Energy Companies

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    Carbon Natural Gas Targets Chattanooga Shale in TN

    Carbon Natural Gas Company, an independent oil and gas exploration and production company, owns, operates and develops oil and gas properties in the Appalachian, Illinois and Ventura Basin areas of the U.S. Most of the wells they own and operate are conventional. However, the company is dipping its toe into unconventional shale as well. Yesterday Carbon issued a press release to announce they have formed a subsidiary called Carbon Appalachian Company, with backing from two unnamed institutional investors. The new venture has access to a whopping $100 million to get them going, with $20 million of that going to the purchase of “natural gas producing properties and related facilities” located in Tennessee. Currently the existing wells just purchased by Carbon in TN produce a measly 3.6 million cubic feet per day (Mcf/d) of mostly natural gas. You paid $20M for that?! Aaahh, there’s more to the story. The acreage that comes with the wells is located in the Chattanooga Shale–a shale layer much shallower than the Marcellus or Utica. Carbon plans to drill horizontal wells in the Chattanooga. Which got us to thinking: How active is the Chattanooga? Who else is drilling there? Is there shale drilling in TN? We found some answers…
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    FERC Delays Final EIS for Mountain Valley Pipeline by 3 Months

    The Mountain Valley Pipeline (MVP) is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. The project has faced stiff opposition from landowners in both West Virginia and Virginia. Although the project is not yet fully approved by the Federal Energy Regulatory Commission (FERC), the project did get a favorable Draft Environmental Impact Statement from FERC last September (see FERC Gives WV to VA Mountain Valley Pipeline Provisional Thumbs Up). MVP had wanted a final Environmental Impact Statement by March 10th, but that didn’t happen. They’re still waiting, and now will wait until the end of June before they get their final EIS from FERC…
    Read More “FERC Delays Final EIS for Mountain Valley Pipeline by 3 Months”

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    Judge Certifies Royalty Class Action Against EQT, CONSOL in VA

    This is a story we have not previously covered on MDN. It goes back to 2010 and involves two of the biggest Marcellus/Utica drillers–although in this case the issue is not related to the Marcellus/Utica. Landowners in southwestern Virginia previously sued both EQT and CONSOL Energy’s CNX subsidiary over charges that EQT and CNX shorted landowners out of royalties owed to them, claiming post-production expenses, deductions for severance taxes, etc. that should not have been taken. The wells drilled were conventional wells–some 3,347 EQT wells and 4,261 CNX wells. The vertical wells targeted methane extraction from coal seams–not horizontal wells through shale, which is far more common today. Some lawsuits were green lighted as class action cases in 2013, with a potential for “thousands of landowners” to participate in sharing $30 million in payouts. Last week a federal judge certified three of the five class action lawsuits, allowing them to move forward…
    Read More “Judge Certifies Royalty Class Action Against EQT, CONSOL in VA”

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    Antero WV Focus: Recycle Wastewater, More Pipes for Better Prices

    Antero Resources is one of the biggest drillers in the Marcellus/Utica. Antero can’t seem to buy enough Marcellus acreage, mostly in West Virginia. Last year the company snapped up close to 80,000 Marcellus acres, mostly in WV (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres; Antero Resources Picks Up Another 13K Marcellus Acres for $108M; and Statoil Sells Another 11.5K WV Marcellus Acres to Antero for $96M). Antero has a major midstream division. Earlier this year they formed a joint venture with MarkWest to service 360,000 acres in WV (see Antero Forms JV with MarkWest to Service Combined 360K WV Acres). Antero also has a big water operation. Several years ago Antero spent $500 million to build an 80-mile fresh water pipeline from the Ohio River to Tyler and Ritchie counties in WV (see More on that Half Billion Dollar Antero Water Pipeline in WV). All to say (a) Antero is really big, and (b) Antero’s operations in WV are really important. We spotted an article that interviewed a number of people in the WV oil and gas community. Two of the interviewees were from Antero and shared insights into their latest thinking about Antero’s operations in WV, which we found interesting…
    Read More “Antero WV Focus: Recycle Wastewater, More Pipes for Better Prices”

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    EXCO Resources Adds Dealmaker to Board – What Does it Mean?

    EXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out a year ago, has abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). The company flirted with bankruptcy for some time. They were able to slow the bleeding in 2Q16 (see EXCO Still Hammering Midstreamers re Contracts, Bleeding Slowed). In 3Q16 EXCO finally turned a profit, going from losing $355 million in 3Q15 to making $51 million in 3Q16 (see EXCO 3Q16: Turns a Profit! Marcellus Production Continues to Fall). That was an astonishing turnaround for a company razor close to bankruptcy. However, the turnaround was short-lived. In 4Q16 the company lost $35 million (see EXCO Lost $225M in ’16; Screwing Shareholders to Avoid Bankruptcy). At the same time they released 4Q16 and full year numbers, EXCO also released a game plan to avoid bankruptcy. That plan? Effectively turning over control of the company to its creditors. We’re not sure if it’s the creditors, or EXCO top management, but someone wanted a new face on the board of directors, and EXCO now has it: Last week EXCO announced the appointment of Randall E. King to the board. Who is King and what does his appointment really mean?…
    Read More “EXCO Resources Adds Dealmaker to Board – What Does it Mean?”

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    Fed Court Overturns $4.2M Dimock Judgement Against Cabot O&G

    Big news broke Friday afternoon. Short history lesson for those who are new to MDN: There were 14 families along the Carter Road area of Dimock Township, PA (Susquehanna County) that reportedly experienced turbidity in their water from methane migrating, supposedly from Cabot’s drilling operations nearby. The state Dept. of Environmental Protection (DEP) investigated in 2010 and declared Cabot guilty and imposed stiff fines and requirements, including a requirement to install permanent water treatment systems at each home and even an offer to each of the families to pay twice what their property was worth at the time (see PA DEP Takes Aggressive Action Against Cabot Oil & Gas over Dimock Township Methane Contamination). We won’t recount all of the twists and turns we documented over the years, including research that showed Cabot wasn’t responsible for the methane migration. All of the 14 properties either sold to Cabot or got their water systems repaired–except for two holdout families who were riding the horse of hope that they could sue Cabot for big money and retire millionaires. For a time, it appeared their plan worked. Last year, in March 2016, a trial took place in Scranton. It was a sham trial, with the lawyer for the two families engaging in borderline unethical practices in the courtroom in her attempt to influence the jury. One of the two families admitted, under oath on the witness stand, that their water had too much methane in it BEFORE Cabot Oil & Gas began to drill nearby. The same family, the Elys, later built a 22-room, $1 million mansion on the same property AFTER they admit there was trouble with the water. And yet the jury found Cabot at fault and awarded the Elys $2.75 million. The other family suing Cabot got $1.49 million. As we said at the time: “That’s called brain-dead. A total miscarriage of justice–stupidity on the same level as the OJ Simpson jury” (see Dimock Jury Levies $4.24M Judgement Against Cabot in Dimock Case). Indeed it was brain-dead, as we now see from a federal court which heard Cabot’s appeal. On Friday a federal judge tossed out the $4.24 million verdict against Cabot, calling the evidence against Cabot “spare, sometimes contradictory, frequently rebutted by other scientific expert testimony, and relied in some measure upon tenuous inferences” (full copy of the ruling below). Unfortunately the judge did not find for Cabot and dismiss the case, but instead ordered a new/second trial. However, the new trial will not happen in state court amateur hour–instead it will happen in federal court–IF it happens…
    Read More “Fed Court Overturns $4.2M Dimock Judgement Against Cabot O&G”

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    Big New Housing Complex Planned Near Shell Ethane Cracker

    Positive economic signs continue to pop up with respect to Shell’s multi-billion dollar ethane cracker project in Beaver County, PA. Here’s the latest major economic impact from the project. A local developer has filed for a state grant to build a massive new housing project 2.5 miles from the cracker site. The new project calls for 450 housing units, retail space, a golf course, swimming pool and parking garage. What’s that? What happens after the cracker is built and the “temporary” workers, who would be living in this new complex for the next 5-10 years, leave? Great question! Answer: Turn it into a retirement community…
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    PA Court Says Snyder Bros Wells are Strippers, No Impact Fees Due

    In 2014 MDN brought you the interesting story of strippers in the Marcellus–stripper wells, that is (see High-Priced Strippers in PA: Semantic Gymnastics with Impact Fee). Synder Brothers is an oil/gas producer in Pennsylvania. Most of the wells they drill are vertical-only wells. Among them are 24 wells from 2011 and 21 wells from 2012 that are vertical only–but all targeting the Marcellus. According to the definition of a stripper well under the Act 13 law passed in 2012, a well qualifies as a stripper well if it doesn’t produce over 90 thousand cubic feet (Mcf) of natural gas per day for at least one month. Synder Bros. says although their wells may have produced over 90 Mcf in some months, they didn’t produce that much in at least one month during the years in question. Ergo, their wells qualify as stripper wells and not liable to pay an impact fee. The PA Public Utility Commission (PUC), charged with evaluating what does and does not qualify, said nope–your wells target the Marcellus formation and produced above 90 Mcf for “at least” one month out of the year, therefore must pay the impact fee. So the PUC sued Snyder Bros., intending to collect $500,000 in unpaid fees PLUS a $50,000 fine for inconveniencing the PUC (see PA PUC Sues Snyder Bros to Collect $500K in Unpaid Impact Fees). In January of this year, more than a year after first hearing the case, PA Commonwealth Court wanted to hear it all over again (see High-Priced PA Strippers Go Back to Court, Impact Fee Semantics). The court has finally ruled: the law clearly means if production is less than 90 Mcf in any single month, that well is a stripper. Snyder Bros. doesn’t have to pay the $500K impact fee on those wells…
    Read More “PA Court Says Snyder Bros Wells are Strippers, No Impact Fees Due”

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    Wayne National Forest 2nd Lease Auction – List of Winners

    Last week the Bureau of Land Management (BLM) auctioned off a second round of properties located in Wayne National Forest (WNF), in Ohio (see 2nd Wayne Natl Forest Lease Sale Hauls in $5.2M, Double Expectations). The first such auction was for 719 acres (see BLM Auction Leases 17 Parcels, 719 Acres in OH Wayne Natl Forest). The winners of the 17 parcels in the first auction were Eclipse Resources, Flat Rock Development, Gulfport Energy and Petrogas. This most recent (and second) auction was for 20 parcels totaling 1,180 acres. The winners this time were Eclipse Resources, Flat Rock Development, and private investor Philip White. In fact, this second auction was pretty much the Eclipse Resources show. Eclipse paid $3.5 million and took 987 of the 1,180 acres…
    Read More “Wayne National Forest 2nd Lease Auction – List of Winners”

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    Range Resources’ PR Chief Matt Pitzarella Jumps Ship to Law Firm

    Matt Pitzarella

    Here’s a bit of personnel news that caught us by surprise. Back in January Matt Pitzarella, director of corporate communications and public affairs for Range Resources, announced he was leaving Range. Matt has been a fixture in the Marcellus universe since we started writing the MDN website in 2009. Range, as you may or may not know, was the first driller to sink a Marcellus horizontal/fracked well–back in 2004. The company remains one of the largest and most active drillers in the PA Marcellus. Over the years Matt, working from the company’s Southpointe office, has been the face of the company. MDN editor Jim Willis bumped into Matt a few times over the years at various industry conferences–although Jim doubts Matt remembers. Still, it’s kind of sad to lose one of the most visible faces of the industry. So what’s next for Matt? That’s the new news. Matt has just been hired by Buchanan Ingersoll & Rooney PC, Pittsburgh’s third largest law firm, to be the firm’s director of the Energy, Environment and Natural Resources Section. No, Matt is not a lawyer. This is new territory for both Matt and Buchanan…
    Read More “Range Resources’ PR Chief Matt Pitzarella Jumps Ship to Law Firm”

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    PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns

    Good news for Pennsylvania drillers: the PA Dept. of Environmental Protection (DEP) finally, after years of review, granted permission to two different companies to operate two new wastewater injection wells in the Keystone State. One well is located in Elk County, the other in Indiana County. With these two new injection wells coming online, the state will have a total of eight operating injection wells (vs. hundreds in Ohio). You may have seen news about the newly authorized injection wells from other news sources yesterday. But you read MDN for “the rest of the story.” And here it is, something you won’t find anywhere else (until other news sources read MDN): As soon as the DEP issued the permits for the injection wells, the DEP filed lawsuits against the two townships where the injection wells will be located, because both of those townships–Highland Township in Elk County, and Grant Township in Indiana County–had previously passed so-called Home Rule Charters in an attempt to prevent the injection wells from being located in their towns. The DEP has sued each of them (copy of the Highland lawsuit below) to correct laws that attempt to prevent the DEP from doing its job in authorizing the injection wells. We have the full news of the DEP’s decision to permit the injection wells, along with details about the lawsuits, below…
    Read More “PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns”

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    WV DEP Grants Mountain Valley Pipeline Water Crossing Permit

    The Mountain Valley Pipeline (MVP) is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. The project has faced stiff opposition from landowners in both West Virginia and Virginia. Although the project is not yet fully approved by the Federal Energy Regulatory Commission (FERC), the project did get a favorable Draft Environmental Impact Statement from FERC last September (see FERC Gives WV to VA Mountain Valley Pipeline Provisional Thumbs Up). MVP had wanted a final Environmental Impact Statement by March 10th, but that didn’t happen. They’re still waiting. But there is a bit of good news for MVP: the WV Dept. of Environmental Protection yesterday issued a State 401 Water Quality Certification for the MVP project. However, there are still a couple of other WV permits under review, so MVP has not yet gotten the all clear signal in the Mountain State just yet…
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    Antero Ramps Up Growth, Owns 40% of Undeveloped M-U NGL Acreage

    We have commented and observed a number of times that Antero Resources, one of the biggest drillers in the Marcellus/Utica, is perhaps the best company in our region at hedging. As we wrote in January 2016: “What’s Antero’s secret to making money in arguably the worst time for our industry in a generation? In a word, it’s hedging. Somehow Antero crafts financial deals a year or more in advance to sell whatever gas they produce for prices much higher than others–at prices that mean the company continues to make a profit. Most energy companies these days are keeping the people who run those companies, AND their investors, up at night. A company like Antero comes as close to any as a SWAN–a ‘Sleep Well At Night’ energy company” (see How Antero Resources Converted an Ugly Duckling into a SWAN). Antero consistently gets more money for the gas it sells than other large drillers in the M-U. So we like to keep an eye on the company. An analyst at Morningstar, an investment research and investment management firm headquartered in Chicago, published an article yesterday closely looking at Antero. He finds that Antero is gearing up to grow NGLs (natural gas liquids) in 2017. Little-known factoid: Antero owns 40% of the undeveloped liquids-rich acreage in the Marcellus/Utica region. Can the company repeat its top hedging performance with NGLs, as they have with methane?…
    Read More “Antero Ramps Up Growth, Owns 40% of Undeveloped M-U NGL Acreage”

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    EQT Raises Estimates of Methane, NGL Production for 2017

    In December 2016 EQT, one of the largest Marcellus/Utica drillers with its headquarters in the Pittsburgh area, released a forecast for 2017 (see EQT 2017 Forecast: Drilling 119 Marcellus, 81 UD, 7 Utica Wells). At that time, EQT said they would spend $1.5 billion to drill a total of 200 Marcellus and Upper Devonian wells, and 7 exploratory Utica wells. Yesterday EQT released an update to/revision of their 2017 plans. The new plan still shows a budget of $1.5B to drill a total of 207 wells. So what changed? EQT is drilling longer laterals–from 7,000 feet on average to 8,000 feet on average, for their Marcellus wells. EQT finds by doing so their decline curves (how much a well will ultimately produce) has increased by 14% to 2.4 billion cubic feet equivalent per 1,000 feet drilled. Originally EQT forecasted they would produce 810-830 billion cubic feet equivalent (Bcfe) of natural gas. That has gone up. They now plan to produce 835-855 Bcfe of natural gas in 2017. NGLs are going up too. The original forecast was for 13,100-13,700 barrels of liquids, now raised to 17,975-18,575 barrels. The one “negative” in this updated forecast is that EQT has factored in a 15% rise in the cost of oilfield services…
    Read More “EQT Raises Estimates of Methane, NGL Production for 2017”

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    EnerVest Selling 1,100 Wells, 361K Acres in Appalachia

    In September 2012 EV Energy Partners/EnerVest put 539,000 Ohio Utica Shale acres on the auction block. It didn’t sell. In 2013 they announced they would begin selling sections piecemeal, a strategy that has netted a few sales since then (see EnerVest Strategy: Sell Utica, Drill Vertical, Expand Midstream). However, EnerVest still retains a lot of Utica acreage. According to the NGI’s Shale Play Factbook, EnerVest owns 903,000 acres, slightly less than powerhouse Chesapeake Energy. In 2014, EnerVest made another run at trying to figure out how to get oil out of their acreage (see Utica Shale Oil Far from Dead – EnerVest, EQT Try Again). In September 2015, EV Energy Partners, a subsidiary of EnerVest, purchased property from the mothership EnerVest in the Appalachian Basin, San Juan Basin, Michigan and Austin Chalk for $259 million (see EV Energy Partners Buys $259M in Wells/Leases from Parent EnerVest). And last year, in 2016, we brought you a story about EnerVest experimenting with drilling horizontal wells in the Ohio Clinton sandstone layer (see EnerVest Likes Clinton Sandstone “Utica-lite” Oil Wells in OH). The company remains active. MDN friends at Kallanish Energy have some new news about EnerVest. In yet another “drop down” deal, EnerVest is selling 360,621 acres of leases and 1,100 wells in the Appalachian Basin to EnerVest Operating, yet another subsidiary. [NOTE: MDN read the news wrong on this. EnerVest previously bought the leases/wells and now THOSE leases/wells are for sale–to someone else. This is not a drop down deal. Apologies to our friends at Kallanish!] The land and wells cover West Virginia, Virginia and Kentucky. We suspect that most, if not all, of the wells are conventional (non-shale) wells. However, the possibility remains that some of the wells are shale wells. And certainly the land has potential for horizontal shale drilling, which is why we’re interested in this bit of news…
    Read More “EnerVest Selling 1,100 Wells, 361K Acres in Appalachia”

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    Ascent Resources Continues Aubrey’s Borrowing Ways: $1.5B in IOUs

    Feed me, feed me! Let’s be honest. Aubrey McClendon (God rest his soul) almost bankrupted Chesapeake Energy. The company’s stock price took a nose dive when the price of oil and natural gas went over a cliff. Aubrey had the company leveraged to the eyeballs and it teetered on the edge of bankruptcy until last year, when CEO Doug “the ax” Lawler claimed the company was out of the woods. We won’t recount our disdain for how Aubrey was ejected from the company he founded (by evil corporate raider Carl Ichan). After leaving Chesapeake, Aubrey started a new company–American Energy Partners (AEP). That company, AEP, set up a number of subsidiary companies to target different shale plays. One of the largest was aimed squarely at the Ohio Utica. That company later left the AEP fold (under pressure from investors) and became an independent company, renaming itself as Ascent Resources. However, Ascent, just like pappa Aubrey, went on a money-raising binge. In March 2016 Ascent floated 2.2 billion common units (think shares of stock) to raise $500 million (see Ascent Resources Sells More of Company to Pay Down Debt). Ascent planned to use that money to pay off existing notes, or IOUs. In August 2016, Ascent flirted with bankruptcy but pulled its bacon out of the fire by restructuring its debt (see Ascent Resources Talking to Creditors to Restructure $1.2B Debt). In November last year Ascent sold another 3.5 billion common units, hoping to raise $787 million to (yes) pay down outstanding debt (see Ascent Resources Sells Another 3.5 Billion Units for $787 Million). Here we are four months later, and Ascent is back, floating (yep)–new debt. New IOUs. Ascent pushed out an announcement yesterday that the company is offering $1.5 billion of senior unsecured notes. Unsecured means if they go belly up, investors in those notes won’t see a penny…
    Read More “Ascent Resources Continues Aubrey’s Borrowing Ways: $1.5B in IOUs”