McClendon-Founded Ascent Resources Looks to Launch $3.5B IPO

The Wall Street Journal is reporting rumors that the privately-held Ascent Resources, which targets the Utica Shale in Ohio, is shopping for bankers to help it with an initial public offering (IPO). Ascent reportedly is aiming for a stock market valuation of $3.5 billion. Ascent was formerly known as American Energy Partners (AEP), founded by Aubrey McClendon after he was unceremoniously dumped as CEO of Chesapeake Energy–the company he co-founded. AEP set up a number of subsidiary companies to target different shale plays. One of the largest was aimed squarely at the Ohio Utica (American Energy Partners–Utica LLC). That company later left the AEP fold, under pressure from investors, and became an independent company, renaming itself as Ascent Resources. Ascent, just like founder Aubrey, went on a money-raising binge after departing the AEP fold. In March 2016 Ascent floated 2.2 billion common units (think shares of stock) to raise $500 million (see Ascent Resources Sells More of Company to Pay Down Debt). Ascent planned to use that money to pay off existing notes, or IOUs. In August 2016, Ascent flirted with bankruptcy but pulled its bacon out of the fire by restructuring its debt (see Ascent Resources Talking to Creditors to Restructure $1.2B Debt). In November of last year, Ascent sold another 3.5 billion common units, hoping to raise $787 million to pay down outstanding debt (see Ascent Resources Sells Another 3.5 Billion Units for $787 Million). In March of this year, Ascent floated yet more IOUs, hoping to raise $1.5 billion (see Ascent Resources Continues Aubrey’s Borrowing Ways: $1.5B in IOUs). The company now plans to convert itself into a public stockholding company, in order to raise a staggering $3.5 billion…
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PA Frankenstein House Bill Merges Severance Tax & Minimum Royalty

As predicted earlier this week, yesterday the Pennsylvania House Finance Committee voted to approve a 3.2% severance tax on top of the existing 5%+ impact tax (see RINOsaur DiGirolamo Says Vote on PA Severance Tax Coming Soon). Democrats and mainstream media are nearly orgasmic–this is as far as any severance tax bill has ever gotten in PA. The bill, House Bill (HB) 1401, now goes to the full House for a vote–maybe. It remains to be seen whether or not House Speaker Mike Turzai will allow a vote in the full House. There are procedural ways to tie up the bill. While it’s a crap shoot as to whether or not the full House would pass a Marcellus-killing severance tax, there is a section in HB 1401 that is sure to kill the bill–a guaranteed minimum royalty for landowners of 12.5%. Don’t get us wrong–we think the minimum royalty issue is very important and deserves a vote. PA Rep. Garth Everett has championed the issue, introducing a bill to accomplish that objective three times in the last six years (see PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time). No doubt HB 1401’s chief sponsor Gene DiGirolamo (RINOsaur from the Philadelphia area) is hoping to gain support from landowners for the severance tax by grafting on the minimum royalty provision–in the style of Dr. Frankenstein’s monster. Take a body part here (severance tax) and a body part there (guaranteed minimum royalty), sew it together (HB 1401) and shock it into life with a vote. Landowners should beware of this ruse. The minimum royalty issue needs to be addressed separately, on it’s own, and not part of a severance tax bill…
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Southwestern Energy Offers $5/Acre for Seismic Testing in WV

In 2014, Southwestern Energy cut a massive deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in northern West Virginia, for $5.375 billion (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Southwestern has done some drilling on that acreage since, but all the signs are now visible that the company intends to really ramp up their WV drilling program. In August, Southwestern nailed down some missing acreage in the Wheeling area by leasing 66 acres from the Wheeling Park School District for $231,000 (see Wheeling Park HS Signs Lease with Southwestern for $3500/Acre). Just last week we reported that midstream giant Williams has cut a deal with Southwestern to provide gathering and processing for over 200,000 acres in Marshall and Wetzel counties (see Williams Launches Major WV Expansion to Serve Southwestern Energy). And now, further evidence: A contractor working for Southwestern plans to begin seismic testing covering 260 square miles–stretching from Donegal (Westmoreland County), PA through northern WV all the way to Shadyside (Belmont County), OH–next year. The contractor, in speaking with members of the Bethlehem Village Council (Wheeling, WV area), said Southwestern is offering the “standard” price of $5 per acre for seismic testing…
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Poor Prospects for Moving Marcellus/Utica Ethane to Gulf Coast

According to the energy experts at RBN Energy, ethane production in the Marcellus/Utica region will go from 470,000 barrels per day now to 800,000 barrels per day by 2022–a 70% increase. Ethane, which is sometimes up to 10% of the hydrocarbons coming out of Marcellus/Utica wells (from wet gas and oil wells), can be an important revenue stream. However, you have to have someplace to sell it. Right now, many Marcellus/Utica producers have to mix in the ethane with the methane stream in order to get rid of it. In other words, it costs them money. It’s a waste product. However, when the Shell cracker plant in Beaver County, PA and (possibly) the PTT Global cracker plant in Belmont County, OH go online, important new markets will open up. But even two huge crackers won’t be able to buy all of the available ethane. There are a slew of new cracker plants coming online in the Gulf Coast over the next five years that could use Marcellus/Utica ethane. But will they? The problem, as always, is pipelines. According to an analysis by RBN, the prospects for moving more of our ethane to the Gulf Coast do not look good…
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PA Supreme Court Hears Arguments on DEP Request to Unblock Regs

PA Supreme Court Justices

In October 2016, after five years in the making, Pennsylvania adopted new shale drilling regulations (see PA’s New Chapter 78a Drilling Regs Go into Effect Oct 8). Although the regs were ready at the end of the Gov. Tom Corbett Administration, Corbett fumbled the ball and the regs didn’t get adopted, which left them vulnerable to the incoming left-leaning Tom Wolf Administration. Wolf’s people mangled the regulations under the Dept. of Environmental Protection (DEP) Dictator/Secretary John Quigley, who got fired over unethical collusion with Big Green groups. Some of the good stuff remained, but onerous new elements were introduced. The Marcellus Shale Coalition (MSC), which represents PA’s biggest shale drillers, filed an appeal in Commonwealth Court to block the most onerous aspects of the new regulations (see Marc. Shale Coalition Files Lawsuit to Block PA Chapter 78a Regs). The judge agreed to “temporarily” block some of the items in the MSC list (see PA Judge Temporarily Blocks Some DEP Chapter 78a Drilling Regs). In December, the DEP escalated the case by asking the PA Supreme Court to undo the block on those regulations imposed by the lower Commonwealth Court (see PA DEP Asks Supreme Court to Overturn Stay on New Regs). Yesterday the Supremes heard oral arguments in the case. Although one activist justice (Sallie Updyke Mundy) seems to want to grant the DEP’s request to allow the stopped rules from going into effect, several other justices appear to want to let the issue play out in the lower Commonwealth Court, preferring to goose the lower court into speedier action…
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PA DEP Public Hearing on Japanese Gas-Fired Elec Plant in SEPA

EmberClear Corp. (and its parent Ember Partners) is a Canadian-based company that builds and operates natural gas-fired electric generation plants in North America. In 2015, EmberClear filed an application to build a new 488-megawatt natural gas-fired electric plant in Birdsboro, in Berks County, near Philadelphia (see New NatGas-Fired Electric Plant Coming Near Philadelphia). In April of this year, two different Japanese companies, Sojitz Corporation and Tokyo Gas, each purchased a one-third share ownership of the project (see Japanese Now Own 2/3 of Marcellus-Powered Electric Plant in SEPA). We call the Birdsboro project a “Japanese-owned” project, which it is, but in reality EmberClear is still the company building and operating it. The PA Dept. of Environmental Protection (DEP) has just announced they will hold a public hearing on the project, to consider issuing both a water permit and an erosion/sediment control permit for the project. The hearing will be on Nov. 2 in Birdsboro…
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Public Hearing Next Wk on Albany, NY Fracked Gas-Fired Electric Plant

In May MDN brought you the news that New York Gov. Andrew Cuomo had announced plans to construct a new “state-of-the-art, locally-sourced mini-power grid” that will connect to the statewide electric grid but will also be able to operate independently, to power the Empire State Plaza in Albany–a complex of buildings in downtown Albany housing much of New York State government (see NY Gov Cuomo Building New Fracked Gas Elec Plant to Power Albany!). The energy-efficient microgrid will supply 90% of the power for the 98-acre downtown Albany complex, and is expected to save the Plaza more than $2.7 million in annual energy costs. The project will also remove more than 25,600 tons of greenhouse gases from the atmosphere each year–the equivalent of taking more than 4,900 cars off the road–supporting New York’s goal to reduce emissions by 40 percent by 2030 from 1990 levels. The fuel that will power this engineering marvel? Fracked shale gas from the Pennsylvania Marcellus Shale. Yep. Cuomo is a disgusting hypocrite. He won’t allow pipelines to bring in fracked gas, but he’s building a microgrid to power state government that uses that same fracked gas. Next Wednesday, Oct. 25, the NY State Power Authority and the Office of General Services will host a public information meeting to discuss the microgrid. There will no discussion of IF the plant gets built because Dictator-in-Chief Cuomo has decreed it. The meeting will be to parcel out details to the hoi polloi, so the little folk know what to (shut up and) expect…
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Billionaire Fracker Terry Pegula #160 on Forbes 400 Richest List

Terry Pegula

Terry Pegula is a billionaire who owns both the Buffalo Sabres (NHL hockey team) and the Buffalo Bills (NFL football team). Pegula is the owner of East Resources, once a big driller (and holder of acreage) in the Marcellus Shale. Pegula sold off East’s Marcellus assets and used the money, in part, to buy the Buffalo Bills in 2014, which gave rise to MDN calling the team “the Marcellus Bills”–since it was Marcellus money that kept the team in Buffalo, instead of moving to another market (see Buffalo Bills Stay in Buffalo, Thanks to $1.4B of Marcellus Money and Buffalo “Marcellus” Bills – Team Sold to Fracker for $1.4B). Yes, “dirty” fracking money saved the Bills! After selling all of East’s Marcellus assets, Pegula still had an itch to frack, so he started up a new company, JKLM, in order to keep his finger in the Marcellus/Utica pie. JKLM is, as we reported in July, fracking 12 Utica wells in Potter County, PA this year (see JKLM Drilling 12 Utica Wells in Potter County, PA This Year). Fracking is what made Pegula rich. We found it interesting that he made the Forbes 400–a list of the 400 richest people in the United States. Pegula was one of only four people who call Upstate New York home to appear on the list. Here is Pegula’s entry for the list…
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FERC Chairman Neil Chatterjee Pledges Faster Pipeline Approvals

Neil Chatterjee

Newly minted chairman of the Federal Energy Regulatory Commission (FERC), Neil Chatterjee, made his first public appearance on Tuesday since being sworn in last August. Chatterjee addressed the Energy Bar Association’s 2017 Mid-Year Energy Forum in Washington, DC. Among some of Chatterjee’s choice comments, he said he wants to “significantly reduce” the amount of time it takes to review and issue certificates for natural gas pipelines. He also said he “strongly disagrees” with fellow FERC commissioner Cheryl LaFleur’s vote against authorizing the Atlantic Coast Pipeline and Mountain Valley Pipeline projects. In an extensive presentation, Chatterjee laid out his priorities, which he said is not a “drastic change” from the work done by FERC in previous years. Here is a revealing look into the thinking of Chatterjee, and what lies ahead in the coming months (and years) at FERC…
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Marcellus & Utica Shale Story Links: Thu, Oct 19, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Dominion says Cove Point LNG export open for business by end of year; open records petition seeks more sunlight on corrupt NY Attorney General emails re #ExxonKnew; Rex Energy stock hits 12-month low; Total CEO says US shale will see wave of new investment; Obama would have loved Perry’s “resiliency” plan; Japan bets $10B on US natgas; Gazprom & Mitsui talk LNG cooperation; and more!
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