Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate
There was an explosion and fire in Spectra Energy’s Texas Eastern Transmission’s “Delmont Line 27” pipeline last Friday. The explosion occurred in Salem Township (Westmoreland County), PA, about 30 miles east of Pittsburgh. One man was seriously burned when his house caught on fire (his house was destroyed). Nine homes in the area of the explosion/blaze were evacuated. As of yesterday six of the nine were able to return to their homes. Texas Eastern Transmission is one of the largest natural gas pipelines in the U.S.–running from the Gulf Coast through Marcellus/Utica country to New Jersey. The really disgusting part was the way the NJ chapter of the radical Sierra Club immediately, with a few hours, used the explosion by implying this is what awaits homeowners if the PennEast Pipeline is built. FYI, the Texas Eastern pipeline was built in 1981 and the portion that exploded was last inspected in 2012. Below are pieces of news accounts and the running response from Spectra about the accident…
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It’s a sad day for Halliburton and Baker Hughes. The two companies intended to get married, with Halliburton buying out BH and merging it in a deal worth $35 billion (see 
Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. On Friday Ultra filed for Chapter 11 bankruptcy protection in Houston. The company listed $1.28 billion in assets and $3.92 billion in debt. One (we would say stupid) investor owns a whopping $1.46 billion in unsecured IOUs (i.e. notes) from Ultra. Good luck with getting that paid. Here’s the low down on Ultra’s bankruptcy filing…
Reuters has written a wide ranging article on Magnum Hunter Resources (MHR) and the results of bankruptcy. The article implies MHR is nearly out of bankruptcy now (although it looks to us like a hearing in June will likely be the grande finale). The deal that MHR cut with debtors was to turn their debt into equity–note and bond holders are now stockholders. So MHR CEO Gary Evans now has a new board of directors composed of the new owners of the company. The problem is, the investors who used to hold stock in the company before bankruptcy have essentially lost their ownership–with the value of their previously issued stock now worthless. At least that’s our understanding of how this works (we’re open to being corrected on this). The Reuters article does a close-up of Gary Evans and recounts how he assured investors that a major asset sale was in the works that would save the company–shortly before he had the company file for bankruptcy. Some investors are not very happy with Mr. Evans over what they consider a deceptive practice…
Cabot Oil & Gas issued their first quarter 2016 update last Friday. The company reports losing $51 million in 1Q16 (compared to making a $40 million profit in 1Q15) because the price for natural gas slide 40% last year. Production numbers continue to impress. While they operate just a single rig in the PA Marcellus (in Susquehanna County), Cabot’s production increased 10% from 4Q15 to a whopping 1.628 million cubic feet per day average. In addition to the official update, we also selected out portions of Friday’s analyst phone call with Cabot’s top management. Among the topics discussed: the Constitution Pipeline, Cabot’s love of the PA Marcellus, “keep it in the ground” anti-drilling nutjobs and more…
A circuit court judge recently ruled on a case in West Virginia with implications for unitization or pooling. No, NOT forced pooling–or forcing landowners who haven’t signed a lease into a drilling unit, forcing drilling under their land. That’s not what this case was about. This case was about landowners with an already-signed lease for vertical wells now being used to allow that land to be pooled with other land and a horizontal well allowed to be drilled under it. The landowners, who wanted a new lease for horizontal drilling (and more money, which is reasonable in our opinion) said because the lease was silent on the matter of pooling or unitizing, it should not be allowed. The judge disagreed and found in favor of the energy company, in this case American Energy…
As we pointed out to you last December, evil corporate raider Carl Icahn (invests in companies so he can fire a bunch of people, boost the stock and pocket the profit) had fired Cheniere Energy CEO Charif Souki (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NGL prices in Appalachia heading higher; inside the NY fracking decision; the corrupt Cuomo Constitution Pipeline decision; New England pipelines update; the important role of natgas in Virginia’s power plan; natgas imports lowest since 1986; $840B decline in o&g reserves; and more!