Energy Companies

Energy Companies | EnerVest | EV Energy Partners

EnerVest Goes Bust, from $2 Billion to $0 – Impact in M-U?
July 18, 2017July 21, 2017

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 subsidiary, EV Energy Partners. In March of this year, EnerVest put 360,621 acres of leases and 1,100 wells in the Appalachian Basin up for auction (see EnerVest Selling 1,100 Wells, 361K Acres in Appalachia). Bids were due by the end of March. We never heard the outcome, but judging from the EnerVest website (Acquisitions & Divestitures), we don’t think they sold anything. Why go on about EnerVest and their Appalachian assets? Because EnerVest, which once had a value of $2 billion, is now worth nothing. Zero. Nada. Not because of their Appalachian assets, but because EnerVest took on heavy debt to finance purchases in oil plays–in Texas and Utah. Now investors, including pension funds and banks, have essentially lost their investments. They may see “pennies on the dollar” when it’s all over and done. So how does this affect the Marcellus/Utica?…
Read More “EnerVest Goes Bust, from $2 Billion to $0 – Impact in M-U?”
Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Why Corp Raider Jana Won’t Succeed in Derailing EQT/Rice Deal
July 18, 2017July 18, 2017

One of our favorite oil and gas analysts, Richard Zeits, says it’s a long shot at best that the corporate raiders at Jana Partners will be able to scuttle EQT’s planned purchase of Rice Energy. In June, EQT announced a deal to buy out Rice Energy for $6.7 billion in cash and stock, and assume $1.5 billion in debt, for a total deal price of $8.2 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). These kinds of machinations are far above our understanding when it comes to high finance. However, there is a guy who eats, sleeps and breathes this stuff–Richard Zeits of OIL ANALYTICS. In an analysis piece on the Seeking Alpha investors website, Zeits says, “Jana’s activism is unlikely to derail” the deal. Here’s his reasoning…
Read More “Why Corp Raider Jana Won’t Succeed in Derailing EQT/Rice Deal”
Allegheny County | Energy Companies | Industrywide Issues | Olympus/Huntley & Huntley | Pennsylvania | Seismic Testing

H&H: Seismic Testing Coming to Monroeville, Not to Oakmont
July 17, 2017July 17, 2017

In June MDN brought you news about a move by the Borough of Oakmont (suburb close to Pittsburgh, northeast side of the city) to regulate seismic testing in the Borough, essentially to prevent it from happening by Huntley & Huntley (see Pittsburgh Suburb Moves to Regulate Seismic Testing by H&H). Not long after that story ran, MDN was contacted by H&H CEO Keith Mangini to set the record straight. H&H never intended to do any seismic testing in Oakmont. According to Mangini, Oakmont “is just too congested and one could not possibly have ever designed a seismic program as such.” H&H’s land agents were making the rounds, and Oakmont was on the list (for full transparency). But the company never had plans to test there. So we found it curious to run across an article in the Pittsburgh Post-Gazette stating that Oakmont has adopted seismic testing restrictions, and because of it, H&H has now “dropped its plans” for testing in Oakmont. The Post-Gazette gets it wrong again. There never were plans to test there! However, H&H is beginning to run seismic tests in the nearby town of Monroeville…
Read More “H&H: Seismic Testing Coming to Monroeville, Not to Oakmont”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Pipelines | Shell

Latest Amount Shell Paid for Ethane Pipeline Easements Goes Down
July 13, 2017July 13, 2017

Bit by bit, piece by piece, Shell is getting landowners in Beaver County, PA to sign easements for its 94-mile Falcon Ethane Pipeline–a pipeline with two “legs” that will feed Shell’s mighty ethane cracker plant. MDN exclusively broke the news in February 2016 that Shell had begun to sign leases with landowners for the pipeline (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). More easements signed in January, and again in May. However, it was not until last month, June, that we learned what money Shell is paying out for those easements. The numbers for leasing 3,138 feet of space for the pipeline in Greene Township worked out to be roughly $75 per foot (see New Easement for Shell Ethane Cracker Pipeline Reveals Price Paid). Which is far higher than any other rate we’ve seen for pipeline easements–ever. We now have another recorded easement from Shell for the ethane pipeline in Beaver County. This one is a bit more modest: $43 per foot. That’s still a lot more than the typical pipeline easement, but quite a bit less than the previous deal. Bear in mind this is only the second time we’ve spotted actual numbers, so we have no way of knowing what the average price is that Shell has been paying…
Read More “Latest Amount Shell Paid for Ethane Pipeline Easements Goes Down”
Energy Companies | EQT Corp

EQT Update on Mon Valley Drilling – 7 Utica Wells Coming This Yr
July 13, 2017July 13, 2017

A couple of EQT representatives addressed the Monongahela Area Chamber of Commerce yesterday to update residents on EQT’s drilling plans in the Mon Valley region. The EQT reps said all of the wells drilled locally so far have been Marcellus wells. However, EQT plans to drill 7 Utica wells this year in the Mon Valley area. Here are some of the details on where EQT has been, and plans to, drill in the Mon Valley region during 2017…
Read More “EQT Update on Mon Valley Drilling – 7 Utica Wells Coming This Yr”
CONSOL Energy | Energy Companies

CONSOL Energy’s Split into 2 Companies Nearly Complete, New Name?
July 12, 2017July 12, 2017

CONSOL Energy, headquartered in Pittsburgh, began life as a coal company some 150 years ago. For the past half dozen years MDN has reported on CONSOL’s transformation from coal company to natural gas company. That transformation is now nearly complete. Yesterday CONSOL filed paperwork with the Securities and Exchange Commission that lays out a plan for the final split. CONSOL the coal company will retain the CONSOL name and get various coal mines and other coal-related assets. The CEO of the coal company will be Jimmy Brock. Meanwhile, CONSOL the natural gas driller will get a new name and retain the other assets. Nick DeIuliis will remain president and CEO of the natgas company. Current CONSOL shareholders will get shares in the separated coal company, as well as retain their shares in the gas company. While no specific date is given for the final split, the announcement says the company remains committed to getting it done sometime by the end of this year. The big question is, what will be the name of the new gas-focused company? We have a suggestion…
Read More “CONSOL Energy’s Split into 2 Companies Nearly Complete, New Name?”
Energy Companies | Industrywide Issues | Litigation | Olympus/Huntley & Huntley | Pennsylvania | Regulation | Westmoreland County

Westmoreland Zoning Challenge re H&H Wells Closer to Resolution
July 11, 2017July 11, 2017

Huntley & Huntley has plans to drill shale wells in Upper Burrell Township (Westmoreland County), PA. As MDN reported in June, a landowner in Upper Burrell filed an appeal against Upper Burrell’s zoning ordinance that allows drilling in rural, agricultural districts (see Westmoreland Zoning Challenge Heads to Court, Delays H&H Drilling). H&H plans to drill a well near where this woman lives, and she’s arguing such drilling will violate the state’s environmental rights clause and (more importantly), “devalue her property.” The case was supposed to go to township’s Zoning Hearing Board, but all of the (many) lawyers involved agreed to instead move it to county court, making the process faster and less expensive. The only potential problem with that is the judge may decide to hold off on a decision until two similar cases are heard and decided by the PA Supreme Court. However, the judge is not waiting. A recent media report states the judge will make a decision in the case “next month” (meaning in August) about whether or not the town can issue conditional use in agricultural-residential zoning districts…
Read More “Westmoreland Zoning Challenge re H&H Wells Closer to Resolution”
Empire Pipeline | Energy Companies | Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Seneca Resources | Statewide NY

Northern Access Pipeline Court Case Further Threatens NY DEC
July 10, 2017July 10, 2017

NY DEC is on legal precipice

A new threat against the New York Dept. of Environmental Conservation’s authority over pipeline projects is coming from yet another federal court. Last month MDN brought you the huge news that the U.S. Court of Appeals for the District of Columbia Circuit dismissed a lawsuit brought by the Millennium Pipeline against the NY DEC for delaying a decision to authorize a 9-mile pipeline Millennium wants to build from their main pipeline to an under-construction natgas-fired electric plant in Orange County, NY, called the Valley Lateral Project. Which may, at first blush, seem like a defeat. It was anything but a defeat. The justices, in their decision, said that the Federal Energy Regulatory Commission (FERC) has the right and responsibility to step back in and issue the water crossing permits themselves, overruling the NY DEC, if FERC so chooses (see DC Court Tells Millennium FERC Can Override NY DEC Pipeline Delay). A second court case in a different federal court, the U.S. Court of Appeals for the 2nd Circuit, is now progressing. That case was brought by National Fuel Gas Company in April against the NY DEC for a similar reason: delay and denial of federal 401 stream crossing permits for NFG’s Northern Access Pipeline project (see NFG Sues NY DEC in Fed Court re Northern Access Pipe Rejection). That case is now advancing and the lawyers for NFG are quoting the decision from the Millennium case as precedent for a ruling by the 2nd Circuit Court that the DEC cannot arbitrarily stop a federally-permitted pipeline project…
Read More “Northern Access Pipeline Court Case Further Threatens NY DEC”
Energy Companies | JKLM Energy | Pennsylvania | Potter County

JKLM Drilling 12 Utica Wells in Potter County, PA This Year
July 10, 2017July 11, 2017

It’s been a while since we’ve updated you on a little-known (but rapidly becoming better known) company called JKLM Energy. In May 2016, the last time we wrote about JKLM, we told you the company had successfully drilled and was flowing gas from Potter County, PA’s first Utica Shale well (see Potter County, PA’s First Utica Well Fracked & Flowing). JKLM is owned by Terry Pegula, the guy who sold most of his Marcellus assets and used the money to buy the Buffalo Bills football team (see Buffalo Bills Stay in Buffalo, Thanks to $1.4B of Marcellus Money and Buffalo “Marcellus” Bills – Team Sold to Fracker for $1.4B). ~~Pegula’s former company is East Resources.~~ [Update: an alert MDN reader informed us that Pegula still owns East Resources.] JKLM is Pegula’s way of keeping his finger in the Marcellus/Utica pie. So what’s the latest? According to a brief article we spotted, JKLM “continues to move forward with an ambitious plan” to drill a dozen Utica wells in Potter County this year…
Read More “JKLM Drilling 12 Utica Wells in Potter County, PA This Year”
Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Corp Raider Jana Sends Nastygram to EQT Demanding it Split in Two
July 7, 2017July 13, 2017

Earlier this week MDN told you the news that corporate raider Jana Partners, along with the Cohen family (of Atlas Energy fame), are colluding to try and stop the merger/sale of Rice Energy to EQT (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). The two groups together now own nearly 6% of EQT’s stock. Jana is trying to get two people added to EQT’s board. Their demands? Abandon the buyout/merger of Rice Energy, and that EQT needs to split itself in two, right now, into upstream (drilling) and midstream (pipelines). Jana filed the required paperwork with the Securities and Exchange Commission on July 3rd. On July 5th, Jana’s founder and managing partner, Barry Rosenstein, sent a letter (i.e. nastygram) to EQT–his list of demands. It’s going to be a long summer for EQT…
Read More “Corp Raider Jana Sends Nastygram to EQT Demanding it Split in Two”
Energy Companies | Energy Services | EQT Corp | Industrywide Issues | M&A | Rice Energy | Rice Midstream

Rice Midstream Investors Hope Deal with EQT Doesn’t Happen
July 7, 2017July 7, 2017

When EQT and Rice Energy announced a deal in June for EQT to buyout and merge in Rice to create the largest natgas-producing company in the U.S., it seemed like a match made in heaven (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). However, not everyone is in favor of the merger, including a corporate raider who know owns nearly 6% of EQT’s stock (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). You can add another group–from the “inside”–that doesn’t want to see the merger happen either: investors in Rice Midstream. Rice Midstream is an MLP, or master limited partnership, a different structure from the usual stockholding corporation. In an MLP, investors hold “units” instead of shares, and those units are tax-advantaged. The bottom line is that Rice Midstream investors are, according to a Bloomberg Businessweek article, concerned that they will get the short end of the stick in a post-merger EQT world. Already the value of their units has fallen 20% since the announcement of the merger. It wouldn’t hurt Rice Midstream investors’ feelings at all if Jana (evil corporate raider) prevents the merger from happening. For Rice Midstream investors, the enemy of my enemy is my friend…
Read More “Rice Midstream Investors Hope Deal with EQT Doesn’t Happen”
Energy Companies | EQT Corp | Industrywide Issues | M&A | Rice Energy

Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal
July 5, 2017July 5, 2017

So-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) has started a proxy fight and is trying to block EQT’s takover/merger with Rice Energy. Jana is the same company that recently helped Amazon buy Whole Foods. In a filing with the Securities and Exchange Commission on Tuesday (embedded below), Jana disclosed the company has purchased ~5% of EQT’s stock and is launching an effort to block EQT’s proposed buyout of Rice Energy (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). As a quick reminder, here’s what corporate raiders (aka “activist investors”) do: They buy up enough stock in a company to control board decisions, getting several of their own people appointed to the board of directors. Typically corporate raiders will collude with another large stockholder or two to accomplish a board coup d’état. The corporate raider then forces the target company to sell off assets and layoff people. The resulting company is, they claim, “healthier” and more streamlined. The stock price bumps up, the raider sells its stock, pocketing a nice profit. And then moves on to the next target. Meanwhile, good people are standing in the unemployment line, in the wake of the raider’s “improvements.” There is nothing moral or righteous or just about the actions of corporate raiders. It is immoral, unjust and disgusting. In the words of Whole Foods CEO John Mackey, Jana are “greedy bastards.” That about sums it up. It’s distressing to see the Cohen clan collude in this kind of behavior. They should stick to their own knitting. Maybe if they had, their own company (Atlas Energy) wouldn’t have gone bankrupt (see Atlas Resource Partners Filing for Bankruptcy Tomorrow). Here’s the developing story of the effort to derail EQT’s deal with Rice Energy, and force EQT to break itself into pieces…
Read More “Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal”
CONSOL Energy | Energy Companies

CONSOL Energy CEO Bends the Ear of Trump Cabinet @ White House
July 3, 2017July 7, 2017

CONSOL Energy CEO Nick Deluliis

Last week was “Energy Week” at the White House. At a big speech and confab on energy, held at the White House, President Trump delivered a speech highlighting six new initiatives that will help America become energy dominant (see President Trump Unveils 6 Energy Initiatives, Half Involve NatGas). One of the invited guests from industry at that speech/confab was CONSOL Energy CEO Nick Deluliis. CONSOL has transformed itself in a little over a decade from being a coal company to becoming a powerhouse Marcellus/Utica driller. Deluliis took advantage of the meeting to bend the ear, privately, of Energy Secretary Rick Perry and “other cabinet secretaries” to drive home the message “that the Pittsburgh region is at the center of the energy revolution the administration envisions.” Cool! Nick was the unofficial ambassador for the Marcellus/Utica at the meeting. Here’s what else transpired between Nick and Team Trump last Thursday…
Read More “CONSOL Energy CEO Bends the Ear of Trump Cabinet @ White House”
Chesapeake Energy | Eclipse Resources | Energy Companies | Range Resources Corp

Utica Super Lateral Wells Now Catching on in Other Plays
July 3, 2017July 3, 2017

Click for larger version

What is a “super lateral” as opposed to a “long lateral” when it comes to shale drilling? And who is drilling these really long wells? That’s the topic of a recent post by energy expert Richard Zeits on the Seeking Alpha investors website. We’ll give you our definition. But first, some brief background. When you read about a “lateral” in shale wells, it refers to the part of the well that is horizontal. When drilling a new well, you first (of course) drill vertically–more or less straight up and down. But at a certain depth, when you hit the shale layer you are targeting, you gradually turn the hole so that it becomes horizontal, running through the rock layer (see the illustration). The horizontal part is the lateral. In the early days of Marcellus (and Utica) shale wells, laterals were perhaps a maximum of 2,000 feet in length. Today? The longest on-shore lateral in the world (all three of them, actually) are located in Ohio–drilled by Eclipse Resources. Eclipse’s wells–first the Purple Hayes, then the Great Scott and most recently the Outlaw–are considered “super laterals” because they exceed 15,000 feet. In the case of the Outlaw C 11H well in Guernsey County, OH, the lateral is a staggering 19,500 feet long (see Eclipse Breaks Record Again – New Longest Shale Well in World!). If we use the metric that a “super lateral” is 15,000 feet or longer, there is one Marcellus well that qualifies (see Range Resources Drills Longest Marcellus Well Ever – in Washington Co.). While Mr. Zeits doesn’t use the exact metric of 15,000 feet, he does talk about super laterals, and predicts they will soon become common. He notes some new news for us: Chesapeake Energy has drilled an Eagle Ford oil well with a 17,000 foot lateral. Zeits says we should expect to see this in other plays too. We found his musings over super laterals, and the economics behind them, interesting…
Read More “Utica Super Lateral Wells Now Catching on in Other Plays”
Energy Companies | HG Energy | Noble Energy

Noble Energy Exits Marc/Utica, Sale to HG Energy Closes for $1.1B
June 30, 2017June 30, 2017

In May, Noble Energy dropped a bombshell that it is selling its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer” (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy–a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). At the time of the announcement, MDN was the only news source that correctly identified the “undisclosed buyer”–which is HG Energy (headquartered in Parkersburg, WV), backed with money from investment firm Quantum Energy Partners. Noble didn’t identify the buyer until earlier this week, when they issued another announcement that the deal is now done. In this latest announcement, Noble did identify HG Energy as the buyer. An interesting aside: The original announcement pegged the deal at $1.225 billion. In the end, it turned out to be $1.125 billion–$100 million less than the original asking price…
Read More “Noble Energy Exits Marc/Utica, Sale to HG Energy Closes for $1.1B”
Accidents | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Rice Energy | Washington County

Ambulance Service Sues Rice Energy for $27K re Jan. Well Pad Fire
June 30, 2017July 7, 2017

In January, MDN reported on a well pad fire at Rice Energy’s Papa Bear well pad in Somerset Township (Washington County), PA (see Explosion & Fire at Rice Energy Drill Pad in Washington County, PA). Although no one was hurt, the explosion and fire ended up ruining six of the 20 pumps, and damaging four pumper trucks. As might be expected, local first responders were called to the scene, including four ambulances from Bearcat EMS Inc. Following the initial incident, Bearcat sent a bill to Rice for $26,742 to cover their costs of responding. Rice responded that they didn’t call Bearcat, and that Bearcat didn’t actually do anything, so they don’t owe them a penny. Bearcat, in paperwork filed in a lawsuit against Rice, says even though they didn’t help Rice personnel/contractors, they did provide services to other EMS staff at the scene, over a four-hour period. Therefore, pay up. The matter now sits in court…
Read More “Ambulance Service Sues Rice Energy for $27K re Jan. Well Pad Fire”