Assets Reshuffled at CONE Midstream/CONE Gathering
Companies in the oil and gas sector often split the ownership of assets into different companies (on paper) for various reasons: tax purposes…to attract investment…to give us laypeople headaches. CONE Midstream, a joint venture between CONSOL Energy and Noble Energy (CO from CONSOL and NE from Noble Energy) was formed in summer 2014 (see CONSOL & Noble Energy Form New Marcellus Midstream Company). CONE Midstream has been a small but stellar performer in the midstream (pipeline) sector, as evidenced by their most recent quarterly update (see CONE Midstream 3Q16: Success Story Continues). But before there was CONE Midstream, there was CONE Gathering (see New Pipeline, Wells Coming to Upshur & Barbour Counties in WV). There is also CONE Midstream DevCo, yet another entity on paper. Is your head spinning yet? CONSOL and Noble yesterday announced that, well, we’re not quite sure what was announced! It appears that the two CONE Midstreams and CONE Gathering are reshuffling the deck once again–transferring some of the assets held between them to the other entities. If you can figure it out, please let us know. Here’s what CONSOL and Noble said in a joint announcement yesterday…
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Chesapeake Energy, which continues to be strapped financially, embarked on a mission to lighten the debt load years ago–first under co-founder Aubrey McClendon, and then more aggressively under his successor, Doug “the ax” Lawler. Many pieces of the company have been sold off: the Oilfield Services division, all of its Haynesville Shale assets, all of its Barnett Shale assets…we could go on. Chessy loves to do land deals. In December 2014 Chesapeake sold off 413,000 Marcellus acres mostly in West Virginia (see 
In March of this year MDN reported that Ascent Resources–formerly Aubrey McClendon’s American Energy Partners’ Utica Shale company–floated 2.2 billion common units (think shares of stock) to raise $500 million (see 
Rex Energy, the little Marcellus/Utica driller that could, swung things around in the third quarter. Yesterday Rex issued its third quarter update and the company is in the black–earning $5.4 million. No, it’s not much in the o&g world, but it’s a whole lot better than losing $95 million as they did in 3Q15. During 3Q16 Rex drilled 1 Marcellus and 3.5 Utica wells, completed several more wells and brought a variety of wells online in both the Marcellus and Utica. Here’s the full update with details on what Rex did in 3Q16…
Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 90,000 acres of leases. Last year Stone quit drilling in the northeast and actually shut-in part of their production due to low prices (see 
National Fuel Gas Company (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). Big company. Diverse operations. Late last week NFG issued what they call their fourth quarter update (everyone else’s third quarter update), covering July through September. NFG’s CEO Ronald Tanski said lower natural gas prices and higher temperatures didn’t help. However, the company improved. In NFG’s 4Q15 the company lost $188 million–but this year they made $37.5 million. That’s a significant $225 million improvement in just one year’s time. However, NFG ended the full year in the red–losing $291 million (an improvement from losing $379 million last year). As for Seneca’s performance, it was a good year overall, with banner production. Seneca’s production was 161.1 Bcfe (billion cubic feet equivalent) in fiscal 2016, an increase of 3.3 Bcfe, or 2%, versus fiscal 2015. Seneca voluntarily curtailed an estimated 34.6 Bcf (billion cubic feet) of net natural gas production in fiscal 2016. Seneca’s average realized natural gas and oil prices, after the impact of hedging, was $3.02 per Mcf and $57.91 per Bbl, respectively, a decrease of $0.36 per Mcf and $12.45 per Bbl, versus fiscal 2015. Below is the NFG update for all of their subsidiaries including Seneca and Empire, along with a copy of the latest PowerPoint slide deck…
CONE Midstream, a joint venture between CONSOL Energy and Noble Energy (get it? CO from CONSOL and NE from Noble Energy) was formed in summer 2014 (see 
Chesapeake Energy released it’s third quarter 2016 update yesterday. Revenues were down 33% year over year. Production for all forms of hydrocarbons the company extracts–oil, natural gas and natural gas liquids, expressed as million barrels of oil equivalent or MMboe–was down 2 MMboe (around 3%). The company lost $1.2 billion in 3Q16–a marked improvement over losing $4.6 billion in 3Q15. Most of the loss was a paper loss (write-downs for impairments) and not out-of-pocket money. Chesapeake remains one of the largest producers in the Marcellus/Utica region, with a combined production in the two plays of 261 thousand barrels of oil equivalent (~1.5 million cubic feet per day of natural gas). One thing stands out in the 3Q16 update: Chesapeake’s renewed/big push in the Haynesville. The company operated an average of 11 rigs in 3Q16 (down from 18 in 3Q15), drilling 63 wells (down from 81 in 3Q15) and completing 80 wells (down from 84 in 3Q15). They connected 105 wells to pipelines for production in 3Q16 (down from 112 in 3Q15). All of those numbers are cumulative across all shale plays. Unfortunately Chesapeake doesn’t break out any of their numbers by individual shale play. They remain the biggest driller in the Ohio Utica. Here’s the update…
Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released their third quarter 2016 update yesterday. In 2Q16 Eclipse resumed drilling with one rig, allocated a drilling budget of $196 million, and began completing previously drilled but uncompleted (DUC) wells in their portfolio (see 
In mid-October Gulfport Energy was one of the first out of the gate with information on the third quarter (see 
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. According to Carrizo’s latest quarterly update for 3Q16, that (sad) state of affairs continues…
Magnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see 
This is an important story for both drillers and rig workers, potentially answering the question of who can and can’t be sued if something goes wrong when drilling a well. In 2006 Atlas Resources leased land in Greene County, PA to drill shale wells. In 2007 Atlas hired Gene D. Yost & Son, Inc. to drill wells for Atlas, including on the land leased in Greene County. Yost was the subcontractor, employing people to do the work using Yost’s equipment. As workers were removing drill pipe, preparing to shut in the well, there was an accident which appears to be operator error. One man, Rock A. Doman, was killed. The Doman family later filed a wrongful death lawsuit against Atlas Energy for negligence. After years of litigation and court findings, an appeals court ruled last week that Atlas is, in fact, a “statutory employer” under PA law, meaning they are immune from such lawsuits. That is, because Atlas hired another company for that company’s services, they (Atlas) cannot be held responsible for what the company they hired theoretically did or did not do. In this case, Yost’s “negligence” (if indeed there was any negligence) is not transferable to Atlas…