Chevron Hires Barclays to Help Sell Its Marcellus/Utica Assets
In December Chevron announced it was writing down over $10 billion worth of its U.S. onshore shale assets, with $6.5 billion of that number coming from their Marcellus/Utica assets (see Chevron Writes Down $5B+ in Marc/Utica Assets, Looks to Sell All). In addition, the company announced it is putting all of its M-U assets up for sale (see Chevron Confirms M-U Assets for Sale, Asks Vendors to Avoid Media). Just sticking a “for sale by owner” sign on more than a half-million acres of leases and over 500 wells doesn’t appear to be working. So Chevron has hired investment bank Barclays to help shop their M-U assets.
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The Ohio Supreme Court ruled yesterday that the Ohio tax commissioner correctly charged Tallgrass Energy’s Rockie Express (REX) pipeline $2 million in excise tax (based on $699 million of income), for gas transported from and to (within) Ohio. REX claimed it did not owe the tax because the same law that exempts gas transported out of state applies to gas sales in-state. But the tax commission, and now the Supremes, say that the portion of gas transported through REX that stays in Ohio is not exempt and can be taxed. So pay up.
Yesterday Dominion Energy issued its fourth quarter and full-year 2019 update. As part of the update, Dominion’s top brass talked about 2020 and beyond. Of particular interest for us was a bunch of news about the company’s stalled Atlantic Coast Pipeline (ACP) project. In particular, Dominion has purchased a small stake in the pipeline from partner Southern Co. for $175 million. The new price tag for the project has now gone to $8 billion. Even with the delays and setbacks in court, Dominion remains 100% committed to building ACP.
A Reuters article warns that U.S. shale gas investors are “bracing” for write-downs by major drillers, particularly in the Marcellus/Utica region. The article chronicles the write-downs we already know about (EQT, CNX, Shell and Chevron) and speculates that others (like Antero and Cabot) may make announcements in the coming days. And then, in a bit of a twist, the article ends with information about BKV (Banpu Kalnin Ventures), to say (a) Banpu’s American shale assets have already been written down before they purchased them, and (b) Banpu will not do any new drilling until the price of gas recovers to at least $3.50/Mcf. They may wait a looooong time.
Three cheers for Pennsylvania State Rep. Daryl Metcalfe (R-Butler). Hip hip hooray! Metcalfe is the Majority Chair of the House Environmental Committee. He’s not a big believer in the hoax/myth of man-made global warming, and he’s not afraid to say so. Because Metcalfe won’t bow down to the climate change worshipers and their twisted agenda, a cabal of “green” groups has colluded to demand House Speaker Mike Turzai fire Metcalfe from the Environmental Committee. When pigs fly my climate changer friends!
Powerhouse consulting firm Deloitte released its “2020 Oil and Gas M&A Outlook” report yesterday (full copy below). In something of a surprise (for us), the experts at Deloitte found that the number of mergers and acquisitions in the oil and gas space went DOWN in 2019, although the value of the deals was up (due to big deals like Occidental’s $55 billion buyout of Anadarko). What’s ahead in 2020? More of the same, according to Deloitte. Wait–aren’t drillers dropping like flies, not able to turn a profit so they’re selling and merging? No, not really.
MARCELLUS/UTICA REGION: Longtime Pennsylvania state Sen. Andy Dinniman is retiring; OTHER U.S. REGIONS: Why Shell drilled a “horseshoe” well in the Permian Basin; Holmdel residents sign petition opposing NJNG regulator station; NATIONAL: Look how low oil prices have fallen: 6 impacted industries; Tallgrass Energy announces new commercial officer, establishing Houston office; About 13% of U.S. electricity generating capacity can switch between natural gas and oil; NARUC publishes handbook on state natural gas distribution infrastructure replacement programs; People out there turnin’ natgas into gold – NGLs, gas processing and the frac spread; Money & power: new FOIA’d documents offer ugly candor about ‘green energy’; U.S. Department of Energy issues four LNG export approvals; Pew Research 2019 survey: ‘climate change’ still ranks as low priority – 17th place out of 18; INTERNATIONAL: Russia is ‘fearful’ of US competition in the European gas market, official says.