Energy Companies

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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?…
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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…
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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…
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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…
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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…
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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”

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    Thai Company Banpu Invests Another $16M in PA Marcellus Wells

    Last May, Range Resources sold its portion of a joint venture in northeast Pennsylvania (see Thai Company Buys Out Range Resources’ JV in NEPA for $112M). Banpu Pcl, Thailand’s largest coal producer, invested $112 million to purchase Range’s Marcellus non-operated JV operations in Bradford County, PA. 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. We have a three-peat. Banpu, via its American agent Kalnin Ventures, has just signed an agreement to invest $16 million into a venture with Tug Hill Marcellus. The new deal does not identify the exact counties, but does say the acreage is located in northeastern PA. Once the deal closes, when you add all three deals together, Banpu says it will own partial interests in 215 operating wells producing 40 million cubic feet of gas per day. And Banpu says it’s not over yet. They plan to invest more in the Marcellus in 2017…
    Read More “Thai Company Banpu Invests Another $16M in PA Marcellus Wells”

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    Empire Energy Owns 300K Marcellus/Utica Acres – Sitting in NY

    A press release announcing fourth quarter and full year 2016 results for Empire Energy Group caught our eye. The release talks about assets owned by Empire in the Marcellus/Utica region–specifically in Pennsylvania and New York. When we got digging, we found some interesting information. First off, Empire has operations in both Australia and (primarily) here in the U.S. One interesting observation is that Empire sold some of its considerable leases in Australia to Aubrey McClendon back in 2015 (see McClendon Nearly Triples Australian Shale Deal – 55M Acres!). Here in the U.S., Empire owns leases and wells in both the Midcontinent (Kansas) and in Appalachia (PA & NY). The website for Empire says this on the home page: “Empire Energy Group Limited is an oil and gas exploration and production (E&P) Company focused on onshore long-life oil and gas fields, primarily in the USA. The Company targets producing oil and gas assets with attaching low cost, low risk development acreage. The business strategy is to operate all assets. USA oil and gas operations are managed by an experienced and qualified technical team based in the USA. In addition to production assets, the Company is undertaking an exploration and development program of its extensive oil and gas shale opportunities in New York and Pennsylvania in the USA and The Northern Territory, Australia.” We went nosing some more and found that Empire owns 6,500 acres in NW PA, and 303,000 acres of leases in western NY. Yes, you can see the problem right away. There is no shale drilling in NY. Empire owns land on the wrong side of the border. So while they do have some conventional wells in NY, they don’t have (and won’t have) any shale wells in the Empire State any time soon. So although they advertise they have a presence in the Marcellus–it’s not much of one right now…
    Read More “Empire Energy Owns 300K Marcellus/Utica Acres – Sitting in NY”

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    Well Pad Fire @ Chief O&G Site in Wyoming County, PA

    Chief well pad fire – click for larger version

    There was a fire at a natural gas well pad operated by Chief Oil & Gas in Wyoming County, PA over the weekend. We only have a few details from one news source (which seems odd). A call came in just after 4 am Saturday morning for a well pad in Lemon Township near Tunkhannock, PA. The cause of the fire is unknown. Nobody was hurt. And that’s about all we know. Perhaps an MDN reader in that area can shed more light? Here’s the very brief news item we spotted…
    Read More “Well Pad Fire @ Chief O&G Site in Wyoming County, PA”

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    EXCO Lost $225M in ’16; Screwing Shareholders to Avoid Bankruptcy

    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. EXCO has just released its fourth quarter and full year 2016 update, along with details on a plan to keep the company out of bankruptcy court. The update shows the company lost $35 million in 4Q16. EXCO lost $225 million for all of 2016, versus losing $1.2 billion in 2015. The bleeding has slowed. In a surprise move, they added 1 Marcellus well to production in 4Q16. EXCO’s master plan to stay out of bankruptcy includes selling $300 million in bonds to a group of investors–effectively turning over control of the company to its creditors and screwing existing shareholders. Believe it or not, there is a connection between EXCO and the Trump Administration…
    Read More “EXCO Lost $225M in ’16; Screwing Shareholders to Avoid Bankruptcy”