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    Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.

    A second corporate raider is now making trouble for EQT and its planned purchase of/merger with with Rice Energy. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks after the announced merger, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Jana is now joined by a second group, a group that holds 4% of EQT’s outstanding stock–D.E. Shaw Group. Shaw is headed up by former Elliott Management head and corporate raider Quentin Koffey. As a reminder, raiders buy enough stock to get themselves a seat or two on the board of directors, so they can force a company to sell assets and fire people to drive up the price of the stock, lining their pockets because the raiders then sell the stock after the price goes up, moving on to the next target. Disgusting. And now Shaw, perhaps in league with Jana, is ganging up on EQT. So it’s no surprise that EQT has had to respond by issuing a statement that they’ve “accelerated” the timeline to explore the issue both Jana and Shaw are demanding–that the company split itself in two–upstream (drilling) and midstream (pipelines). That will, according to the money-grubbing raiders, “unlock shareholder value” (i.e. make them rich). Below we have EQT’s announcement, which came a day before Shaw sent the company a letter and a presentation (also below) that supposedly outlines how splitting EQT in two is best for everyone. At least Shaw is not demanding EQT pull out of the Rice Energy deal, as Jana is doing…
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    PA Court Case May Create Loophole for Landowners to Bust Old Leases

    According to expert analysis by the legal beagles at the Blank Rome law firm, a recent decision by the Superior Court of Pennsylvania disregards established precedent law and has created a new law in PA, possibly “leaving lessees [drillers] in limbo, possibly giving unscrupulous lessors [landowners] a unilateral tool to terminate oil and gas leases, and ultimately harming both lessors and lessees in the process.” In Montgomery v. R. Oil & Gas Enterprises, two (out of three) judges ruled that oil and gas leases could be severed (terminated) both “vertically” and “horizontally” by unilateral actions of the landowner. In this case “vertical” means shale or other rock layers under the ground, and “horizontal” means surface ownership. As with most things legal, this is a complicated case with a lot of history we won’t attempt to recount it chapter and verse. If we can boil it all down, the judges found that a landowner who had purchased a piece of property with an old lease that contained terms for shallow rock layers and deeper rock layers, could, unilaterally, terminate one aspect of that lease (in this case the shallow layer portion of the lease) while keeping the other aspect of the lease intact (the deeper layers, already drilled and producing). The Blank Rome analysis below does a deep dive into the case, frankly ripping the decision to shreds, and postulates the theory that it may lead to cases in which a landowner with a decades-old lease in which the shallow layers are held by production can separate and convey the deeper layers to a family member or family trust, and then terminate the deeper layer lease, re-releasing it to a different driller…
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    PA House Should Nuke Anti-Landowner Section 1610 of Budget Bill

    In July when the Pennsylvania Senate passed their awful budget bill that includes a variety of new taxes, including a new severance tax on the Marcellus industry, they also slipped in Section 1610 which changes established lease law with respect to oil and gas wells that no longer produce anything (see PA Senate Slips Anti-Landowner Measure into State Budget Bill). Under existing law, when an oil or gas well stops producing–and the landowner quits getting royalty checks–the lease is considered terminated. Done. Finished. Under new Section 1610, drillers can resurrect those dead leases under a couple of conditions. If the landowner doesn’t officially state “your lease is now dead since you’re not producing anything” a driller can quick-like-a-bunny restart production at the well and send the landowner a royalty check, re-starting (or continuing) the existing lease with its existing terms. Or if the driller sends a notice to the landowner stating its intention to drill a new well on the property, and if the landowner doesn’t object (within a 3-month time limit), the driller is free to begin drilling a NEW well, under the OLD lease terms. Section 1610 really stinks, in our humble opinion. It means a driller can drill a new shale well after an old conventional/vertical well quits producing–without having to sign a new lease or pay a new bonus or negotiate a new royalty rate. An editorial in the profoundly anti-drilling (and far-left) Scranton Times-Tribune encourages the House to nuke the Section 1610 provision. This is one of those rare (perhaps first time!) cases when MDN agrees with the lefty libs at the Times-Tribune…
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    Big Green Begs FERC to Delay Construction of Atlantic Sunrise Pipe

    Last week the Pennsylvania Dept. of Environmental Protection (DEP) issued the final permit needed by Williams to begin construction on Atlantic Sunrise, a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County (see PA Issues Final Permit for Atlantic Sunrise, Construction Sept 20). The only thing left before Williams fires up the bulldozers and backhoes and begins to dig is for the Federal Energy Regulatory Commission (FERC), which has already fully approved the project, to issue a “you can begin building” order. Last week Williams said they hope/plan to receive that order imminently, and begin construction next week, on Sept. 20th. However, the radicals at the Sierra Club and a bunch of other loony leftist “environmental” organizations are riding in to ruin the day. They’ve filed an urgent request with FERC to delay issuing the order to begin building. Why? Because these cancerous groups previously filed a lawsuit in federal court that seeks to have FERC reverse their decision to approve the project. The first step in the process when radical groups challenge a FERC order is for FERC itself to reconsider whether or not to rehear arguments against a project. FERC did delay, using something called a “tolling order.” Because of the tolling order delay, the radicals could not (as they wanted all along) appeal the case to the liberal D.C. Court of Appeals, the next step in the process. The radicals say the now-appealed case before the 2nd Circuit hasn’t had enough time, therefore FERC should delay an order to allow construction to begin for Atlantic Sunrise…
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    Pinelands Commission Approves Pipeline Thru NJ Scrub Pines

    Click for larger version of map

    Anti-fossil fuel radicals behaved badly, as they usually do, at yesterday’s New Jersey Pinelands Commission meeting. Using “whistles, cowbells and shouts,” and holding “Pinocchio noses to their faces,” radical antis from groups like the Sierra Club tried to bully commissioners into denying approval of a $130 million, 28-mile natural gas pipeline proposed by New Jersey Natural Gas (NJNG) to connect NJNG’s distribution system serving customers in Ocean, Burlington and Monmouth counties (in NJ) and the interstate pipeline system adjacent to the New Jersey Turnpike. Spoiled, rotten-acting children grow up to be spoiled, rotten-acting adults. Ever notice that truism? The pipeline runs through 12 miles of scrub pines that are “protected” in NJ. The “Southern Reliability Link” pipeline project, as it is called, is meant to provide a backup for hundreds of thousands of NJ residents who lost access to natural gas following Super Storm Sandy. Such reliability makes no difference to radicals (many of them out-of-state) who irrationally hate all fossil fuels. The Sierra Club sued to stop the project. The courts ruled that the Commission would need to hold a full vote on whether to approve it, so the Commission held a public hearing in July (see Antis Oppose Tiny Pipeline Thru Scrub Pines in N NJ at Hearing). Yesterday the full Commission voted, 8 to 4 (with 1 abstention), to approve the Southern Reliability Link. Finally! Of course the radicals say they will now launch yet another frivolous lawsuit to try and stop it, claiming the Commission “ignored the law” in approving the project. No, Sierra Club, YOU are the ones who continually ignore the law…
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    UGI Adds Marcellus Gas Service to Town Between Scranton, W-B

    It is a story we see happening more and more frequently–local distribution companies (LDCs, your local gas & electric company) are adding new customers in places previously not served by natural gas lines–because of the presence of the abundant, cheap, and clean-burning Marcellus Shale. The latest such story we noticed of this type comes from the Scranton/Wilkes-Barre area. If you ever whiz through Scranton, and then Wilkes-Barre, motoring down Interstate 81 (as we’ve done hundreds of times over the years), one of the townships you pass through without knowing it is Dupont (in Luzerne County)–quite close to the regional airport in Avoca, not far from Montage Mountain ski resort, and a whisker away from Moosic. Utility giant UGI has begun a program to install natural gas pipelines to 123 homes in Dupont, to provide Marcellus Shale gas to those homes…
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    VA Pipeline Rally: Protesters Say Global Warming Causes Hurricanes

    Earlier this year a poll of Virginians found 62% of them support building the Mountain Valley Pipeline (MVP) project in the state (see New Poll: 62% of Virginians Support Mountain Valley Pipeline). MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, will be built by EQT, NextEra Energy and several other partners including WGL. Even though the vast majority of Virginians want the pipeline, there are always a few, typically from Big Green groups like the Sierra Club, who oppose it. Opponents of MVP, and another project, Dominion’s Atlantic Coast Pipeline, held rallies on Wednesday at seven Virginia Dept. of Environmental Quality locations scattered across the state. About 50 people gathered at the Roanoke location. The rally was instructive. Given the safety record of pipelines, we always wonder what excuses these people can possibly have to oppose these projects? The answer always comes back to one, core motivation: they irrationally hate all fossil fuels. We know! You’re tired of us repeating this like a broken record. But it’s so true, as was perfectly illustrated at the Roanoke rally…
    Read More “VA Pipeline Rally: Protesters Say Global Warming Causes Hurricanes”

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    Time for FERC, Congress to Slap States into Line re Pipe Refusals

    West Virginia Dept. of Environmental Protection’s (WVDEP) capricious decision to yank a permit it previously granted for the Mountain Valley Pipeline is “the last straw” according to the legal beagles at the Blank Rome law firm. Last week WVDEP, under pressure in a lawsuit brought by the radical Sierra Club, decided to revoke a previously granted water crossing permit (see Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit). The corrupt New York Dept. of Environmental Conservation is now making a habit of refusing these types of permits for projects in our beloved home state–so far refusing permits for the Constitution Pipeline, Millennium Pipeline, and Northern Access Pipeline projects. Given this recent activism by state agencies, the lawyers at Blank Rome say it is now time for both the Federal Energy Regulatory Commission (FERC) and Congress to act, to “stem this overreach by States.” In our words, it’s time to slap the states back into line. They lay out a case to do so…
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  • Liberal Short Seller Says Shale Oil & Gas on “Road to Ruin”

    Ever notice how liberal mainstream news organizations, like CNBC, call someone “renowned” when they echo the media narrative of the day? Such is the case with an investor, Jim Chanos, who is betting against the shale industry by short selling–taking stock positions that bet stock prices for shale companies will go DOWN. So this big-time investor bets against shale, then gives a talk at a big-time financial industry conference in New York to trash talk the shale industry, hoping he can create a run (down) against the stocks he’s bet against. Anyone else see a huge conflict of interest here? And then lib-central CNBC comes along to give this guy a megaphone to spew his trash talk of the shale industry. Welcome to Wonderland, Alice. A day after CNBC ran their segment on Chanos trash talking shale, Harold Hamm, CEO of Continental Resources (great guy) showed up on CNBC asking, “Who is this guy?” One of the stocks Chanos focused on trash talking was Hamm’s company. Hamm’s point was/is “renowed” investor Chanos is a nobody, at least nobody most folks have ever heard of. Hamm rips him a new one, revealing that Chanos made big bets the price of shale stocks (particular that of Continental) would go down, and when they didn’t, Chanos scrambled to try and talk them down…
    Read More “Liberal Short Seller Says Shale Oil & Gas on “Road to Ruin””

  • Marcellus & Utica Shale Story Links: Fri, Sep 15, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Rover Pipeline sends more Marcellus/Utica shale gas west; Maryland antis hold public meeting to trash talk short pipeline under Potomac River; LNG exports picking up post-Hurricane Harvey; Sabal Trail pipeline operated safely through Hurricane Irma; Texas frac sand in demand; House votes to block funding for Obama EPA methane rule; we’re hitting the “golden age” of natgas; Canadians strike back against U.S. shale; and more!
    Read More “Marcellus & Utica Shale Story Links: Fri, Sep 15, 2017”