Range Res. 2018 Budget & 5 Yr Outlook: Focus on SWPA Marcellus

Yesterday Range Resources released a pair of press releases. One outlines a high level overview for what the company will spend in 2018 and beyond, for the next five years. The other release trumpets Range’s “proved reserves.” As for 2018, Range says they are reducing the amount of money they will spend to drill this year versus what they spent last year. Range previously said they would spend $1.15 billion this year. That’s now been reduced to $941 million. Last year Range spent $1.27 billion, so this year’s spending is down 26% over last year. That’s a pretty hefty decrease. The good news is that Range will spend 80% of this year’s budget on drilling in the Marcellus, mainly in southwestern Pennsylvania. Even though Range will spend and drill less this year, they predict production will grow another 25%. As for the 5-year outlook, Range says almost all growth will come in the Marcellus (not the Louisiana Haynesville, their other drilling location). Range still has some 3,200 locations where they can drill new wells. Range CEO Jeff Ventura says shale has entered a “new era” of shale development where companies (like Range) have “captured the most prolific resources” and will now switch to focus on returns for shareholders. Translation: We won’t be drilling as much as we did in the past so we can concentrate on bottom line profitability. Which explains why Range is spending less this year than last. In the release Range calls the Marcellus its “flagship asset” and clearly signals the company will keep its focus here, in our region. As for proved reserves (how much gas and oil is in the ground, retrievable with today’s technology and at today’s costs), Range says proved reserves as of December 31 increased by 26% from the prior-year, now at 15.3 trillion cubic feet equivalent (Tcfe). That’s alotta gas! We have the Range announcements below, along with an updated PowerPoint slide deck chocked full of useful information…
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PA AG Not Backing Down re Chesapeake Energy Royalty Lawsuit

At the end of last year Chesapeake Energy offered a $30 million olive branch to Pennsylvania landowners to settle claims the company had screwed them out of royalty money by artificially inflating post-production costs in an elaborate scheme to pocket more money at landowners’ expense (see Chesapeake Agrees to $30M Royalty Settlement for PA Landowners). Chesapeake’s proffered deal would give the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. Frankly, it’s chump change. The big concession by Chesapeake in the proposed deal is that it gives landowners the right to reset the terms of their leases going forward. The catch is that Chesapeake won’t pull the trigger on the deal unless/until PA’s Attorney General, who has an ongoing, separate lawsuit filed against Chesapeake over the same issue, settles as well. PA AG Josh Shapiro has fired back saying he will not cave to Chesapeake’s “pressure tactic” and settle. PA landowners are caught in the middle. Some of them want the Chesapeake $30M chump change deal saying a bird in the hand is better than two in the bush. That is, the AG may eventually lose his case–and it will take years to play out. Why not take the money and run now, especially if we can reset the lease terms to prevent any more gouging by Chesapeake? But other landowners, including National Association of Royalty Owners (PA Chapter) President Jackie Root say PA landowners “deserve better” than the deal offered by Chesapeake. Here’s the latest in the royalty wars…
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FERC Stops Rover Drilling Near River After 200K Gal Mud Disappears

The Ohio EPA continues its yapping insistence that the Federal Energy Regulatory Commission (FERC) *permanently* shut down underground horizontal directional drilling (HDD) work being done by Rover Pipeline near the Tuscarawas River over concerns that nontoxic (totally safe) drilling mud keeps disappearing down the borehole. FERC listened, sort of. In an order dated yesterday, FERC told Rover to *temporarily* stop HDD work at Tuscarawas until Rover can outline a plan for moving forward that FERC has confidence will address concerns over the disappearing drilling mud. When mud used for drilling holes comes out on the surface any place other than the hole from which it went down, it’s called an “inadvertent return.” We call it a leak. However, if that same mud never comes back to the surface, as sometimes happens, it’s fine. Except when it’s a LOT of mud, as is the case in drilling near Tuscarawas where a cumulative 200,000 gallons of it have disappeared down hole, not (so far) coming back out. Sooner or later it seems likely that at least some of that mud will come back to the surface–somewhere. That’s the concern that no doubt prompted FERC to send Rover a letter yesterday telling them to (for now) stop HDD work at Tuscarawas…
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PA Supreme Court Rejects Landowner Lawsuit Against ME2 Pipeline

You may recall our story about the daughter of a Huntingdon County, PA landowner who took to a tree on her mom’s property in March 2016 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 needed 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 two serial criminal trespassers/antis who participated. The charges against all them were later dropped (see Charges Dismissed Against Tree Sitting Anti in Huntingdon County). The landowner family, using Big Green lawyers, sued Sunoco–twice. One of the lawsuits challenged Sunoco’s right to use eminent domain in order to run the pipeline across the landowner’s land. That lawsuit was appealed all the way to the PA Supreme Court and on Tuesday, the court refused to hear it, meaning the decision of the lower Commonwealth Court upholding Sunoco’s right to use eminent domain stands. That is, the anti landowners lost. At least that first lawsuit. The second lawsuit was filed by the mom, her daughter and the two serial criminal trespassing antis (see Anti-Pipeline Quartet Sues Sunoco, ET, Police, Others re ME2 Arrests). That second lawsuit sues everyone and everything connected to their arrest (Sunoco, a private security firm, a publicist, and 27 state and local police officers) for violating their Constitutional rights. The second lawsuit is still alive and kicking. Meanwhile, here’s the good news that yet another attempt to block Mariner East 2 construction has been defeated…
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PA Chips in $2M to Build NatGas Pipelines in Berks, Centre Counties

In 2016 the Pennsylvania legislature, over the objections of PA Gov. Tom Wolf, voted to shift $24 million away from a boondoggle program called the PA Alternative Energy Investment Act and into a new program called the Pipeline Investment Program, or PIPE (see PA Gov Wolf Launches (Gasp) Pipeline Investment Program). The PIPE program helps fund pipeline construction to manufacturers, hospitals and schools to provide clean-burning, abundant, cheap and home-grown Marcellus Shale gas to those organizations. Since that time a number of PIPE $1 million grants have been doled out. Each time another grant is issued, Gov. Wolf’s publicity team makes a big deal out of it, pretending old Tommy is Santa Claus himself. Nary a word about Wolf’s original objection to the program. Last November Wyoming County got a $1 million grant to help run natgas pipes there (see PA Approves $2.4M Project to Run NatGas Pipes in Wyoming County). On Tuesday, Gov. Santa Claus handed out another two such grants. One $1M grant will go to Berks County (near Philadelphia) to run natgas pipelines to the Hamburg Commerce Park where it will feed 33 businesses and 20 area homes. The other $1M grant will go to Centre County (home of Penn State), where a new natgas pipeline will feed 6 businesses and 89 homes…
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Riverkeeper Gears Up to Fight PennEast in Court via FERC Requests

That didn’t take long. We knew it wouldn’t. Last Friday the Federal Energy Regulatory Commission (FERC) gave its full, final approval for the PennEast Pipeline project, a $1 billion, 120-mile primarily 36-inch natural gas pipeline that will stretch from Dallas (Luzerne County), PA to Transco’s pipeline interconnection near Pennington (Mercer County), NJ. (see FERC Grants Final Approval for PennEast Pipe – Real Battle Begins). Yesterday THE Delaware Riverkeeper, a radicalized Big Green group, filed two requests with FERC: (1) a motion to “rehear” (i.e. reconsider) their decision to approve PennEast, and (2) a motion to block any construction on PennEast until the motion to rehear has been decided. As Riverkeeper plainly states on their website, “A Rehearing Request must be submitted and denied before a legal challenge in court can be pursued.” A court challenge is, of course, the strategy. Asking FERC to rehear the decision is nothing more than going through the motions, jumping through the necessary hoops. A huge side benefit for Riverkeeper with FERC’s decision to approve PennEast is that the opposition to the project can be leveraged as a big fundraiser for Riverkeeper: “Help us stop the big, bad pipeline. Donate here!” Below is Riverkeeper’s press release (i.e. fundraiser) about their plan to challenge FERC approval, along with their FERC filings from yesterday…
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PA Groups Want to Steal Marcellus $ to Fund “Free” College Educ

On Tuesday, two left-leaning, Harrisburg-based Democrat groups with innocent sounding names–the Keystone Research Center and the Pennsylvania Budget and Policy Center–introduced what they labeled as “The Pennsylvania Promise” during a presentation in the Capitol Rotunda. We call it “The Pennsylvania Grand Theft.” No doubt inspired by autocrat Andrew Cuomo in the state next door and his “free college tuition” program, the groups want to give away a “free” college education to PA residents who go to a PA state college or university. Of course nothing is free. The program would cost $1 billion a year and would be funded in part by (you guessed it), a Marcellus Shale severance tax. The personal state income tax would also go up in order to help pay for this “free” program. How is this not theft? Transferring money from those who work hard to earn it–to those who don’t. Government theft, plain and simple. We have such a program here in New York State and people are leaving our state in DROVES. Year in and year out NY loses population, particularly in the Upstate region. Socialism, the transference of wealth from those who earn it to those who don’t (or won’t), eventually breaks down when the earners get tired of being shaken down by their government and move away. That’s what will happen in PA if a cockamamie plan like “The Pennsylvania Promise” is adopted…
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CPV Proposes New $1B Gas-Fired Elec Plant in Livingston, Mich.

Location of Livingston County, Mich.

Michigan is not within the Marcellus/Utica Shale region, so you may wonder why we would highlight a story about a new natural gas-fired electric plant proposed for Michigan. Although there is no shale drilling in Michigan (at least not yet), we still have an interest in the state. Why? Pipelines from the Marcellus/Utica are right now being built to Michigan (Rover, NEXUS). In addition, Marcellus/Utica gas is already flowing to points in the Midwest via pipelines like the reversed Rockies Express (REX). Once the gas makes its way West, it catches a ride on other pipelines to feed places like Chicago, and (yes) Michigan. In other words, it’s a pretty good bet that the gas that will feed this plant if/when it gets built, will come from our region. Competitive Power Ventures (CPV) is proposing to build a new power plant in Livingston County. So far it’s still only talk. However, the talk is starting to get serious. CPV recently purchased a 7-year option to buy 145 acres of farmland where the plant would be located. In other words, money is now starting to get spent, which is a good sign. Here’s the particulars we could find about this project…
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Volunteers Test Water for Marcellus Impact Past 8 Yrs, Find Nothing

Here’s something truly ALLARMing: Over the past eight years the group Alliance for Aquatic Resource Monitoring (ALLARM) has conducted more than 70 workshops to train volunteer “citizen scientists” in how to test local creeks and rivers to detect the least little hint of pollution coming from the Marcellus Shale industry. Eight years! And what have they found in all that time? Nothing. Not one, single, thing. If they had, it would be front page news for days and weeks and months. Don’t get us wrong, if they want to be out there in Mother Nature testing, keeping an eye on things, we’re all for it. Knock yourselves out. Our point: Nothing has been found. Yet ALLARM continues to conduct their “free” workshops to this day. Somebody is making money somewhere on this environmentalist scheme, we’re not sure how. At any rate, the ALLARMists are hooking up with the anti-drillers of Protect Penn-Trafford to conduct another of their “free” training sessions, called Shale Gas Stream Monitoring Workshop, in Westmoreland County in February…
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Marcellus & Utica Shale Story Links: Thu, Jan 25, 2018

The “best of the rest”–stories that caught MDN’s eye over the break that you may be interested in reading. In today’s lineup: Water truck driver dead after tanker truck crash in WV; trouble at the top of Linde Corp; Dela. County looks into risk assessment study for ME2 pipe; NETL in step with Trump; Colorado joining NY and CA in suing big oil; more electric cars mean more coal and natgas; shale oil myth – US flooding the world with condensate; the world’s most critical pipeline; and more!
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