Mass. Retirement Fund Sues EQT for Plummeting Stock Price

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The Cambridge (Massachusetts) Retirement System is not happy with their investment in EQT shares of stock, so they’re suing the company. They hope to turn the lawsuit into a class action on behalf of other shareholders. Cambridge claims EQT made false and misleading statements about their purchase of Rice Energy–claims about cost efficiencies that never materialized, and claims about the location of Rice leases that were not as close to EQT’s acreage as claimed. In a word, Cambridge is alleging fraud on the part of EQT.
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Pipeline Outage Causing Headache for PennEnergy in W PA

We caught a helpful update on PennEnergy Resources from a report on last week’s Hart Energy DUG East Conference in Pittsburgh. PennEnergy CEO Richard Weber told the DUG audience that his company is currently producing an average half a billion cubic feet of natural gas per day, with plans to increase that by 10% this year. One thing holding the company back is the ongoing outage of Energy Transfer’s Revolution Pipeline gathering system.
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Another Round of Dueling Letters to Shareholders from Rice, EQT

Both the Rice brothers and EQT are issuing press releases just about every day now in their battle to wrest (or keep) control of EQT. Yesterday the latest round of letters to shareholders, circulated via press release for the world to see, were issued. First up was a letter early yesterday from John F. McCartney, a Rice Team board nominee, praising Toby Rice (potential new EQT CEO). Later in the day EQT issued a letter chronicling what we would call an EQT listening tour. Although both letters tell shareholders to not vote for the other side’s board picks, noticeably absent from this latest round was the acrimony and personal attacks that have been present in recent letters.
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Progress on $5M Office in NEPA for Marcellus Co. from Thailand

We received some pictures from a loyal MDN subscriber (S.B.) showing progress on clearing a site where a new $5 million office and warehouse facility in Tunkhannock Township (Wyoming County), PA. Ever hear of BKV Operating? No? How about Kalnin Ventures? Or if not Kalnin, how about Banpu, the largest coal producer in Thailand? Like a Russian matryoshka (nesting) doll, BKV Operating is a subsidiary of Kalnin Ventures, and Kalnin is the American agent/partner representing Banpu here in the U.S. Ultimately it is Banpu money that is building this new facility, and major Banpu money being invested in PA Marcellus drilling in northeastern PA.
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Shell’s Falcon Ethane Pipe – Building a Pipeline the Right Way

The Falcon ethane pipeline being built by Shell in western Pennsylvania and eastern Ohio is unique in many ways. Falcon is a 97-mile, two-legged pipeline system to carry ethane to the mighty Shell cracker plant now under construction in Beaver County, PA (near Pittsburgh). We spotted an article about the pipeline and its construction. According to a local conservation office in Beaver County, pipeline construction “hasn’t even affected us [wildlife] a bit,” thanks to careful planning by Shell. A pipeline everybody loves? Is that even possible?!
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Former EQT CEO: Shale Revolution a “Disaster” for Investors

Steve Schlotterbeck

One of the highlights for MDN editor Jim Willis in attending last week’s Northeast Petrochemical Conference in Pittsburgh was the opportunity to meet and hear speak Steve Schlotterbeck, former CEO of EQT. Steve is the guy who pulled off the buyout/merger of Rice Energy into EQT, creating the largest natural gas producing company in the United States. He had the guts to walk away from EQT when the board refused to pay him what he was worth (see EQT CEO Steve Schlotterbeck Suddenly Quits, Leaves Company). Last Friday morning Steve opened the final day of the conference with more guts and plain talk. He said the shale industry has been “an unmitigated disaster for buy and hold investors.” Whoa! What did he mean?

UPDATE: We have a full transcript of Steve’s speech below.
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Antero Wins $96M Lawsuit Against DC Utility for Not Buying Gas

In 2016 WGL Midstream became an investor/joint venture partner in the Stonewall Gathering System, a system which gathers Antero Resources’ natural gas from several West Virginia counties (see M3’s Stonewall Gathering System in WV Gets New Investor/Partner). WGL Midstream is a subsidiary of Washington Gas Light Co., a utility servicing the Washington, D.C. area.
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Equinor (Statoil) Drilling Long Utica Laterals, Production Up 5X

We caught some news of interest coming from last week’s Hart Energy DUG East Conference about Equinor, formerly known as Statoil. According to reporters at the event, Nicole Baird, an asset manager with Equinor, said the company has increased its Utica production five-fold from 2016 to 2018 and now produces in the range of 300 million cubic feet per day (MMcf/d) of Utica shale gas.
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EQT Claims Toby Rice Mismanaged Rice Energy, Not Fit to be CEO

The nasty proxy war between EQT CEO Rob McNally and Toby Rice over who will control the company following a July 10 annual meeting just got a whole lot nastier. Last Friday, McNally revealed that a review of internal documents they received as part of their purchase of Rice Energy in 2017 show that in the span of two weeks in 2015 some 25 complaints by Rice employees were made against Toby with the Rice HR department, although the nature of the charges are not detailed, leaving it open to shareholders to speculate.
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Ohio Appeals Court Upholds Antero’s Right to Use Forced Pooling

The legal beagles at Vorys represented Antero Resources in a recently-decide case with far-reaching implications for Ohio drillers and landowners. The Vorys team won the case. As with most lawsuits, this one is complicated and gets in the weeds. The short short version is that under an original lease signed years ago, a landowner and drilling company (at that time) removed a section of the lease that allows the landowner’s property to be pooled (called “unitized” in Ohio) with other properties.
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Encino Sends 70%, Ascent Sends 33% of Utica Gas to Gulf Coast

Last week, in addition to the petchem event held in Pittsburgh, Hart Energy held their DUG East (Developing Unconventional Gas) event in Pittsburgh. Although MDN did not attend DUG, MDN friend Rick Stouffer from Kallanish Energy did. Rick caught some interesting news about two of the biggest drillers in the Ohio Utica–Ascent Resources and Encino Energy. One of the eye-opening stats Rick reports is that Encino is sending a full 70% of their Utica production to the Gulf Coast. In addition, most of Ascent’s production goes out of the region too–one-third to the Gulf Coast, one-third to the Midwest, and one-third to the East Coast.
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EXCO Resources Emerges from Bankruptcy 18 Months Later

In January 2018, some 18 years ago, MDN told you that EXCO Resources had filed for Chapter 11 bankruptcy (see Sad Day: EXCO Resources Files for Chapter 11 Bankruptcy). While EXCO no longer actively drills in the Marcellus/Utica, the company owns 281,000 net acres in Appalachia, with approximately 149,000 of these net acres prospective for the Marcellus shale, and 5,709 conventional and 126 Marcellus wells. Last week EXCO said it expects to emerge from bankruptcy in “the coming weeks”–and already wants to drill new oil wells in Texas.
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EQT Fires Back at Rice Bros. with New Investor Presentation

On Tuesday Toby and Derek Rice published a presentation to EQT investors in connection with EQT’s upcoming annual meeting of shareholders on July 10 that “takes no prisoners” (our words), condemning EQT’s current management and most of its board members (see Rice Brothers Publish Scalding EQT Investor Presentation). We said in our post that if the allegations (or spin, or whatever word you want to use) are true, EQT would need to respond, strongly, to refute it. Yesterday EQT issued its response by publishing a newly updated investor presentation. Continue reading

LOLA Energy is Back! Scoops Up Rice Acreage EQT Let Expire

LOLA Energy was birthed near the end of 2015, by former EQT executives using private equity money from Denham Capital (see New Marcellus/Utica Drilling Company is Born – LOLA Energy). In July 2017, Rice Energy (later sold to EQT) bought the assets of LOLA Energy for $180 million, over the objections of LOLA CEO Jim Crockard (see Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell). Like a phoenix rising from the ashes, LOLA Energy and Jim Crockard are back. The company has scooped up leases that EQT inadvertently let expire, potentially blocking EQT from drilling some already-planned-and-in-the-works wells–until EQT pays LOLA.
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Rice Brothers Publish Scalding EQT Investor Presentation

Yesterday Toby and Derek Rice delivered a presentation to EQT investors in connection with EQT’s upcoming annual meeting of shareholders on July 10 (full copy below). The presentation and the accompanying press release take direct aim at EQT’s second quarter preliminary results and postulates that instead of a “free cash flow generating machine,” the final numbers for 2Q19 will show EQT actually lost money during the quarter.
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EQT Releases Positive 2Q19 Results in Attempt to Block Rice Bid

Although the second quarter isn’t over yet, EQT has just released “preliminary” 2Q19 financial and operational results in a bid to fend off a takeover attempt. EQT’s current management and board of directors is in a tough fight to retain control of the company. Toby and Derek Rice, formerly of Rice Energy (which was sold to EQT in 2017) are making a play to replace the board of directors and all of EQT’s top management.
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