Energy Companies

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    Out with the Old – Part 2: EQT Sign Replaces Rice at HQ Building

    On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). In that post we shared with you a short video taken by an MDN friend that showed a pair of cranes taking down the Rice Energy name from Rice’s (now former) headquarters building in Canonsburg, PA (just outside Pittsburgh). Another MDN friend sent us a pair of pictures (below), taken the following day, which show an EQT sign now fixed over top of where the Rice Energy sign once stood. Our second MDN friend also told us that all the parking lot signs at the facility have EQT stickers on them, covering over the Rice Energy name. As we said in our Tuesday post, EQT isn’t wasting any time making a statement: Out with the old, in with the new. EQT is firmly large and in charge. A few days after the merger and Rice is already a memory, starting to fade away…
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    Corp Raider Slinks Away After Losing EQT Fight; Selling Stock

    On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way to the deal getting done–primarily opposition by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to vanquish Jana’s efforts to stop the merger. How did EQT do it? We went behind the curtain yesterday to share EQT’s winning strategy in defeating Jana (see EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal). They way corporate raiders work, as we’ve explained many times before, is to buy enough stock in a company to get a board seat, then agitate in the board room, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so the raider can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations. Since Jana lost face and reputation by not stopping the EQT/Rice merger, they’ve decided to slink away, back into the darkness. We spotted a story that says Jana has already sold a portion of their EQT stock–and they continue shop more of it. They’ve thrown in the towel on EQT and will now go pick on someone else to destroy…
    Read More “Corp Raider Slinks Away After Losing EQT Fight; Selling Stock”

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    63K Gal. Brine Spill at Inflection Well Pad in Lycoming County

    Approximately 63,000 gallons of treated brine (naturally occurring, very “salty” water that comes out of a well long after it’s drilled) spilled in an accident at an Inflection Energy well pad in Eldred Township, Lycoming County, PA, on Monday. Inflection blames a contractor and operator error for the spill, which happened after an already-full tank was overfilled. Some of the brine (no word on how much) reached a nearby unnamed creek that flows into the Loyalsock Creek. However, testing done on the Loyalsock shows no presence of contamination. The Loyalsock flows into the Susquehanna River, and the Susquehanna is used as a public drinking water source–hence the concern. There are no warnings to public drinking water operations along the Susquehanna because there is no problem to report. Now comes an investigation, and no doubt fines, for the accident. Here’s what we’re able to find out about the episode–an occurrence so rare it’s newsworthy when it happens…
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    A Closer Look at Kalnin Ventures and Their Marcellus Investments

    It’s time to look deeper into Kalnin Ventures, a Denver, CO-based investment firm that invests in U.S. upstream (mostly shale) deals. Sound familiar? Kalnin has been the “front man” for Banpu Pcl, Thailand’s largest coal producer. Over the past year and a half Kalnin/Banpu have snapped up some 55,000 acres and 355 shale wells–in the northeast Pennsylvania Marcellus (see our Kalnin/Banpu stories here). At least, we thought Kalnin was the “front man” for Banpu. It’s certainly Banpu money buying the leases and the wells, so we figured Kalnin was just an American subsidiary on paper for Banpu. But it turns out the truth is more nuanced. Kalnin is its own company. Yes, Banpu is the major benefactor providing the funds, but Kalnin is clearly in the driver’s seat with these Marcellus deals. Kalnin is not an operator. While news coverage may say Kalnin is “a top-20 gas producer,” as the Bloomberg article below says, that does not mean Kalnin is an operator. They’re investors. They’re owners. Other people do the actual drilling and management of the wells. In checking out the Kalnin website we found this description of the company: “Kalnin Ventures currently is backed by investors with equity fund commitments of USD 500 million, within its oil and gas fund BKV Oil and Gas Capital Partners, L.P. The company seeks to invest in attractive upstream oil and gas opportunities in North America (United States of America and Canada) with the goal of creating long-term sustainable value in the energy industry.” And right under that statement, this interesting statement: “Kalnin Ventures supports and upholds biblical principles as the foundations for the company’s values and underpins our company’s promise of integrity and transparency to our investors and partners.” Hats off to Kalnin for being upfront and unashamed of their God-honoring, faith-based principles. Not many companies have the guts to be so bold these days. Here’s an inside look at Kalnin Ventures, and how they continue to make money on Marcellus shale deals–even in a low-gas-price world…
    Read More “A Closer Look at Kalnin Ventures and Their Marcellus Investments”

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    EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal

    On Monday, Rice Energy was merged into EQT, creating the largest onshore natural gas producing company these United States (see Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger). The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Another corporate raider, D.E. Shaw, piled on too, but at least they supported the deal to merger Rice into EQT (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). You know we loathe corporate raiders. They buy enough stock in a company to get a board seat, then agitate, forcing the company to layoff people and sell assets–all in a bid to make the stock price pop so they can sell their shares at a handsome profit and move on to the next victim. Disgusting organizations and disgusting people. Jana was the primary opponent to the EQT/Rice deal. Jana was fresh off from helping Amazon take over the Whole Foods grocery store chain. Yet somehow EQT was able to fend off Jana’s efforts against their company. How did they do it? That was the subject of a recent post on the Seeking Alpha investor’s website. Here’s a fascinating look at the strategy EQT used to fend off an evil corporate raider…
    Read More “EQT’s 4-Pronged Strategy for Defeating Corp Raider Jana in Rice Deal”

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    Rex Energy 3Q17: $47M Loss, 10 More Utica Wells on the Way

    Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), issued their third quarter 2017 update earlier this week. The company continues to bleed money, losing $47 million in 3Q17, versus losing $55 million in 3Q16. An improvement, but showing a profit would be a whole lot better than a loss at this point. Highlights for 3Q17: Rex placed the four-well Wilson pad into sales (Butler County, PA) with initial 24-hour average sales rate per well of ~10.9 million cubic feet equivalent per day (MMcfe/d). Total production averaged 182 MMcfe/d–with 38% of that liquids production. Rex drills in both western PA and eastern OH. Rex officials said they are currently working on 10 new wells in Carroll County, OH that will go online in 2018. So far Rex has drilled 30 wells in the Buckeye State. Below is the full 3Q17 update, along with excerpts from the analyst phone call and the latest Rex slide deck…
    Read More “Rex Energy 3Q17: $47M Loss, 10 More Utica Wells on the Way”

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    Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger

    Yesterday the Marcellus/Utica experienced a fracking earthquake of historic proportions. That is, a fracking earthquake metaphorically speaking. Yesterday Rice Energy was merged into EQT, creating the largest onshore natural gas producing company in these United States. The $8.2 billion deal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). There was plenty of drama along the way–primarily opposition to the deal by evil corporate raider Jana Partners, in collusion with Atlas Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Shame on both of them. Fortunately their effort to stop the deal didn’t gain traction. Yesterday was the day when the two companies became one. Two Rice Energy board members, Dan Rice IV and Bobby Vagt, joined the EQT board. Another two independent (outside either firm) board members were also added–Thomas Karam, founder and Chairman of Karbon Partners, and Norman Szydlowski, former president and CEO of SemGroup Corporation. Standing by the virtual water cooler, MDN has overheard that many Rice personnel were nervous about what yesterday would bring. You know the routine: Two rooms–one for those staying, and one for those getting the heave-ho. Everyone waiting to get “the call” to whichever room they’re assigned. We’ve been there. It sucks. But that’s the reality in today’s corporate world. One thing we found interesting is that the huge Rice Energy sign on the company’s (former) HQ building was taken down yesterday–the very day the two merged. An MDN friend caught some of it on a smartphone video (below). EQT isn’t wasting any time making a statement: In with the new, out with the old…
    Read More “Out with the Old: Rice Energy Sign Comes Down Day of EQT Merger”

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    Penn Twp Ninny Nannies File Lawsuit to Block Apex, H&H Wells

    A group of ninny nannies calling themselves Protect PT (Penn Township, Westmoreland County), 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. We first alerted you to the lawsuit in October, when we were only aware of Apex being in the group’s sights (see Judge to Rule on Apex Energy Well Drilling in Westmoreland County). Since then, we’ve learned that the partial injunction blocking well drilling not only bars Apex drilling wells, but H&H as well. Gillian Graber, Executive Director of Protect PT, fibbed when she said, “We’re not saying don’t frack in Penn Township or ban fracking. We never took that position. We disagreed with where [the drilling companies] put it.” We think that’s BS–Barbara Streisand. They want all drilling stopped period. That’s the aim of the lawsuit. Below is a somewhat biased article, but useful nonetheless, with insight into the legal tactics (bastardizations) being used by Protect PT’s PennFuture lawyers, hoping to overturn settled Act 13 law. We also have a copy of a brief filed by H&H, pushing back against this latest assault on Marcellus drilling in southwestern PA…
    Read More “Penn Twp Ninny Nannies File Lawsuit to Block Apex, H&H Wells”

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    “Health Experts” Meet in Pitt. to Demonize Shale, Shell Cracker

    A group of so-called “health experts” pontificated at an event yesterday hosted by the League of [Liberal Democrat] Women Voters in Pittsburgh. They were supposedly there to discuss shale and public health. One of the gripe sessions took aim against Shell’s now-under construction ethane cracker facility. Speakers tried hard not to come right out and curse shale and the cracker–but they couldn’t help themselves. In the end they made untrue statements that imply the cracker will poison the community and make it unlivable. One speaker’s solution? “Don’t build it.” Typical. All you need to know about yesterday’s meeting is that one of the panelists is the staff attorney for the radical enviro organization Earthjustice. Truth was the main casualty at yesterday’s meeting…
    Read More ““Health Experts” Meet in Pitt. to Demonize Shale, Shell Cracker”

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    Longer Laterals Major Trend in 2017 Marcellus-Utica Drilling

    Yesterday MDN updated you on Eclipse Resources’ program of drilling looooong laterals–the horizontal part of shale wells (see Eclipse Res. 3Q17: Super-Laterals Proving to be Super Productive). Eclipse is the reigning champ, having drilled the three longest onshore horizontal wells–in the WORLD. Upward of 3.5 miles underground! All three of Eclipse’s record-breakers are Utica wells. However, Eclipse isn’t the only driller hopping on the long lateral bandwagon. In June, Range Resources reported drilling the longest Marcellus lateral well (see Range Resources Drills Longest Marcellus Well Ever – in Washington Co.). If you compare the lateral length of Range’s wells from 3Q17 with 3Q16, they are drilling laterals 90% longer than they were just one year ago! EQT and Antero Resources are also experimenting with longer laterals. All of which leads us to christen 2017, “the year of the longer lateral”…
    Read More “Longer Laterals Major Trend in 2017 Marcellus-Utica Drilling”

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    Antero’s $275M WV Wastewater Recycling Facility Ready to Launch

    By our reckoning, Antero Resources’ $275 million wastewater recycling facility in Doddridge County, WV is either already operational, or will be within the next few days (sometime this week). In 2015 Antero hired Veolia Water Technologies Inc. to build a new shale wastewater recycling facility in Doddridge County (see Antero Building New 60K Bbl Wastewater Recycling Facility in WV). The facility, called the Clearwater Facility, will process 60,000 barrels of wastewater per day, separating water, salt and radioactive particles. The salt can be sold to municipalities for use as road salt–but frankly there’s not enough of a market to sell it all. And not all of it will be of sufficient quality to be sold that way. So Antero also spent $20 million to build a landfill next to the plant for the salt (see Update on Antero’s $275M Wastewater Facility in WV). According to the Clarksburg Exponent-Telegram, an Antero official recently said the Clearwater Facility is set to open in “the first part of November.” If you consider the first 15 days of the month the first part of the month, that leaves two days for the facility to be up and running. Hence our speculation it either already is open, or will be this week…
    Read More “Antero’s $275M WV Wastewater Recycling Facility Ready to Launch”

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    Eclipse Res. 3Q17: Super-Laterals Proving to be Super Productive

    Last week Eclipse Resources, the “super-lateral” Marcellus/Utica driller, turned in its third quarter 2017 update. Eclipse is a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in the Ohio Utica. Eclipse has drilled the top three longest onshore oil/gas wells in the world. What do we glean from the 3Q17 update? Two of their world’s longest onshore wells–the Great Scott 3H and Outlaw C11H–are now online and pumping. They are pumping record-setting amounts of condensate. Each is averaging 3,300 barrels of oil equivalent (BOE) to date on a restricted choke, consisting of almost 50% condensate and 68% in total liquids. Gushers! During 3Q17 Eclipse drilled 10 wells in all, including four super-laterals with an average lateral length of over 17,500 feet. So far the company has drilled 11 super-lateral wells with an average lateral length of ~18,000 feet–averaging just 16 days from spud to total depth. Incredible! The company had average daily production of 353 million cubic feet equivalent per day (MMcfe/d). On an analyst phone call, Eclipse’s top brass said they are working to create a “reputable” super-lateral program, meaning (our words) building a successful program of long laterals that also makes big money. Here’s the 3Q17 update, along with portions of the analyst phone call and the latest slide deck…
    Read More “Eclipse Res. 3Q17: Super-Laterals Proving to be Super Productive”

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    Questerre Plans 8 Initial Well Pads in Canadian Utica 2018-2019

    Although the primary focus of Marcellus Drilling News has always been on Marcellus and Utica Shale gas (and oil) as found in the northeastern U.S., the Utica Shale also underlies part of Canada’s Quebec province. From time to time we highlight news concerning the Utica in Canada. There hasn’t been much news to highlight over the years since Quebec has had a moratorium on fracking at least as long as New York’s moratorium (now at 9 years and 9 months and counting). But as we reported in December 2016, something of a minor miracle happened–the Quebec National Assembly voted to pass Bill 106, ostensibly to support Quebec’s “clean power plan” (see Fracking in Canadian Utica Shale Takes Big Step Closer to Reality). The bill includes a section that “lays out a framework for oil and gas development” in Quebec. Fracking will not begin immediately. The bill does, however, mean that new regulations will come along in 2017 and after that, it’s an almost certainty that fracking will begin. Those draft rules were finally been released in September of this year (see Quebec Government Publishes Draft Utica Fracking Regulations). Questerre Energy, which owns Canadian Utica leases in Quebec and has long lobbied get the government to allow Utica drilling. In Questerre’s recently-released third quarter 2017 update we get an update on their plans to drill in the Canadian Utica. The company says if progress continues with the draft regulations, they have eight well pad sites picked out where they will drill first–in locations that have been oil and gas friendly in the past…
    Read More “Questerre Plans 8 Initial Well Pads in Canadian Utica 2018-2019”

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    EQT/Rice Shareholders Make it Official – Merger Happens Nov 13

    Next Monday the largest natural gas-producing company in the these United States will be born–from the merger of EQT and Rice Energy, based in Pittsburgh. Yesterday the shareholders for both EQT and Rice voted to approve the merger/deal by overwhelming majorities. The megadeal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). Evil corporate raider Jana Partners tried to stop the deal–but failed, as they acknowledged earlier this week (see Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote). Next Monday the transaction will be complete and the new EQT will produce more natural gas in the Lower 48 States than Chesapeake Energy, the current reigning champ. Some 84% of the EQT shareholders who voted, voted to approve the deal, and 74% of voting Rice shareholders voted in favor of the deal. What happens next? After the consummation of the merger on Monday, EQT CEO Steve Schlotterbeck said the company will immediately appoint a committee to look into…splitting the company. Yes, you read that right. Not splitting it back into EQT and Rice, but splitting it into upstream (drilling) and midstream (pipelines). Two companies will become one and then become two again. Go figure. A recommendation and decision about whether to proceed with a split will happen, according to Schlotterbeck, by “the end of the first quarter 2018.” There’s little doubt the decision will be “yes” on a split…
    Read More “EQT/Rice Shareholders Make it Official – Merger Happens Nov 13”

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    EXCO Resources Heading for Bankruptcy, Turnaround Expert Resigns

    In the end, not even turnaround expert John Wilder could turn around EXCO Resources. Wilder is the guy now Secretary of Commerce Wilbur Ross brought in two years ago to turn around the ailing company. At first it seemed like it might be working (see EXCO Resources Turnaround is Working, but Comes at a High Cost). EXCO Resources was once a sizable player in the Marcellus. They still have 184,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However the company, as we pointed out in March 2016, has abandoned the Marcellus/Utica at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). The company flirted with bankruptcy for some time, but in the end they effectively turned over control of the company to its creditors this past summer (see EXCO Issues 2.7M Shares of New Stock in Lieu of Paying $23M). However, the company has continued to struggle financially. Yesterday EXCO announced Wilder has resigned from his position as a member of EXCO’s Board of Directors and from his position as Executive Chairman of the Board, effectively immediately. Translation: He’s given up on trying to save the company. In the same announcement, EXCO said Wilder’s departure “was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.” In EXCO’s third quarter 2017 update, released on Tuesday, there is a section in which management says if they can’t make the interest payments on the company’s debt, “the Company may be forced to seek protection from creditors under the U.S. Bankruptcy Code.” They go on to say debt payments and other factors, “raise substantial doubt about the Company’s ability to continue as a going concern.” Ominous language. Here’s the announcement about John Wilder and company statements about possibly seeking bankruptcy protection…
    Read More “EXCO Resources Heading for Bankruptcy, Turnaround Expert Resigns”

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    Milestone: Construction Begins on Shell Cracker Plant Buildings

    A major milestone has been reached in the mighty Shell $6 billion ethane cracker facility project. Over the past year or so site preparation has been vigorous. Work at the site in Monaca (Beaver County), PA has included building bridges, relocating a state highway, improving existing interchanges, repositioning a rail line, and preparing foundations for the new complex. The prep work is now largely done–and this week begins construction of the buildings that will house four processing units–the ethane cracker itself and three polyethylene units. Also part of this next (final) phase of construction: a 900-foot long cooling tower, rail and truck loading facilities, a water treatment plant, an office building and a laboratory. Oh! And let’s not forget that Shell will also build a 250 megawatt electric generating plant that will provide all of the electricity needed at the facility–powered by Marcellus Shale gas, of course! Here’s an update from Shell, with a picture of the site as it is now…
    Read More “Milestone: Construction Begins on Shell Cracker Plant Buildings”