WV Gov. Justice’s Top Adviser Bray Cary Leaving EQT Board in July

Bray Cary

Bray Cary, the EQT board member who refused to leave the administration of West Virginia Gov. Jim Justice even though many said he had a conflict of interest by staying, is finally leaving the EQT board in July. We first told you about Cary’s exit last week (see EQT Issues List of Board Nominees; Adopts Universal Proxy Card). Cary had a few comments for the media about his departure.
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Rice Boys Respond to Scorching Letter from EQT Board

Another day, another episode of the ongoing soap opera that is the power struggle to retain (or take over) control of the country’s largest natural gas producer: EQT. Yesterday we told you about current CEO Rob McNally’s bold and gutsy move in adopting a “universal proxy” and about going on offense with a scorching letter written to Toby Rice (see EQT Issues List of Board Nominees; Adopts Universal Proxy Card). Following EQT’s letter, Toby and brother Derek Rice issued a rebuttal letter of their own.
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Cabot O&G Having a Tough Time Filling Open Jobs in NEPA

Several members of the Marcellus Shale industry spoke at a meeting of the Williamsport/Lycoming Chamber of Commerce yesterday, including MDN friend George Stark from Cabot Oil & Gas. George is director of external affairs. At the meeting he said the Marcellus industry has made tremendous strides in the last 10 years and will be around for decades to come. He said, “It’s booming in our area.” George also said Cabot is having trouble filling vacant jobs.
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EQT Issues List of Board Nominees; Adopts Universal Proxy Card

In the fight to control EQT, it appears like the momentum has just shifted in favor of EQT’s existing management. No more defense, EQT’s management team and board are now on offense. Yesterday the board and CEO Rob McNally released their list of proposed nominees to be voted on at the annual meeting in July. Three longtime members of the existing board including (surprisingly) board chairman Jim Rohr, will be out. Three new members have been named to replace them. Most important, in a bold move, EQT is adopting a “universal proxy card”–something advocated by Toby and Derek Rice in their attempt to replace the board. We explain this important development below…
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Chesapeake Turns its Back on NatGas in Pursuit of St. Elmo’s Oil

Chesapeake Energy CEO Doug Lawler continues his quest to transform what used to be the nation’s second largest natural gas producer into an oil company. Yesterday the company issued its first quarter 2019 update. From that update we learn that Chessy will pull money out of its Marcellus and Haynesville shale gas drilling programs, dropping from three to two rigs in the Marcellus and from two to one rigs in the Haynesville, in order to put more money, rigs, time and effort into the company’s Powder River Basin oil drilling program. We liken their pursuit of oil riches to trying to grab St. Elmo’s Fire–it appears, and as soon as you reach to grab it, it’s gone.
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Chevron Leaves the Altar with $1B, Waves Goodbye to Anadarko

Whew, that was close. We’ve had a concern that if Chevron ended up buying Anadarko Petroleum (for Anadarko’s Permian Basin oil assets), it might lead to Chevron pulling back from their drilling program in the Marcellus/Utica (see Permian Love Story: Chevron Buying Anadarko in $50B Megamerger). We don’t have to worry any more. Even though Anadarko signed a deal to sell itself to Chevron, Occidental Petroleum made a bid to buy the company too (see Occidental Petroleum Offers 14% More than Chevron to Buy Anadarko). There’s a breakup clause in the signed Chevron deal. Anadarko would have to pay Chevron $1 billion for leaving them at the altar.
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Saudi Arabia Wants to Buy Piece of the Marcellus via Equinor

Saudi Arabia is sniffing around the Marcellus Shale. Bloomberg reports that super secret talks are happening between Saudi Aramco (largest oil company in the world, owned by the Saudi government) and Equinor, which until recently was called Statoil. Equinor is majority-owned by the government of Norway. The Saudis are considering “buying a stake” in or possibly a joint venture with Equinor. It seems Norway is hesitant to hop into bed with the Saudis. We don’t blame them.
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Court Lets EQT Examine Cell Phone of Worker Accused of Helping Rice

A Pennsylvania federal judge has ordered a former EQT employee to turn over his cell phone to EQT so they can have experts examine it for deleted text messages to Toby Rice and others helping him. You may recall EQT accused two fired workers of stealing company secrets and sharing those secrets with Toby and Derek Rice, who are trying to take over EQT (see EQT Accuses Fired Employees of Colluding with Rice Boys). EQT maintains one of the fired workers has evidence on his phone that can corroborate their claims of collusion. Hence the judge’s order.
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SWPA County Judge Rules Range Can’t See Reporters’ Notes/Sources

one hand tied behind the back

So-called reporters, like some at the Pittsburgh Post-Gazette, must have known they were breaking the law by using confidential information (sealed under a court order) in some of their anti-shale articles. Range Resources, fighting against an out-of-control Attorney General (Josh Shapiro) who wants to charge the company with crimes, wants to depose those reporters to try and find out who, exactly, broke the law in leaking information that is sealed by court order. However, a county judge won’t let Range do it. Not yet, anyway.
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PA DEP Fines EQT $330K for Minor Erosion Violations in SWPA

The Pennsylvania Dept. of Environmental Protection (DEP) has just fined EQT $330,775 for erosion and sedimentation violations at two well sites in Forward Township, Allegheny County, PA. Water with sediment in it leaked from the well sites in early 2018, which sometimes happens. The reason for the stiff fine is that EQT failed to notify the DEP when it happened. If the DEP finds out via its own inspections first, the cost goes way up.
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Rice Brothers Drop EQT Proxy Lawsuit – Feud Continues

On April 25 the Rice brothers (Toby and Derek) sued EQT alleging the company is trying to confuse shareholders by requiring some of the board candidates the Rice boys are proposing get commingled with EQT’s own slate of candidates (see Rice Brothers Sue EQT to Prevent Proxy Manipulation). The Rice boys said the lawsuit was aimed at “preventing EQT from manipulating shareholder election.” Over the weekend the Rice boys dropped the lawsuit, claiming victory, saying EQT has relented. EQT says the lawsuit was a “tactic intended to distract focus” away from the company’s stellar first quarter results.
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Anadarko Leaves Chevron at the Altar to Elope with Occidental

The battle to buy Anadarko Petroleum by Chevron and Occidental Petroleum (Oxy) has taken an interesting turn. Over the weekend Oxy revised its offer. It will still pay Anadarko shareholders $57 billion (as before), but the offer was revised to dial up the amount of cash and dial down the amount of stock swaps. Never hurts to use cash as a sweetener. The new offer did the trick. Although Anadarko previously signed an agreement to sell itself to Chevron, Anadarko announced yesterday they are leaving Chevron at the altar and riding off into the sunset to elope with Oxy.
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Seneca Resources NatGas Production “Slightly” Disappoints

“In our exploration and production business, even though we achieved our highest ever average daily production rate this past quarter, we were expecting more. It’s a slight disappointment that we modestly lowered the midpoint of our production guidance to the low end of the range that we established last August.” So said National Fuel Gas Company (NFG) CEO Ron Tanski in talking about NFG’s Seneca Resources shale drilling subsidiary on a conference call last Friday.
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Gulfport Energy Sells “Small” Marcellus Leasehold in SE Ohio

Gulfport Energy, one of the biggest drillers in the Ohio Utica Shale (210,000 acres) with record production in the Utica last year, announced last week (as part of its first quarter update) it has sold a “small footprint” of Marcellus drilling rights on some of their Utica acreage in southeastern Ohio for $30 million. Gulfport concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays. Piecing together the company’s plans for this year, we’re calling 2019 the “Year of the DUC” for Gulfport.
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Antero Resources 1Q19: Marcellus Economics Better than Utica

Antero Resources, one of the biggest Marcellus/Utica drillers (pure play) released first quarter 2019 numbers yesterday. The Mariner East 2 (ME2) pipeline, which Antero uses to ship and sell natural gas liquids (NGLs) had a huge beneficial effect for the company. Antero’s production was massive: 3.1 billion cubic feet equivalent per day (Bcfe/d) in 1Q19, up an astonishing 30% from 1Q18. But here’s the kicker: Nearly one-third of Antero’s production (29%) was NGLs. Without ME2, that big number would have been a small fraction of Antero’s production.
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Seneca Drilling New Utica Well *on* PA State Land in Elk County

This is a “man bites dog” kind of story. Typically when we read about drilling on Pennsylvania state-owned land, the drilling happens on private land adjacent to the state land with the lateral reaching under state land (leased for that purpose). This time we spotted a story about a new well due to be drilled this year in Elk County, PA that sits directly *on* state land, and will reach under private land!
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