Energy Companies

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    PA Manufacturers’ Assoc: NatGas Demand Going up 40% Next 10 Yrs

    Yesterday the 11th “Think About Energy” Briefing was held at Misericordia University, near Wilkes-Barre, PA. The session aimed to provide an update on the economic and environmental benefits of PA natural gas, and was organized/sponsored by Borton-Lawson, Cabot Oil & Gas, UGI Energy Services, UGI Utilities, and Williams, in conjunction with ACT for America and the Back Mountain Chamber of Commerce. About 100 people attended. Carl Marrara, vice president of government affairs for the Pennsylvania Manufacturers’ Association, had this to say: “The demand for natural gas is expected to increase by 40 percent over the next decade, and even more in Pennsylvania.” He said that more natural gas is needed by PA manufacturers, but slow pipeline infrastructure approvals by “government officials” are “holding up growth.” MDN friend Bill desRosiers of Cabot Oil & Gas was the moderator and master of ceremonies. Other speakers included: Abe Amorós of the Laborers’ International Union of North America (LiUNA), Mike Atchie of Williams, and Larry Godlasky of UGI Energy Services. Although it was a gas-friendly crowd, the session wasn’t, however, without a touch of controversy. One anti showed up–a math professor from Luzerne Community College–and left in a huff when the audience told him to shut up and sit down during the Q&A portion…
    Read More “PA Manufacturers’ Assoc: NatGas Demand Going up 40% Next 10 Yrs”

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    Shell Lines Up 3K+ Parking Spaces for Cracker Construction Workers

    Believe it or not, Shell previously hired a third-party consultant to perform a traffic study in the area where Shell plans to build a $6 billion ethane cracker in Beaver County, PA. Based on the findings and recommendations of that study, Shell has begun to secure parking spots for construction workers that will descend on that location to build the plant–beginning later this year. One of the recommendations is to limit the number of parking spots to no more than 1,500 at any one location. Shell currently has three locations lined up and (mostly) ready to go, enough for 3,100 parking spots. At its peak, the project will employ something like 6,000 workers. So either Shell will line up more spots, or maybe workers will carpool…
    Read More “Shell Lines Up 3K+ Parking Spaces for Cracker Construction Workers”

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    ExxonMobil & Employees Contribute More than $50M to Higher Ed

    You know how money-grubbing, cheap, careless and in general no-good those Big Oil companies are, right? They only care about themselves. They seek to rape and pillage Mom Earth, keeping piles of gold in their coffers, killing humankind in the process. That’s the picture painted by anti-fossil fuel nuts. Here’s the real picture: In 2016, between employees and the corporation, Exxon Mobil donated more than $50 million to colleges and universities across the United States. That is a staggering number. Many of those colleges and universities were located in the Appalachian basin (Marcellus/Utica), including $2.7 million in PA, $800K in OH, $1.4 million in VA, $3.2 million in NY and $1.2 million in NJ. Just the opposite of the negative picture painted by the enemies of fossil fuels… Read More “ExxonMobil & Employees Contribute More than $50M to Higher Ed”

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    PA Appeals Court Clears Way for EQT to Drill Jefferson Hills Well

    In December 2015 MDN told you about EQT’s application to drill a single shale well in Jefferson Hills (Allegheny County), PA (see Jefferson Hills, PA Antis Oppose EQT Well Near Future School Site). The well would be drilled “near” where a new school is due to be built, which provided anti-fossil fuelers with an excuse to oppose the project. As part of the a conditional use permit, EQT agreed to (a) not use Borough roads during construction, (b) use a pipeline from a local water company instead of trucks for the water needed to drill and frack, greatly reducing the amount of truck traffic, (c) pledged the project would not impact local streams and wetlands, (d) comply with local lighting regulations, and (e) install sound walls if needed. In other words, EQT bent backwards, forwards, sideways, jump through numerous hoops and turned itself inside out to comply with requests from the town. The Borough Planning Commission unanimously approved the conditional use permit request. But then the town, bowing to pressure from local antis, rejected the request in December 2015, saying the proposed project would endanger local health and the environment. In other words, they had no basis for rejecting the permit. EQT sued and won in the Court of Common Pleas of Allegheny County in June 2016. Jefferson Hills appealed and last week, the Commonwealth Court of Pennsylvania upheld the EQT verdict saying the town arbitrarily rejected the permit and EQT should be allowed to drill…
    Read More “PA Appeals Court Clears Way for EQT to Drill Jefferson Hills Well”

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    Noble/CONSOL Breakup Continues: Noble Sells 50% of CONE Midstream

    Noble Energy dropped a bombshell that it has sold 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?). MDN exclusively shared the news of exactly the who the “undisclosed buyer” is: HG Energy (headquartered in Parkersburg, WV), backed with money from investment firm Quantum Energy Partners. HG is a “portfolio company” of Quantum. The press release announcing the acreage/asset sale went to great lengths to stress that Noble’s half operating interest in the CONE Midstream pipeline gathering system was not part of the deal. CONE is a 50/50 joint venture between CONSOL Energy (the “CO” part of the name), and Nobel Energy (the “NE” part of the name). CONE was Noble’s final connection to our region. No more. Yesterday, Noble Energy announced they’ve sold their 50% stake in CONE to Quantum Energy Partners for $765 million. This time Noble went ahead and announced the buyer, perhaps figuring MDN would find out and blab it any ;-). Here’s the announcement that Noble Energy has left the Marcellus/Utica building…
    Read More “Noble/CONSOL Breakup Continues: Noble Sells 50% of CONE Midstream”

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    Another 7 Easements Signed for Shell’s Falcon Ethane Pipeline

    Click for larger version

    Last year MDN shared details about Shell’s Falcon Ethane Pipeline system–a pipeline with two “legs” that will feed Shell’s mighty ethane cracker plant in Beaver County, PA (see Shell Working on 94-Mile Ethane Pipeline to Feed PA Cracker). Before the pipeline system had a name (Falcon), Shell had begun the process of signing up landowners to allow the pipeline to cross their property–as far back as February 2016 (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant). In January 2017, we reported on Shell’s progress in leasing land for the pipeline (see Shell Leases More PA Properties to Build Ethane Pipeline). This is a further update. Shell has signed an additional seven parcels of property–in Beaver County–bringing the total to 32 easements now secured for the project in Beaver County… Read More “Another 7 Easements Signed for Shell’s Falcon Ethane Pipeline”

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    Platts: M-U Drillers Need to Double Rigs to Fill Pipelines in ’17

    Platts senior energy analyst Luke Jackson yesterday posted a Platts Snapshot titled, “New Northeast US Gas Pipelines Will be Hard to Fill.” Provocative title. It’s a video. Below is a transcript of the video. In it, Jackson says according to their analysis that drillers in southwestern PA and eastern OH and the northern panhandle of WV will struggle, but eventually succeed, in producing enough natural gas to fill new pipelines coming online this year. But they won’t be able to fulfill their obligations until perhaps December 2017. That is, Antero, Range Resources and Ascent Resources will need to rapidly ramp up drilling–or risk paying for pipeline capacity they’re not using. However, it was Jackson’s comment about pipelines coming online in 2018 and 2019 that really caught our attention. He says in the video: “This new capacity will be nearly impossible to fill, barring a massive ramp in drilling activity, which, per our forecast, is not expected to occur.” So Platts says Marcellus/Utica drillers will not be able to produce enough natural gas to fill all of the new pipelines that will be online by 2019. If we assume the price of natgas goes higher over the next few years (not an unreasonable assumption), what this means is that new drilling is going to ramp up like crazy in the next few years. Buckle up! Here’s the transcript…
    Read More “Platts: M-U Drillers Need to Double Rigs to Fill Pipelines in ’17”

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    Frack Crew Shortage Hits Nationwide, Including the Marcellus

    Once upon a time (in 2013), the oil and gas industry was expanding so rapidly that in places like North Dakota workers at the local McDonalds were getting a singing bonus and making $20/hour. No lie. Workers on drilling rigs and frack crews were paid a premium to keep working. But we became victims of our own success. So much oil and natural gas was produced, the market became saturated and prices crashed. And along with the price crash, rigs were idled and workers were laid off–in the tens and eventually hundreds of thousands. By the time of the deepest, darkest part of the down cycle (early 2016), some 350,000 workers in the industry had received a pink slip (see Big Oil’s Footprint in Washington Shrinks With Price of Crude). Oil and gas is a boom and bust business–that’s the reality. And guess what? The boom times are back. There are now not enough workers and some crews are leaving one company and going to work for another–lured away by higher wages. It’s happening across the Fruited Plain. It’s also happening in the Marcellus. One (very big) Marcellus driller was “left short of fracking crews during the first quarter when some pumping companies walked away for higher-paying contracts.” What does it all mean? It means the good times are here again. Let’s enjoy it while it lasts… Read More “Frack Crew Shortage Hits Nationwide, Including the Marcellus”

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    Lease Offer in Harrison County, WV: $1500/Acre + 14% Royalties

    It’s not often we read about lease offers these days. We’re sure they happen regularly, but the only ones you read about are offers made to lease publicly owned land. Such offers for public land are a useful gauge for private landowners. So when we noticed a story about an offer made by Arsenal Resources to the North Central West Virginia Airport (Bridgeport), our eyes and ears perked up. The opening offer is for 188.5 acres (out of 500 acres) with a $1,500 per acre signing bonus and 14% royalty on anything produced. The Benedum Airport Authority, charged with managing the airport and property, told the Authority’s attorney to counter offer–they want 15% royalties… Read More “Lease Offer in Harrison County, WV: $1500/Acre + 14% Royalties”

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    Ultra Petroleum 1Q17 – Holding on to 72K Marcellus Acres, for Now

    Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. One year ago, in April 2016, Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). A year later, Ultra announced it has emerged from bankruptcy, raising nearly $3 billion to pay back creditors and floating 195 million shares of new stock (see Ultra Petroleum Does Bankruptcy Right, Exits with Higher Value). The company is worth more today than when it entered bankruptcy. Talk about engineering a turnaround! Ultra shows other E&Ps how to do a bankruptcy “right.” A few weeks back Ultra issued its first quarter 2017 update. While the official update itself doesn’t mention Ultra’s Marcellus acreage, the earnings call did. We learn more about Ultra’s attitude and future plans for their Marcellus holdings from comments made by Ultra CEO Michael Watford. We also get more details about the company’s Marcellus holdings from the accompanying slide deck used during the earnings call…
    Read More “Ultra Petroleum 1Q17 – Holding on to 72K Marcellus Acres, for Now”

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    Thai Company Banpu Invests in Another 34 Marcellus Wells in NEPA

    One year ago, Banpu Pcl, Thailand’s largest coal producer, invested $112 million to purchase Range Resources’ Marcellus non-operated JV operations in Bradford County, PA (see Thai Company Buys Out Range Resources’ JV in NEPA for $112M). The “Chaffee Corners Joint Exploration Agreement” gave Banpu an ownership share in 62 producing wells and another 14 wells waiting on completion, and a share in 170+ more drilling locations. Talisman is the operator of the wells and the company that does the drilling (Banpu is just an investor). Banpu liked it so much, they did it again in January of this year (see Thai Company Banpu Makes 2nd Investment in Northeast Marcellus). The January deal gave Banpu a 10.24% stake in 10,000 acres of Marcellus leases, once again in northeastern PA, for $63 million. Chief Oil & Gas is the driller on the acreage in the second deal. Then in March, Banpu signed an agreement to invest $16 million into a venture with Tug Hill Marcellus (see Thai Company Banpu Invests Another $16M in PA Marcellus Wells). It seems that Banpu can’t get enough of the Marcellus in northeastern PA. The company just announced a fourth deal to invest in more NEPA acreage and wells. How many wells? What county is the new deal located in? And which driller is the operator of that acreage? We give you the details you won’t find elsewhere…
    Read More “Thai Company Banpu Invests in Another 34 Marcellus Wells in NEPA”

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    DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes

    There’s a reason hospitals and court rooms are frequently the settings for soap operas on TV–there’s always so much drama surrounding medicine and the law–the latter of which is our focus today. In January MDN reported what seemed like the final chapter in a long, drawn-out case between Marcellus driller EQT and the Pennsylvania Dept. of Environmental Protection (DEP). In October 2014, the DEP fined EQT a whopping $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT did not say there wasn’t a problem with leaks at the site, they did say the way the DEP calculated the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT had sued the DEP over a different matter–that is, sour grapes. EQT appealed the fine and the case all the way to the PA Supreme Court. In December 2015, the high court handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine (see PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case). The Supreme Court sent the case back to a lower court, PA Commonwealth Court, for follow up work, and in January 2017, a three-judge panel ruled that the method the DEP currently uses to assess fines–by how many days pollution lingers, instead of by how many days the initial release of pollution lasted–is not legal nor common sense (see EQT Wins Court Case Against PA DEP re $4.5M Wastewater Leak Fine). The judges said such a method in fining, “would result in potentially limitless continuing violations.” Under the old way of calculating fines, the DEP was considering upping the fine on EQT to an insane $157 million. Calculating it under the new way will mean a fine of around $120,000. We thought with that ruling it was all done and dusted. Not so. The soap opera continued when the DEP appealed the Commonwealth Court panel’s ruling back up to the PA Supreme Court where the Supremes will consider it all over again. When you read the “friend of the court” brief just filed by those supporting the DEP in their case, it’s a Who’s Who of Big Green organizations and virulent anti-drillers–which tells you all you need to know about which side is in the right in the case of EQT v DEP… Read More “DEP Appeals $4.5M Wastewater Leak Fine Against EQT to Supremes”

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    VA Landowner Uses State Police to Eject Pipeline Surveyors

    Increasingly landowners (and anti-fossil fuelers, sometimes one and the same) are attempting to employ the use of local law enforcement to prohibit pipeline companies from surveying their land–especially in Virginia. Survey crews for the Mountain Valley Pipeline, a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA, have the right under Virginia State law to enter a property without the property owner’s permission to survey–as long as they have sent a prior notice to the landowner with target dates of when they will be on location. However, some landowners (very small percentage) don’t want the pipeline and don’t want surveyors on their property–and have had their lawyers tell them so. When surveyors recently turned up on one property, the landowners called the State Police. The State Police (as well as local police) have a stated policy that they do not interfere with non-criminal matters. And surveying a property legally is not a criminal matter. However, the troopers came out and had a quick talk with the surveyors. The troopers did not eject the surveyors per se, but soon after the troopers left the surveyors did too. This is troublesome and problematic. Did the troopers put undue pressure on the surveyors to leave? Should the troopers have come to the property at all? Does the landowner have culpability in calling the cops for a non-criminal matter, wasting the troopers’ time?… Read More “VA Landowner Uses State Police to Eject Pipeline Surveyors”

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    EV Energy Partners 1Q17 – $51M Loss, Borrowing Base Reduced $75M

    In March 2016, MDN reported that EV Energy Partners (EVEP)–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–was in survival mode (see EV Energy Partners: No New Utica Wells in 2016, in Survival Mode). In April 2016 the company quit paying unit holders (see Problem: EV Energy Partners Quits Paying Unit Holders). It’s been a while since we’ve last checked in on the company. EVEP released their first quarter 2017 update and held an earnings call earlier this week. It appears to us like the company continues to struggle. There is no mention of the Marcellus/Utica in the official update, although there is a brief mention on the earnings call that the company has sold 1,200 wells “throughout Appalachia.” We’re pretty sure most, if not all, of those wells are conventional (vertical only) wells. The company’s attention is mostly on the Eagle Ford (TX) Shale play–an oil play. As for EVEP’s financials, the company reported losing $51 million in 1Q17 versus losing $29 million in 1Q16. They also report their borrowing base (the estimated value of assets against which they can borrow money) has been reduced by $75 million–from $450 million to $375 million. Here’s the full update, along with a brief portion of the earnings call… Read More “EV Energy Partners 1Q17 – $51M Loss, Borrowing Base Reduced $75M”

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    Rex Energy 1Q17 Full Update – Swings to Black, Drilling Picks Up

    In April, Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), issued an operational update (see Rex Energy 1Q17: Production Drops 8.5%). Earlier this week the company issued a full 1Q17 update. What does it show? Rex swung from losing $62 million in 1Q16 to making $2.1 million in 1Q17–quite a turnaround! This update also includes a fuller look at the drilling that did happen in 1Q17, and what the company plans for the balance of 2017. In Rex’s Legacy Butler Operated Area (Butler County, PA), the company has begun drilling 4 wells on a single pad and plans to have them completed and online in 3Q17. In Rex’s Moraine East Area (also Butler County) the company drilled 7 gross (3.3 net) wells and completed 4 gross (1.4 net) wells in 1Q17. In addition, Rex had 12 gross (5.5 net) wells awaiting completion at the end of 1Q17. In Rex’s Warrior North Area (Carroll County, OH), the company plans to drill 12 gross (10.2 net) wells by the end of 2017, with most of them not going online until 2018. Below is the full update, along with select portions of the earnings call where Rex’s CEO shares some interesting insights… Read More “Rex Energy 1Q17 Full Update – Swings to Black, Drilling Picks Up”

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    Gulfport Energy 1Q17 – Spud 26, Completed 5 Utica Wells

    Gulfport Energy turned in their first quarter 2017 update earlier this week–a very impressive report. Gulfport reports producing an average 849.6 million cubic feet equivalent (MMcfe) per day in 1Q17–8% higher than 4Q16 and 23% higher than 1Q16. They scored an average price of $2.68 per thousand cubic feet (Mcf) for the gas they sold. Perhaps most impressively, the company went from losing $242 million in 1Q16 to making a profit of $154 million in 1Q17–a swing of $396 million. Gulfport is a big Utica Shale driller. During 1Q17, the company spud (began to drill) 26 new Utica wells. The average length of each well was 8,145 feet. They hooked up 5 Utica wells to pipelines. On an earnings call, Gulfport CEO Michael Moore said 38% of their Utica well completions during 1Q17 included fracture treatment designs of “greater than 2,500 pounds [of sand] per foot.” That’s a lot of sand! Marcellus and Utica drillers typically find more sand = better production–and that’s what Gulfport is finding. Gulfport works with Mammoth Energy and Evolution Well Services–which operates rigs run by natural gas instead of diesel fuel. Below is the full 1Q17 update, along with comments from Moore delivered during the quarterly earnings call… Read More “Gulfport Energy 1Q17 – Spud 26, Completed 5 Utica Wells”