Energy Companies

  • | | | |

    XTO Selling 9,400 OH Utica Acres in Monroe & Washington Counties

    XTO Energy, the shale drilling arm of Exxon Mobil, wants to sell ~9,400 Ohio Utica Shale acres in Monroe and Washington counties. Have no fear, XTO isn’t going anywhere. According to XTO’s website, the company currently owns 82,000 acres of Utica Shale leases in Belmont and Monroe counties. The tiny 9,400-acre sale appears to us to be selling off acreage in areas that don’t fit with XTO’s future drilling plans. XTO maintains a regional office in Belmont County. According to the sale announcement appearing on Oil & Gas Asset Clearinghouse, there are potentially 40 drilling locations on the 9,400 acres. The acreage has dry gas potential. The sale is not exactly an auction, but it is timed and uses bids. XTO is accepting sealed bids on the property through May 17. Here’s a copy of the listing, along with a flyer…
    Read More “XTO Selling 9,400 OH Utica Acres in Monroe & Washington Counties”

  • |

    Rex Energy Gets 3rd Extension to Pay Defaulted IOU

    Three 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. April 16 arrived without a deal, so 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, giving Rex one more week. Rex is not only having trouble paying its debt obligations, a few weeks back Rex’s stock was relegated to the penny stock Pink Sheets (see Rex Energy Stock De-Listed by Nasdaq as of April 12th). We have no inside knowledge of what’s happening behind the scenes, but we’re sure of this: There is a lot of heated discussion taking place. Rex previously floated the possibility of declaring bankruptcy. One thing’s for sure–something will have to happen soon…
    Read More “Rex Energy Gets 3rd Extension to Pay Defaulted IOU”

  • | | | | | | |

    Some PA Drillers Threaten to Spoil it for All via Royalty Shenanigans

    We’ve written a number of posts over the years about the ongoing, sometimes quiet sometimes not, civil war between Pennsylvania landowners and some (not all) drillers who use inflated post-production deductions to pad their own bottom lines, leaving landowners with peanuts–sometimes with no royalties at all (see Deep Dive: PA Royalties Civil War Between Landowners & Drillers). If we can oversimplify and summarize this complex issue, landowners maintain that a 1979 PA law guarantees landowners a 12.5% royalty regardless of expenses involved in extracting the gas, and drillers say no, landowners must abide by the contracts they’ve signed and if those contracts allow post-production costs to be deducted before calculating a royalty, the rate may go lower than 12.5%–sometimes to zero and below. PA landowners have, for the past six plus years, lobbied for legislation to clarify and protect a 12.5% minimum royalty. Today we have a guest post from the landowner point-of-view. Thad Stevens is a Gaines, PA resident and real estate developer. Thad has negotiated more than 50 oil and gas leases. He sits on the Dept. of Environmental Protection Citizen Advisory Council and is a director with the National Association of Royalty Owners PA chapter. We consider Thad a friend. He’s smart and he’s passionate about the the ongoing issue that some companies take inflated post-production deductions leaving PA landowners with little or nothing. Thad writes that some of PA’s gas drillers are displaying real arrogance in their attitudes toward the very people they need the most–landowners…
    Read More “Some PA Drillers Threaten to Spoil it for All via Royalty Shenanigans”

  • | | | | | |

    Penn State to Help Create New Biz Opportunities from Shell Cracker

    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…
    Read More “Penn State to Help Create New Biz Opportunities from Shell Cracker”

  • | | |

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

    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”

  • | | | | |

    Seneca Resources Wastewater Recycling Plant Largest in PA

    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…
    Read More “Seneca Resources Wastewater Recycling Plant Largest in PA”

  • |

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

    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%”

  • | | | | | | |

    EQT Sues WV for Passing Minimum Royalty Law re Flat Rate Leases

    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…
    Read More “EQT Sues WV for Passing Minimum Royalty Law re Flat Rate Leases”

  • |

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

    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”

  • | | | | | |

    Southwestern Appeals “Trespass” Case to Entire PA Superior Court

    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”

  • | | | | | |

    PA Supreme Court Takes a Close Look at Strippers…as in Wells

    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”

  • |

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

    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…
    Read More “Rex Energy Stock De-Listed by Nasdaq as of April 12th”

  • | | | | |

    Cabot Completes $2.5M Endowment for Lackawanna College 1 Yr Early

    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…
    Read More “Cabot Completes $2.5M Endowment for Lackawanna College 1 Yr Early”

  • | | | | | |

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

    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”

  • | | | | | |

    Planned Potter County Frack Wastewater Treatment Facility is Dead

    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”

  • | | | | | | | |

    Penn Twp Antis Try to Use PA ERA to Block Shale Drilling

    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”