Clock Runs Out – Rex Energy Files for Chapter 11 Bankruptcy
In early April, Rex Energy, a driller focused solely on the Marcellus/Utica driller, defaulted on payments it owes to debtholders (see Rex Energy Defaults on IOUs, Can’t File Annual Report on Time). Rex told the Securities and Exchange Commission (SEC) the company could not make a semi-annual interest payment due on senior notes on April 2. Rex said in the filing that the noteholders to whom payment is due signed a temporary “forbearance” agreement that gives Rex a little breathing room, until April 16. The April 16 payment didn’t happen. Rex and the noteholders signed a second forebearance agreement giving Rex another extension, then another, then another. At least four, maybe five such extensions were granted. But in the end, Rex could not work out favorable terms. And lack of progress caused the banks that lend Rex money to call in the loans. With no money to pay those loans, Rex has no choice but to file for Chapter 11. Rex reported in an SEC 10-Q filing on Tuesday that: “An acceleration notice from the lenders of our senior term loan has been received and we lack the liquidity to pay these obligations. Given these circumstances, the Company is currently in the process of preparing to file for protection under Chapter 11 of the U.S. Bankruptcy Code which is expected to occur imminently following the filing of this Form 10-Q.” Rather ominously, the next sentence reads: “There can be no assurances that the Company will be able to reorganize its capital structure on terms acceptable to the Company, its creditors, or at all.” What does this mean for Rex’s Marcellus/Utica drilling program?…
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Disgusting and frustrating. That’s our reaction to a decision by the U.S. Fourth Circuit Court of Appeals that invalidates (vacates) a permit issued by the U.S. Fish and Wildlife Service that allows Dominion Energy’s Atlantic Coast Pipeline (ACP) to accidentally kill a few bats and bumble bees (classified as endangered) as it builds the massive $6.5 billion, 600-mile project from West Virginia to North Carolina. The Sierra Club, Defenders of Wildlife and Virginia Wilderness Committee (all radical left organizations) previously sued in federal court asking the court to stop work on ACP until the Federal Energy Regulatory Commission makes a decision on whether or not to “rehear” their decision to approve the project in the first place. In March, the court declined to stop work on ACP (see 
It was a big week for Sierra Clubbers. The radical environmental organization (that irrationally hates all fossil fuels, even fossil fuels they used to love, like natural gas) previously filed a lawsuit in the U.S. District Court of Appeals for D.C. asking the court to consider whether or not the Federal Energy Regulatory Commission (FERC) should have issued an approval for Mountain Valley Pipeline (MVP). MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–to move Marcellus/Utica gas south. No, the court did not rule FERC was out of order in its decision. Not yet, anyway. This gets in the weeds just a bit, so bear with us. The first step in the process of challenging a pipeline is to ask FERC to rehear their decision. If FERC refuses to rehear (reconsider) the decision, then whoever asked for the rehearing is free to file a lawsuit in the court system to challenge FERC’s decision to approve a project. FERC has 30 days to make a rehearing decision–unless they pull out the “tolling order” card and play it. A tolling order allows FERC more time to decide on rehearing–months, even a year. FERC played the tolling order card here and told the court, “We haven’t decided on rehearing yet, so you need to toss out the radical Sierra Club lawsuit challenging our decision to approve MVP” (MDN condensed version). This week the court said a very loud “NO” to FERC’s request. The court further told FERC to get off its duff and make the rehearing decision within 30 days. In the meantime, the Sierra Club of course wants MVP construction “paused indefinitely” while they continue to tie it up in legal knots. Don’t look for that to happen…
It appears a decision by the Federal Energy Regulatory Commission (FERC) earlier this year that strips away the main advantages of the tax-advantaged master limited partnerships (MLP) structure is causing the MLP to go the way of the dodo bird. Because of the Trump tax cut, in March FERC reversed a previous policy and will no longer allowed MLP interstate oil and gas pipelines to include an income tax allowance in their cost-of-service rates (see 
In April MDN told you that the New York Dept. of Environment Conservation (DEC) had rejected a modest pipeline expansion proposal by Williams’ Transco Pipeline subsidiary (see 
Good news. The main part of the Atlantic Sunrise Pipeline project–where it runs through Lancaster County, PA–is almost finished. Atlantic Sunrise is 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. The most opposition to the pipeline has happened in Lancaster County. Right now 90% of the pipeline has been welded in Lancaster County and sits above ground. By the end of July, all of it will be done and buried in the ground. It won’t be long after that that the entire 198 miles will begin to flow northeast PA Marcellus gas…
We get tired of saying it, but perhaps we should never get tired of saying that according to the most reliable methods of tracking temperatures on earth (by satellite), THERE IS NO GLOBAL WARMING. The only way global warming alarmists get away with claiming the earth is heating up is by using doctored computer algorithms. The actual testing and measurement of temps doesn’t show we’re heating up! And yet the manipulators who persist in using scare tactics that mankind is somehow causing the earth to heat up catastrophically by burning fossil fuels and leaking methane into the atmosphere, have just claimed a couple of more scalps in their efforts to shut down the fossil fuel industry. A so-called church, the Unitarian Universalist Association (people who believe in everything, consequently they believe in nothing) bought $2,000 worth of Range Resources stock and proposed a resolution to all shareholders at the annual meeting that forces Range to publish a report on how evil the company is for causing global warming (i.e. produce a report on Range’s efforts to scale back methane emissions). The measure passed by 50.25%. A group called As You Sow bought Anadarko stock and floated a resolution instructing the company to produce a report on how mythical man-made global warming will affect the company financially as it will no doubt have to scale back its exploration and production. That resolution passed by 53%. These groups, with innocent-sounding names, are NOT innocent. They are far left, liberal groups that have snookered shareholders into voting against their own best interests by harming the very companies they invest in, forcing those companies, ultimately, to stop drilling. All in the name of “climate change” (i.e. global warming)…
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: PA Sen. Scott Wagner (friend of gas) wins PA primary to challenge Tom Wolf for governor; industry invests $63.9B in Ohio Utica; UGI lowering natgas rates starting June 1; PA EQB taking public comment on raising shale permit fees 250%; could Utah see the country’s largest shale oil operation?; the great Bakken rebound; CFTC issues report on LNG markets; Gulf Coast ports limiting crude oil exports; Trump Justice Dept. tells court climate lawsuits violate Constitution; US o&g companies have invested $108B (!) in greenhouse gas reduction since 2000; and more!