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Chevron Consolidates Reduced Marcellus Workforce Under One Roof

In January, Chevron announced it is cutting 23% of its Marcellus Shale workforce in the Pittsburgh area (see Chevron Laying Off 23% of their Marcellus Workforce in Pittsburgh). Last July, the company put a long-planned massive new 350,000 square foot office complex project they planned to build in Moon Township on hold (see Chevron Puts Moon Twp, PA Office Building Project on Hold). The new office complex project is still under reconsideration. Meanwhile, since they’ve downsized, Chevron is consolidating the workforce under one roof, renting a new office space in Moon Township…
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Chevron Selling 17K Marcellus Shale Acres, More Sales Coming

land for saleChevron, according to NGI’s Shale Plays Factbook, is the fourth largest acreage holder in the Marcellus Shale with some 700,000 acres. It appears Chevron is looking to sell off at least some of that acreage. MDN received an email notice (below) from EnergyNet, hired to broker a sale for two of what they say will be an eventual 12 tracks of Marcellus acreage that Chevron owns. The current two are located in Bedford, Blair and Cambria counties in Pennsylvania and represent just over 17,000 acres total. EnergyNet is accepting sealed bids on various tracks, some held by production, some not…
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Chevron Laying Off 23% of their Marcellus Workforce in Pittsburgh

cutting jobsWell, don’t say we didn’t warn you. In November MDN brought you the news that Chevron announced the are “restructuring” their northeast business until to “become more efficient” and for “long-term growth.” We pointed out at the time that kind of language doesn’t inspire confidence (see Chevron Scaling Back in the Marcellus/Utica? Maybe). We also said it was a good sign that no WARN Act notices of impending large layoffs had been issued. Oops. That’s now changed. In an emailed statement yesterday, Chevron said it plans to lay off 162 Pennsylvania workers as part of their “restructuring”–nearly a quarter of their Marcellus workforce. Ouch. It wasn’t so long ago Chevron was planning to build a massive, new 350,000 square foot regional headquarters near Pittsburgh (see Chevron Puts Moon Twp, PA Office Building Project on Hold). It seems that project is now dead–no signs of life. Here’s the disappointing info on Chevron’s coming round of layoffs…
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Moundsville Leases Park Land for $5K/Acre, 18% Royalties

Moundsville (Marshall County), WV recently signed a deal with Chevron that allows Chevron to drill under (not on) the municipal-owned Valley Fork Park. The deal leases the park’s 14.95 acres for $5,000 per acre plus 18% royalties when the gas begins to flow. Moundsville received $74,750 up front in lease bonus payments…
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Chevron Scaling Back in the Marcellus/Utica? Maybe

What a difference just a year or two makes–at least in the plans of a major oil and gas company like Chevron. It wasn’t so long ago that Chevron (2011) that Chevron bought out Atlas Energy and along with it 622,000 acres of Marcellus Shale leases. Chevron then picked up another 228,000 acres of Marcellus leases from Chief Oil & Gas. A little over a year ago Chevron got an initial approval to build a massive new 350,000 square foot headquarters in Moon Twp, PA, near Pittsburgh. Then the first red flag–Chevron put that project on hold in July of this year (see Chevron Puts Moon Twp, PA Office Building Project on Hold). Now a second, big red flag: Chevron is “restructuring” its northeast business unit. When a company throws around words like “become more efficient” and “long-term growth” that, frankly, does not foreshadow good things for some of the 700+ people who work in the Appalachia unit…
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EnLink Takes Ownership of Henry Hub from Chevron

Technically this is not a Marcellus or Utica story–but it does has implications for the Marcellus/Utica region. If you’re around the natural gas marketplace in the United States for any amount of time, you will soon run into this strange-sounding price point called “the Henry Hub.” The HH is a market point where natural gas is bought and sold in southern Louisiana. Once upon a time, because of the pipelines running through the Gulf Coast (many of them from off-shore), some 20% of all natural gas flowed through the HH, making it the “benchmark” or best average price for natural gas–used for futures contracts and by NYMEX in commodity trading. All natural gas prices quoted at other sales locations use the HH as its benchmark or “basis” and compare themselves with the HH price. It’s been that way for two decades. The new news is that EnLink Midstream (the former Crosstex Energy and Devon Energy midstream units merged together) has just taken ownership of the pipeline system that includes the HH…
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Chevron Launches Appalachia Partnership Initiative with $20M

Kudos to Chevron. Yesterday the company announced $20 million in grants for education and workforce development in 27 counties across Pennsylvania, West Virginia and Ohio. Called the Appalachia Partnership Initiative, Chevron aims to fund education (for students) and training (for workers) in STEM–Science, Technology, Engineering and Math. A variety of programs and organizations will be the recipients of Chevron’s largess…
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CSSD Bestows First Certification for Sustainable Drilling: Chevron

FirstIn March 2013, the Center for Sustainable Shale Development (CSSD) burst onto the scene. It had been a closely guarded secret, the creation of a few hand-picked people from both industry and the environmental movement working together to see if there is any common ground on which both sides can agree that shale development would be safe, sustainable AND affordable. They worked hard for over a year and finally hammered out a set of 15 standards that if a driller (or midstream company or contractor) would meet, it would get a stamp of approval from both the industry and environmental groups as being a good goobie–a safe driller. We were somewhat skeptical from the start (see Important: Drillers & Enviros Form New Group, Launch Cert Program). However, the time for skepticism may be over. Today the CSSD announced they have certified their very first driller–one of their founding members–Chevron…
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DEP Issues Final Report – What Caused Chevron Well Fire?

case closedIn early February, a well already drilled and completed by Chevron in Greene County, PA was in the process of being connected to a pipeline system. The well caught fire and exploded, eventually spreading to a second well close by (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). The fire and explosion killed a worker at the site, a contractor with Cameron International (see Remains of Chevron Contractor Found at Greene County Well Site). The PA Dept. of Environmental Protection did a thorough investigation and has just released its After Action Review of the incident (below). Here, in a nutshell, is what the DEP says caused the fire and death…
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Chevron Puts Moon Twp, PA Office Building Project on Hold

In February 2011 Chevron completed the purchase/buyout of Atlas Energy and with it, some 622,000 acres of Marcellus Shale leases. Atlas was located in Moon Township, PA (Allegheny County, near Pittsburgh). In September 2011, Chevron picked up another 228,000 acres–this time from Chief Oil & Gas (see Chevron Continues Aggressive Expansion into Marcellus Shale in PA – Buys Leases for Additional 228K Acres from Chief Oil & Gas). In May 2013 it was rumored that Chevron would build a new, massive 350,000 square foot headquarters in Moon Twp, a rumor that was confirmed when Chevron gained initial approval for the new facility in September 2013 (see Chevron Wins 1st Approval for New Regional HQ Near Pittsburgh). Chevron has just put those plans on hold…
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Parents of Worker Killed in Chevron Greene Co Fire Sue

In February of this year there was an explosion and fire at Chevron’s Lanco 7H well pad in a remote area northwest of Bobtown in Greene County, PA (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). Sadly, the fire killed Ian McKee, 27, a Cameron International contractor working at the Chevron well site (see Remains of Chevron Contractor Found at Greene County Well Site). Ian’s parents recently filed paperwork suing Chevron…
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DEP Says Residents Not Exposed to Pollutants in Chevron Well Fire

You may recall the Chevron well fire in Greene County, PA that resulted in the death of one contract worker on February 11th (see Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped). Soon after the fire began, the Pennsylvania Dept. of Environmental Protection (DEP started measuring and testing in the area–to ensure nearby residents and first responders were not being exposed to unsafe pollutants. They sampled both upwind and downwind for 57 different toxic air pollutants. The DEP did find elevated levels for some pollutants, but (thankfully) nothing that would threaten the health of those in the area.

Below are the results of the testing along with the DEP announcement in releasing the results.
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PA DEP Says Chevron Blocked Access to Greene County Well Fire

On Feb. 11 Chevron’s Lanco 7H well in Greene County, PA exploded and caught fire. Although it’s not clear what caused the explosion, workers were connecting the well to a gathering pipeline (i.e. welding) and it’s not much of a stretch to connect the dots. One of the workers at the site tragically lost his life (see Remains of Chevron Contractor Found at Greene County Well Site). The fire at Lanco 7H spread to the well next it–Lanco 6H. After five days the twin fires were put out and eventually the wells were capped (see Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped).

Both the PA Dept. of Environmental Protection (DEP) and Chevron continue to investigate what went wrong. However, three weeks ago the DEP issued a preliminary Notice of Violation about the accident and fires (see it embedded below). The surprising revelation in the NOV is that Chevron blocked DEP personnel from accessing the site for two days while the fire burned. DEP personnel, by law, have carte blanche access to any well anywhere at any time. Chevron was no doubt trying to protect the DEP agents, however, blocking them from the site clearly rankled the agency and will now be part of a fine they eventually assess on Chevron…
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Chevron CEO Says Marcellus Drilling Scaled Back Due to Low Price

When the annual analyst teleconference for a big oil company is forecast to go 2.5-3 hours long, you know the news will not be good. It doesn’t take that long unless you have explain and re-explain yourself multiple times. Although MDN did not participate in yesterday’s annual analyst call for Chevron, by all accounts, the news was negative and the company’s stock ticked down by the end of the day by $1.33 per share (1.1%).

Chevron is a huge company–the second largest oil company in the United States based on market capitalization. The only thing MDN was interested in, aside from any mentions about the recent well fire in Greene County, PA (no mentions of the well fire in the call that we could find), is, What is Chevron up to in the Marcellus? The answer we got from looking at the slides and reading media reports of yesterday’s call is: not much. Chevron Chairman and CEO John Watson said “some” of the drilling in the PA Marcellus has been curtailed because of the low commodity price of natural gas. MDN’s Marcellus and Utica Shale Databook show Chevron’s permitting activity picked up a bit toward the end of 2013. It seems from Watson’s comments that they will continue to actively drill in the Marcellus in 2014, but likely not at the same levels seen in 2012 and 2013…
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Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped

We’ve been monitoring the tragic well fire in Greene County, PA that claimed the life of one contract worker. On Sunday afternoon Chevron reports the original well to explode and catch fire, the Lanco 7H, was capped (see Greene County Chevron Well Fire: 7H Well Capped, 6H in Few Days). Chevron now reports the second well to catch fire from the first, the Lanco 6H, is also capped as of yesterday afternoon (see the announcement below). What we somehow missed in the coverage was the fallout from the fire. Last week the PA Dept. of Environmental Protection asked Chevron to suspend drilling operations at other wells in the area pending a review. Chevron responded they had already stopped drilling operations at 7 nearby wells.

Here’s the latest official announcement from Chevron (that does not mention shutting down operations on other wells), along with a story from last week about the DEP’s tete-a-tete with Chevron:
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Greene County Chevron Well Fire: 7H Well Capped, 6H in Few Days

Chevron reports that as of yesterday (Sunday) afternoon, Wild Well Control has successfully capped one of two leaking gas wells in Dunkard Township, Greene County, PA. The well capped was the Lanco 7H. However, work to cap the second well at the pad, the 6H, is up next and expected to take “several days” to complete. These are the wells that caught fire after an explosion occurred as workers were completing a hook-up of the 7H (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). Unfortunately the explosion and fire took the life of one contract worker (see Remains of Chevron Contractor Found at Greene County Well Site).

The latest couple of updates from Chevron about the accident, the fire and capping of the wells:
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