transco Pipeline in PA, NY). The new project is meant to increase pipeline capacity and flows heading into northeastern markets. In particular, Transco wants to provide more natural gas to utility giant National Grid beginning with the 2019-2020 heating season. National Grid operates in New York City, Rhode Island and Massachusetts. Also in May, Williams ran an open season to lock up commitments for the Northeast Supply Enhancement project (see Williams Announces Open Season for Northeast Supply Enhancement). The open season worked. National Grid committed to all 400,000 dekatherms (400 million cubic feet per day) of extra gas the project will provide. Last September Transco held four public hearings about the proposed project. The time for hearings and comments and pre-filings is over. Yesterday Williams announced they have made an official, full application for the Northeast Supply Enhancement project…
Continue reading

FERC Gives Columbia WB XPress Enviro Thumbs Up

Click image for larger version

In Jan. 2016, Columbia Pipeline Group (now owned by TransCanada) filed their full, official application with the Federal Energy Regulatory Commission (FERC) for approval of the $850 million WB XPress Project (see Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA). WB XPress consists of two new compressor stations, 26 miles of pipeline replacement located along existing corridors, and 2.9 miles of new pipeline in Virginia and West Virginia. The WB XPress Project will expand capacity of the Columbia Gas Transmission pipeline system in the region by 1.3 billion cubic feet per day (Bcf/d), linking Marcellus gas supplies to new markets. The first and most important step in an approval process is an environmental review conducted by FERC. If the environmental assessment (EA) comes back positive, the project is virtually assured of approval. Good news: FERC just delivered a favorable EA for WB XPress…
Continue reading

Constitution Pipeline Still Waiting on “Biggie” Court Decision

Last week MDN brought you the news that a federal judge had dismissed a case brought by the Constitution Pipeline against the New York Dept. of Environmental Conservation (DEC) over the issue of denying water crossing permits for the project (see Federal Judge Rejects Constitution Pipe Request to Bypass NY DEC). What we have since come to understand is that this was one of two lawsuits filed by the Constitution against the NY DEC. In fact, it was the lesser of the two lawsuits. The “biggie” lawsuit is still not yet decided. That decision will come from the U.S. Court of Appeals for the Second Circuit–and is due to arrive within the next two months. The fate of the project hangs in the balance. Lawyers for the Constitution are confident that the court will find the DEC’s denial of permits is capricious and politically motivated, and will strip the DEC of its role in the project. If that happens, it is the equivalent of a 10.0 earthquake. The DEC will no longer play a role in federally regulated pipeline projects. Perhaps if the DEC wants to maintain a role in such projects, they ought to move forward and issue those permits now (i.e. “settle out of court”), before the ruling comes down…
Continue reading

Gun Loaded & Cocked, Maryland About to Commit Fracking Suicide

Several weeks ago the Maryland House of Delegates put the bullet in the chamber of gun when they voted to ban fracking (see Maryland House overwhelmingly approves fracking ban). Yesterday the Maryland Senate cocked the hammer of the gun by voting 35-10 in favor of a frack ban. Now the legislation goes to Republican Gov. Larry Hogan (traitor, ran on a platform supporting fracking) who has pledged to pull the trigger and shoot the state in the head, committing fracking suicide (see Maryland’s Traitorous “Republican” Gov Caves, Supports Frack Ban). What a shame. Democracy and freedom never die from invading countries–it’s always internal, from within, from the people themselves who willingly give up the freedoms won with the blood and sacrifice of their ancestors. RIP Maryland–a once-great state. We recommend a total boycott of Maryland from now on. If you can avoid it, don’t shop there, don’t stop there, don’t stay there, quit buying anything made in Maryland–just avoid it whenever and wherever possible…
Continue reading

Antero Ramps Up Growth, Owns 40% of Undeveloped M-U NGL Acreage

We have commented and observed a number of times that Antero Resources, one of the biggest drillers in the Marcellus/Utica, is perhaps the best company in our region at hedging. As we wrote in January 2016: “What’s Antero’s secret to making money in arguably the worst time for our industry in a generation? In a word, it’s hedging. Somehow Antero crafts financial deals a year or more in advance to sell whatever gas they produce for prices much higher than others–at prices that mean the company continues to make a profit. Most energy companies these days are keeping the people who run those companies, AND their investors, up at night. A company like Antero comes as close to any as a SWAN–a ‘Sleep Well At Night’ energy company” (see How Antero Resources Converted an Ugly Duckling into a SWAN). Antero consistently gets more money for the gas it sells than other large drillers in the M-U. So we like to keep an eye on the company. An analyst at Morningstar, an investment research and investment management firm headquartered in Chicago, published an article yesterday closely looking at Antero. He finds that Antero is gearing up to grow NGLs (natural gas liquids) in 2017. Little-known factoid: Antero owns 40% of the undeveloped liquids-rich acreage in the Marcellus/Utica region. Can the company repeat its top hedging performance with NGLs, as they have with methane?…
Continue reading

EQT Raises Estimates of Methane, NGL Production for 2017

In December 2016 EQT, one of the largest Marcellus/Utica drillers with its headquarters in the Pittsburgh area, released a forecast for 2017 (see EQT 2017 Forecast: Drilling 119 Marcellus, 81 UD, 7 Utica Wells). At that time, EQT said they would spend $1.5 billion to drill a total of 200 Marcellus and Upper Devonian wells, and 7 exploratory Utica wells. Yesterday EQT released an update to/revision of their 2017 plans. The new plan still shows a budget of $1.5B to drill a total of 207 wells. So what changed? EQT is drilling longer laterals–from 7,000 feet on average to 8,000 feet on average, for their Marcellus wells. EQT finds by doing so their decline curves (how much a well will ultimately produce) has increased by 14% to 2.4 billion cubic feet equivalent per 1,000 feet drilled. Originally EQT forecasted they would produce 810-830 billion cubic feet equivalent (Bcfe) of natural gas. That has gone up. They now plan to produce 835-855 Bcfe of natural gas in 2017. NGLs are going up too. The original forecast was for 13,100-13,700 barrels of liquids, now raised to 17,975-18,575 barrels. The one “negative” in this updated forecast is that EQT has factored in a 15% rise in the cost of oilfield services…
Continue reading

Schlumberger Throws Weatherford a Lifeline, Challenges Halliburton

Schlumberger is the world’s largest oilfield services (OFS) company. Weatherford International is the world’s fourth largest OFS company. They both have operations in the Marcellus/Utica region. We’ve posted a number of stories about Weatherford’s financial troubles–and seemingly inevitable march toward bankruptcy (see our stories here). However, Weatherford may have just gotten a reprieve from its much larger competitor. On Friday, Schlumberger and Weatherford announced they have formed a joint venture called OneStim, “to deliver completions products and services for the development of unconventional resource plays in the United States and Canada land markets. The joint venture will offer one of the broadest multistage completions portfolios in the market combined with one of the largest hydraulic fracturing fleets in the industry.” Hmmm. Interesting. Here’s why. The world’s second largest OFS company is Halliburton. However, Halliburton is the world’s largest fracking company. The media is universally claiming the Schlumberg/Weatherford jv is squarely aimed at overtaking Halliburton to become the world’s largest fracking service. Can they do it? Another interesting observation: Earlier this month Mark McCollum, who had been Chief Financial Officer (CFO) of Halliburton left to become the CEO of Weatherford (see Halliburton CFO Leaves to Become Weatherford CEO). We don’t think it’s a coincidence that Weatherford is now making a play to best its larger rival Halliburton, leveraging McCollum’s knowledge of how Halliburton became king of fracking. Two thoughts on the Sclumberger/Weatherford hook-up: (1) it keeps Weatherford out of bankruptcy by infusing $535 million of cash, (2) We think it may be the prelude to a full-out sale of Weatherford to Schlumberger down the road…
Continue reading

Coal King Robert Murray Still Spoiling for a Fight with NatGas

Robert Murray

Murray Energy CEO Robert Murray is an interesting character. We’ve reported on him a number of times over the years. Murray went after Aubrey McClendon when Aubrey named is new company American Energy Partners. Murray claimed a subsidiary company he owns already had that name. Eventually a court told Aubrey he could keep the name (see Federal Court Decides McClendon Can Keep ‘American Energy’ Name). In early 2016 Murray went after the shale gas industry in West Virginia. He said WV should lower the coal severance tax from 5% to 2%, and raise the natgas severance tax from 5% to whatever, in order to give coal a break in the Mountain State (see Why Can’t We be Friends: Can Coal & NatGas Get Along in WV?). Even though he rails against natural gas, Murray found it in his heart to lease some of his coal mining property for natgas drilling, twice (see Coal Company Leases 6K Acres for Natgas Drilling in Belmont, OH and Coal Co. Murray Energy Sells 5,900 OH Utica Acres – Who Bought?). The second lease was for $10,800/acre. Seems Murray says one thing but does another when it comes to natgas. Today President Trump delivers on yet another campaign promise by rolling back some of Obama’s draconian environmental regulations–specifically the Clean Power Plan–which will benefit Robert Murray and the coal industry. At least, theoretically. The jury is still out on whether coal will ever come back. Recently the Columbus Dispatch interviewed Murray. He maintains that coal can compete with natural gas “all day long” if only coal had a “level playing field.” Here’s what he said…
Continue reading

Marcellus & Utica Shale Story Links: Tue, Mar 28, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: LNG storage tanks arrive in Jacksonville Port; oil now flowing under Missouri River via Dakota Access Pipeline; vapid actress Shailene Woodley pleads guilty to disorderly conduct charge related to Dakota Access “protest”; tech still the key in shale plays; nuke plants closing hit small towns hard; green groups promise violence to stop Keystone XL pipeline; US natgas exports to Mexico skyrocket, Mexicans worried about depending on gringos; LNG hub in Asia; and more!
Continue reading