Energy Services | Industrywide Issues | M&A | MarkWest Energy | Ohio | Pipelines | Statewide OH | Summit Midstream
Summit Midstream Sells Utica Pipeline Assets to MPLX for $625M
Summit Midstream Partners, LP, which owns midstream (pipeline) assets in a number of major plays across the country, including the Marcellus/Utica, announced on Friday the sale of the company’s Ohio Utica assets, including its Summit Midstream Utica, LLC subsidiary, which includes its approximately 36% interest in Ohio Gathering Company, approximately 38% interest in Ohio Condensate Company, and other wholly-owned Utica assets. The sale was made to a subsidiary of MPLX LP (i.e., MarkWest Energy) for $625 million in cash. Summit will no longer own Utica assets in Ohio, but the company WILL retain (for now) its Marcellus assets in West Virginia.
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Diversified Energy (formerly Diversified Gas & Oil), with major assets in the Marcellus/Utica region (and other regions, too), owns approximately 8 million acres of leases with 67,000 (mostly) conventional oil and gas wells. The company’s business model is to buy lower-producing wells on the cheap and find ways to make them more productive. Last week, Diversified issued its fourth quarter and full-year 2023 update. Part of the update included an announcement that Diversified is acquiring financial partner Oaktree Capital Management’s interests in the companies’ JV assets in western Oklahoma, East Texas, and northwest Louisiana for a net purchase price of $386 million.
Over the past year or so, there has been merger mania in the upstream (drilling) sector. And it continues even now. According to major midstream (pipeline) companies speaking at last week’s CERAWeek event in Houston, TX, pipeline companies are next in line for merger mania. However, combinations in the midstream space will not follow the same path upstream has followed. There’s a big difference.
Is hydrogen energy a solution in search of a problem? That’s the question that keeps running through our heads. In a free market, customers buy products from companies that manufacture them. If a company is producing a product for which there is no demand, that company doesn’t stay in business long. According to a journalist at last week’s CERAWeek energy event in Houston, TX, one of the “hot topics” at the event was “hydrogen’s demand dilemma” — as in, the customers don’t exist to buy it.
Now we’re teaching our kids how to become eco-terrorists? In Ohio?? It seems the answer to that is YES. Ohio State University (OSU) has a geography class that teaches “the political economy of climate change and the political philosophy of climate justice.” One of the books to be used in the course is: “How to Blow Up a Pipeline.” Ring any bells? There was a movie released with the same title last year (see 
Last week, the Baker Hughes rig count dropped five rigs after adding seven the week before. The count went from 629 active rigs two weeks down to 624 last week. The national count is officially rangebound. Since last October, the national count has gone as low as 616 and as high as 629. And that’s it. No higher and no lower. The Marcellus/Utica cumulatively lost one rig (in Pennsylvania) last week and now runs 42 rigs. The number of gas rigs cumulatively across the country fell to its lowest number since January 2022.
MARCELLUS/UTICA REGION: WVU technology innovations position WV to lead hydrogen; NATIONAL: Climate activists are done playing nice; The climate scam won’t end until we end it.