CNX’s Pipelines to be Used for “Partners” – Not Just CNX Res.

Yesterday we brought you the news that CONE Midstream has been renamed to CNX Midstream, and that CNX Resources is now the sole owner of the entire gathering pipeline system (see CONE Midstream Gets a New Name: CNX Midstream Partners). CONE was originally a joint venture between CONSOL Energy (the “CO” part of the name) and Noble Energy (the “NE” part of the name). CONSOL and Noble had a joint venture on hundreds of thousands of Marcellus/Utica Shale acres. Some of the wells drilled were “owned” by CONSOL, some by Noble. CONSOL and Noble decided to divide up the JV, each taking a piece, in late 2016 (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture). Then in May 2017, Noble up and sold all of their Marcellus leases and wells, to HG Energy (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). Not long after, Noble announced they also want to sell their share of CONE. Long story short, CNX (formerly CONSOL) bought Noble’s CONE share, and now owns it lock, stock and barrel. Does that mean CNX will no longer flow gas from HG Energy (formerly Noble) wells served by their 100%-owned pipelines? Not on your life! CNX will continue to service HG Energy’s wells, and may even run gathering lines to other competitors’ wells (i.e. “partners”) in the areas where CNX Midstream operates. So said CNX CEO Nick DeIuliis on a conference call yesterday with analysts. DeIuliis is jazzed that his company now owns 100% of the pipeline gathering system because it will allow them to “move quickly” to seize opportunities…
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Noble Energy Exits Marc/Utica, Sale to HG Energy Closes for $1.1B

In May, Noble Energy dropped a bombshell that it is selling its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer” (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy–a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). At the time of the announcement, MDN was the only news source that correctly identified the “undisclosed buyer”–which is HG Energy (headquartered in Parkersburg, WV), backed with money from investment firm Quantum Energy Partners. Noble didn’t identify the buyer until earlier this week, when they issued another announcement that the deal is now done. In this latest announcement, Noble did identify HG Energy as the buyer. An interesting aside: The original announcement pegged the deal at $1.225 billion. In the end, it turned out to be $1.125 billion–$100 million less than the original asking price…
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Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?

Yesterday Noble Energy dropped a bombshell that it has sold its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer.” That works out to be $3,181 per acre. Not included in the sale is Noble’s half operating interest in the CONE Midstream pipeline gathering system. It was just three years ago that Noble announced it would lease 138,000 feet in a new office building in Southpointe, and move in 200 employees (see Noble Energy’s Huge Vote of Confidence in the Marcellus). At the time, Noble’s CEO said the Marcellus is “the premiere gas play in the United States” and that the Marcellus figures prominently in Noble’s future plans. That was then, this is now. Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy–a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). All of the above is what you get from other news sources. The reason you read MDN is because we’ve found out who the buyer of the Noble acreage is
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Southwestern Sells More Assets from 2014 Chesapeake Deal

southwestern energyAs we report today, Antero Resources is buying 55,000 acres of leases in the Marcellus (and Utica) Shale from Southwestern Energy (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). The acreage that Southwestern is selling comes from the massive $5.375 billion deal Southwestern made with Chesapeake in 2014 (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). The interesting thing is that selling land is not the only recent deal Southwestern has brokered to dump assets from the Chesapeake deal. Southwestern cut a deal (in May) to sell 135 vertical (conventional) and 37 horizontal (shale) wells in West Virginia to HG Energy. Earlier this week Southwestern got approval from the Federal Energy Regulatory Commission (FERC) to sell pipeline contracts to HG Energy too. Which begs the question: How many more Chesapeake deal assets is Southwestern going to sell off?…
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Domestic Eco-Terrorism: Worker Shot at Rural WV Oil Well Site

We have what appears to be an act of eco-terrorism, (possibly attempted murder) in southwestern West Virginia, by what appears to be an anti-driller who has had a snap with reality. Mark Miller, a 39 year-old married father of two who works for oil and gas company HG Energy, was visiting a conventional oil well site in Lincoln County on Monday. Miller said in an interview he was at the well, which has a history of leaks, to take pictures of an existing leak. The well is located on state-owned land, in a rural wildlife management area. Miller, in an unmarked pickup truck, started to drive away when a “tall, lanky man dressed in camouflage, with black stuff rubbed all over his face” approached the truck. Miller stopped to see if he could help, assuming the man’s vehicle was broken down somewhere nearby. The man approached the passenger side window, didn’t talk but held up a recorder which played something about not drilling, and he stuck a gun through the window, pointing it at Miller’s head. Miller tried to knock the gun away and the man pulled the trigger, shooting Miller in the hand, shattering bones in his left hand…
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Who’s Still Leasing Land and Where in WV?

Who’s leasing land for drilling–and where? Perhaps the bigger question is, are drillers still leasing land?! The answer to that would be a resounding “yes, they are still leasing.” We don’t have a comprehensive overview of where people are leasing, but we spotted a list of leases filed with the clerk in Wetzel County, WV and found it interesting. Here’s who leased, how much acreage, and which energy company they signed with (sorry, no lease terms with signing bonuses and royalties, just acreage & driller)…
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McClendon Deal Last June was HG Energy’s OH Utica Acreage/Wells

Columbus Business First is reporting that during this past summer’s wheeling and dealing by Aubrey McClendon and his American Energy Partners (see McClendon Buys 48K WV Marcellus Acres, 27K More OH Utica Acres), McClendon picked up HG Energy’s Ohio Utica Shale acreage–all 27,000 acres–along with HG’s already-drilled Utica Shale wells (in the June announcement HG was simply referred to as “an unnamed private company”). HG Energy has now fully exited the Utica Shale. Oh! Two of the HG wells purchased by McClendon as part of that deal were in the top 10 most productive wells in the state for 3Q14. Yet another smart move by Aubrey…
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Flip Side: Some OH Utica Shale Wells Get Plugged/Abandoned

When it comes to drilling in the Ohio Utica Shale, a lot of attention has been focused on the ramp up in activity—the growing number of drilling rigs, huge land lease deals, and eye-popping initial production results for some of the wells drilled. But there is another side to the story.

Every now and again, a well does not produce. Could be the driller did not properly find the shale layer (extremely rare). Could be they did find it but for whatever reason the layer doesn’t produce in that area. More likely there were problems during the drilling that caused the work to be stopped—like a broken-off drill bit. In Ohio, there have been nine Utica Shale wells that have been plugged and abandoned (so far). Here’s where they are located and who did the drilling:

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WV Energy Exec Says Marcellus Will Last 100+ Years

David Drennon is marketing and transportation manager with H.G. Energy LLC in Parkersburg, West Virginia. He spoke yesterday at the Parkersburg Rotary Club weekly meeting about development of natural gas from Marcellus Shale deposits and oil from Utica Shale deposits. He offered these observations and predictions about shale development in WV:

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