| | | | | |

Hilcorp to Build New Gathering Pipeline in NWPA

Hilcorp remains very active in northwestern PA. The company has filed paperwork and plans to build several new pipelines in Lawrence and Mercer counties. They will build a buried gathering line (what they call the Weiser-Varano pipeline), a buried “fluids pipeline” and an above-ground temporary water pipeline. The details as we know them…
Continue reading

| | |

Struggling Rex Energy Gets JV Partner, Slashes Budget Again

Rex Energy, our little energy company that could (and does) continue to drill in the Marcellus/Utica, is struggling. Rex has, like all companies, been hit with low commodity prices for natural gas, a shortage of pipelines to get the gas to markets, and consequently has scaled back on plans for 2015. Although Rex had a great 2014 with production up some 66% over 2013, in December the company announced they would trim the 2015 budget by 44% over 2014 (see Rex Energy Reduces 2015 Marcellus/Utica Drilling Budget by 44%). In February Rex was included in a list of 19 companies on one analyst’s “death list”–meaning they owe a lot more money than they bring in–in Rex’s case they owe 5 times as much as they bring in annually (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Shortly after that, Rex put 28K PA acres up for sale in their non-core area, to raise cash (see Rex Energy Looks to Sell 28,300 Marcellus Acres in Bid to Raise $). And that brings us to yesterday, when Rex announced they are slashing their drilling budget again, by another 30%, and they’ve taken on a joint venture partner for some of their acreage in a bid to keep drilling…
Continue reading

| | | | | |

PA DEP Signals Approval for Shell Ethane Cracker Air Quality Plan

positive signsWe understand it’s a really big commitment to decide to spend $2 billion or more on a single project, like the Shell ethane cracker plant announced in June 2011 that may (or may not) be coming to the Marcellus (see Shell Commits to Building a Billion Dollar Chemical Plant in the Marcellus Region of U.S.). But after a while (nearly four years!), the waiting grows tiresome. In March 2012 Shell settled on a potential site in Monoca (Beaver County), PA, about 30 miles northwest of Pittsburgh (see Shell Announces Location of Ethane Cracker Plant). In June 2012, a Shell official said a final decision on whether or not to build was “18 to 24 months away” (see Shell: Final Decision on Cracker Plant Still 18-24 Mo. Away). Er, right. The end of the 24 months was nine months ago. Still, there have been some positive signs, including a very positive sign from last Saturday…
Continue reading

| | | | | | |

CONSOL Employee Goes to Prison for Stealing $440K in Royalties

A sad story, and one we wish we didn’t have to report, but we do. Scott Hamilton was the manager for CONSOL Energy’s land records department in 2009 when he fraudulently set up a fake company and transferred CONSOL’s ownership interest in land in two counties (Christian County, IL, and Fayette County, WV) to the dummy corporation. He then had royalty checks for the two properties (owed to CONSOL as the royalty owner) mailed to a post box in Washington County, PA. In all, Hamilton stole some $440,000 from CONSOL before he was caught. Hamilton has already paid all of it back and he will now, after pleading guilty, spend the next 30 months in federal prison…
Continue reading

| | | |

Belmont County Loves Rice Energy

Belmont County, OH loves Rice Energy, which is a good thing because Rice has nearly 16% of all the land in the county now under lease for Utica Shale drilling. So far the company has pumped “hundreds of millions” of dollars into the Belmont County economy, and there’s no end in sight. No wonder they love Rice! Rice currently has some 55,000 acres under lease in Belmont. How much are they paying for leases? Last April Rice leased 406 acres from Belmont County and paid a signing bonus of $7,500 per acre with a 20% royalty (see Belmont County Shopping New Deal to Lease Additional 426 Acres). Rice came back in June and leased an additional 426 acres from the county, paying an eye-popping $8,200 per acre with a 20% royalty (see Rice Energy Does 2nd Deal with Belmont County, $8,200/Acre!). County officials say Rice has become part of the community and supports area schools…
Continue reading

| | | | |

Man Confesses, Admits Why He Vandalized Chevron Well in SWPA

copper theftTwo weeks ago MDN told you about two men who had been indicted by a federal grand jury on felony charges of damaging a shale well (or wells) on Chevron’s Burchianti Pad in Greene County, PA in March 2014 (see 2 Men Indicted by Feds for Vandalizing Chevron Wells in SWPA). At the time we said it was too early to speculate what they were up to and why. Those words were prescient. We wondered if it was environmentalism gone amok. Or perhaps previous employees with an ax to grind. Or maybe a drunken stunt. It was none of those things. As it turns out, it was plain old, garden variety theft–of copper wire…
Continue reading

|

CONSOL Energy Floats $650M in Senior Notes, Paying Off Old Debt

Yesterday MDN told you about the mad dash to raise cash by Carrizo Oil & Gas and Rice Energy (see The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy). Carrizo went the equity route, selling shares of stock, and Rice Energy went the debt route, selling IOUs or notes. It seems the mad dash is far from over. Now comes word that CONSOL Energy is also going the debt route–floating $650 million of senior notes. CONSOL will use the money to pay off older debt…
Continue reading

| | | | | | | |

Statoil Cuts Deal to Drill Under 474 Acres of the Ohio River in WV

VikingsThe Vikings are Coming! Er, well, at least the Norwegians are. And they’re not coming to conquer but to drill–underneath the Ohio River in West Virginia on the border of Marshall and Wetzel counties. The West Virginia Department of Commerce has cut a deal with Norway-based Statoil which allows the company to drill and frack for oil and natural gas on 474 acres thousands of feet beneath the Ohio River. What are the lease terms? An average price of $8,732 per acre with 20 percent production royalties. That translates into a signing bonus of $4.14 million. And that’s not all. WV is near to signing a deal with Noble Energy and Gastar Exploration on two other Ohio River tracts that will provide lease bonuses of $4.9 million and $749,000 (respectively) along with 20% royalties…
Continue reading

| | | | | |

Range Resource Secret to Drilling More Productive Wells for Less $

Every year drillers get better at what they do. They experiment, they learn, they grow. Here’s an example from Range Resources. Range went back to a well pad they previously drilled with five wells and drilled two more. The two new wells used a different technique. Comparing the first year of production from the new wells with the first year of the original wells, the two new wells produced 53% more natural gas (per well) than the old wells did. Tell us again, peak oil/gas theorists, how the shale boom is just a flash in the pan and will be all gone by the end of this decade. Here’s more details on how Range increased production by 53%–what their “secret” is to drilling more productive wells using LESS money per well…
Continue reading

| |

The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy

The “get cash through the door” game continues for both drillers (E&P) and midstream companies. We have two more drillers looking to get cash through the door in two different ways. Last week, Carizzo Oil & Gas, an independent oil and gas company with drilling operations in several shale plays including the Marcellus and Utica, floated a plan to use equity financing (selling more of the company via shares of stock) to raise $205 million by floating 4.5 million shares of stock for $45.50 per share. Carrizo, which has no plans to drill new wells in the northeast in 2015 (see Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015), will use the money to pay down debt. Meanwhile, Rice Energy, which is a “pure play” energy company targeting the Marcellus/Utica, announced yesterday they’re going the IOU route–issuing new notes, or promises to repay loans (incurring more debt), hoping to raise $400 million to be used for “for general corporate purposes, including capital expenditures”…
Continue reading

|

Chesapeake Slashes 2015 Budget Again, Another $500M

Just a month ago Chesapeake Energy released their disastrous 2014 numbers and their stock price took a huge hit. Along with the numbers for 2014, Chessy released a projected budget for 2015 of $4-$4.5 billion, down 34% over 2014 (see Chesapeake Energy Earnings Down 60%; Cutting Budget 34% in 2015). It’s a month later and Chesapeake has just slashed the 2015 budget again–another $500 million. They blame it on the low commodity price of natural gas…
Continue reading

|

Carl Ichan Ups Ownership of Chesapeake, Continues to Lose $

Corporate Raider Carl Ichan continues his stranglehold on Chesapeake Energy. Ichan, you may recall, holds the second highest number of Chesapeake shares of stock and was largely the person responsible for booting Aubrey McClendon from the company he co-founded in April 2013 (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). In the lead-up to ejecting McClendon, Ichan increased his ownership in the company, starting in November 2012 (see Carl Ichan Ups Stake in Chesapeake Energy). He upped his ownership again after McClendon left, in August 2013 (see Corporate Raider Carl Ichan Ups Stake in Chesapeake – Again). How has that worked out for Carl? He’s losing money hand over fist (see Carl Icahn Has Lost $633 Million on Chesapeake Gamble…So Far). But channeling his inner Britney Spears (“Oops I Did It Again”), Carl just can’t get enough of the money-losing Chessy. He’s just increased his stake again–to 11% of the company. He remains Chessy’s #2 stockholder, behind fellow corporate raider Mason Hawkins…
Continue reading

| | | | |

SWN “Rigging Up” in WV, Plans to Drill 50-70 Wells in 2015

big sloppy kissIn February, West Virginia passed a new law “fixing” an old law. The old law, which was itself a new law just a few years ago, stipulated if oil and gas leases/operations change hands, the new owner must apply for permits to drill all over again, even if the previous owner had already been awarded those permits. This was a really big problem for Southwestern Energy that had just purchased $5 billion worth of leases and operations from Chesapeake Energy, most of it in WV. So the WV legislature passed, in record time, a law to fix the problem–and Gov. Earl Ray Tomblin signed it (see WV Gov Tomblin Signs “We Love You Southwestern” Bill into Law). And none too soon. We’re now six weeks later and Southwestern says they’re now “rigging up” and beginning to drill in WV, with plans to drill 50-70 wells this year in northern WV. Southwestern is very happy with WV’s quick action and is giving them a big, sloppy kiss right back…
Continue reading

| | | | | | |

Southwestern Sells Pipeline Gathering System in NEPA for $500M

Yesterday Southwestern Energy announced they’ve struck a deal to sell their local gathering pipeline network in Bradford and Lycoming counties in northeastern Pennsylvania for $500 million to the Texas-based Howard Midstream Energy Partners. From what we can tell, this is Howard’s first foray into the Marcellus–so welcome! The pipeline network includes approximately 100 miles of natgas gathering lines with ~600 million cubic feet per day of capacity. Southwestern plans to use the half bil to pay down a loan coming due in December 2016. Howard Energy says, in their version of the announcement, that they also have a handshake deal with Southwestern to construct and operate a new gathering system for Southwestern in Tioga County, PA…
Continue reading

| | | | | |

Gulfport Energy Sues Barnesville, OH for Access to Water in Reservoir

A legal battle is shaping up in Belmont County, OH–in and around Barnesville. Way back in 2012, Gulfport Energy signed a contract with Barnesville to buy water from the Slope Creek Reservoir for 1 penny per gallon. Not long after, the Village of Barnesville (which controls the reservoir) signed a lease with Antero Resources for a sizable sum (see Barnesville, OH Signs Lease with Antero, Receives $6M). Antero also snapped up more acreage in the area (see Antero Offers Barnesville, OH Residents $5,700/Acre 20% Royalties). Gulfport and Antero reached a “mutual development agreement” in June and now Gulfport wants to start drilling in the area–but Barnesville is saying the reservoir is too low because other drillers (Antero?) have drawn it down. So Barnesville won’t let Gulfport, which has its own contract, to access water in the reservoir. Gulfport has just sued the Village to gain access…
Continue reading

| | | | | | | | |

List of World’s 21 Biggest Oil & Gas Companies

Over the past decade, from 2004 to 2014, something happened: the miracle of hydraulic fracturing. Because of fracking, the world now pumps more oil than it did a decade ago. During the past decade the price for a barrel of oil went sky high. Now, according to the popular narrative of the day, the price of oil has “collapsed” because we’re swimming in “too much oil.” Who woulda thunk? (Side note: the price for a barrel of West Texas Intermediate crude in 2004 was $41.50. Today? About $43. So much for a price “collapse”–it’s more like a “price maintenance.”) For a while some people, like the now thoroughly discredited Art Berman, peddled the “peak oil” theory–that the world was running out of oil and would soon be paying $200 a barrel or more (see Peak Oil Theorist Art Berman Says Shale Gas is Peaking Too). So much for those theories. A decade ago the world was pumping 64.1 million barrels of oil equivalent per day (boepd)–that is, oil and the energy equivalent in natural gas. Today? The world is pumping 80.4 million boepd. So who are the world’s 21 largest oil and gas producing companies? We have the list below…
Continue reading