Range Gets $300M for 1% Royalty on Washington County Production

Yesterday Range Resources, the very first company to sink a Marcellus Shale well back in 2004, announced it has cut a deal to “sell a proportionately reduced 1% overriding royalty in its Washington County, Pennsylvania leases for gross proceeds of $300 million.” Yeah. What, exactly, does that mean? More high finance stuff. The deal, as we try to understand it, reminds us of “factoring” that we learned about in our college business classes. You know, selling the money you will receive in the future from accounts receivable for a lump sum today? We think of this deal as kind of like that. Not exactly, but kind of.
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EIA Oct ’18 Drilling Report: Shale Gas Output Up Another 1 Bcf/d

The hits keep rollin’ in. Last month the U.S. Energy Information Administration’s (EIA) monthly “Drilling Productivity Report” (DPR) estimated that this month (in October) the country’s seven major shale plays would produce an amazing, all-time high of 73 billion cubic feet per day (Bcf/d) of natural gas production (see EIA Sep ’18 Drilling Report: Shale Output Flies Past 73 Bcf/d). EIA issued the October DPR yesterday (with numbers for November) and once again, production is going up. EIA estimates November production will hit 74 Bcf/d–another record-breaker.
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Nine Energy Buying Magnum Oil Tools for $493M

Nine Energy Service, an oilfield services company that competes with companies like Halliburton and Baker Hughes, operates in a number of shale basins, including the Marcellus/Utica. Magnum Oil Tools is a “downhole technology” company providing completions products including dissolvable frac plugs and a number of other patented inventions. Magnum also has operations in the Marcellus/Utica. Yesterday Nine announced it is buying out and merging in Magnum in a deal worth $493 million.
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Recruiting Young People into Skilled (Non-College) Jobs in M-U

Here’s a theme we return to from time to time, when we spot a story worth highlighting. Not everyone can or even should go to college following high school. Some students would be better served by learning a skill, a trade, and entering the workforce sooner rather than later. There are a number of skilled trades in the shale industry–in all segments from upstream (drilling) to midstream (pipelines) to downstream (petrochemicals). Last week a workforce forum was held at the Mon Valley Career & Technology Center in Washington County, PA. A panel discussion pointed out we’re quickly heading for a shortage of skilled workers for shale (and other industries) in the tri-state area.
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Cove Point LNG Plant Restarts After 3 Wks Offline for Maintenance

On September 21, Dominion Energy stopped pulling gas from pipelines into the Cove Point LNG export facility (on the shoreline of Maryland) in order to conduct scheduled maintenance (see Cove Point LNG Plant Down for 3 Weeks of Maintenance). Cove Point liquefies and exports some 3/4 of a billion cubic feet (Bcf) each day. True to their word, over the weekend (three weeks later) Dominion began pulling gas again. By the way, all of the gas feeding Cove Point comes from the Marcellus/Utica region–most of it headed to Japan and India.
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Peoples Gas Installs First Residential NatGas Fuel Cell in U.S.

WATT Imperium Fuel Cell System Installed in a Residential Home (click for larger version)

In early September MDN told you about a cool new experiment coming from Peoples Natural Gas in the Pittsburgh area–installing a natural gas fuel cell in homes to help generate electricity (see Pittsburgh Utility Experiments with NatGas Fuel Cells in Homes). The fuel cells would not replace a connection to the electric grid, but would augment or supplement electric generation during heavy load times. And get this, it generates the electricity using natural gas with “little to zero emissions.” The new news: The first such installation happened in a home in Westmoreland County on Friday, September 28, 2018. The very first in the country.
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Trump Rolling Back Obama’s Wild Overregulation of Methane

The Obama years were a disaster for the country in general, and the oil and gas industry (all coal) in particular. One of the egregious examples of overregulation under Obama (wild, far-out overregulation) was reducing so-called fugitive methane (CH4)–preventing teeny tiny leaks of methane from pipelines, wellheads, etc. Obama’s Stalinist EPA put in place expensive requirements to capture nearly every last molecule of CH4–making it uneconomical for many drillers and pipeline companies, driving them from the industry. The Trump Administration is correcting many of the egregious regulations of the Obama era. On Monday, Team Trump floated reworked (relaxed) regs for methane emissions.
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Energy Stories of Interest: Tue, Oct 16, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Intense fight over Colorado oil and gas setbacks could end with national precedent; Opponents speak out on Superior natural gas power plant; Ohio Sen. Sherrod Brown is a climate kook; U.S. eyes military bases for coal, natural gas exports; Williams appoints Debbie Cowan as Senior Vice President and Chief Human Resources Officer; Why satellites could unlock the future of natural gas; Natural gas jumps on expectations of above-average cold, with supplies at decade low; The giant corporations behind your burgers and milk have a “terrifying” climate secret; Not being there: How augmented reality is changing the oil industry; Saudis team up with Russians to compete with US natural gas; The LNG Canada project will impact gas markets, but not soon enough; In wake of “terrifying” climate report, German environmentalists will rally for nuclear.
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