Titan Energy Sells Marcellus Assets, Buyer Rapidly Expanding

In February, MDN told you that Titan Energy, which used to be known as Atlas Energy/Resource Partners, was listing what appeared to be the rest of the acreage they still own on the Appalachian basin–some 494,229 acres–including rights for drilling in the Marcellus (see Titan Energy Puts 494K Appalachian Acres Up for Sale). On Friday, Titan announced it has signed an agreement to sell the acreage, along with 8,400 oil and gas wells across Pennsylvania, Ohio, Tennessee, New York and West Virginia, for $84.2 million to Diversified Gas & Oil (DGO). Yes, the vast majority of those wells are conventional (vertical only) and not shale wells. In fact, we’re not sure any of the wells are shale wells. However, Marcellus assets were part of the sale–so at least some of the acreage will allow for Marcellus drilling, should DGO want to pursue it. Although Titan is keeping its Utica Shale acreage, the company says it use the money from this sale to concentrate efforts on oil drilling in the Texas Eagle Ford Shale play. Titan is moving its headquarters from Pittsburgh to Houston, TX. In addition to the news about Titan selling its conventional assets and moving, the twin story (perhaps even more interesting) is that the buyer, DGO (nominally headquartered in Birmingham, Alabama, although actually a UK company), has been on a buying spree–snapping up 75,250 conventional acres (1,300 wells) in PA & WV earlier this year. All told, DGO now owns 1.6 million acres of leases and 10,000+ conventional oil and gas wells in Appalachia…
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PDC Energy Pulling Out of the Utica – Selling Acreage & Wells

PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). In December 2015, the company announced they would restart Utica drilling in 2016 with plans to drill five wells (see PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells). Indeed they did reactivate their program, in a much-scaled-back fashion, last year. However, another shale play has turned the head of PDC–the Permian Basin in Texas, an oil play. When PDC released their plans for 2017 in December, they said they would drill two more Utica wells in the second half of 2017 and spend just $18 million to do it, spending the bulk of their money in the Permian and Wattenberg (see PDC Releases 2017 Plans – Drilling Just 2 Utica Wells in 2H17). Then in March, the plan to drill those two Utica wells this year got mothballed (see PDC Changes Course, Delays More Utica Drilling in 2017). Now we know why. Buried in their first quarter 2017 update (released last Friday), PDC has announced they are putting their Utica assets up for sale, so they can concentrate on the Wattenburg and Delaware Basin (i.e. Permian)…
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NFG Update – Getting “Lousy Treatment” in NY, Threatens to Leave

National Fuel Gas Company (NFG), headquartered in Western New York State, is making noises (threats) that Gov. Andrew Cuomo should be very concerned about. NFG covers the full span of the oil and gas business–from upstream (with its wholly-owned drilling subsidiary Seneca Resources), to the midstream (with wholly-owned subsidiary Empire Pipeline) to downstream (NFG’s natural gas utility service to 740,000 customers in NY and PA). It’s a big company that generates a lot of jobs and revenue for New York State. Yet NY is metaphorically crapping all over NFG–and the company is signaling its willingness to retaliate by leaving. No, not move the company HQ, or sell off its gigantic utility business. Nothing of that sort (yet, anyway). But NFG CEO Ronald Tanski said on an earnings call last Friday that NFG is “getting lousy regulatory treatment in New York State” and that “Given this type of regulatory treatment in the state, we have to take a serious look at our ability to achieve any reasonable growth in New York.” Translation: We’ll stop launching new projects that invest billions in the Empire State, and instead invest that money and the jobs it creates in PA and other states. The “lousy treatment” NFG is getting is related to NY’s corrupt Dept. of Environmental Conservation decision to deny it permits to build the Northern Access Pipeline (see NFG Calls Cuomo DEC Denial of Northern Access Pipe “Troubling”). NFG has taken the Cuomo DEC to court to try and get the DEC’s capricious pipeline decision overturned. However, the damage is now done. NFG is threatening to invest elsewhere–and we take them at their word. This is not an empty threat…
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Rex Energy Offers 1-for-10 Stock Split, Updated 2-Yr Plan

Two announcements from Rex Energy, one from Thursday and one from Friday, show the company is working hard to reassure investors that the company once again has momentum and that it’s safe to buy the company’s stock. On Thursday, Rex–a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA)–released an updated two-year operational and financial plan. It is an update to the plan originally released in January (see Rex Energy’s 2-Year Plan: Scale-up in 2017, Scale-down in 2018). Under the original plan released in January, Rex said they planned to spend $80-$90 million on drilling in 2017 and $20-$40 million in 2018. Last week Rex announced a new $300 million loan to help with the drilling budget (see Rex Energy Gets a New $300M Loan to Help Fund M-U Drilling). The loan made the difference. Rex’s revised drilling budget for 2017 is now $115-$130 million, and for 2018 it’s gone up to $65-$80 million. On Friday, Rex announced a one-for-ten reverse stock split. Rex’s stock is listed on the Nasdaq exchange, and Nasdaq threatened to delist the stock back in December because the per-share price had sunk below $1 (see Rex Energy Stock Threatened with De-Listing by Nasdaq). A common “fix” for low per-share stock prices is to combine outstanding shares into a smaller number of shares. As of this morning (when writing this post) Rex’s share price was $0.42 per share. If you combine 10 of those shares into a new, single share, presumably the price would be 10 x $0.42 = $4.20 per share. Voilà. The per share price is now in compliance with Nasdaq rules. The new stock price doesn’t mean the company is actually worth any more on paper–it simply means a fewer number of shares are worth more per share…
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Ohio DNR Issues New Pooling Guidelines for Drillers

Last week the Ohio Dept. of Natural Resources (ODNR) issued updated guidelines for “statutory unitization applications” (full copy below). That is, when a driller wants to form a unit for drilling by combining adjacent properties, the driller must first request permission from the ODNR to form a unit. In Ohio, a unit can be formed when the driller has 65% of the acreage in the unit under a lease agreement. In other words, these are the revised/new guidelines (i.e. hoops) drillers must jump through before the ODNR will agree to combine either willing, or unwilling (force pooled) landowners into a unit for drilling…Continue reading

TransCanada Sells Iroquois Pipeline to Itself, Part of $765M Deal

Last week TransCanada announced they are “selling” their interest in the Iroquois Gas Transmission pipeline and a second pipeline, Portland Natural Gas Transmission System (PNGTS), to a subsidiary of TransCanada for $765 million. Every now and again big energy companies transfer some of their assets to different subsidiary companies, on paper. We say “on paper” because nothing really changes with the management of the assets–in this case two pipelines. However, money does change hands because usually there are different sets of investors for the different subsidiaries. So TransCanada “sold” themselves (different set of investors) these two pipeline systems. Iroquois is majority owned by TransCanada–in two pieces. After the drop down sale, TC PipeLines will own both pieces, representing 61.1% of the Iroquois system. Iroquois is a 416-mile interstate natural gas pipeline extending from the U.S.-Canadian border at Waddington, NY, through New York State and western Connecticut to its terminus in Commack, NY, and from Huntington to the Bronx, NY. The second pipeline part of the transfer deal is PNGTS–an interstate natural gas pipeline company providing natural gas transportation service for gas utilities, paper mills, and electric generation plants throughout New England. Here’s info about the deal, and an overview for each pipeline system…Continue reading

Baker Hughes April Rig Count – M-U Highest in 12 Months

The International (non-U.S.) Baker Hughes rig count for April 2017 was 956, up 13 from the 943 counted in March 2017, and up 10 from the 946 counted in April 2016. However, the U.S. rig count for April 2017 was 853, up 64 from the 789 counted in March 2017, and up 416 from the 437 counted in April 2016. Did you catch that? The U.S. over the past year doubled its rig count. Of particular note is that Canada’s rig count went over a cliff in April, falling by 145 active rigs in one month. Not sure what that’s all about. What about rig counts in our neck of the woods–in the Marcellus/Utica? It was good news for our region. Pennsylvania’s average rig count was up by 2 (to 34), Ohio up 1 (to 22), and West Virginia up by 2 (to 12). Total rig count for the Marcellus/Utica was 68 active rigs in April–the highest in the past 12 months…
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Energy Transfer 1Q17 – Updates on Rover, Mariner East 2 Pipelines

Last week Energy Transfer Partners (ETP), the main operating division of Energy Transfer Equity (ETE), released its first quarter 2017 financial and operating update. ETP is the company that built the Dakota Access Pipeline, which was finally completed after Obama was ejected from office–and is right now building the Rover Pipeline. Another division of ETE was, until last month, Sunoco Logistics Partners. In April Sunoco LP was merged into ETP (see Sunoco Logistics Partners Ceases to Exist as of Today). Sunoco LP, now ETP, is building the Mariner East 2 (ME2) pipeline project. So as part of last week’s update, we got mini-updates on two critically important projects for the Marcellus/Utica: Rover and ME2. The Rover chatter indicates all systems are go and they are on track to have the project completed and in-service as far as the Midwest Hub in July, and the rest of the way to Michigan in November. ME2 chatter contained an interesting question and response. An analyst’s question seems to indicate that ETP (the Sunoco Logistics part of it) is considering a joint venture arrangement for the ME2 pipeline project. President & CEO of Sunoco LP (not sure what his title is now) Mike Hennigan was quick to tamp down that speculation. He didn’t deny it, saying the company is having “conversations”–but he did say their focus right now is to finish the darned thing. Get it built…
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PA Landowner Threatens to Go Up a Tree (Again) to Stop Pipeline

Elise Gerhart has been up a tree before. You may recall our story about Elise, daughter of a Huntingdon County, PA landowner, radicalized by Big Green groups (as evidenced by her association with well known protesters previously arrested), who took to a tree on her mom’s property in order to illegally stop crews working on tree clearing for the Mariner East 2 pipeline (see PA Anti Literally Goes Up a Tree to Stop Mariner East 2 Pipeline). It ultimately didn’t matter, because Sunoco came back and cut down the few trees they need to cut anyway (see Sunoco Tricks Radicalized Protester – Returns and Cuts More Trees). Eventually law enforcement got around to arresting the daughter, and the mom (who also trespassed during tree clearing). Law enforcement also arrested a serial criminal trespasser/anti who aided and radicalized them. Unfortunately, in a miscarriage of justice, the charges against all three were dropped (see Charges Dismissed Against Tree Sitting Anti in Huntingdon County). That oversight will come back to bite law enforcement, because Elise plans to go up a tree again. Or maybe, since the trees are already cut down, she plans to chain herself to a bulldozer. Who knows. One thing is for sure: Ms. Gerhart and her mom are planning to get themselves arrested when the bulldozers show up to begin digging a trench on the Gerhart’s land…Continue reading

Marcellus & Utica Shale Story Links: Mon, May 8, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: How Delaware Riverkeeper funders live (like kings); Tokyo Gas invests in U.S. shale player Castleton Resources; anti-pipeliners harming the environment they profess to protect; how much natgas comes from fracking?; Pruitt recuses himself from several lawsuits against EPA; Chesapeake – the good and the ugly; Russia suspends LPG exports to Ukraine – again; and more!
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