Shakedown Complete: XTO Pays PA AG $400K to Make Case Go Away
Just prior to going on trial for committing felonies while in office, Pennsylvania Attorney General Kathleen Kane (Democrat) needed something, ANYTHING, to distract the press from focusing on her own crimes. Since she took office in January 2013, Kane has targeted the Marcellus industry. One of the first high profile cases she manufactured (out of nothing) was to accuse XTO Energy of committing a crime in an accidental spill of a few thousand gallons of frack wastewater–an accident in Lycoming County, PA that happened years before she took office and didn’t have any long-term effects (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO). The case Kane has tried to manufacture against XTO, launched in her first year in office, is finally over. Instead of dragging it out further, XTO decided to pay Kane $400,000 to make it all go away (called a shakedown in the organized crime world). Kane is settling with XTO using a “rehabilitation” program normally used for drunk drivers without a prior record–that’s how desperate she is to get this case settled and turn the focus away from herself for a few days. “Coincidentally” Kane’s own felony trial begins on Monday. It’ll be a sweet day to watch her frog marched out in leg irons when she’s convicted…
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Chesapeake Energy, the second largest natural gas producer in the United States (thanks to co-founder Aubrey McClendon), issued its second quarter 2016 update yesterday. Depending on which media source you read, the update shows a company in full recovery, to a company that’s doomed. A few facts from the update: Chessy lost (on paper) $1.8 billion in 2Q16. Which is huge. But it’s much better than the $4.1 billion they lost in 2Q15–so we do see progress. Chesapeake’s debt reduction program continues. So far this year they’ve paid down another $1 billion in debt. Another good sign. As for drilling, Chesapeake currently operates 10 rigs–three each in the Eagle Ford, Haynesville and Mid-Continent plays, and one in the Utica. They’re not operating any rigs in the Marcellus at present. The company says it plans to spend close to $1.8 billion this year on drilling and will drill another 100 wells by the end of the year. Here’s the update from the biggest shale driller on the planet…
As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Month by month Paterson’s rig count has declined over the past year plus–until June (see 
National Fuel Gas Company covers the full span of the oil and gas business–from upstream (with its wholly-owned drilling subsidiary Seneca Resources), to the midstream (with wholly-owned subsidiary Empire Pipeline) to downstream (NFG’s natural gas utility service to 740,000 customers in NY and PA). Big company. Diverse operations. Yesterday NFG issued what they call their third quarter update (everyone else’s second quarter update), covering April through June. According to NFG’s CEO Ronald Tanski, Seneca’s Marcellus production grew by an impressive 25% year over year, due to increased takeaway capacity on NFG’s pipelines and on improved gas prices in Appalachia. NFG’s pipeline business is doing very well–making more this year than last. The one part of the business that (surprisingly) lost money was the utility business. Here’s the full run-down for NFG and its various divisions…
Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. According to Carrizo’s latest quarterly update for 2Q16, that (sad) state of affairs continues…
CONE Midstream, a joint venture between CONSOL Energy and Noble Energy (get it? CO from CONSOL and NE from Noble Energy) was formed in summer 2014 (see 
Summit Midstream has a small but growing presence in the Marcellus/Utica region largely through purchasing pipeline systems from other companies, including Mountaineer Midstream, Summit’s Marcellus-area pipeline system in Doddridge County, WV. The company released its second quarter 2016 update yesterday, and unfortunately the numbers don’t look so hot. Whereas CONE Midstream, a much smaller, totally focused on the Marcellus/Utica pipeline company stayed about even with net income in 2Q16 (see Cone Midstream Continues to Impress – 2Q16 Update), Summit did not. In 2Q15 Summit lost $2.4 million. In 2Q16 they lost $50.6 million–or 21 times what they lost a year ago. However, $38 million of that loss was an impairment charge (meaning its a paper loss, not actual money out the door loss). Since Summit operates in a number of plays, including the Marcellus and Utica, we’ve selected out portions of the update below that mostly deal with the northeast…
MDN is pleased to announce a regular feature on Scranton radio station 94.3 FM “The Talker.” Each Saturday the station airs the Shale Gas News show, co-hosted by MDN friend Bill desRosiers (of Cabot Oil & Gas). Bill recently asked Jim to supply a weekly segment recounting the top stories read on MDN. That is, MDN is becoming the official news source for Shale Gas News! To kick things off, Jim compiled a list of the Top 10 most read stories on MDN for the first six months of 2016. It’s an interesting list, as you’ll see. It may or may not surprise you to learn that 4 of the top 10 stories relate to Shell’s planned ethane cracker plant, a $3 billion+ project that will create thousands of jobs and inject something like $20 billion in the state’s economy. The Shell cracker is a really big deal! Without further ado, let’s count them down like Letterman used to…
LNG (liquefied natural gas) is a big deal and getting bigger–you know that if you’ve read MDN for any length of time. As the U.S. begins to shift into producing more natural gas than it can use here at home, exporting that gas, via LNG, is an important market–for the Marcellus, Utica and beyond.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: REX capacity expansion from east to west on track; Marcellus/Utica takeaway to New England & Mid-Atlantic; Talen reports $3M loss, Riverstone takeover in jeopardy?; radical anti from DC visits SWPA to spread lies; protesters want to block Vermont gas pipeline; EPA’s regulatory push jeopardizes natgas progress; Harold Hamm talks Trump and Hillary; and more!