Energy Companies

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    Liberal Groups Force Range, Anadarko to Consider Global Warming

    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)…
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    Update on Hess’ Activity in the Ohio Utica: Completing 5 Wells

    It’s been a while–quite a while–since we’ve heard anything about Hess’ Utica drilling program. The last article we ran on Hess drilling in the Utica was in April 2016 when Hess management said that while they have “good rock” in the Utica, they would mothball their Utica operations until more pipelines are built. Looks like the pipelines are built. We spotted a story that gives new information about Hess’ plans in the Utica. They currently have 59 wells producing in the Ohio Utica. They’re working to complete another 5 previously drilled (in 2015?) wells, which will give them 64 producing wells “in the next month or so.” As for new drilling, the company will hopefully restart their program to drill new wells “hopefully in mid-2019.” Here’s what Hess’ “Utica operations area lead” guy had to say at a Kiwanis Club meeting last week in Steubenville about how much, and where, they’re drilling in the Utica…
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    Average Workers at Top Marcellus Drillers Make $100K+ Salary

    The average worker who works for producers (i.e. drillers) in the Pennsylvania Marcellus makes among the highest average salaries of any industry in the state. Looking at six of the state’s top Marcellus drillers, the average worker made $113,610 last year! That’s an average taken from workers at CNX Resources, Range Resources, Chesapeake Energy, Southwestern Energy, EQT and Cabot Oil & Gas. We hasten to add not “all workers” but “average” or “median” workers–meaning there are people who make below that number and people who make well above that number. It also means the majority of Marcellus workers in those companies made at least $100,000 per year. Those working for oilfield services (OFS) companies like Halliburton, Baker Hughes and others didn’t fare quite as well, making an average of $52,000-$80,000 per year. Still, hey, it ain’t bad money! Here’s a look at the average wage for top Marcellus drillers and the OFS companies that serve them…
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    Investor Owning 3% of Range Stock Voting Against Mgmt Compensation

    Although the average employee at Range Resources made $123,500 last year (see today’s lead story, Average Worker at Top Marcellus Drillers Makes $100K+ Salary), those in upper management at Range made considerably more. We don’t have the 2017 number, but in 2016, Range CEO Jeff Ventura made $9.8 million (see EQT Pay Dispute – Comparing CEO Salaries for Top M-U Firms). Ventura’s salary works out to be 79 times the average Range worker’s salary–actually far better than the average for all industries which averages 140 times as much. Still, not everyone is happy with the what Range’s upper management gives themselves. A significant investor in Range, Stelliam Investment Management, which owns around 3% of all outstanding Range stock, has issued a press release and an open letter to the board to say they intend to vote against Range’s proposed management compensation plan at today’s annual meeting. Stelliam says over the past four years management compensation has “remained generous” while during the same period the company’s stock price has slipped a huge 80% in value. So who is Stelliam, and does their vote of no confidence create any issues for Range management?…
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    Shell’s PA Ethane Cracker Plant Gets a Name: Shell Polymers

    If you’ve read MDN for any length of time, you know about a $6 billion ethane cracker plant being built by Shell in Monaca (Beaver County), PA–near Pittsburgh. The plant will chemically “crack” ethane, an abundant natural gas liquid (NGL) that comes out of the ground along with methane, creating polyethylene from the ethane. Polyethylene is, in essence, raw plastic. Manufacturers in the region and beyond will use the plastic pellets Shell will produce at the plant to create an unlimited variety products. Shell is a smart company. They’re as much a marketing company as they are an oil and gas producer and petrochemical manufacturer. They know the value of positioning and mind share. We hadn’t thought about it previously, but we always just thought of and called the project the “Shell cracker plant.” The plant now has a name: Shell Polymers. The name Shell Polymers has been around for a long time but had fallen out of use when Shell largely exited the plastics business. With the new cracker coming online in the next few years, it’s time to revive the Shell Polymers name/brand and apply it to the cracker plant, which is how the project was being pitched at the last week’s NPE2018 (formerly called the National Plastics Exposition) in Orlando, Florida…
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    Statoil Gets a New Name Starting Today – Equinor

    Can you imagine an oil company being ashamed of the word “oil”? Sounds like a European thing–and indeed it is. Statoil, Norway’s largest oil company (in fact, the single largest company in Norway period) with operations in 36 countries around the world and over 20,000 employees–is ashamed of its own name. And so, as of today, Statoil is changing its name to Equinor. “Equi” stands for equal, equality, or equilibrium (take your pick), and “nor” stands for Norway. Whatever. We mention this bit of tomfoolery because Statoil (now Equinor) still has meaningful leases and assets in the Ohio Utica. According to MDN’s forthcoming Marcellus & Utica Shale Upstream Almanac 2018 (on sale June 1st), in 2017 Statoil had 42 spud wells in the Ohio Utica, with 18 of them producing. Not huge, but also not nothin’. Here’s the tale of the oil company that doesn’t want to be called an oil company any more–even though they still are…
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    San Francisco Play Exposes $18B Environmental Fraud

    A shocking and at times farcical tale of how an environmental lawsuit turned into the world’s biggest fraud is revealed in a new play. The world premiere of “The $18-Billion Prize,” based on the true story of rainforest natives and their New York lawyer “fighting for justice” against one of the world’s biggest oil companies, opens May 19 at San Francisco’s Phoenix Theatre. Performances continue through June 3. Written, or perhaps a better word is assembled, by Phelim McAleer and Jonathan Leaf, the play uses exact words from transcripts of court documents. In 1993, Steven Donziger, a Harvard-educated American lawyer, represented indigenous groups from Ecuador’s rainforest in a class action lawsuit against Chevron–a shakedown. The case received an enormous amount of media attention, including major coverage by Vanity Fair, Rolling Stone and 60 Minutes to name a few, and it drew the support of international celebrities. Chevron, to their credit, fought back. An American court found evidence of fraud and ordered Donziger to hand over his files and diaries, which exposed a massive bribery and corruption scheme. The play will make you laugh, and cry, and make you angry that such a long-running fraud could be perpetrated here in the United States…
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    Dela. Riverkeeper Suffers Major Defeat in Martian Well Case

    Nearly a year ago MDN reported that Big Green group THE Delaware Riverkeeper (aka Maya van Rossum) and the odious Philadelphia-based Clean Air Council (CAC) had suffered a crushing legal defeat in their attempt to interfere with shale drilling on the opposite side of the state from where the Delaware River and Philly is located (see Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling). A small group of anti-drilling parents from the Mars School District (whom we affectionately call “Martians”) in Butler County, PA, backed by money and legal help from Riverkeeper and CAC, filed frivolous lawsuit after frivolous lawsuit aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. Even amid the back and forth lawsuits, at least two of the wells were permitted and drilled by Rex Energy, despite the bleatings of the Martians (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). Following last year’s final word by PA Commonwealth Court, we thought that was the end of it. However, Riverkeeper and CAC tried one last, desperate attempt–by filing an appeal with the Environmental Hearing Board. The EHB is a special court set up to hear appeals of decisions made by the Dept. of Environmental Protection (DEP). Riverkeeper and CAC argued that the DEP abrogated their responsibilities under the PA Environmental Rights Amendment (ERA) to protect PA’s environment by issuing permits for Rex’s Martian wells. Last Friday the EHB ruled that DEP was well within its rights and did not, in fact, violate the ERA by allowing the Rex wells…
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    EQT Continues to Fight PA DEP Fine re Wastewater Impoundment

    On Wednesday, Pennsylvania Commonwealth Court (an appeals court) heard oral arguments over how to prove whether contaminants in the soil have moved into groundwater. The case dates back to 2014 when the PA Dept. of Environmental Protection (DEP) slapped EQT with a $4.53 million fine for a leaky wastewater impoundment in Tioga County (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). EQT did not say there wasn’t a problem with leaks at the site, but they did say the way the DEP calculated the fine was unreasonable and arbitrary. EQT appealed the fine and the case all the way to the PA Supreme Court, and in early April the Supremes ruled in favor of EQT, saying that the DEP’s levied fine was excessive and that the DEP misinterpreted language in the 1937 Clean Streams Law (see PA Supreme Court Axes DEP $4.5M Fine in EQT Tioga Wastewater Leak). We thought (mistakenly) that was the end of the case. But it’s not. The Supremes ruled on “water to water” contamination in the case, but not on ground to water contamination. PA law allows for companies to be on the hook for each day a contaminant enters the water table. What lawyers argued this week was whether or not, and how, the DEP can prove contaminants in the ground, there because of EQT’s leak, can be proven to have leached into the water on any given day. DEP is calculating a revised $1.1 million fine based on assumptions about how many days the contaminants leaked out of the ground. EQT is forcing DEP to use more than just spitball estimates in calculating the fine…
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    Gulfport Energy 1Q18: “We Love SCOOP” but Spends 70% on Utica

    In April Gulfport Energy released an initial look at the company’s first quarter operations (see Gulfport 1Q18 Update: Utica Production Up 37%, SCOOP Up 198%). The April operational update did not include financial performance. Gulfport is an “independent” oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. Yesterday Gulfport dropped the other shoe–the financial report for 1Q18. The company reported $90 million of net income for 1Q18 vs. $154 million in 1Q17–a 42% drop. Much of the update focused on Gulfport’s activity in the Oklahoma SCOOP, which seems to have turned Gulfport’s head. However, there is continued strong activity in the Ohio Utica. Gulfport reports drilling 13 wells in the Utica in 1Q18 with an average lateral length of 9,000 feet (11% longer than 2017’s laterals). They averaged just over 1 billion cubic feet per day (Bcf/d) of production in the Utica. And Gulfport CEO Michael Moore said on an analyst conference call, in response to a question, that the company is still spending 70% of its capital budget on Utica drilling in 2018…
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    The Different Ways Range and CNX Dealt with ME1 Pipeline Outage

    Now that the Mariner East 1 (ME1) NGL (natural gas liquid) pipeline is back up and running, Marcellus/Utica producers are breathing a sigh of relief–at least, Range Resources, the primary customer for the pipeline, is. Following sinkholes that developed while Sunoco Logistics Partners was drilling for the Mariner East 2 (ME2) project, a portion of ME1 was exposed to open air in Chester County, PA, which prompted the state Public Utility Commission to shut down ME1 in early March (see PA PUC Shuts Down Mariner 1 Pipeline Due to Mariner 2 Sinkhole). Range sends 20,000 barrels a day of ethane and propane through ME1. The closure sent them scrambling for alternatives (see Range, CNX Look for Alternatives to ME1 Pipe Following Shutdown). CNX Resources is also a customer using ME1, but much less so than Range. It took two months, but the PUC finally allowed ME1 to restart last week (see Sunoco’s ME1 Pipe Restarts, ME2 Pipe Pays Another $355K in Fines). Range and CNX coped with the ME1 closure in very different ways…
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    Anti Group Stirs Up Pittsburghers Against Fracking, (Ab)Uses Kids

    We always find it deeply disturbing when a group of anti-fossil fueulers, like the innocent-sounding (but very radical) Moms Clean Air Force, pushes little kids in front of the cameras, getting them to hold protest signs in a sleazy attempt to play on people’s sympathy. That’s what happened yesterday in the Pittsburgh suburb of Indiana Township (Allegheny County). Hey, knock yourself out if you want to show up and protest and make some noise. But don’t bring the kids along. Don’t put your guilt trip on the kids, making them protest something they frankly don’t even understand. Don’t implant them with your irrational fears. We find it disgusting…
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    Rex Energy Gets 4th Extension to Delay Paying Defaulted IOU

    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 (Angelo, Gordon & Co.) signed a temporary “forbearance” agreement that gives Rex a little breathing room, until April 16. The April 16 payment didn’t happen. Rex and Angelo signed a second forebearance agreement giving Rex another extension–until April 23–to either pay or agree to a new deal (see Rex Energy Gets 1 Extra Wk to Pay Defaulted IOU, Files Annual Report). April 23 came and went with no deal, and once again Rex and Angelo signed an agreement, the third such forbearance agreement, which gave the company until May 2 (see Rex Energy Gets 3rd Extension to Pay Defaulted IOU). May 2 came and went and (you guessed it), Rex has now signed a fourth forebearance agreement, giving the company another week–until May 9…
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    NFG/Seneca: Pursuing Plan B for Blocked NY Pipeline Project

    Last Friday National Fuel Gas Company (NFG), headquartered in Western New York State which operates drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its second quarter 2018 (everyone else’s first quarter) update. Via Seneca Resources, NFG drills wells in northcentral and northwestern PA. Via Empire Pipeline, they build and maintain hundreds of miles of pipelines. NFG wants to add to their pipeline portfolio by building the Northern Access Pipeline–a $455 million project with 97 miles of new pipeline along a power line corridor from northwestern PA up to Erie County, NY. Northern Access would allow Seneca to drill new wells in an area currently pipeline “constrained.” However, Northern Access construction has been blocked by the corrupt NY Dept. of Environmental Conservation (see Cuomo’s Corrupt NY DEC Blocks NFG Northern Access Pipeline Permit). During a conference call with analysts on Friday, NFG CEO Ron Tanski outlined what we call Plan B for the Northern Access. Yes, NFG still wants to build Northern Access, but they now have an alternative. NFG recently signed an agreement with Williams’ Transco Pipeline to flow 300 million cubic feet per day (MMcf/d) of Seneca natural gas to Transco Zone 6 markets. Transco is talking with other shippers before it files to expand the existing pipeline–a project that would not be online until late 2021. If by some miracle NFG could get the corrupt DEC to change its mind and authorize Northern Access, that project would be online in 2020. Other interesting bits of news coming from last week’s update: Seneca plans to drill Utica wells on some of its existing Marcellus well pads. Seneca added a second drilling rig in 2017, and plans to add a third rig any time now…
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    Eclipse 1Q18: No Comment on Process to Buy or Be Bought

    Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA, issued its first quarter 2018 update last week. Eclipse has drilled the longest onshore natural gas wells in the world–in the Ohio Utica. Impressive company. In March the company announced it is looking for someone to buy, or (more likely) for someone else to buy them (see Eclipse Resources Board Considering Either Merger or Acquisition). Eclipse CEO Ben Hulburt began the quarterly analyst phone call last week by anticipating questions about the buy/be bought process. He shut down any questioning before it began by saying: “I hope you can understand, because of the nature of this process, we will not be able to address any questions relating to it or discuss it further during today’s call.” So what did Ben discuss? The company drilled 8 wells in 1Q18. They completed (fracked) the company’s first PA Utica well. And he took time to toot the company’s own horn (deservedly so). Eclipse drilled 8 of Ohio’s 10 most productive Utica oil wells in 4Q17. The company has a talent for drilling very long, and very productive wells…
    Read More “Eclipse 1Q18: No Comment on Process to Buy or Be Bought”

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    CNX Resources 1Q18: Record High Production as Utica Skyrockets

    Yesterday CNX Resources, formerly CONSOL Energy, released its first quarter 2018 update–its first full 3-month update since separating from the coal company. CONSOL began life as a coal company 150 years ago and only in recent decades entered the oil and gas business. The company split itself into coal and oil/gas back in November (see CONSOL Energy Split Done – Meet “New” Gas Driller CNX Resources). So 1Q18 is the first full quarter as a standalone o&g company for CNX. And what a quarter it was! Production of everything–gas, NGLs and oil, called “equivalent” was 129.5 billion cubic feet equivalent (Bcfe) in 1Q18, which works out to be 1.4 Bcfe per day–an increase of 36% over 1Q17. Production from Marcellus wells (gas and liquids), which is the majority of CNX’s wells, was up 14%. However, production from CNX’s Utica wells was up a huge 184% over 1Q17. Utica volumes (43.5 Bcfe in 1Q18) are rapidly catching up to Marcellus volumes (65.9 Bcfe in 1Q18). Here’s the latest from CNX…
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