Eclipse Resources Merging with Former Magnum Hunter

Blue Ridge/Eclipse combined acreage location – click for larger version

Some big news breaking from yesterday: After months of teasing by Eclipse Resources that it’s working on selling itself–it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres–focused 100% on the Marcellus/Utica. Eclipse is renown for having drilled the world’s longest onshore lateral wells. Why do we say Blue Ridge is buying Eclipse when the announcement talks about a merger and on paper Blue Ridge will become a subsidiary of Eclipse? Because Eclipse is doing a 15 to 1 reverse stock split (combining shares to boost the per share value) and Eclipse CEO Ben Hulburt is nowhere to be found in the management structure of the newly combined company. Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev–the guy who figures out how to drill those super-long laterals–will become Executive Vice President and COO of the combined company. No word yet on which name (or new name) they will use for the newly merged company…
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Atlantic Sunrise Pipeline Slightly Delayed, Ready by Sept 10

In July MDN told you that Williams said their $3 billion Atlantic Sunrise Pipeline that runs through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County will go online in August (see Williams: Atlantic Sunrise Pipeline Going Online in August). At the time, we said this: “We have no reason to doubt Williams. After all, if they make an announcement like that and then don’t live up to it, there will be PR hell to pay.” Oops. Looks like it’s time for Williams to pay PR hell. Last Friday Williams filed an official request with the Federal Energy Regulatory Commission (FERC) to begin flowing gas along the rest of Atlantic Sunrise beginning Sept. 10. Yeah, it’s only 10 days late, and perhaps close enough that we can forgive them. It is exciting! We’ve waited years to announce the beginning of Atlantic Sunrise flows–amidst protests from nuns, kooks and quacks. Most of the time we think of Atlantic Sunrise as the new greenfield pipeline that cuts through 10 northeastern PA counties, traveling from Susquehanna County to Lancaster County. But that part of the project, called the  Central Penn Line, is only part of the project. Other parts of the larger Atlantic Sunrise project were actually up and running a year ago around this time (see Williams Atlantic Sunrise Project to Begin Partial Service on Sept 1). What will happen Sept. 10 is the completion of those parts of the project not yet online, including the Central Penn Line…
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Sen. Pat Toomey Claims Trump Tariffs Will Delay Shell Cracker

US Sen. Pat Toomey

Pennsylvania’s U.S. Senator Pat Toomey is a DC swamp dweller–let’s just be honest about it. He’s a Republican, largely in name only. He’s better than a Democrat–but not by much. Toomey is claiming that President Trump’s attempt to stop the flow of foreign steel dumping in our markets by using tariffs (dumping which hurts our own steel industry and isn’t anywhere close to being fair or free trade), will delay incoming material for the Shell ethane cracker plant in Beaver County and result in the layoff of “hundreds” of workers. A Shell spokesman neither confirms nor denies Toomey’s claims but uses doublespeak to sidestep the issue–meaning Shell likely asked Toomey to be the front guy in shaming the Trump Administration into granting waivers so they can get their cheap, imported steel. Toomey has been an early and repeat critic of Trump. Toomey opposed Trump’s tariffs from the beginning and is currently trying to get a new law passed stripping the President of his constitutional power to impose tariffs…
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Marcellus Gas Heads to Florida Electric Power Plants

Sabal Trail Pipeline route – click for larger version

Do you know which of our 50 states (57 states if you’re Obama) generates the most electricity? It’s Texas! How about the state that generates the second highest amount of electricity? That would be Florida. California, our most populous state (maybe not anymore now that it’s run by lib Dems) is not in the top 2 for electric generation. Over the past few years, Florida has been dumping coal generating plants and instead building new natural gas-fired electric generating plants. Traditionally Florida has sourced its natgas from the Gulf Coast, but increasingly they now get their natural gas from–yep–the Marcellus/Utica. Say what? That’s right! How does our gas get all the way to Florida? Pipelines, of course. Specifically, Williams flows our gas south along the mighty Transco Pipeline. Marcellus gas volumes along the Transco are about to increase dramatically as the Atlantic Sunrise project comes online (see today’s story about the rest of Atlantic Sunrise going online Sept. 10). Our gas flows south on Transco to a point in Alabama where Transco connects with the Sabal Trail Pipeline–and Sabal Trail goes all the way to the Orlando area. RBN Energy does a deep dive into how our gas gets to Florida in a 2-part series. Below is part one…
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China Official Says $83.7B Deal with WV Still On, Some Progress

Some encouraging words, but also some outright lies, coming from Ling Wen, president of China Energy Investment about China’s planned investment in West Virginia. Wen addressed reporters yesterday in Hong Kong, and some of the conversation turned to China Energy Investment’s 20-year deal to invest $83.7 billion in WV’s shale and petrochemical industries (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Months ago we speculated that the impending trade war with China might put that investment on hold, a fear that was confirmed in June. Chinese officials were supposed to attend the Northeast U.S. Petrochemical Construction Conference in Pittsburgh to announce the first round of investments in WV. However, Brian Anderson, director of the West Virginia University Energy Institute, said given the trade war with China, the officials elected to stay home instead. Anderson said at that time, “The pending trade war has put this project in jeopardy” (see Trade War Puts $83.7 Billion Chinese Investment in WV on Hold). But a few weeks later Anderson changed his tune. He told a reporter, “In terms of the development process, we continue to move forward…We’re even working on the next potential visits by officials and team members, so it’s not just the high-level executives, but development teams” (see $83.7B Chinese Investment in WV Shale & Petchem Still Alive?). Yesterday Ling Wen said even though there is an ongoing trade war between China and the U.S., the WV deal is still on. That’s good news. Wen also said that media reports that China cancelled trips “was not true.” That’s an outright lie. They did cancel trips in June…
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Fake Study Recommends Quarter-Mile Setbacks for PA Shale Drilling

More fake “research” on drilling, courtesy the anti-drilling Southwest Pennsylvania Environmental Health Project (EHP). This is the same group of antis who brought us the so-called list of the harmed (in 2013) and last year launched a faux health registry that attempts to link everything from the sniffles to “performance issues” to nearby fracking (see Fake Science: SWPA Enviro Health Registry for Those Near Fracking). Here’s the latest laughable “research” published (yes published) in a pay-for-play journal: Setback distances for unconventional oil and gas development: Delphi study results. The so-called researchers from EHP asked 18 of their anti-drilling friends, who are supposedly experts, for an opinion on how far away a building should be located from a shale well. The current standard in PA is 500 feet. That is, a well being drilled must be at least 500 feet away from an “occupied building.” EHP’s anti-drilling friends (16 of the 18) said that number should be 1,320 feet–a quarter mile. EHP wrote it all up, presenting it as fact, and got it published in the very low-standard PLOS One journal–a journal where you pay them and they’ll publish anything. Totally made-up research. PLOS One is “peer reviewed” so voila, there’s now a “peer reviewed study” that says setbacks in PA should be at least a quarter of a mile away when it comes to shale drilling. Which would eliminate about 90% of all shale drilling in the state (which is the purpose of this “study”). We really don’t know how those from EHP can show their faces in public, pedaling this kind of junk science. More to the point, how can any honest, self-respecting organization spend good money to fund EHP?…
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KLX Splits in Two – Sells Aerospace to Boeing, OFS Spin-Off

KLX Inc. is the “world’s leading provider” of aerospace fasteners, consumables, and logistics services, operating as KLX Aerospace Solutions. Little known fact: KLX also provides oilfield services and associated rental equipment across North America as KLX Energy Services. In particular, KLX operates in the Marcellus/Utica region. KLX Energy Services is actually an umbrella covering seven companies KLX has acquired in the energy services sector. Each unit is in the business of providing technical services and related rental equipment to oil and gas exploration and production companies (i.e. drillers). KLX provides a broad range of solutions and equipment. Here’s the big news: KLX the aerospace company is selling itself to Boeing (yes, that Boeing) for $4.25 billion ($3.25 billion in cash and assuming $1 billion in debt). But Boeing isn’t interested in the oilfield services business, so KLX Energy Services is being spun off into a standalone company. Here’s the details…
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Energy Stories of Interest: Tue, Aug 28, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: New director for Utica Shale Academy; Sistersville Tank Works wants more local shale customers; diversifying America’s petchem industry by building in Ohio Valley; why US electric demand will increase; US can help its neighbors by exporting more natgas; new NAFTA deal will help US-Mexican natgas trade; the gas market *should* be panicking, but isn’t; China gives up tariffs on US oil after only 2 months; and more!
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