Energy Companies

Energy Companies | EXCO Resources

EXCO Restructuring Plan: New Board Members, Hammer Midstreamers
May 25, 2016May 25, 2016

Last week MDN told you that the board at EXCO Resources, a company in financial trouble, is considering “restructuring”–coded language for bankruptcy (see EXCO Resources Board Looks at “Restructuring” – Stock Nosedives). Yesterday EXCO provided an update on their efforts. We learn that the board itself is getting “streamlined”–meaning some board members have been fired and some new board members appointed (from investors who hold a lot of EXCO’s outstanding debt). The company also says it will “target an aggressive restructuring of gathering and transportation contracts”–which means the company is about to threaten midstream companies who have the misfortune of providing services to EXCO, that either those companies will reduce the price of their services, or risk not getting paid at all. Such is life in the rough and tumble world of oil and gas these days…
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Bradford County | Energy Companies | Pennsylvania | Range Resources Corp

Thai Company Buys Out Range Resources’ JV in NEPA for $112M
May 24, 2016May 25, 2016

5/25/16 NOTE: Our thanks to a sharp MDN reader (Chris H.) for pointing out we had this story slightly wrong. Banpu is not entering a JV with Range, they are, instead, buying Range’s portion of an existing JV. That is, Range is exiting the JV by selling its share to Banpu. Range was not the operator in the JV acreage–they only owned a piece of the action. Talisman is the operator of the wells and the company that does the drilling.

Range Resources, the company that just committed to buying another driller based in Louisiana for $4.4 billion (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B), has just ~~gotten itself a joint venture partner/investor in its own Marcellus operations~~ just sold its portion of a joint venture in northeast Pennsylvania. Banpu Pcl, Thailand’s largest coal producer, yesterday invested $112 million ~~in some of~~ to purchase Range’s Marcellus non-operated JV operations in Bradford County, PA. The “Chaffee Corners Joint Exploration Agreement” will give Banpu an ownership share in 62 producing wells and another 14 wells waiting on completion, and a share in 170+ more drilling locations. The wells currently produce an average 21 million cubic feet per day (Mmcf/d) of natgas…
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Energy Companies | Industrywide Issues | Lycoming County | Pennsylvania | Range Resources Corp | Regulation

PA DEP Drops $8.9M Fine Against Range Res. re Methane Migration
May 23, 2016May 23, 2016

In June 2015 then-Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), John Quigley, slapped Range Resources with an $8.9 million fine–the largest such fine ever levied by the DEP (see PA DEP Slaps Range with Record $8.9M Fine for Methane Migration). Range’s enviro “crime?” Methane migration from a well in Lycoming County, PA. The DEP says the Range well, drilled in 2011, leaked methane since at least 2013 via an improperly cemented well casing, and the methane “contaminated the groundwater-fed wells of private water supplies, and a nearby stream.” Range and the landowner where the well is drilled say methane was in groundwater supplies long before Range drilled the well. Range fought the action tooth and nail, appealing the determination and fine to the PA Environmental Hearing Board (see PA DEP’s $8.9M Methane Migration Fine Appealed by Range Resources). Although the DEP is being hush hush, in early May the DEP dropped the fine and the case against Range…
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Energy Companies | Stone Energy

Stone Energy Threatened with De-listing by NYSE
May 23, 2016May 23, 2016

As we commented in April, there’s no way to sugarcoat the fact that Stone Energy–an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana that drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 75,000 acres of leases–is inching toward a bankruptcy filing (see Stone Energy Appoints Special Liaison, Inches Toward Bankruptcy?). Stone now has another problem: the New York Stock Exchange sent the company a warning that unless they get the per-share price of the stock boosted, it will be de-listed from the NYSE…
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American Energy Partners | Energy Companies

McClendon’s American Energy Partners Shutting Down This Summer
May 20, 2016May 20, 2016

Perhaps it’s a good thing when one’s children leave the nest. As we’ve been reporting, even prior to Aubrey McClendon’s untimely death, the subsidiary companies he founded as part of his new venture, American Energy Partners, were running away from Aubrey as fast as they could (see McClendon’s New Empire Continues to Separate and Leave and McClendon’s Child Companies Continue to Run Away from AEP Parent). Aubrey died in a fiery car crash on March 2 that appears to have been (sorry to say) a suicide (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). Aubrey was leveraged to the hilt at the time (see WSJ: Aubrey McClendon was in Debt Up to His Eyeballs). So it’s no surprise to us to learn that his company, American Energy Partners, laid off 100 employees on Wednesday and announced it will permanently close its doors in the next three months. The children (i.e. subsidiary companies) will go on…
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Energy Companies | Halcon Resources

Another One Bites the Dust: Halcon Resources Filing for Bankruptcy
May 20, 2016May 20, 2016

Floyd Wilson, CEO of driller Halcon Resources, is a plainspoken kind of guy. Halcon “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill in any of that acreage. Their less-than-stellar acreage led Wilson to comment, in colorful language, that the company would no longer drill any “substandard” (our word) Utica wells (see Halcon CEO Says No More S***** Wells in Northern OH Utica). In early 2015 when asked by an analyst about the company’s plans for the Utica, Wilson quipped “What’s the Utica?” (see Halcon CEO Floyd Wilson: “What’s the Utica?”). So we found it interesting that Wilson, so outspoken, was uncharacteristically silent when the company announced it would “take one prepackaged bankruptcy to go.” On Wednesday Halcon announced that like Seventy Seven Energy, they’ve worked out a deal with current debtholders into stockholders, shafting current stockholders in the process. In the announcement we read a lot about restructuring–but the word “bankruptcy” appears just once…
Read More “Another One Bites the Dust: Halcon Resources Filing for Bankruptcy”
Atlas Energy | Energy Companies

Atlas Energy 1Q16: Production Down, but Hedging Yields $3.41/Mcf
May 19, 2016February 6, 2017

As MDN has previously noted, Atlas Energy has been in financial trouble for some time. Just a few years after the company sold two different tranches of their vast Marcellus assets for a cumulative $12 billion, the company’s stock was tossed off the New York Stock Exchange and relegated to the Pink Sheets as a penny stock (see Atlas Energy “Penny Stocks” Begin Trading Today on OTCQX). In February the relatively small company laid off ~125 employees (see Atlas Energy Update – 125 Layoffs Companywide). In March, the company announced they’ve rejiggered their debt–restructuring, converting some first into second liens (see Atlas Energy Rejiggers Outstanding Debt, Converts 1st to 2nd Liens). Earlier this week Atlas released its first quarter 2016 update. The company reports production has fallen–from 271 million cubic feet equivalent per day (Mmcfe/d) in 1Q15 to 237 Mmcfe/d in 1Q16–down 12.5%. They did, however, turn a nice profit on what they produced. Due to “hedging,” Atlas got $3.41 per thousand cubic feet (Mcf) for their gas in 1Q16. At the time the average Henry Hub price was around $2/Mcf. Here’s the update from Atlas…
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Alpha Natural Resources | Energy Companies | Greene County (PA) | Pennsylvania | Rice Energy | Vantage Energy

Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres
May 18, 2016December 22, 2016

Earlier this year Alpha Natural Resources (ANR), primarily a coal company with 27,400 acres of Marcellus/Utica Shale leases, filed for bankruptcy and announced it would sell off its Marcellus assets. ANR previously had a joint venture with Rice Energy (which Rice later bought out). Rice was also interested in the 27K acres ANR is selling as part of their bankruptcy–and made a “stalking horse” bid of $200 million for the assets (see Rice Energy Offers Bankrupt ANR $200M for Marcellus/Utica Assets). Other drillers objected to what they considered a sweetheart deal (see EQT, APP Challenge Rice Energy’s $200M Bid for ANR Shale Assets). In the end, Rice didn’t get it anyway. ANR announced yesterday that Vantage Energy won the bidding process–paying $339.5 million for the assets, “far exceeding” Rice’s bid…
Read More “Vantage Outbids Rice For Bankrupt Alpha Natural’s 27K Marcellus Acres”
Eclipse Resources | Energy Companies | Guernsey County | Hydraulic Fracturing | Industrywide Issues | Ohio

Nine Energy Completed World’s Longest Shale Well – in the Utica
May 18, 2016May 18, 2016

Earlier this month MDN brought you the exciting news that Eclipse Resources, a smaller Marcellus/Utica pure play driller headquartered in State College, PA (but drilling mostly in Ohio) has drilled the world’s longest shale well–in the Utica in Guernsey County, OH (see Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes”). Eclipse’s Purple Hayes well an underground lateral reaching out 18,500 feet–3.5 miles! It took 124 frac stages to complete the well–a massive number of stages. Yesterday we learned that the company doing that completion work was not Schlumberger, the world’s largest oilfield services company. Nor was it Halliburton, the world’s second largest oilfield services company. It was, instead, Nine Energy–a much smaller oilfield service company, not even in the top 10. Congrats to Nine Energy! Here’s what they had to say about their work on a truly historic shale well…
Read More “Nine Energy Completed World’s Longest Shale Well – in the Utica”
Apex Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Westmoreland County

Penn Twp Commissioners Block Apex Shale Well Request in 3-2 Vote
May 18, 2016May 18, 2016

Last month MDN told you that the Penn Township (Westmoreland County) zoning board refused to grant a permit to Apex Energy to build a DEP-permitted well pad in the town (see Penn Twp Blocks Apex Energy Well Pad Request, What Next?). Last night the town board followed suit also voted to deny the request in a close vote: 3-2. As we previously mentioned, last year a group of anti-drillers took Apex to court to stop drilling on two wells, with the town backing them. Apex’s lawyers roared that the company was losing $70K per day by not drilling, threatening to sue. The town backed down, and Apex drilled the wells. We’re hoping for a repeat…
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Energy Companies | Range Resources Corp

Range Resources Buys Louisiana Driller in Deal Worth $4.4B
May 17, 2016May 17, 2016

Credit: Oil & Gas Journal – Click for larger version

Range Resources, the very first driller in the Marcellus Shale (in 2004) and one of the largest Marcellus drillers, has decided to take advantage of the down market and branch out into another shale play. Yesterday Range announced a deal to buy Memorial Resource Development Corp. (MRD) in a stock swap/debt assumption deal worth $4.4 billion. MRD holds 220,000 acres of leases and drills in the Terryville Field in northern Louisiana. Essentially Range has purchased themselves a Gulf Coast operation which sets them up nicely to export natural gas to Mexico. That’s at least part of the attraction. Perhaps another part of the attraction is that gas from Terryville Field, part of the Cotton Valley Tight Gas formation, is cheaper to drill and in many cases just as productive as shale wells in the Marcellus. At least according to an MRD investor’s presentation (see below). Below is the Range announcement and other associated details to help understand that announcement…
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Energy Companies | EXCO Resources

EXCO Resources Board Looks at “Restructuring” – Stock Nosedives
May 16, 2016May 16, 2016

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 in March, has pretty much abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). Things are getting bleaker at the company. On Friday EXCO announced they’ve formed a special committee from their board of directors to evaluate “options” for the company’s future. One of those options on the table for discussion is “restructuring,” which is coded language for bankruptcy. As soon as the news hit last Friday the companies stock went down even further. It pretty much went over a cliff–from $1.81 last Thursday to $0.72 this morning (down 60%). Here’s the announcement which details which kinds of options are under consideration by the board…
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Energy Companies | Penn Virginia Corporation

George Soros’ Penn Virginia Corp. Files for Bankruptcy
May 16, 2016May 16, 2016

George Soros

Although headquartered in Radnor, Pennsylvania (near Philadelphia), Penn Virginia Corporation is an oil and gas driller with only a small presence in the Marcellus Shale: 21,700 net acres with no drilled wells. They concentrate on oil drilling the Texas Eagle Ford Shale play. Penn Virginia is one of the Philly area’s oldest companies, started in 1882 by Philadelphia coal barons. It later transitioned into an oil company. MDN told you in March 2015 that Penn Virginia’s top stockholder, the vile corporate raider George Soros, forced the company to put itself up for sale so George can line his pockets with more cash (see George Soros Finally Bullies Penn Virginia into Selling Itself). We’re happy to report that didn’t work out so well for old George (who reminds us of a dried-out, shriveled up prune). Last week the company, which is now a penny stock trading on the Pink Sheets, filed for bankruptcy…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company
May 13, 2016May 13, 2016

Gary Evans

That didn’t take long. Gary Evan, former CEO of bankrupt Magnum Hunter Resources lost has job as CEO of the company post-bankruptcy, just last week (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). He’s already started a new drilling company–this one aimed at scooping up leases in the oil-rich Permian Basin and Eagle Ford fields of Texas. Apparently the Marcellus/Utica, once the apple of Gary’s eye, has left a bad taste in his mouth. He’s already raising investment capital–from friends and family–for Energy Hunter Resources, as he’s calling it. Gary does love the “Hunter” name…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

More Progress at Shell’s PA Ethane Cracker Plant Site
May 12, 2016May 12, 2016

Proposed Shell cracker plant site plan – click for larger version

All signs continue to point to a “go” decision for Shell’s planned ethane cracker plant facility in Monaca (Beaver County), PA. Shell has now spent over half a billion dollars out of a projected $2-$3 billion (25%) on the project already (see Shell has Spent “Half a Billion Dollars” on PA Cracker Already!). Last month a local mall owner said that Shell has leased part of the mall’s parking lot for big bucks (see More Evidence that the Shell Ethane Cracker Plant in PA is a Go). And just last week Shell’s CFO said the PA cracker project is “an excellent project” and they expect to make a decision soon (see Shell Says PA Cracker Decision Coming < 12 Months – Looking Good). We can throw a few more positive signs into the mix. A bridge Shell was building over top a local highway to give trucks easy access to the site is now complete. Shell has committed $69 million to build a new water treatment plant for the local town. And they are now building a new dock facility which, according to Shell, will be “critical” to building the new plant…
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Anti-Drilling/Fossil Fuel | CONSOL Energy | Energy Companies | Industrywide Issues

Anti-Driller Wins Right to Nominate Candidates for CONSOL’s Board
May 12, 2016May 12, 2016

NYC Comptroller Scott Stringer

The anti-drilling nutjobs who run the finances for New York City have been (potentially) successful in interfering with the operation of CONSOL Energy, a coal company rapidly transforming itself into a Marcellus/Utica driller. The Comptroller for New York City is Scott Stringer, a hardened leftist and anti-fossil fuel nutjob. He apparently likes to invest in fossil fuel companies with OPM (other people’s money) in order to try and shut them down. At least that’s the way it appears. He uses the pension funds of NYC residents to try and force the companies he invests in out of business. And somehow he gets elected and re-elected–go figure. Stringer sponsored a proxy resolution that passed at CONSOL’s annual meeting yesterday–a resolution that will allow any single investor owning 3% (or more) of the CONSOL’s stock for three consecutive years the ability to nominate a candidate to the board of directors. The board, of course, hires and fires top management and essentially guides the company on the path it wants the company to go. The proposed candidate must still pass a vote by all shareholders. If Stringer can motivate enough other investors, over time he may be able to get anti-fossil fuel candidates elected, which would be a disaster for the company. Needless to say, CONSOL’s management was not happy…
Read More “Anti-Driller Wins Right to Nominate Candidates for CONSOL’s Board”