Energy Companies

Economic Impact | Energy Companies | Erie County | Ethane | Industrywide Issues | Pennsylvania | Shell

Penn State to Help Create New Biz Opportunities from Shell Cracker
April 25, 2018April 25, 2018

The Penn State campus in Erie County (called Penn State Behrend) has been tapped by the PA Dept. of Community and Economic Development (DCED) to be the “lead partner” for developing business and market opportunities for the state related to the mighty $6 billion Shell ethane cracker–currently under construction in Beaver County. Erie County where Behrend is located is certainly not next door to the cracker, not nearly as close as some other Penn State campuses. So why was Behrend selected? In a word, plastics. “The strength of Erie’s plastics industry and the success of Penn State Behrend’s School of Engineering, which offers one of only six accredited U.S. plastics undergraduate programs, makes Erie of particular interest to DCED.” According to DCED’s Denise Brinley, senior energy adviser, “Penn State Behrend can provide critical connections to research support, materials testing and a talent pipeline that will add value to this large-scale petrochemical investment and associated growth in the plastics sector.” Penn State is kicking in a $250,000 grant to their Energy University Partnership for oil and gas strategies, to help prime the pump…
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Ashland County | Coterra Energy (Cabot O&G) | Energy Companies | Ohio

New Cabot Drilling Program Kicks Off This Week in Ashland, OH
April 23, 2018April 23, 2018

As we have reported since last December, Cabot Oil & Gas, long-known for the incredible amount of Marcellus natural gas they produce out of a single northeastern Pennsylvania county (Susquehanna), is eyeing north central Ohio as a potential spot for “what’s next” after the Marcellus (see Cabot O&G Considers Drilling in Ashland County, OH). Cabot locked up leases and is planning to drill a number of test wells in not only Ashland, but also Holmes, Knox, Richland and Wayne counties in the Buckeye State (see New Details Emerge on Cabot’s Shale Plans in Central Ohio). The company doesn’t know exactly what it will find–gas, NGLs or perhaps even oil (see Just What is Cabot Looking for in Ohio – NatGas, Oil or NGLs?). Cabot is about to find out. Beginning tomorrow (Tuesday), Cabot says they will start to push dirt around and build their very first well pad in Ashland County. If all goes according to plan, Cabot will spud (begin to drill) the well itself in about three weeks. Plans for a second well, also located in Ashland County, are already in the works and will come along after the first well is drilled…
Read More “New Cabot Drilling Program Kicks Off This Week in Ashland, OH”
Energy Companies | Industrywide Issues | McKean County | Pennsylvania | Seneca Resources | Wastewater

Seneca Resources Wastewater Recycling Plant Largest in PA
April 23, 2018April 20, 2022

A few years ago Seneca Resources (wholly-owned drilling subsidiary of National Fuel Gas Company) purchased a wastewater treatment facility at the McKean County Landfill and began using it to recycle Seneca’s brine (wastewater). The operation was renamed Highland Field Services and now handles all of the “sourcing, handling and recycling of fluids associated with the Seneca’s Appalachian development program.” Because of the facility, last year Seneca was able to recycle 100% of it’s brine/wastewater, and because of that, some 75% of all the fluids Seneca used in their 2017 drilling activities came from the Highland facility. Put another way, Seneca had to acquire and use fresh water sources for only 25% of all the water they needed to drill and frack–far less fresh water was needed in Seneca’s operations last year than in previous years. Not only did the Highland facility handle 100% of Seneca’s wastewater, it also handled wastewater for other drillers too–a total of 7.9 million barrels between Seneca and other drillers, making Highland the largest oil and gas wastewater recycling facility in PA…
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Energy Companies | Gulfport Energy

Gulfport 1Q18 Update: Utica Production Up 37%, SCOOP Up 198%
April 20, 2018April 20, 2018

Yesterday Gulfport Energy released an initial look at the company’s first quarter operations (full copy below). The update does not include financial performance–only operational 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. Gulfport also owns acreage along the Louisiana Gulf Coast. Our primary interest is in Gulfport is their Ohio Utica Shale program. In 1Q18, when you role everything together (methane, NGLs and oil) converting it all to natural gas “equivalent,” Gulfport produced 92,772 million cubic feet equivalent (MMcfe), versus producing 67,559 MMcfe in 1Q17–a 37% increase year over year. However, what you can’t ignore in this update is that Gulfport has really turned up the activity in the Oklahoma SCOOP. In 1Q18 Gulfport brought online 3 Utica wells, but 7 SCOOP wells. In 1Q18 Gulfport produced 22,103 MMcfe in the SCOOP, versus producing just 7,398 MMcfe in the SCOOP a year ago in 1Q17–a 198% increase. The conclusion is inescapable: the SCOOP is ascending for Gulfport, occupying the company’s time, attention and money…
Read More “Gulfport 1Q18 Update: Utica Production Up 37%, SCOOP Up 198%”
Energy Companies | EQT Corp | Industrywide Issues | Lease & Royalty Payments | Litigation | Regulation | Statewide WV | West Virginia

EQT Sues WV for Passing Minimum Royalty Law re Flat Rate Leases
April 18, 2018April 18, 2018

Earlier this year the West Virginia legislature passed Senate Bill (SB) 360, which Gov. Jim Justice subsequently signed into law (see WV Gov Justice Signs Bill to Guarantee 12.5% Minimum Royalty). SB 360 overturns a ruling by the WV Supreme Court in Leggett v. EQT Production, a case in which the Supremes (in a very unusual move) reversed their own previous decision and allowed EQT to deduct post-production expenses in an old flat rate lease. In essence, SB 360 guarantees rights owners/landowners a 12.5% minimum royalty, regardless of post-production deductions–but only in flat rate leases. A flat rate lease is a lease in which a company pays a regular (in EQT’s case, annual) payment, regardless of how much oil/gas is produced. Traditionally drillers don’t deduct post-production expenses because the payments they make aren’t all that much anyway. But then EQT began to claim deductions, prompting a lawsuit that went all the way to the Supreme Court. The legislature aimed to “fix” what they considered an error in the court’s ruling. EQT claims the new law is unconstitutional and last week filed a lawsuit (copy below) asking a judge to block implementation of the law, set to take effect on May 31…
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Energy Companies | Rex Energy

Rex Energy Gets 1 Extra Wk to Pay Defaulted IOU, Files Annual Report
April 18, 2018April 18, 2018

Two weeks ago Rex Energy filed a notice with the Securities and Exchange Commission to alert shareholders that the company has defaulted on an interest payment due on senior notes (see Rex Energy Defaults on IOUs, Can’t File Annual Report on Time). 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 to pay up. Angelo, Gordon & Co. promised not to take any action until that date. In a second filing two weeks ago, Rex said they would not be able to file their annual 2017 report on time. We have updates on both filings. First, Rex has still not made the interest payment and still has not negotiated a new agreement with Angelo, Gordon & Co. However, yesterday Angelo signed a new, second forebearance agreement giving Rex one more week–until April 23–to either pay or agree to a new deal. The clock is ticking. Meanwhile, last Friday Rex filed it’s annual report for 2017. Among the revelations in the report: Rex plans to spend $78-$83 million on drilling this year, down from spending $133 million last year…
Read More “Rex Energy Gets 1 Extra Wk to Pay Defaulted IOU, Files Annual Report”
Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Southwestern Energy | Statewide PA

Southwestern Appeals “Trespass” Case to Entire PA Superior Court
April 17, 2018April 17, 2018

Southwestern Energy has just taken the next very important step in a process that frankly has us holding our breath. Two weeks ago MDN brought you the news that the Pennsylvania Superior Court handed down a decision that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed the case to Superior Court and three judges heard the case. One of the Superior judges authored a decision overturning the lower court, with a second judge “joining” (agreeing with) the decision. The third judge was AWOL (“not participating”). Frankly, the stakes could not be higher for the future of Marcellus drilling in PA. Southwestern has just filed a request with the Superior Court asking that all 20 judges who sit on that court hear and consider the case, which makes sense given the gravity of the case and PA’s economic future…
Read More “Southwestern Appeals “Trespass” Case to Entire PA Superior Court”
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Snyder Brothers | Statewide PA | Taxation

PA Supreme Court Takes a Close Look at Strippers…as in Wells
April 16, 2018April 16, 2018

It’s always fun to talk about strippers here on MDN. Uh, stripper wells that is. Background: In 2012 Pennsylvania passed the Act 13 drilling law that includes an impact fee on wells targeting shale layers, including the Marcellus. Snyder Brothers, headquartered in PA, drills mostly conventional (vertical only) wells in southwestern PA. In 2011-2012 they drilled 45 vertical-only wells targeting the Marcellus. All 45 of the vertical-only wells were fracked. Initially those wells produced more than 90 thousand cubic feet per day (Mcf/day), but by December of the year in which they were drilled, the wells produced less than 90 Mcf/day. The way the 2012 Act 13 law is written, if a well produces less than 90 Mcf/day during “any” month it is considered a stripper well and exempt from paying the impact fee. The state’s Public Utility Commission (PUC) assessed the fee anyway because for 11 months the wells produced more than 90 Mcf/day, arguing the word “any” is not a get-out-tax-jail-free card. Snyder Bros. sued and after an appeal of the case, Snyder Bros. won the case in March 2017, exempting those wells from paying impact fees (see PA Court Says Snyder Bros Wells are Strippers, No Impact Fees Due). That sent the state Public Utility Commission (PUC) into a tizzy with claims the Act 13 impact fees are now in jeopardy. So the PUC appealed the case to the PA Supreme Court. The Supremes heard arguments in the case last Wednesday…
Read More “PA Supreme Court Takes a Close Look at Strippers…as in Wells”
Energy Companies | Rex Energy

Rex Energy Stock De-Listed by Nasdaq as of April 12th
April 13, 2018April 13, 2018

Rex Energy stock performance last 3 mos – until it stopped trading on 4-11-18 (click for larger version)

The walls continue to close in on Rex Energy. Yesterday Rex’s stock was officially de-listed from the Nasdaq Stock Exchange. Rex’s stock can now only be bought and sold over-the-counter (OTC), sometimes referred to as the Pink Sheets. MDN told you that Nasdaq warned Rex in November that the stock would be de-listed unless stockholder equity (number of shares of stock times the share price) was boosted (see Rex Energy Once Again Threatened with NASDAQ De-listing). Last November shareholder equity was a paltry $2.5 million. That is, Rex’s “value” on paper was $2.5M. It wasn’t the first time Rex had been warned by Nasdaq. Previously Rex pulled a rabbit out of the hat and met Nasdaq’s criteria for continued listing. This time they could not, and consequently it’s now harder to find/buy/sell shares of Rex stock. As we told you just last week, Rex is heading full steam ahead toward bankruptcy. They missed an important interest payment on outstanding debt (see Rex Energy Defaults on IOUs, Can’t File Annual Report on Time). Rex has not yet filed for bankruptcy, but it appears there are very few options left…
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Coterra Energy (Cabot O&G) | Education | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

Cabot Completes $2.5M Endowment for Lackawanna College 1 Yr Early
April 13, 2018April 13, 2018

Cabot O&G regional HQ in Dimock, PA

Cabot Oil & Gas is such an impressive company. They are, without a doubt, one of our favorite Marcellus/Utica drillers. We know! You’re not supposed to have favorites among your “children.” We can’t help it. Cabot is a favorite child for us. The company pumped $4.6 billion into Susquehanna County the first 10 years they were in the county (see Amazing: Cabot O&G Invests $4.6 BILLION in One PA County in 10 Yrs). Some $1.5 billion of that amount was lease bonuses and royalty payments–direct into the pockets of landowners. The other $3.1 billion was money Cabot spent in the county to drill there–money that was spread around to contractors, suppliers and workers. It is an incredible story, and certainly would be “enough” if Cabot left it at that. But Cabot hasn’t settled for just benefiting the community with an enormous amount of investment–an investment that benefits Cabot’s own business. Cabot is also one of the biggest philanthropists in Susquehanna County (perhaps THE biggest). In 2012, Cabot gave $2.2 million, that was matched, helping to raise $4.4 million for a new hospital in the county (see Cabot Effort Raises $4.4 Million for PA Physicians Clinic). Then in April 2014, Cabot announced it would donate $2.5 million to Lackawanna College (Scranton, PA) over a five-year period (Cabot Oil & Gas Does it Again – $2.5 Million Gift to Lackawanna College). The gift funds the School of Petroleum & Natural Gas located in New Milford, PA, and is the largest single private donation in the history of Lackawanna College. Cabot has just completed fully funding the $2.5 million Lackawanna gift–a full year ahead of schedule…
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Allegheny County | Crime | Energy Companies | Industrywide Issues | Olympus/Huntley & Huntley | Pennsylvania | Seismic Testing

9 More Seismic Testing Devices Stolen in SWPA, 6 Were Returned
April 12, 2018April 12, 2018

Click for larger version

Somebody in southwestern Pennsylvania has sticky fingers. In March MDN reported that someone(s) in SWPA had stolen nine seismic testing nodes in Westmoreland County (see Whoops! Stolen Seismic Testing Nodes in SWPA have Tracking Devices). The seismic testing devices were legally placed in various locations by Geokinetics, hired by Huntley & Huntley to map what’s below the surface in preparation for drilling shale wells. Geokinetics let it be known that if the devices were not returned by March 26, the perps would be hunted down and prosecuted. Oh! And did we tell you that each device has a GPS tracker in it, so Geokinetics can locate the devices whenever they want? We now have a second case of sticky fingers. Stupid is as stupid does. Geokinetics reports another nine units were lifted, this time in Monroeville (Allegheny County). Once again the word has gone out: Return them now, by April 16th, or you will be found and prosecuted. Six of nine have already been returned…
Read More “9 More Seismic Testing Devices Stolen in SWPA, 6 Were Returned”
Anti-Drilling/Fossil Fuel | Energy Companies | Industrywide Issues | JKLM Energy | Pennsylvania | Potter County | Wastewater

Planned Potter County Frack Wastewater Treatment Facility is Dead
April 11, 2018April 18, 2018

Those who once supported a cutting-edge technology wastewater treatment plant, proposed by Epiphany Water Solutions for Coudersport, PA, are now running away from the project as fast as they can. First was JKLM, the primary (only) customer for the project–the main reason for the project. As we told you on Monday, JKLM, which was rumored to also be the main financial backer, said they are no longer interested (see JKLM Pulls Support of Planned Potter County Wastewater Facility). Now comes the news that the Coundersport Area Municipal Authority (CAMA), which operates the local sewage treatment plant that was going to take the distilled water from the proposed Epiphany plant (clean enough to drink) and discharge it into the Allegheny River, has just voted to rescind the permits and contract they had with Epiphany. With friends like these…
Read More “Planned Potter County Frack Wastewater Treatment Facility is Dead”
Anti-Drilling/Fossil Fuel | Apex Energy | Energy Companies | Industrywide Issues | Litigation | Olympus/Huntley & Huntley | Pennsylvania | Regulation | Westmoreland County

Penn Twp Antis Try to Use PA ERA to Block Shale Drilling
April 10, 2018April 10, 2018

Last November we updated you on a lawsuit filed by a group of radical anti-fossil fuelers in Penn Township (Westmoreland County), PA (see Penn Twp Ninny Nannies File Lawsuit to Block Apex, H&H Wells). A group calling themselves Protect PT, backed with money and legal help from Big Green group PennFuture, filed a lawsuit to try and stop Apex Energy and Huntley & Huntley (H&H) from drilling wells in the township. The lawsuit finally made it to a county judge who is hearing testimony this week. One of the “expert witnesses” called by Protect PT is retired and discredited Cornell professor Tony Ingraffea, who makes a living by traveling around the country bashing fracking (see our Ingraffea stories here). The peril with this particular lawsuit is that it uses Pennsylvania’s so-called Environmental Rights Amendment (ERA), which liberal PA judges have, in recent years, breathed new life into. The argument is that fracking denies those who live near this temporary activity their “right” to enjoy Mom Nature, therefore it should be banished forever. That’s what Protect PT is attempting to pull off–a total frack ban in the Penn Township…
Read More “Penn Twp Antis Try to Use PA ERA to Block Shale Drilling”
Energy Companies | Industrywide Issues | Ohio | Seneca Resources | Trumbull County | Wastewater

Trumbull Co. Residents Rally to Oppose 3 New Injection Wells
April 10, 2018April 10, 2018

Town of Brookfield – Trumbull County, OH

Last December MDN told you about three proposed new injection wells planned for the Town of Brookfield, in Trumbull County, OH (see 3 More Injection Wells Coming to Trumbull County, OH). Highland Field Services (subsidiary of Seneca Resources/National Fuel Gas Company) brought two new injection wells online in Brookfield last year. Shortly after the two wells went online, Highland then floated a plan to build three more wells in close proximity to the existing two, a plan opposed by many in the town. Even though Brookfield Township trustees issued a “no more injection wells” letter to Gov. John Kasich and the Ohio Dept. of Natural Resources (ODNR), the ODNR ignored the letter and two weeks ago issued the necessary permits to build the three additional new wells (see ODNR Grants Permits for 3 New Injection Wells in Trumbull County). Last Thursday a group of town residents staged a rally against the three new injection wells. Do they have valid concerns?…
Read More “Trumbull Co. Residents Rally to Oppose 3 New Injection Wells”
Energy Companies | Industrywide Issues | JKLM Energy | Pennsylvania | Potter County | Wastewater

JKLM Pulls Support of Planned Potter County Wastewater Facility
April 9, 2018April 18, 2018

It’s always disappointing when our side backs down from a fight–especially when the other side is demonstrably lying. On Friday afternoon JKLM, the drilling company founded by Terry Pegula (owner of the Buffalo “Marcellus” Bills), announced it is no longer interested in processing brine (wastewater) from shale wells the company drills in Potter County at a proposed shale wastewater treatment plant in Coudersport, PA (see Shale Wastewater Treatment Plant Planned for Potter County, PA). The cutting-edge technology plant, proposed by Epiphany Water Solutions, was opposed by folks who, frankly, lied about it. The lies got so bad that lawyers for Epiphany (and JKLM) recently warned them to stop their lying (see Opponents Slandering Potter Co. Wastewater Facility Legally Warned). JKLM would have been the primary customer for the facility. On Friday, JKLM issued a short statement (below) to say they are no longer interested. We’re guessing they’ve pulled out because of the negative publicity, which is too bad, because it teaches antis that if they make enough noise and enlist lying media to aid them, they can shut down important projects like this one. Is this the end of the Epiphany project–at least in Potter County? JKLM was the primary customer AND financial backer. You do the math…
Read More “JKLM Pulls Support of Planned Potter County Wastewater Facility”
Beaver County | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Shell

More Workers Needed for Shell Cracker Plant, Unions Gear Up Training
April 9, 2018April 9, 2018

Last Thursday Pittsburgh’s KDKA-TV hosted an event called “Eye on Beaver County” in Beaver, PA–a celebration of Beaver and a discussion about the county’s future. An 11-member panel discussed the past, present and future of the county. The discussion, as you might imagine, quickly turned to Shell’s $6 billion ethane cracker, going up in Monaca even as you read this. A Shell rep and several reps from labor unions were on hand to discuss the manpower issue. The short version is this: Unions for carpenters, ironworkers, steamfitters, and heavy equipment operators need more members, more people to help build the facility. Like, now. The unions offer free training. No, the jobs are not permanent, but such jobs never are. They’re good, high-paying jobs and the jobs will last at least a few years. Plus you get bragging rights–“I helped build the Shell cracker plant.” Here’s how the discussion about the need for more cracker plant workers went at last week’s event…
Read More “More Workers Needed for Shell Cracker Plant, Unions Gear Up Training”