EQT Raises $3B in IOUs as Down Payment for Rice Energy Purchase

On Wednesday, EQT announced the company has floated $3 billion (yikes!) of IOUs–called “notes” in the financial industry–with various due dates and interest rates payable, in order to make a cash payment due as part of their purchase of Rice Energy. The total deal is worth $8.2 billion, with EQT paying $6.7 billion and assuming Rice’s existing debt of $1.5 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). This deal is moving ahead, over the objections of two different corporate raiders who own a considerable amount of EQT stock (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal and Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). In addition to raising $3 billion in cash from IOUs, EQT is also tapping into its line of credit and the money it has socked away in its checking account to get this deal done…
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Former Magnum Hunter Sells Remaining Stake in Eureka Midstream

We love to connect the dots and reveal information (news) that others miss. Sometimes we get it wrong–but more often we get it right. Here’s another connect-the-dots story. Yesterday we brought you the news that a huge South Korean conglomerate, SK Group, had purchased itself a $100 million slice of ownership in Marcellus/Utica midstream company Eureka Midstream (see South Korean SK Group Buys a Piece of Eureka Midstream for $100M). Eureka Midstream was once a subsidiary of Magnum Hunter Resources. Magnum Hunter spun Eureka out into a standalone company prior to Magnum Hunter going through bankruptcy. Not long after Magnum Hunter exited bankruptcy, they changed their name to Blue Ridge Mountain Resources (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). The newly named company still owned a slice of Eureka, but Eureka was/is its own company, not controlled by Blue Ridge Mountain Resources. How big a slice does Blue Ridge own? We don’t know, but we’re guessing around $100 million worth, because yesterday Blue Ridge Mountain Resources coincidentally issued a press release to say it had sold the remaining shares of stock it owned in Eureka to “an undisclosed buyer.” Well isn’t that interesting. The day before SK Group bought a large slice of Eureka–for $100 million. Want to bet the “undisclosed buyer” is SK Group?…
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List of 15 Active Marcellus/Utica Pipeline Projects Worth $23B

One of the major themes at this year’s Shale Insight, emphasized several times, is that “We need pipelines, and we need them asap.” MDN heard that refrain a number of times, in different sessions. The good news is that there is more than $23 billion in planned pipeline investment to build more than 3,200 miles of pipelines–either planned or under development–for the Marcellus/Utica region. If you add these 15 project together, they will move another 17 billion cubic feet of Marcellus and Utica natural gas, and 345,000 barrels of natural gas liquids (NGLs), PER DAY! Some of these pipeline projects are already under construction, nearing completion. Some have just begun construction. Some will begin construction soon. And some are still waiting for regulatory approvals. A few are tied up in court, attempting to overcome state bans in New York. Any way you slice it and dice it, more pipelines ARE on the way, asap. And that’s very good news. Below is a list of the 15 projects, courtesy our friends at Energy in Depth…
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Fed Judge Tosses Lancaster Nuns’ Freedom of Religion Lawsuit re ASP

A group of Catholic nuns in Lancaster County called Adorers of the Blood of Christ have tried several strategies to derail the Williams Atlantic Sunrise Pipeline (ASP) project. One of stunts they have pulled, in league with a radical Big Green group, is to stick a few wooden park benches in the middle of a corn field that they own (leased to a local farmer), and call it a “chapel” (see Catholic Nuns Use Radicals to Build Chapel in Path of PA Pipeline). Which is why MDN dubbed them, Sisters of the Corn. The heck of it is that the good Sisters use natural gas to heat an old folks home they operate at the same address! Talk about religious hypocrisy. The Sisters used the chapel-in-the-corn as an excuse to sue the Federal Energy Regulatory Commission over their approval of Atlantic Sunrise on the grounds that running the pipeline through their corn field violates their religious freedom (see Lancaster Nuns Sue FERC to Stop Atlantic Sunrise Pipeline). Yesterday a federal judge in Reading, PA dismissed the frivolous lawsuit brought by the Sisters of the Corn…
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Shale Insight 2017 – Day Two News Roundup

Shale Insight 2017 is now in the books. Another year, another great show. MDN editor Jim Willis is back in the office, chained to his computer. Next week Jim will share notes he took at the conference. For now, below are highlights from other news source from Day Two of the event. Unfortunately Jim had to leave before the closing keynote, given by former Trump White House Press Secretary Sean Spicer. But others were there to hear what Spicer had to say. Day Two began with a focus on the Shell ethane cracker. Members of the Shell team were on hand to describe how this critical project affects the region, and where it fits in the Marcellus/Utica landscape. One of the Shell team members said the skyline at the Beaver County site will change dramatically over the next 12 months as the buildings housing the various components are built. It was a fascinating talk with lots of information. Below is a roundup from Day Two…
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Maine Wants Canada to Build NatGas Pipeline, Bypass MA, NH, NY

This story makes us angry–not at Maine Gov. Paul LePage, but at the obtuse governors and officials in Massachusetts, New Hampshire and (yes) New York. For years LePage, a Republican, has advocated for more natural gas pipelines to his state and to the entire New England region. Back in 2014 all of New England’s governors were on board with supporting Kinder Morgan’s Northeast Energy Direct (NED) pipeline extension of the Tennessee Gas Pipeline (see Blue State Blues: 6 New England States Want New Natgas Pipeline). But then radical environmentalist took over, and the others lost their nerve–and their minds–eventually killing the project two years later (see NED is Dead – Kinder Morgan Suspends $3.3B New England Pipeline). Every pipeline project floated for the New England region meets with the same obtuse, frankly idiotic resistance. And LePage has had enough. If Massachusetts, New Hampshire and New York won’t let pipelines pass through their stats to reach Maine, then LePage wants the Canadians to build a pipeline south across the border Maine shares with Quebec. You can’t blame LePage–he’s doing what he has to in the best interests of his residents. The real shame is that cheap, abundant American shale gas from the Marcellus/Utica could be the gas flowing to Maine. But now, it appears it will be Canadian gas instead. Maddening!…
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GlobeLTR Energy Inc. Rebrands Itself as Gravity Oilfield Services

This one is follow the bouncing ball. In February 2017 Permian-based oilfield service company Light Tower Rentals merged with Globe Energy Services and became GlobeLTR Energy Inc., which is one of the portfolio companies of Clearlake Capital Group. Clearfield is the money and likely offers “advice” (i.e. directives) on how to run the business. After all, it’s their money on the line. Earlier this week GlobeLRT Energy changed names again, and has become Gravity Oilfield Services. It is a “comprehensive rebranding effort,” according to the announcement. Why do we care? Because Gravity nee GlobeLRT nee Globe Energy has operations in the Marcellus/Utica region. In fact, in addition to the mighty Permian oil play, they also operate in the Eagle Ford Shale, SCOOP/STACK, Williston Basin, DJ Basin, Marcellus Shale and Haynesville Shale–among others. Sometimes you need a score card to keep track of who does what and what they call themselves…
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Gas Traders Go After M-U’s Local Hubs for Higher Returns

The greater the risk, the greater the reward. You’ve heard that bromide multiple times in your life. And for good reason–it’s true. Our entire stock and financial markets are based on that truism. Gas traders, those who trade futures contracts for natural gas, are like any other traders–they big price swings. It is when the price of the underlying commodity swings that (i.e. when risk rises) that traders make the most money. Don’t know if you’ve noticed, but the price of natural gas hasn’t really swung much at all over the past few years–at least at the Henry Hub, which is where most contracts are pegged. Why? We have a “glut” of natural gas. As soon as the price creeps up a bit, more gas floods the market. But as we’ve written many times in the past, there isn’t just “one price” when it comes to natural gas. There are hundreds of prices–gas is traded at hundreds of different trading points along major pipelines across North America. While the price of gas is steady and doesn’t change much (i.e. no real opportunity to profit from risk) at Henry Hub, such is not the case at all trading hubs. Particularly in the Marcellus/Utica. In our region, prices have been much lower than the Henry Hub–and much more volatile. Wider swings up and down. Now that Rover is flowing, prices are going up in some areas of our region. Other pipelines have a similar effect. So gas traders are beginning to leave contracts pegged to Henry Hub behind and trying their hand at contracts pegged at other trading hubs–some in our region, some in other regions. Bloomberg gives us the low down on a trend that has the power to affect the price of natural gas across the country–particularly in our region…
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MDN About to Get a Facelift

MDN is about to get a face lift–long overdue and badly needed. When you click on a headline in the daily email to visit the site to read full stories today, you will notice the font styles have changed. That’s a temporary change. Fonts, colors and more will be changed starting next week. We have selected a new, cleaner (more modern) “theme” for the site, that will launch sometime next week.

Why the change? A variety of reasons–the biggest being that we haven’t changed the look and feel of the website since it began in 2009. MDN looks like an eight-year-old website! A lot has changed since then, most noticeably, half or more of our readers now read MDN on a smart phone (or tablet, or other non-computer device). The site needs to automatically change and respond to whatever device is being used to read it–something called “responsive design” in the business.

What will change? The overall structure will, for now, not change. We hate it when we arrive at a favorite/familiar website to see everything is rearranged, with no prior warning. That won’t happen with MDN. The same overall architecture remains, with stories on the left of the page, links to various things on the right. Same drop-down menus along the top. Basically what we are doing is giving the site a new coat of paint. The fonts will change, and the font colors will change (a darker font, to make it easier to read). Better use of white space. The date of a post, which has always been part of the post (but hard to find at the bottom) will be moved to the top, much easier to spot. Little things, basically, will be tweaked and changed to make reading full articles a more pleasant experience. At least, that’s what we hope!

We will alert you when the changes roll out. As always, we appreciate your feedback and ideas on how to make it a better site. Stay tuned for what’s coming next week!

Marcellus & Utica Shale Story Links: Fri, Sep 29, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA budget talks advance, WITHOUT a severance tax; drone inspections of pipelines may soon be reality; Cheniere asks FERC for permission to fire up Train 4 LNG export; Microsoft launches gas-powered data center in Seattle; Congress probes Russian ads targeting energy markets; US regulatory climate “wobbles”; Shale-Zilla knocking at crude oil price door; the future of oil prices; it’s been a tough week for peak oil theorists; and more!
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