Eureka Midstream Confirms MDN Article on New Ownership

In late September MDN connected the dots and was the first to tell you that Blue Ridge Mountain Resources, the renamed Magnum Hunter Resources, had sold its ownership stake in Eureka Midstream (formerly Eureka Resources) to South Korean conglomerate SK Group (see Former Magnum Hunter Sells Remaining Stake in Eureka Midstream). 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 Blue Ridge still owned a slice of Eureka–until a few weeks ago. In a press release issued on Tuesday, Eureka Midstream officially acknowledged that the company’s ownership has changed. Morgan Stanley is still a major shareholder in the company, but now SK Group is in the mix too. Whether Blue Ridge sold its shares directly to SK Group, or whether Blue Ridge sold to Morgan Stanley which then turned around and sold to SK, the result is the same. Blue Ridge is gone, SK is here, and Eureka now answers to a different board of directors…
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NEXUS Pipeline Begins Construction in OH, MI

Last week NEXUS Pipeline notified the Federal Energy Regulatory Commission (FERC) they had begun construction on the $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. We purposely held off on sharing this exciting news until we could tell you where construction has begun. Each week NEXUS, like other interstate pipelines answering to FERC, provides a weekly update on construction and other project activities. We have a copy of that report (below). What does it show? Preliminary activities are taking place to move equipment, put up signage, and begin to work in “Spread 1”–meaning somewhere within Columbia, Stark, Summit, and Wayne counties in Ohio. Similar work is happening in “Spread 4”–meaning counties in Michigan. Initial site preparation is already happening at three of the four planned compressor stations. Here’s what we have been able to piece together about the initial construction work done on NEXUS…
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CPV Marcellus-Fired Power Plant in Cambria, PA Breaks Ground

CPV Fairview Energy Center – click for larger version

It took a few years, but Competitive Power Ventures (CPV) has finally broken ground and has begun to build a new Marcellus gas-fired power plant in Cambria County, PA. Located 60 miles east of Pittsburgh, the CPV Fairview Energy Center is a 1,050-megawatt natural gas and ethane-fueled two-by-one combined-cycle electric generating plant expected to begin commercial operations in early 2020. CPV held the groundbreaking ceremony at the site on Tuesday–a former brownfield site off Route 271 near Vinco in Jackson Township. President and CEO Gary Lambert said it “only” took three years to get through the permitting process, from conception to groundbreaking. That seems like two years too many to us, but hey, who are we? Local officials attended and are pumped. According to Bruce Baker, Jackson Township supervisors’ chairman, “This is arguably one of the biggest events that ever happened in Cambria County – especially Jackson Township, for sure.” The project will take 30 months to build, providing jobs for up to 500 people during construction, and when it’s done, the plant will power 1 million homes. All powered by Marcellus Shale gas…
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Range Resources 3Q17: $112M Profit, Production Hits 1.99 Bcf/d

Range Resources released its third quarter financial and operational update earlier this week. Range is one of the premier drillers in the Marcellus (and Utica) shale region. In fact, Range drilled the very first Marcellus well back in 2004. The Range update is full of interesting details. First and foremost, the company turned a profit of $112 million in 3Q17, contrasted to losing $361 million in the same period last year. That’s nearly half a billion dollar swing in one year. Impressive. Also impressive is that Range’s total production came a whisker away from 2 billion cubic feet equivalent per day–which is up 32% over the same period last year. During 3Q17 two Marcellus “super-rich” pads were brought on line. The wells on those pads had an average per well 24-hour initial production (IP) rate of 41.3 million cubic feet equivalent (Mmcfe) per day. Impressive. As part of the update, Range held a call with financial analysts to discuss company performance. As these types of calls usually do, this one had a Q&A at the end. One analyst asked if Range would be willing to sell some of it’s non-core assets in southwest PA. Range CEO Jeff Ventura said yes, the company would consider such a move, under the right kind of terms. Here’s the full update from Range…
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Marcellus Gas Now Flows All the Way to Nova Scotia

For years now MDN has kept an eye on several LNG (liquefied natural gas) export plants planned in Nova Scotia, Canada. Why? Because of the potential for Marcellus/Utica gas to feed those hungry beasts, once they are built. How would/could that happen? Primarily through a plan floated by Spectra Energy (now owned by Enbridge) called the Access Northeast Project, a roughly $3 billion project in New England to connect four existing pipeline systems (with enhancements): Texas Eastern, Algonquin Gas Transmission, Iroquois and Maritimes & Northeast. That last one, the Maritimes & Northeast (M&NE) pipeline, stretches from Massachusetts to Nova Scotia, to bring offshore Canadian gas south into New England. Part of Spectra’s plan is to make M&NE bidirectional, able to flow gas to Nova Scotia. Unfortunately the full Access Northeast Project got weighted down by opposition and in July Enbridge pulled the application (see Enbridge Withdraws $3B Access Northeast Pipeline Application). However, all is not lost. Part of the larger Access Northeast Project survived in another project called Atlantic Bridge, which the Federal Energy Regulatory Commission (FERC) approved in January of this year (see FERC Approves Atlantic Bridge Project for New England/Canada). Atlantic Bridge beefs up capacity along the Algonquin Gas Transmission pipeline and turns Spectra’s M&NE bidirectional, to carry more Marcellus/Utica gas into New England and eventually all the way to Nova Scotia. Work on the M&NE must have progressed quickly, and under our radar, because we read an article (below) that surprised us. Apparently M&NE is now bidirectional and has been since this summer. A paper mill operator in Nova Scotia says he has been buying Marcellus gas since this summer to power his plant. Who knew?! Some of our molecules are now able to make it all the way to Nova Scotia! The problem for the paper mill, and for all of Nova Scotia, is that when winter sets in and gas supplies get tight (and expensive) around Boston, Marcellus supplies to Nova Scotia will dry up or become uneconomical…
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An Honest Discussion about PA’s Proposed Severance Tax

While Pennsylvania legislators and PA Gov. Tom Wolf work to finish up the four-month-late state budget, the issue of whether or not to enact a severance tax to help pay for Harrisburg’s wild overspending is still alive. We think it’s mostly dead, but the severance tax keeps coming back to life like a zombie in a B horror flick. The latest incarnation comes from a Republican in Name Only (RINO), Gene DiGirolamo, a Philadelphia area member of the PA House. As we previously reported, DiGirolamo’s House Bill (HB) 1401 would slap a 3.2% severance tax on top of the existing impact tax, which is the equivalent of a 5%+ severance tax already (see PA Frankenstein House Bill Merges Severance Tax & Minimum Royalty). It’s obscene. The bill was reported out of committee and went to the full House for a vote, but the bill is now suffocating under the load of more than 350 amendments. We think (and hope) it’s dead–but again, you never know. The Pennsylvania Independent Oil & Gas Association (PIOGA) was tired of reading the half-truths and outright lies by severance tax supporters like DiGirolamo, so they composed and sent a letter to all members of the PA House. The letter sets the record straight, refuting the lies spread about the severance tax and the drilling industry. It is a devastating letter that MDN subscribers need to read…
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Appalachian Grid Operators: We Don’t Need Trump’s Reliability Plan

Several weeks ago U.S. Energy Secretary Rick Perry sent a letter to the Federal Energy Regulatory Commission (FERC) directing the agency to complete action on a “grid resiliency” pricing rule within 60 days. The proposed rule Perry proffered to FERC would put in place regulations that favor electric generating plants powered by coal and nuclear. That is, it would allow unprofitable ventures to pass along new costs, making them profitable–in the name of protecting the electric grid. The theory Perry (and by extension President Trump) subscribe to is that if the free market drives out coal and nuke plants, the electric grid would be “vulnerable” to far fewer sources to power it. If coal and nukes are all but gone, and all of sudden there’s a natural gas shortage, or prices spike for natural gas, it would endanger the electric supply in this country. On one side of the argument are those who believe the free market sometimes needs a helping hand (via regulation), and on the other those who believe the free market will sort it all out and we are not vulnerable. It’s no surprise that the coal and nuclear lobbies are celebrating Perry’s action, and the oil & gas lobby is not. The largest grid operator in the U.S. is PJM Interconnection, which covers all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV, and Washington, DC. The head of PJM has weighed in on the resiliency debate. He told FERC that Perry’s plan to prop up coal and nuclear is not necessary–that PJM is just fine without it…
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NGSA, API Take Aim at New York’s Plan to Favor Nukes over NatGas

It seems like since Donald Trump was elected, the far-left loons of the Democrat Party have become unhinged. Nowhere is that more apparent than New York State, with it’s corrupt governor, Andrew Cuomo. When it comes to oversight of the nation’s electric grid, and interstate pipeline infrastructure, the law is clear: The federal government, specifically the Federal Energy Regulatory Commission, is numero uno. Individual states cannot just willy-nilly decide they will horn in on how energy companies are incentivized–and they cannot use regulations to change the nature of power generation within their borders, because of the interconnected nature of electric power. Yet that is precisely what the lawless Cuomo is attempting to do in the Empire State. Via the NY Public Service Commission, Cuomo has set up a program called the Zero Emissions Credits (ZEC) program to subsidize nuclear power at the expense of fossil fuels, like natural gas. He’s trying to make it uncompetitive and expensive for natural gas to generate electricity in the state. An industry group sued to overturn ZEC, but a liberal judge for the US District Court for southern New York stuck up for Cuomo’s cockamamie plan (no surprise there). The case has been appealed and the Natural Gas Supply Association and American Petroleum Institute filed a friend-of-the-court brief supporting the appeal against ZEC. It’s a loooong brief–40 pages. We have it below…
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Northwestern Univ Study: Marcellus Shale Fracture Properties

Researchers at Northwestern University have just published a new study called, “Characterization of Marcellus Shale Fracture Properties through Size Effect Tests and Computations” (full copy below). The study runs 33 pages and is highly technical. The premise of the study is to use a new/different method of testing on Marcellus Shale rock in order to more accurately describe how the rocks behave under certain conditions. We’re not scientists and don’t know whether there are important insights in this research which can help drillers, but we suspect there may be, which is why we pass it along. Any time we see hard science relating to the Marcellus that’s not colored by a fractivist agenda, we think it’s worth highlighting. Below is the abstract, followed by a full copy of the study, for our drilling engineer readers…
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Marcellus & Utica Shale Story Links: Thu, Oct 26, 2017

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Appalachian ethane storage hub faces “chicken-egg” issue; Williams funds improvements in Lancaster, PA & the Brooklyn Library in NYC; hundreds attend youth expo for energy careers; West Texas needs more oil workers stat; shale industry faces stiff headwinds; U.S. gas market heading for oversupply; natgas truck sales flat; Canadian LNG; and more!
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