EQT Spends $1.6M to Lease More Land Under Monongahela River
The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has just amended an existing lease with EQT that allows EQT to extract natural gas (and other hydrocarbons) from underneath the Monongahela River in Allegheny, Greene, Fayette, Washington and Westmoreland counties. EQT is paying $4,000 per acre for 392 acres ($1.568 million total) in a signing bonus, along with a big 20% royalty on anything produced. However, the announcement raises an important question we’ve asked for more than four years: Is the land under rivers and streams actually owned by the state? PA says yes. We suspect landowners who own land along those rivers and streams would say otherwise. The state grabbing money for land under bodies of water has been going on for years (see PA DCNR Program Leases Under Rivers/Creeks for Marcellus Drilling and PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks). Below is the latest lease deal by DCNR to lease more land under the Monongahela River…
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On Feb. 15, XTO Energy was drilling a Utica Shale well on the Schnegg well pad near Captina Creek (York Township, Belmont County, OH) when they “lost control” of the well and it exploded and caught fire (see 
We have to confess this story is a bit complex to understand. We will take a stab at making the complex understandable. Blue Racer Midstream has a subsidiary called Blue Racer NGL Pipelines LLC. The subsidiary operates the G-150 pipeline system, which provides batched propane and butane service. G-150 currently, located in West Virginia, connects a Natrium, WV processing plant to the TE Products Pipeline Co. (TEPPCO). The G-150 pipeline will also have a connection to the Mariner East 2 Pipeline when it goes into service, theoretically in June of this year. Currently the G-150 is flowing about 6,300 barrels per day of product through it–only 20% of its capacity. When the connection with ME2 is up and running, Blue Racer says it can handle 30,000 bbl/d through the G-150. However, Blue Racer itself signed up for most of the capacity (27,000 bbl/d). Blue Racer recently asked the Federal Energy Regulatory Commission (FERC) to allow it to have two different rate structures–a lower rate for “committed” shippers (Blue Racer itself with its 27,000 bbl/d) and a higher rate for uncommitted shippers. FERC rejected the request pointing out that existing shippers with contracts–namely Chesapeake Energy–would be left out in the cold in favor of Blue Racer moving its own volumes at lower prices. Yes, it’s complicated. Bottom line, Blue Racer can’t do what it wants and has to go back to the drawing board…
Private equity firm EnerVest owns a lot of acreage and wells (most of them conventional) in the Marcellus/Utica region. In addition to investing in land and wells, EnerVest also has its own upstream (i.e. drilling) subsidiary, EV Energy Partners (EVEP), with operations and assets in Ohio, Pennsylvania and West Virginia. EVEP is an MLP–a master limited partnership. While EVEP is joined at the hip with EnerVest, they are (on paper) two different companies. EnerVest has vast holdings and is in the top 25 oil & gas companies in the nation. Last July the Wall Street Journal ran a story that said EnerVest was worth nothing on paper (see 
Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), announced earlier this week that it is selling some of its non-operated oil and gas assets in three Pennsylvania counties: Westmoreland, Centre and Clearfield. Which assets are not described. The buyer is: XPR Resources. The sale amount is $17.2 million. Rex has, in the past couple of years, had stiff challenges, at least on the financial front. It has swapped out old IOUs for new IOUs, converted debt (IOUs) into equity (shares of stock), sold off assets in other basins–a whole lotta stuff to keep on drilling (see our 
On Tuesday CNX Resources (formerly CONSOL Energy) held an investors day in Pittsburgh to disclose the company’s strategy for the next few years. CNX is one of the big players in the Marcellus/Utica. The company owns 531,000 net Marcellus acres and 652,000 net Utica acres, with some/much of that acreage the same (the Utica layer sits under the Marcellus layer). The company has only developed about 6% of its acreage so far. Not even on first base! CNX CEO Nicholas “Nick” DeIuliis had some big boasts at Tuesday’s event. DeIuliis said CNX’s stacked pay (layer over layer) acreage gives it a leg up and makes the company “a disruptor” in the region. He also said this, with respect to the company’s acreage position: “We’ve got the biggest, baddest sandbox in the Appalachian region.” Indeed! Below is a summary of the event, along with the PowerPoint presentation used at the event (loaded with great information)…
In some places, drillers have to fight tooth and nail, every inch of the way, just to drill a simple Marcellus Shale well. Such is the case in Upper Burrell (Westmoreland County), PA. Huntley & Huntley has plans to drill four shale wells in Upper Burrell Township. Sure there’s been push-back, but we thought the corner had been turned when town supervisors voted last November to approve H&H’s plans (see 
MDN reported yesterday that due to underground horizontal direction drilling (HDD) in Chester County, PA (near Philadelphia) for the Mariner East 2 (ME2) Pipeline project, a third sinkhole had developed (see