Handful of Butler Co. Residents Still Suing Rex Energy 5 Years Later
For years MDN has reported on a lingering/ongoing story of a community in western Pennsylvania (in Butler County) who say that nearby drilling by Rex Energy led to contamination of their well water supplies (see PA Residents Weary of Fight with Rex over Water Contamination and Rex Energy Water Contamination Case Shifts Focus to Water Pipeline). Several of the families sued Rex. The PA Dept. of Environmental Protection, after an extensive investigation, said that Rex’s drilling is not at fault in the situation. However, for most of the families, the issue progressed beyond blame–apparently water quality in the area was never the greatest to begin with. Rex had built a water line in the area to supply water for fracking and had expected to turn over control/ownership of that line in 2013. That water line can potentially be used to supply fresh water to the affected homes. The debate has been: Who will pay to hook up the homes and to maintain the pipes and infrastructure required? Since Rex, according to the DEP, is not to blame for the poor water quality in the area, the company understandably doesn’t want to pay big bucks to connect and maintain the line to residences in the area. As far as we can tell, the line is not hooked up. The families with bad water still have bad water and depend on donated water to this day for drinking and cooking…
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In December the Potter Township Board of Supervisors convened a public hearing on the proposed Shell ethane cracker plant–to be built in Potter Twp–that ended up going on for 10 hours (see 
Deal-making (mergers and acquisitions, or M&A) in the Marcellus went through the roof in 2016 as compared with 2015. In 2016, there were 13 deals worth $100 million or more. The total value of deals in 2016 was a big $7.25 billion, compared with $920 million in 2015. What was the #1 M&A deal in the Marcellus for 2016? Rice Energy’s purchase of Vantage Energy for $2.7 billion (see 
It appears to us as if Magnum Hunter Resources, which was founded by former CEO Gary Evans, is shedding the last vestiges of Evans by changing its name. “Wildcatter” Evans grew the company to be worth $1.4 billion in 2013 by borrowing heavily to drill in the Marcellus and Utica shales in West Virginia and Ohio, while at the same time financing the Eureka Hunter Pipeline that gathered and processed its production. Magnum Hunter has/had a number of subsidiary companies, like Eureka Hunter (pipelines), Alpha Hunter (drilling), and GreenHunter (wastewater). But then the price of gas (and oil) crashed, and although Magnum Hunter treaded financial water for a time, they eventually succumbed to bankruptcy in December 2015 (see 
Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), has had its share of financial challenges (
Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company (“driller”) that is a “top 5” driller in the Ohio Utica Shale, released their fourth quarter 2016 and full year 2016 operational (not financial) update yesterday. Gulfport is part of the growing trend to drop one shoe first, then the other. The first shoe is almost always production and operational information (the good news). That doesn’t mean that the financial information is bad news–but sometimes that’s the case. For now, let’s revel in the good news! Gulfport’s net production during 4Q16 averaged 787 million cubic feet equivalent per day (MMcfe/d), a 7% increase over 3Q16 and a 22% increase versus 4Q15. Net production for full-year 2016 averaged 719.8 MMcfe per day, a whopping 31% increase over full-year of 2015. Below is the update, along with the newest investor PowerPoint presentation with lots of useful details…
We have sad news to report. A young man, just 19 years old, was killed when he was “struck by a truck, then pinned between the truck and a stationary object” at an Antero Resources well pad site in Tyler County, WV last Thursday. Hunter Osborn, of Lewis County, WV, worked for U.S. Well Services, the fracking company hired by Antero. The well pad is called the Hartley East Pad in Middlebourne. Mr. Osborn was pinned between a tractor trailer backing up to unload sand and a sand silo. Our thoughts and prayers go out to the family and friends of this young man. Below are the details we could find about the accident…
Cabot Oil & Gas has a major presence in Susquehanna County, PA, not far from where MDN is written (just across the border). In fact, Susquehanna County, located in the northeastern tip of PA, is the only county in PA where Cabot drills. It is a “dry gas” zone–and extremely productive. By our reckoning, Cabot alone produces something like 3% of the entire natural gas supply for the entire country. One driller, in one county. It is an astonishing feat! Susquehanna County is rural. The entire county has 43,000 residents (11,700 families). The largest “city” in Susquehanna County is the county seat of Montrose, population 1,600 (750 households). Until now, there has been drilling all around the edges of Montrose, but no drilling directly under the city. That may soon change. Cabot has made an offer on 10.76 acres of land located within city limits. Cabot is offering a lowball $1,000 per acre as a signing bonus, plus 15% royalties. Not long ago Cabot cut deals for $3,500 per acre and 18.75% royalties. It appears this is just an opening negotiating tactic…
Tired of having their application to expand a pipeline compressor station blocked, Rice Energy has sued West Pike Run Township in Washington County, PA. In the lawsuit, Rice says that the town had 90 days (under law) to render a decision on the request and did not do so. Eventually the town told Rice “no” to expanding an existing compressor station. The lawsuit asks the court to force the town to approve the application forthwith…
This news is a bit dated, from last December, but important nonetheless. Under threat of a $300 million lawsuit, Penn Township (Westmoreland County, PA) voted to allow Apex Energy to build two Marcellus well pads, and arranged for more hearings on four more well pads. In April 2016 Penn Township blocked permits for Apex well pads (see 
In December the Potter Township Board of Supervisors convened a public hearing on the proposed Shell ethane cracker plant–to be built in Potter Twp–that ended up going on for 10 hours (see 
In October 2014 the Pennsylvania Dept. of Environmental Protection (DEP) fined PA driller EQT $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see 
In October EQT announced a deal to buy Trans Energy, Inc., a public pure-play driller in the Marcellus in West Virginia, which will become a wholly-owned subsidiary of EQT (see 
Can you actually use a mathematical formula to figure out better ways to plan how to drill shale gas wells? It turns out the answer to that question is a resounding, “Yes!” A chemical engineering professor at Carnegie Mellon University, along with several Ph.D. students have, working with EQT, pioneered research that figured out how to turn 14,000 water truck trips to a well site into 1,400 trips–an “order of magnitude” difference. That is a big deal in the drilling industry. Using mathematical formulas–something called “mixed-integer optimization”–Professor Ignacio Grossmann and the other researchers tackled how to make processes in the shale gas industry more efficient. They published a paper in the AIChE Journal in 2016 titled, “Strategic Planning, Design and Development of the Shale Gas Supply Chain Network” (full copy below). The paper “presents a mixed-integer nonlinear programming (MINLP) model to optimally determine the number of wells to drill at every location, the size of gas processing plants, the section and length of pipelines for gathering raw gas and delivering processed gas and by-products, the power of gas compressors, and the amount of freshwater required from reservoirs for drilling and hydraulic fracturing so as to maximize the economics of the project.” Er, right. As you can tell, it’s complex. But it’s also very interesting and relevant for drillers and others in the industry, which is why we bring it to you. Below is a quick summary/overview of the paper, a video of Prof. Grossmann describing the research, and a copy of the paper itself…
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 last March, has pretty much abandoned the Marcellus at this point (see