Energy Companies

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    Carrizo O&G Puts Up ‘For Sale’ Sign on Marcellus/Utica Assets

    Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. During the company’s fourth quarter/full year 2016 earnings call, it seemed to us that Carrizo signaled a potential sale of their Marcellus/Utica assets (see Carrizo Actively Considering Sale of Marcellus/Utica Assets). Looks like we were right. Yesterday on an earnings call for 1Q17, Carrizo CEO S.P. “Chip” Johnson said, “[W]e have elected to test the market for our Appalachian assets, as they do not currently compete for capital with our three core oily plays. Monetization of these assets would leave Carrizo with a core position in three high-return, oil-weighted plays and should enhance our long-term production growth profile.” Translation: We’ve now put the “for sale” sign out on our Marcellus/Utica assets. What are those assets? We outline them below…
    Read More “Carrizo O&G Puts Up ‘For Sale’ Sign on Marcellus/Utica Assets”

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    Antero Resources: Production Hits New High of 2.1 Bcf/d, $268M Profit

    Antero Resources, one of the biggest and best drillers in the Marcellus/Utica concentrating on just those two plays, turned in their first quarter 2017 numbers on Monday, and held an earnings call to discuss it yesterday. The first thing that caught our eye was that Antero hit a new production high in 1Q17. The company produced 2.1 billion cubic feet equivalent per day. Impressive. Perhaps even more impressive is that although the company lost $5 million in 1Q16, they swung to making a $268 million profit in 1Q17. Wow! Antero has one of the best hedging programs in the business. That is, they pre-sell their production at higher prices than other drillers, which is no doubt why they turned in such a great first quarter. The Marcellus was their main focus during 1Q17. Antero drilled and brought online 25 Marcellus wells. Although they fiddled with drilling and casing 13 Utica wells in the first quarter, they didn’t complete (i.e. frack) and bring any of their Utica wells online. Why? They’re waiting for the Rover Pipeline to get built first. Antero currently runs three rigs in the Utica. They plan to move one of the three to the Marcellus during 2Q17. Here’s a load of good information from Antero for 1Q17…
    Read More “Antero Resources: Production Hits New High of 2.1 Bcf/d, $268M Profit”

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    Titan Energy Sells Marcellus Assets, Buyer Rapidly Expanding

    In February, MDN told you that Titan Energy, which used to be known as Atlas Energy/Resource Partners, was listing what appeared to be the rest of the acreage they still own on the Appalachian basin–some 494,229 acres–including rights for drilling in the Marcellus (see Titan Energy Puts 494K Appalachian Acres Up for Sale). On Friday, Titan announced it has signed an agreement to sell the acreage, along with 8,400 oil and gas wells across Pennsylvania, Ohio, Tennessee, New York and West Virginia, for $84.2 million to Diversified Gas & Oil (DGO). Yes, the vast majority of those wells are conventional (vertical only) and not shale wells. In fact, we’re not sure any of the wells are shale wells. However, Marcellus assets were part of the sale–so at least some of the acreage will allow for Marcellus drilling, should DGO want to pursue it. Although Titan is keeping its Utica Shale acreage, the company says it use the money from this sale to concentrate efforts on oil drilling in the Texas Eagle Ford Shale play. Titan is moving its headquarters from Pittsburgh to Houston, TX. In addition to the news about Titan selling its conventional assets and moving, the twin story (perhaps even more interesting) is that the buyer, DGO (nominally headquartered in Birmingham, Alabama, although actually a UK company), has been on a buying spree–snapping up 75,250 conventional acres (1,300 wells) in PA & WV earlier this year. All told, DGO now owns 1.6 million acres of leases and 10,000+ conventional oil and gas wells in Appalachia…
    Read More “Titan Energy Sells Marcellus Assets, Buyer Rapidly Expanding”

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    PDC Energy Pulling Out of the Utica – Selling Acreage & Wells

    PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). In December 2015, the company announced they would restart Utica drilling in 2016 with plans to drill five wells (see PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells). Indeed they did reactivate their program, in a much-scaled-back fashion, last year. However, another shale play has turned the head of PDC–the Permian Basin in Texas, an oil play. When PDC released their plans for 2017 in December, they said they would drill two more Utica wells in the second half of 2017 and spend just $18 million to do it, spending the bulk of their money in the Permian and Wattenberg (see PDC Releases 2017 Plans – Drilling Just 2 Utica Wells in 2H17). Then in March, the plan to drill those two Utica wells this year got mothballed (see PDC Changes Course, Delays More Utica Drilling in 2017). Now we know why. Buried in their first quarter 2017 update (released last Friday), PDC has announced they are putting their Utica assets up for sale, so they can concentrate on the Wattenburg and Delaware Basin (i.e. Permian)…
    Read More “PDC Energy Pulling Out of the Utica – Selling Acreage & Wells”

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    NFG Update – Getting “Lousy Treatment” in NY, Threatens to Leave

    National Fuel Gas Company (NFG), headquartered in Western New York State, is making noises (threats) that Gov. Andrew Cuomo should be very concerned about. NFG covers the full span of the oil and gas business–from upstream (with its wholly-owned drilling subsidiary Seneca Resources), to the midstream (with wholly-owned subsidiary Empire Pipeline) to downstream (NFG’s natural gas utility service to 740,000 customers in NY and PA). It’s a big company that generates a lot of jobs and revenue for New York State. Yet NY is metaphorically crapping all over NFG–and the company is signaling its willingness to retaliate by leaving. No, not move the company HQ, or sell off its gigantic utility business. Nothing of that sort (yet, anyway). But NFG CEO Ronald Tanski said on an earnings call last Friday that NFG is “getting lousy regulatory treatment in New York State” and that “Given this type of regulatory treatment in the state, we have to take a serious look at our ability to achieve any reasonable growth in New York.” Translation: We’ll stop launching new projects that invest billions in the Empire State, and instead invest that money and the jobs it creates in PA and other states. The “lousy treatment” NFG is getting is related to NY’s corrupt Dept. of Environmental Conservation decision to deny it permits to build the Northern Access Pipeline (see NFG Calls Cuomo DEC Denial of Northern Access Pipe “Troubling”). NFG has taken the Cuomo DEC to court to try and get the DEC’s capricious pipeline decision overturned. However, the damage is now done. NFG is threatening to invest elsewhere–and we take them at their word. This is not an empty threat…
    Read More “NFG Update – Getting “Lousy Treatment” in NY, Threatens to Leave”

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    Rex Energy Offers 1-for-10 Stock Split, Updated 2-Yr Plan

    Two announcements from Rex Energy, one from Thursday and one from Friday, show the company is working hard to reassure investors that the company once again has momentum and that it’s safe to buy the company’s stock. On Thursday, Rex–a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA)–released an updated two-year operational and financial plan. It is an update to the plan originally released in January (see Rex Energy’s 2-Year Plan: Scale-up in 2017, Scale-down in 2018). Under the original plan released in January, Rex said they planned to spend $80-$90 million on drilling in 2017 and $20-$40 million in 2018. Last week Rex announced a new $300 million loan to help with the drilling budget (see Rex Energy Gets a New $300M Loan to Help Fund M-U Drilling). The loan made the difference. Rex’s revised drilling budget for 2017 is now $115-$130 million, and for 2018 it’s gone up to $65-$80 million. On Friday, Rex announced a one-for-ten reverse stock split. Rex’s stock is listed on the Nasdaq exchange, and Nasdaq threatened to delist the stock back in December because the per-share price had sunk below $1 (see Rex Energy Stock Threatened with De-Listing by Nasdaq). A common “fix” for low per-share stock prices is to combine outstanding shares into a smaller number of shares. As of this morning (when writing this post) Rex’s share price was $0.42 per share. If you combine 10 of those shares into a new, single share, presumably the price would be 10 x $0.42 = $4.20 per share. Voilà. The per share price is now in compliance with Nasdaq rules. The new stock price doesn’t mean the company is actually worth any more on paper–it simply means a fewer number of shares are worth more per share…
    Read More “Rex Energy Offers 1-for-10 Stock Split, Updated 2-Yr Plan”

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    Great Scott! Eclipse Drills New Longest Lateral in World – in Utica

    Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, has done it again. Yesterday as part of Eclipse’s first quarter 2017 update, the company announced it has broken its own record for drilling the longest land-based lateral well in the world by drilling a Utica well with a lateral that’s 19,300 feet long (3.7 miles). Incredible! You may recall Eclipse was the previous holder of that record with their Purple Hayes well (18,500 feet long), drilled one year ago (see Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes”). Eclipse seems to have taken a chapter from Rice Energy by naming their wells with creative names. Purple Hayes, named after the landowner (Hayes). The new record-holder? Great Scott–presumably named after the landowner (Scott). Eclipse reports drilling its newest record setting “Super-Lateral” well, the Great Scott 3H, with a total measured depth of 27,400 feet and completable lateral extension of 19,300 feet in less than 17 days from the drill bit hitting the ground to total depth (called spud to TD) in the company’s Utica Shale condensate area. If you’re an MDN subscriber, you were already expecting this big news. Back in April MDN editor Jim Willis attended the Oil & Gas Investment Symposium in New York City and reported on Eclipse’s session. At the time Jim reported: “They [Eclipse] plan to drill 11 “super lateral” wells that exceed 15,000 feet long. Two wells they hope to drill will break the existing Purple Hayes record–by going to 19,000 feet!” (see Eclipse Resources Touts Big ROI on Long Horizontal Shale Wells). Just a month later and the company is already delivering on its promise. Even bigger news: Eclipse is currently drilling a second well of the same length next to Great Scott! Below is the announcement about Great Scott (I & II), part of the Eclipse 1Q17 update. The latest slide deck included too…
    Read More “Great Scott! Eclipse Drills New Longest Lateral in World – in Utica”

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    Chesapeake 1Q17 – Swings to Profit, Interest in Selling Marcellus?

    Chesapeake Energy released its first quarter 2017 update yesterday. Chesapeake, the second largest natural gas producer in the United States, has its fingers in a lot of shale pies. But two of the key pies is the Marcellus and Utica. What does yesterday’s update tell us about Chessy’s involvement in the northeast? Utica production was down in 1Q17, from 138,000 barrels of oil equivalent in 1Q16 to 96,000 barrels in 1Q17. However, Marcellus production was up, slightly, from 134,000 barrels in 1Q16 to 146,000 barrels in 1Q17. Total production, across all of Chesapeake’s wells, dropped by 21% in 1Q17 versus a year ago. However, perhaps the biggest news is that Chessy seems to be out of the woods financially. In 1Q16 Chesapeake lost $1.1 billion. In 1Q17, the made (profited, in the black) $75 million–more than a huge $1.2 billion swing in just one year’s time. Kudos to Chesapeake CEO Doug “the ax” Lawler. And we’re laughing at corporate raider Carl Ichan–the guy who hired Lawler. Icahn bailed by selling his Chesapeake stock late last year (see Carl Ichan Sells Rest of his Chesapeake Stock, Good Riddance). He sold just in time for the company to turn a profit. Talk about poor timing. And everyone things Icahn is such a god when it comes to investing. Below are extracts from yesterday’s earnings call, where Lawler answers a question about whether or not he wants to sell Marcellus acreage, along with a full copy of the 1Q17 update and the latest PowerPoint slide deck…
    Read More “Chesapeake 1Q17 – Swings to Profit, Interest in Selling Marcellus?”

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    Rice Energy 1Q17 – $35M Loss, Production Soars 86%, Laser Focus

    On Wednesday Rice Energy released its first quarter 2017 update, and yesterday the company held an earnings call to discuss it. On the down side, Rice continued to lose money during the quarter. Rice lost $21 million in 1Q16, and the loss widened to $35 million in 1Q17. But it seems to us the rest of the news they shared was pretty darned good. Production soared–from 61.4 billion cubic feet equivalent (Bcfe) in 1Q16, to 114.5 Bcfe in 1Q17–an 86% increase year over year (vast majority of that was natural gas). Rice’s lateral length now measures over 9,000 feet on average. In 1Q17 Rice added 2,000 Marcellus acres and 2,000 Utica acres to its portfolio, and the company says it’s on track to add a total of 15,000 acres this year. During 1Q17, Rice brought 15 new Marcellus wells online, and 10 new Utica wells. Rice CEO Dan Rice, on the earnings call, said (our words) while everyone is zigging, they like to zag. While everyone else is trying to buy up acreage all over Hades half acre, Rice prefers to concentrate and narrow its focus on truly prime locations that will produce stellar wells. Dan also said the company is in the catbird seat when it comes to new pipelines coming online over the next several years. We’ll explain. Below are excerpts from the earnings call, the 1Q17 update (with financials), and the latest PowerPoint slide deck…
    Read More “Rice Energy 1Q17 – $35M Loss, Production Soars 86%, Laser Focus”

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    Southwestern Energy – Pedal to the Metal in the Marcellus/Utica

    Earlier this week MDN brought you the latest quarterly update from Southwestern Energy (see Southwestern Energy 1Q17: Production Falls 14%, Profits Soar). As we noted, production was down, but profits up. Southwestern is investing 85% of their budget in the Marcellus/Utica this year. In covering the Southwestern story, we neglected to bring you a portion of the earnings call where Jack Bergeron talks. Bergeron is Southwestern Senior Vice President for E&P Operations. He had some things to say about the company’s Marcellus/Utica drilling program that we think you’ll find interesting. What kinds of things? Like details about the company’s move from using 3,500 pounds of sand per foot to 5,000 lbs/ft. And details about the increase in Estimated Ultimate Recovery (EUR) the company is seeing–from 11 billion cubic feet per well to 15 Bcf/well–from using a new completion method. We also have more comments by Southwestern CEO Bill Way, about the number of wells the company plans to drill in Susquehanna County, PA…
    Read More “Southwestern Energy – Pedal to the Metal in the Marcellus/Utica”

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    PA Supreme Court Rejects Range Resources Well Contamination Case

    For years we’ve followed the story of Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who sued Range in civil court. The problem is, the DEP determined that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing came in December 2015 and, we thought, finally closed the door, once and for all (see DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well). But no, that was not the end. Kiskadden appealed again, and in October 2016 a Commonwealth Court appeals panel affirmed the EHB’s 2015 dismissal of Kiskadden’s appeal of the DEP 2011 ruling that Range’s Yeager site operations did not contaminate Kiskadden’s well water. Case closed, right? Nope. Kiskadden had one card left to play and he did it–filing an appeal with the PA Supreme Court (see Landowner Appeals Range Well Contamination Case to PA Supreme Crt). Earlier this week, the Supreme Court sent back the appeal marked “case denied.” The fat lady has now sung…
    Read More “PA Supreme Court Rejects Range Resources Well Contamination Case”

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    Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?

    Yesterday 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.” That works out to be $3,181 per acre. Not included in the sale is Noble’s half operating interest in the CONE Midstream pipeline gathering system. It was just three years ago that Noble announced it would lease 138,000 feet in a new office building in Southpointe, and move in 200 employees (see Noble Energy’s Huge Vote of Confidence in the Marcellus). At the time, Noble’s CEO said the Marcellus is “the premiere gas play in the United States” and that the Marcellus figures prominently in Noble’s future plans. That was then, this is now. 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). All of the above is what you get from other news sources. The reason you read MDN is because we’ve found out who the buyer of the Noble acreage is…
    Read More “Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?”

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    Huntley & Huntley Targets New Drilling in Westmoreland County, PA

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    It’s been a few years since MDN has written a post about seismic testing. Typically before land gets leased and drilled on, drillers will contract with seismic testing companies to conduct a mapping survey of the land. The survey does not show the surface, but rather the sub-surface–a kind of “x-ray” of what the rock layers look like deep underground. Drillers then use that information to determine the best places to drill. Seismic surveys, like every aspect of drilling, is not without controversy (see our previous stories about seismic testing here). Folks understandably have concerns. Will the survey company use dynamite charges? Will they use those big “thumper” trucks? Will it affect water wells? Sewer lines? All legitimate questions. On Monday city officials from Lower Burrell (Westmoreland County), PA asked a lot of tough questions of seismic contractors hired by Huntley and Huntley to map the township–presumably (and the point of this post) so that H&H can soon apply for permits and commence with new drilling in the town. Here’s how it went…
    Read More “Huntley & Huntley Targets New Drilling in Westmoreland County, PA”

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    WV Supreme Court Post-Production Royalty Case Hinges on 3 Words

    Yesterday the five justices of the West Virginia Supreme Court reheard a case involving post-production deductions from royalty payments. Last week we reported that the court *might* rehear the case this week–if they didn’t grant a late-breaking motion to dismiss the rehearing (see WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe). In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). Those who won the case say newly elected Supreme Court Justice Elizabeth D. Walker has conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed, and yesterday the lawyers were in court arguing. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead”… Read More “WV Supreme Court Post-Production Royalty Case Hinges on 3 Words”

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    CONSOL Energy 1Q17 – Posts Loss, Selling Everything in Sight

    Yesterday CONSOL Energy, one of the larger drillers in the Marcellus/Utica, released its first quarter 2017 update. The company reports losing $34 million in 1Q17. Production was down too–but just slightly at less than 2% less than 1Q16. The big news is how fast CONSOL is selling stuff. CONSOL sold $108 million worth of assets in the Marcellus/Utica in 1Q17, part of their plan to sell off a total of $400-$600 million in assets this year. According to a CONSOL statement, the company “recently closed on three asset sale transactions for total cash consideration of $108 million…One of the transactions was the sale of approximately 6,300 net undeveloped acres of the Utica-Point Pleasant Shale in Jefferson, Belmont and Guernsey counties, Ohio, for total cash consideration of approximately $77 million, or approximately $12,200 per undeveloped acre.” We have a highly placed source that tells MDN that Ascent Resources is the buyer. CONSOL CEO Nick DeIuliis said on an earnings call yesterday that the bust-up with Noble Energy last year has allowed CONSOL to sell off acreage that was previously tied up in the joint venture. Noble is doing the same (see today’s lead story). Below we have the full update from CONSOL, including financial statements, along with the latest PowerPoint presentation…
    Read More “CONSOL Energy 1Q17 – Posts Loss, Selling Everything in Sight”

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    Rex Energy Gets a New $300M Loan to Help Fund M-U Drilling

    Yesterday Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), signed paperwork for a new $300 million loan–due to be paid back by April 2021. Rex immediately withdrew $144 million from the loan, to pay back other loans it owed. When all is said and done with paying back this and that, Rex says they will have $110 million they can use for their Marcellus/Utica drilling program. Rex CEO Tom Stabley said that will be enough money to help fund the company’s two-year development program, including “the potential to access the M&A market.” Curious statement. We take that to mean that Rex is potentially in the hunt to add large acreage tracts (or perhaps buy and add a small driller) to its existing operations. Here’s the company statement from yesterday…
    Read More “Rex Energy Gets a New $300M Loan to Help Fund M-U Drilling”