Fire Sale: Rex Energy Selling Everything to Pay Back Lenders

Some even sadder news to share about Rex Energy. On Friday we told you that Rex had filed for Chapter 11 “voluntary” bankruptcy protection (see Clock Runs Out – Rex Energy Files for Chapter 11 Bankruptcy). After our story, Rex released a press release to announce not only are they seeking Chapter 11 protection, they are, as of now, putting all of their Marcellus/Utica assets (wells, leases, etc.) up for sale–in both Pennsylvania and Ohio. The stated reason is to “maximize their long-term value and prospects.” To find good homes for those assets with another driller, because Rex obviously doesn’t think after exiting bankruptcy the company will be doing much in the way of drilling. And they need the cash from those asset sales to pay back lenders. In the end, our “little engine that could,” could not. Notice that Rex filed for Chapter 11 (reorganization), not Chapter 7 (liquidation). The company says “drilling and production programs are operating as usual, and the Company is maintaining the necessary staffing and resources to meet its commitments to gathering and processing partners.” So, limited business as usual–until everything is sold–and then there won’t be any business. Looks to us like it’s still a liquidation–except on Rex’s terms, instead of a forced auction of assets…
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Rice Brothers Act II – $200M Marcellus/Utica Investment Firm

Good news! The four Rice brothers, all of whom formerly worked in the family business, Rice Energy, have launched a new venture. You will recall last November EQT consummated a deal to buy and merge in Rice Energy, paying $8.2 billion to do so (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). Not all of that money went into the pockets of Dan, Toby, Derek and Ryan Rice–but you can be sure a good chunk of it did. We’ve been wondering where the Rice boys would land since they have a non-compete clause with EQT. Would they leave the Pittsburgh region and restart somewhere else? Fortunately, no! The four boys plus a fifth partner, a former VP at Rice, have pooled their money and expertise and have just launched Rice Investment Group (RIG), a (so far) $200 million “multi-strategy fund investing in all verticals of the oil and gas sector with a focus on partnering where our operational, technical, and strategic experience add value.” We love everything about the Rice boys. They’re young, irreverent, know how to have a good time, and smart. They come from good stock. Their dad, Dan Rice III, was once the most successful mutual fund manager in the United States, for over a decade, until the company he worked for (BlackRock) booted him for their own bungling and lack of communication with investors (see BlackRock’s Screw-up with Dan Rice & Rice Energy). The boys learned from the best and now they’ve launched an investment firm of their own. When you look at their website homepage, it is classic Rice boys–an animated video of an 800-pound gorilla on the homepage, signalling their intention to be THE big player in funding Marcellus/Utica ventures…
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School Near Pittsburgh Considers EQT Deal: $2,500/Ac, 15% Royalty

Last week MDN told you about the ongoing vendetta by a few anti parents in the Mars School District (half hour from Pittsburgh, in Butler County) and their Big Green accomplices. They suffered a major court defeat (see Dela. Riverkeeper Suffers Major Defeat in Martian Well Case). Rex Energy has drilled two wells about 3/4 of a mile from one of the Mars schools, and wants to drill another four. The Martians bleat and blat that faraway drilling activity will somehow hurt “the children.” Compare that attitude with the parents (and school district officials) in the Kiski Area School District in Westmoreland County (about 40 minutes from Pittsburgh). The Kiski Area School will vote tonight on a lease deal with EQT to allow shale drilling UNDER SCHOOL PROPERTY! The district will get $2,500 per acre in a signing bonus, and 15% royalties on any gas produced. If signed, the school’s bonus check could be as high as $310,300–for “the children.” The difference in attitude (and aptitude) between the parents in Mars and the parents in Kiski could not be more striking…
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TransCanada Pipe Construction Crew Helps Locate Missing WV Boy

Little boy who went missing in WV

It’s every parent’s worst nightmare. Last Monday afternoon a three year-old boy wandered into the woods near his home in Jackson County, WV and got lost. The parents could not find him. WV State Police and several local fire departments aided in a search effort, canvasing the woods. TransCanada is building the Mountaineer XPress Pipeline project several miles from where the toddler went missing. Upon hearing of the missing boy, the people in charge of the project flew into action, delivering supplies and port-a-potties to the searchers. They also provided maps of the area made by TransCanada–maps which ended up being instrumental in finding the boy. Some 15 hours after he went missing, on Tuesday morning, he was found–safe and sound. Authorities credit TransCanada as being instrumental in the process. TransCanada’s people didn’t do it for accolades. They did it because it was the right thing to do–even though it delayed the project and cost the company money. This episode paints a far different picture of pipeline companies than you typically hear about, does it not? Pipeline companies are not the heartless, “damn the environment and everyone who lives in the path of the pipeline” meme antis feed to sycophantic “reporters” in mainstream media. Quite the opposite. These are people who care about the work they do, and how it impacts the people where they do it. They care about the communities in which they work–and live…
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Trout Unlimited Launches Spy/Snitch Program for PennEast Pipeline

Let’s be right up front about how we feel about the innocent-sounding Trout Unlimited (TU). Four years ago the organization was outed as a radical, far-left environmentalist group–hellbent on opposing fossil fuels (see Trout Unlimited, Other Groups Outted as Radical Green Groups). We have zero respect for the organization. Yes, there are some well-meaning (hoodwinked, misguided) people who belong to it. Good people. But tricked into supporting an anti-American, anti-fossil fuel agenda. (You need to get out!) TU has just announced a new spy/snitch training program to keep an eye on the PennEast Pipeline–when it actually starts to get built. TU will soon begin training for a so-called “water monitoring” program in PA counties where PennEast will run–Luzerne, Carbon, Northampton and Bucks counties. To which we say, knock yourselves out. PennEast has nothing to hide. The pipeline won’t negatively impact waterways–not in any meaningful, long-term way. So if you want to spy and snitch, go right ahead. There won’t be anything to snitch about…
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EIA: Another 6.3 Bcf/d of New Pipes Coming Online in M-U in 2018

The Marcellus/Utica region needs pipelines and we need them bad. That was one of the themes MDN editor Jim Willis heard at last week’s Upstream PA event, held in State College, PA. Marcellus Shale Coalition President Dave Spigelmyer, one of the presenters, showed a slide stating there are 24 Federal Energy Regulatory Commission (FERC) active pipeline infrastructure projects in PA-OH-WV. In PA alone, pipeline projects worth $12.9 billion are either planned or under construction! Jim was one of the presenters too (great to see many MDN subscribers at the event). He presented “7 Trends/Issues that will Impact PA Drilling” in the next year or two. Jim’s #2 most important trend/issue? The pipeline wars. The efforts under way to limit and stop new pipeline projects. So it was with great interest we spotted a post by our favorite government agency, the U.S. Energy Information Administration, providing an update on northeast pipelines. According to the experts at EIA, if all planned and under construction pipelines in our region go online this year (as committed), we will have 23 billion cubic feet per day (Bcf/d) of “takeaway” pipeline capacity flowing out of our region. That’s up from 16.7 Bcf/d of takeaway capacity at the end of 2017–a 6.3 Bcf/d increase (up 38%), a much-needed increase to get our gas to new markets…
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Other Energy Stories of Interest: Mon, May 21, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Trillium opens third CNG station in New Castle, PA; Energy Transfer’s growth projects; M-U Shale Crescent offers big advantages for investors; Trump tax cuts flow through to PA utility customers; energy speakers say pipelines key to natgas boom; the bitter world of fractivism; thank goodness for U.S. natgas exports; California and Texas may see power shortages this summer; Russian pipeline to Europe a bargaining chip; and more!
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