PA Expects $80M in Royalties from Drilling on State Land in 2017
One of the big success stories about Marcellus drilling in Pennsylvania is the money generated from state land leased for oil and gas drilling. You may recall two governors ago Democrat Gov. Ed Rendell was hell bent for leather in leasing state-owned land for drilling ON said land. After his voracious appetite for money was sated and his Democrat cronies in the legislature spent (“blew”) all $444 million of it, Rendell tried to pretend that he’s an environmentalist by slapping an executive order–a moratorium–on any more leasing of state-owned land. Hypocrite. The next Governor, Tom Corbett, lifted that moratorium with an executive order of his own so that another $75 million of badly needed revenue could be raised by leases for drilling under (not on) state land. Then along came the disastrous Tom Wolf. He immediately signed a new executive order banning any new leases on state-owned land (see PA Gov Wolf Signs Exec Order to Ban Drilling Under State Land), cutting off an important new revenue stream. However, a lot of state-owned is, as we said, already leased. And some of it has been drilled on/under–and it produces a prodigious amount of royalties. The PA Dept. of Conservation and Natural Resources (DCNR), which oversees PA’s state land, says they expect to see around $80 million in royalty payments this year. They also report still having issues with some drillers over shorting royalty checks. DCNR says they are owed “hundreds of thousands of dollars” in shorted royalty money…
Read More “PA Expects $80M in Royalties from Drilling on State Land in 2017”
In January 2014 MDN brought you the story that due to incessant nagging from the NJ Sierra Club and the NJ League of [Liberal Democrat] Women Voters the Pinelands Commission, which oversees a stand of scrub pines in South Jersey, nixed a plan for a new natural gas pipeline to bring cheap, clean, abundant Marcellus Shale natural gas to South Jersey for use by residents and to feed an electric plant a local utility wants to convert from burning coal to natgas (see 
Several southwest Pennsylvania Republican lawmakers (and a Democrat lawmaker) addressed the League of [Liberal Democrat] Women Voters at the group’s annual question-and-answer session with area legislators in Washington, PA on Friday. The Lib Dems attending likely got more than what they bargained for, as the legislators who addressed them stuck up for fossil fuels. The moderator asked a question about so-called clean energy jobs and investing, and promptly got schooled about REAL clean energy–i.e., fossil fuels!…
Clearlake Capital Group, a private investment firm with gobs of money ($3 billion of assets under management) has purchased a Texas oilfield services company, Globe Energy Services, and a Texas-based industrial equipment rental company, Light Tower Rentals (LTR) and has merged them together into a new company called GlobeLTR. Details of the transaction (how much Clearlake paid) were not disclosed. What does this M&A story have to do with the Marcellus? According to its website, LTR has a meaningful operation in the Marcellus Shale (in Oakdale, PA, not far from Pittsburgh), and while the combined new OFS company will mainly target business in the expanding Permian Basin in Texas, it will also continue operations in other areas, including the Marcellus. Does that mean drilling and fracking (i.e. “pressure pumping”) services will be added to the existing equipment rental business in the Marcellus? We don’t know–but it’s certainly something to keep an eye on…
An interesting article in the Harrisburg Patriot-News looks (favorably) at a trouble-making anti from Lancaster County, PA who participated in the illegal activities at Standing Rock, ND. He earnestly hopes he can attract that kind of disruption and mayhem to peaceful Amish Country in an attempt to stop the Transco Atlantic Sunrise Pipeline project from getting built. But just like Standing Rock, this effort will fail. What we found interesting is that this is an open admission of something we’ve been reporting (warning about) for months–that some of the miscreants from North Dakota are targeting the Marcellus/Utica for their next round of anarchy. There’s nothing “peaceful” about what these people do…
Anti-drilling zealots are sometimes maddening, sometimes funny, and often just plain bizarre. As they are with their latest publicity attack (aided and abetted by PBS reporters) by claiming a couple of townships along the pipeline’s proposed route have ordinances in place that would potentially stop the pipeline in those locations “if only” those lazy, corrupt townships would just enforce the ordinances. That’s the upshot of the argument. One of the towns, Thornbury (Delaware County, a Philly suburb) has a requirement that the subdivision where the pipeline will run must maintain at least 40% of the land in the subdivision as “open space.” The antis claim the pipeline will use enough acreage to reduce the “open space” to below 40%. Ah, Mr. & Ms. Anti, did you know that the pipeline will run underground? And that pipelines lead to MORE permanent open spaces? Nice green fairways that are well-maintained? Lawyers from the usual radical suspects are getting ready to file lawsuits for “force” the townships to pay money defending against this latest inanity…
It appears President Trump has a problem at the Federal Energy Regulatory Commission (FERC). He needs to get three new conservative Republicans appointed to the Commission stat, to stem the liberal ideology that has taken root from bureaucratic lifers who populate the agency. One of great debates during the Obama reign of terror was the demand (by Obamadroids) that FERC consider the impact pipeline projects would collectively have on mythical man-made global warming. FERC Commissioners steadfastly refused to do so because they are specifically prohibited from doing so under their charter. However, last week FERC issued a new guidance document for midstream companies that file new applications with FERC for pipeline projects. The new guidance, while saying it has not changed any policies or regulations, “advises” (bureaucratic language for “you darn well better do it”) that new pipeline applications should include a calculation of the projects’ “greenhouse gases and weigh the impact on local, state or regional climate goals.” In addition to these new hoops (i.e. non-regulation regulations) imposed by the bureaucrats at FERC, the agency also released a new “guidance” document (i.e. new regulatory hoops) for LNG project applications. Yep, it “advises”–but doe not require–LNG applications to “calculate” potential impacts on mythical man-made global warming…
In December the Pennsylvania Dept. of Environmental Protection (DEP) unveiled new regulations to clamp down on methane emissions and other other air pollution that allegedly comes from shale drilling sites (see 
Cabot Oil & Gas, one of our favorite Marcellus drillers, turned in their fourth quarter and full year 2016 update on Friday. In something of a surprise (for us), the company reports losing $417 million in 2016, up from losing $114 million in 2015. However, when you dig into the numbers, you find that it’s a paper loss. Cabot reports “impairments” (i.e. loss of value) in their assets of $435 million for the year. Some $275 million of that was a write-down in the value of oil and gas properties, including pipelines, in West Virginia and Virginia. Cabot drilled 40 gross (38.0 net) wells and completed 76 gross (76.0 net) wells in 2016, exiting the year with 51 gross (45.2 net) drilled and uncompleted wells, of which 29 gross (26.2 net) were in the Marcellus Shale and 22 gross (19.0 net) were in the Eagle Ford Shale. What’s ahead in 2017? Cabot plans to spend more money this year than they did last year–to drill in both the Marcellus and Eagle Ford. Cabot plans to spend $610 million on drilling, completion, and facility capital in 2017. Of that, two-thirds (67%) will go to the Marcellus and one-third (33%) will go to the Eagle Ford. With that money they plan to drill and complete 90 net wells. On the earnings call with Cabot’s top brass, we learn about their “Gen 4” completions in the Marcellus, which have increased estimated ultimate recovery (EUR) rates from 3.8 billion cubic feet (Bcf) per 1,000 feet of lateral well to 4.4 Bcf. Translation: Cabot gets double the gas per lateral foot of well than some of its competitors, which is why they consistently have something like 15 of the top 20 producing wells in the state. Here’s the Cabot update…
Events related to drilling in the Marcellus and Utica Shale, primarily pro-drilling.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Don’t let utility reforms hurt OH energy boom; will CONSOL sink or swim; PA budget hearing exposes severance tax game; Dakota Access Pipeline operating “within weeks”; pipeline protesters leave dogs and puppies behind to die; four things driving 2017’s o&g recovery; natgas outlook for 2017; tell the truth about fracking; and more!