Seventy Seven Energy Throws in the Towel, Sells to Paterson-UTI
Seventy Seven Energy (SSE) is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). It was an ill-fated venture from the beginning. SSE never turned a profit after becoming its own company. In June of this year, SSE, which has major operations in the Marcellus/Utica, filed for bankruptcy, then emerged from bankruptcy two months later borrowing $100 million (see Seventy Seven Energy Pops Out of Chapter 11 Bankruptcy in 2 Mos.). In the third quarter of this year, the red ink continued to flow, with SSE losing $36.5 million. Patterson-UTI Energy, another oilfield services company with major operations in the northeast, is buying out and merging in SSE in an all-stock deal worth $1.76 billion…
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EQT is feeling bullish about natural gas drilling in the northeast for 2017. The company has just released its 2017 operational forecast. What do we notice? First off, they plan to spend $1.5 billion next year, most of which ($1.3 billion) will be used to drill and complete new wells. That’s a whopping 50% increase from spending $1 billion this year. The next thing we notice is what type of wells they intend to drill: 119 Marcellus wells (76 in PA and 43 in WV); 81 Upper Devonian wells, which will be drilled on the same pads as deeper Marcellus wells, but only in PA; and 7 “deep Utica” exploratory wells. EQT also reworked a midstream deal with Williams in the Ohio Valley. Below are the exciting details of what’s ahead for EQT in 2017, including a second announcement from EQT Midstream about what’s ahead for the pipeline subsidiary, including details on how much they plan to spend on the Mountain Valley pipeline project in the coming year…
Yesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. For the past two reports, estimating production for November and December, Marcellus natgas has increased. The trend continues in this latest report, which forecasts production for the coming month of January. The October report predicted Marcellus production would increase in November by 73 million cubic feet per day (MMcf/d). The November report predicted Marcellus production would increase in December by 130 MMcf/d. The current December report predicts Marcellus production will go up by another 160 MMcf/d in January. Yikes! Another trend observed: four of the seven shale plays will increase production in January, one (the Utica) will produce about the same in January, and only two will produce less gas in January than they did in December. Translation: shale gas production is once again on the rise–which breaks a five month record of month over month declines across all seven plays. It seems we’ve turned a corner…
As MDN alerted you in October, the Bureau of Land Management (BLM) announced they would auction 33 parcels in Ohio’s Wayne National Forest (WNF) to allow shale fracking (see 
One of the many companies in the Marcellus industry targeted by Pennsylvania’s former Attorney General, Kathleen Kane, for extinction was Minuteman Environmental Services, a PA company that served the shale industry with several different businesses (see 
Extreme Plastics Plus (EPP) has been manufacturing and installing well pad liners since 2007. Pad liners protect the ground from accidental spills of frack wastewater and chemicals used during the drilling process. Located in Fairmont, WV, EPP’s customers are in the Marcellus and Utica Shale region. In order to expand, EPP raised an undisclosed amount of investment money from Hastings Equity Partners in 2013 (see 
When it comes to gas-to-liquids (GTL), MDN has observed (as we stated in a story yesterday, see 
Global research firm Wood Mackenzie, a trusted source of commercial intelligence for the world’s natural resources sector, recently published a new study that predicts global oil and gas exploration and production (i.e. drilling) in 2017 is going to bounce back–in a pretty big way. E&P companies in North America are forecast to boost their capital expenditures in 2017 by 24.5%–the first increase since 2014. Perhaps some independent verification of that prediction has just been provided by EQT. As we note in a related story today, EQT is boosting their capex next year to $1.5 billion–a 50% increase (see EQT 2017 Forecast: Drilling 119 Marcellus, 81 UD, 7 Utica Wells). However, the trend in recent months will continue toward “a smaller, more efficient industry.” In other words, we won’t see the roaring days of a few years ago, but at least we’ll see an uptick in new drilling in the coming year. Here’s what the brains at Wood Mackenzie predict will happen in the next 12 months…
Every now and again it’s fun to read Peak Oil people and their wild theories that oil will run out any year now. Such theories have been exposed as complete bunkum, mainly because those crusty old guys (and gals) in the U.S. oil patch keep figuring out how to do new things to extract oil, at cheaper prices. Technology gets better, procedures get better, we do more with less. And we produce more oil, year after year. But it’s still good to read those with a different viewpoint from time to time, just to keep us on our toes. Sometimes they even make some good points. That’s what we found in an article that posits the theory that shale oil really isn’t as good as it may appear. Why? According to this peak oil author, better technology now being used is not nearly as important as the technique currently employed called “high grading”–or targeting the sweetest of the sweet spots, which are far more productive than the run-of-the-mill drilling locations. The author maintains we’ll run out the best areas to drill soon, leaving us with less-than-optimal areas and therefore much higher costs. And then shale is toast. That’s the theory anyway…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OPEC’s production cut won’t boost Marcellus shale output; SWPA Enviro Health Project exploits children to support fractivist cause; FERC denies Elba Island LNG re-hearing request from Sierra Clubbers; proppant demand on the rise; oil rig count spikes way up; Trump will resolve Dakota Access, Keystone XL pipeline delays in January; and more!