CONE Midstream Gets a New Name: CNX Midstream Partners

CONE Midstream is, or rather was, a pipeline joint venture between CONSOL Energy and Noble Energy (“CO” from CONSOL and “NE” from Noble Energy), formed in the summer of 2014 to service wells drilled as part of CONSOL & Noble’s drilling joint venture (see CONSOL & Noble Energy Form New Marcellus Midstream Company). Following Noble’s exit from the Marcellus last year, they began to shop their 50% share of CONE, and thought they had found a buyer in Quantum Energy Partners–for $765 million. However, as we reported in December, that deal hit a snag (see Noble’s 50% CONE Midstream Sale in Trouble – Shopping Deal to CNX). Not long after, CNX Resources (formerly CONSOL Energy) issued a press release to announce they had cut a deal to buy Noble’s 50% CONE share–for $305 million, which is 60% less than of the deal price Noble previously worked out with Quantum (see CNX to Buy Noble’s 50% Share of CONE Midstream for $305M). Two bits of news to share with you regarding the CONE deal: (1) the deal is now done, and (2) CNX Resources has renamed CONE Midstream to be CNX Midstream–which should not be a surprise since the NE part of CONE is now gone, and since the CO part changed its name. Here’s the news…
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CNX to Buy Noble’s 50% Share of CONE Midstream for $305M

On Monday MDN shared news with you that we believe was exclusive news–nobody else picked up on it. The news was that Noble Energy’s original plan to sell its 50% stake in CONE Midstream to Quantum Energy Partners for $765 million, announced back in May, is in trouble (see Noble’s 50% CONE Midstream Sale in Trouble – Shopping Deal to CNX). We told you that according to a recent Securities and Exchange Commission filing Noble had begun negotiations with CNX Resources (formerly CONSOL Energy), which is the other 50% owner of CONE, to sell Noble’s share to them. It seems we were prophetic. This morning CNX issued a press release to announce they have cut a deal to buy Noble’s 50% CONE share–for $305 million. That’s 40% of the deal price Noble previously worked out with Quantum. Must be it’s a buyer’s market for midstream assets…

12/18/17 Update: On Friday, following CNX’s announcement about buying the rest of CONE from Noble Energy, Noble also issued an announcement (below). Noble’s announcement amusingly leaves out the purchase price–less than half of the previously deal they had with Quantum.
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Noble’s 50% CONE Midstream Sale in Trouble – Shopping Deal to CNX

In May MDN brought you the news that Noble Energy dropped a bombshell, 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 HG Energy (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). A couple of weeks later the other shoe dropped when Noble announced they would sell their 50% stake in CONE Midstream, a 50/50 joint venture with CONSOL Energy (now CNX Resources), to Quantum Energy Partners for $765 million, meaning a total exit for Noble from our region (see Noble/CONSOL Breakup Continues: Noble Sells 50% of CONE Midstream). When we say Noble “sold” their CONE stake we mean “will be sold after all the lawyers and bean counters get done with drawing up the necessary paperwork.” Fact is, the CONE sale has still not happened, even though there is a Dec. 31 deadline for the deal to be completed. It appears Noble’s deal to sell it’s CONE stake to Quantum is now in jeopardy. We base that observation on information from a filing Noble made with the Securities and Exchange Commission last week. In an 8-K filing, Noble said (a) they’ve extended the deadline to complete the deal to sell CONE to Quantum from Dec. 31, 2017 to June 30, 2018, and (b) Noble has opened up discussions/negotiations with CNX to sell their half of CONE to CNX instead of selling it to Quantum–which would make CNX the 100% owner of CONE…
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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/CONSOL Breakup Continues: Noble Sells 50% of CONE Midstream

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” (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). MDN exclusively shared the news of exactly the who the “undisclosed buyer” is: HG Energy (headquartered in Parkersburg, WV), backed with money from investment firm Quantum Energy Partners. HG is a “portfolio company” of Quantum. The press release announcing the acreage/asset sale went to great lengths to stress that Noble’s half operating interest in the CONE Midstream pipeline gathering system was not part of the deal. CONE is a 50/50 joint venture between CONSOL Energy (the “CO” part of the name), and Nobel Energy (the “NE” part of the name). CONE was Noble’s final connection to our region. No more. Yesterday, Noble Energy announced they’ve sold their 50% stake in CONE to Quantum Energy Partners for $765 million. This time Noble went ahead and announced the buyer, perhaps figuring MDN would find out and blab it any ;-). Here’s the announcement that Noble Energy has left the Marcellus/Utica building…
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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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Noble Energy 2017: Even with 363K Acres, No New Marcellus Drilling

Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (see Noble Energy Loses $2.4B in 2015; Marcellus Scale-Back in 2016). They followed through on that promise. In November 2016 Noble ended its joint venture deal with CONSOL Energy, with Noble getting 363,000 Marcellus Shale acres in the divorce settlement (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture). Yesterday Noble issued their fourth quarter and full year 2016 update, along with a preview for 2017. What we learned can be summed up as this: No new Marcellus drilling in 2016, and none planned for 2017. However, Noble does plan to complete previously drilled but uncompleted (DUC) wells it has in inventory in the Marcellus…
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Marcellus Biggest Drillers Lock in 2017 Gas Prices at $3+ per Mcf

In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see Hedging Gas Prices in Marcellus/Utica – Who Hedges & How Much?). Hedging is a concept of pre-selling the gas you produce at a price you agree to now, in advance. Although that may sound risky, it’s actually an exercise in risk avoidance. It’s less risky to lock in favorable prices now rather than wait and potentially get far less. How do drillers know what the price of gas will be six months or a year from now? They don’t know, for sure, but there is something called the forward market, that predicts what prices will be at future dates. In fact, traders create contracts now based on prices in the future, and those contracts are reported by various news and data services, like NGI’s Forward Look publication. The company that provided the research back in September, S&P, is back with an update. The latest research shows that all of the top 10 drillers have hedged at least some of their production–and some of them have hedged most or even all of their production. What prices have each of these 10 drillers locked in and for how much production?…
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Assets Reshuffled at CONE Midstream/CONE Gathering

clear-as-mudCompanies in the oil and gas sector often split the ownership of assets into different companies (on paper) for various reasons: tax purposes…to attract investment…to give us laypeople headaches. CONE Midstream, a joint venture between CONSOL Energy and Noble Energy (CO from CONSOL and NE from Noble Energy) was formed in summer 2014 (see CONSOL & Noble Energy Form New Marcellus Midstream Company). CONE Midstream has been a small but stellar performer in the midstream (pipeline) sector, as evidenced by their most recent quarterly update (see CONE Midstream 3Q16: Success Story Continues). But before there was CONE Midstream, there was CONE Gathering (see New Pipeline, Wells Coming to Upshur & Barbour Counties in WV). There is also CONE Midstream DevCo, yet another entity on paper. Is your head spinning yet? CONSOL and Noble yesterday announced that, well, we’re not quite sure what was announced! It appears that the two CONE Midstreams and CONE Gathering are reshuffling the deck once again–transferring some of the assets held between them to the other entities. If you can figure it out, please let us know. Here’s what CONSOL and Noble said in a joint announcement yesterday…
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CONE Midstream 3Q16: Success Story Continues

CONE logoCONE Midstream, a joint venture between CONSOL Energy and Noble Energy (get it? CO from CONSOL and NE from Noble Energy) was formed in summer 2014 (see CONSOL & Noble Energy Form New Marcellus Midstream Company). When CONE released their 1Q16 update, we pointed out what a gem of a midstream (i.e. pipeline) company it is (see CONE Midstream 1Q16: Profits Up, Volumes Up, Looking Great!). In 2Q16 the company continued its winning ways (see Cone Midstream Continues to Impress – 2Q16 Update). What about in 3Q16? Net income was up ($23.6 million in 3Q16 vs. $19.7 million in 3Q15), and average daily volumes flowing through the pipeline was up (840 billion Btus per day in 3Q16 vs. 642 BBtu/d in 3Q15). Here’s the latest from the midstream gem in the Marcellus…
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Noble Energy 3Q16: Aside from Marcellus JV Divorce, Not Much

Noble Energy logoAs we pointed out yesterday in our story about CONSOL Energy and Noble Energy deciding to end their Marcellus joint venture (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture), Noble Energy has decided to cool it with regard to new Marcellus drilling. Noble is focused on other (oily) shale plays. They issued their third quarter 2016 update yesterday, and the section about the Marcellus was pretty short. Noble completed 6 previously-drilled wells, but isn’t drilling any new Marcellus wells…
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Divorce: CONSOL & Noble Dissolve M-U Joint Venture

divorce

Yesterday CONSOL Energy and Noble Energy issued a joint press release to announce they are “separating” their Marcellus/Utica joint venture. We view it more like a divorce. This isn’t a “maybe we’ll get back together at some point” kind of agreement. It is an agreement for CONSOL to take one child (acreage in Pennsylvania) and Noble to take the other child (acreage in West Virginia) and permanently go their separate ways. That’s a divorce. The two companies stressed that their third child together–CONE Midstream–would remain in joint custody for the duration. CONSOL gets 306,000 acres and Noble gets 363,000 acres. Why the break up? The two were joined at the hip and had to agree on spending money to drill on some 669,000 jv acres. CONSOL wants to drill more, Noble wants to drill less. The break up lets each of them do what they want to do. CONSOL has big plans to drill more Utica wells, and Noble has big plans to drill in other shale plays. The net net appears to be expect more CONSOL drilling in the Utica in both PA and WV (where it will retain Utica rights), and less Marcellus drilling by Noble in PA/WV…
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Noble Energy’s 2Q16 Production in the Marcellus Goes Up 28%

Noble Energy logoNoble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (see Noble Energy Loses $2.4B in 2015; Marcellus Scale-Back in 2016). Yesterday Noble issued their second quarter 2016 update. We’ve grabbed out the Marcellus update section to share with you below. You’ll see that Marcellus production for Noble went up in 2Q16 by 28% over 2Q15–a nice surprise. You’ll also see that Noble has 79 drilled but uncompleted wells (DUCs) in the Marcellus as part of their joint venture…
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Noble Energy 1Q16: Still Active in the Marcellus, Compl. 25 Wells

Noble Energy logoNoble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (see Noble Energy Loses $2.4B in 2015; Marcellus Scale-Back in 2016). Last week Noble issued its first quarter 2016 update. We are, of course, most interested in their Marcellus activity. Noble reports, true to their word, that although they didn’t drill any new wells, they did complete 25 wells and production in the Marcellus spiked up 46% in 1Q16 over the same quarter in 2015…
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Top 10 Marcellus/Utica Drillers in SWPA – Ranked by Production

top-10.jpgEverybody loves a list. We do too! We spotted a ranking in a recent issue of the Pittsburgh Business Times that lists the top 37 shale gas producers in southwestern Pennsylvania, based on the amount of gas they produced in 2015. We pulled the names of the top 10, listed in order from most to least…
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Noble Energy Loses $2.4B in 2015; Marcellus Scale-Back in 2016

Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in January the company was cutting its stock dividend and 2016 capital budget (see Noble Energy Cuts Stock Dividend 44%, Lowers 2016 Capex 50%). Yesterday Noble released its fourth quarter and full year 2015 update, along with details about their plans for 2016. What do we learn? Noble lost $2.4 billion in 2015, with $2 billion of the loss coming in 4Q15. Ouch. Of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 Noble plans to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (they have 85 DUCs–drilled but uncompleted wells). Here’s an update on Noble’s performance last year, and plans for this year…
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