CONSOL Call: We’re Now a NatGas Co.; Where They Drill Next; More!
Along with a first quarter update, yesterday CONSOL Energy’s top management held a quarterly analyst conference call. The call was loaded (and we mean LOADED) with useful information. As soon as CONSOL CEO Nick DeIuliis started speaking and sharing his prepared remarks, he noted that CONSOL is now, officially, no longer a coal company–but instead is an exploration and production (E&P) company (i.e. natural gas driller) who happens to own one last coal mine. DeIuliis said the natgas division now provides 71% of CONSOL’s revenue, and that “CONSOL is now an E&P company with essentially one remaining coal complex.” Although they’re a Marcellus/Utica driller, CONSOL hasn’t been drilling since the middle of last year. When will they restart? The jury is still out. The company wants to wait another 3-6 months to see how the market shakes out. However, they know where they will restart drilling when it happens: Monroe County, OH and Westmoreland County, PA. Also discussed on the call: CONSOL believes the NEXUS pipeline will get built; details on CONSOL’s use of “plugless completions”; how much CONSOL pays to drill a Utica well now, and how much they predict it will drop in the next year or two; and CONSOL’s crystal ball with respect to an ethane cracker plant. Buckle up!…
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Two weeks ago MDN told you that Rice Energy had offered a “stalking horse” bid of $200 million for the shale assets of now-bankrupt coal company Alpha Natural Resources (see 
How do you prove a negative? You can’t. But that’s the (illegal) demand Penn Township (near Pittsburgh) is placing on Apex Energy. Penn Township’s zoning board has denied Apex permits to begin building a well pad for an eventual nine wells–wells that are fully permitted and permissioned by the PA Dept. of Environmental Protection (DEP). The Penn Township ordinance “states that drillers have to prove that the drilling site won’t violate Penn Township citizens’ rights to clean air and water.” Apex provided air and water studies showing possible risks from accidental spills, etc.–along with how they will prevent such things from happening. But the zoning board was tone deaf and rejected it. So what’s next? We’ve seen this movie before. 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…
The partners in the Constitution Pipeline, including Williams and Cabot Oil & Gas, have come roaring back against Gov. Cuomo and his pusillanimous Dept. of Environmental Conservation (DEC) after the DEC lied last Friday in announcing they would not grant stream crossing permits for the pipeline project. Yesterday Cabot, along with Williams, issued a STRONGLY worded rebuttal that says, in part that the DEC’s “stated rationale for the denial includes flagrant misstatements and inaccurate allegations, and appears to be driven more by New York State politics than by environmental science.” Flagrant misstatements is another way of saying the DEC lied, which is exactly what we said yesterday (see 
In what appears to be an ongoing strategy/trend among exploration and production companies (i.e. drillers), Rex Energy is the latest driller to convert outstanding debt in the form of notes (IOUs) into equity, or stock ownership. Earlier this year Rex, a small Marcellus/Utica driller headquartered in State College, PA, offered to refinance its IOUs so the notes expire later, meaning Rex wouldn’t have to cough up cash sooner to pay off the debt (see 
In a bit of encouraging “this too shall pass,” we spotted an article that says Southwestern Energy Company is actively renewing leases expiring in West Virginia. You may recall that in the fall of 2014 Southwestern purchased 413,000 Marcellus/Utica acres, most of it in West Virginia (see 
The Philadelphia Inquirer has published yet another “it’s really bad in the gas industry” articles–news they obviously delight in sharing. However, amid the bad news of fewer jobs and businesses falling on hard times, we spotted some good news in the article: Seneca Resources continues to operate a single drilling rig in Pennsylvania. It would be easy to idle the rig and layoff the people running it–but they’ve kept it going, to their credit. So we’d like to celebrate a little good news amid plenty of bad news. The excerpted article below highlights the story of the guy supervising that lone, still-operating Seneca rig. Along the way we get some interesting inside details about how long it takes Seneca to drill–and how much money it costs to drill a hole these days compared with just a year or two ago…
Thailand’s largest coal miner, Banpu Pcl, has spent $112 million to buy a 29.4% stake in the Chaffee Corners Joint Exploration Agreement (JEA). JEA is a Marcellus shale drilling joint venture 65.4%-owned and operated by Talisman Energy. What it means is that Talisman has a new partner in their northeast PA Marcellus drilling program. Banpu has hired the former CEO of PTT Exploration and Production Pcl, Thailand’s largest oil and gas explorer, as a director and to advise Banpu on JEA and on the company’s new and developing upstream gas strategy. PTT Exploration and Production is a subsidiary of Thailand’s state-owned PTT Public Company Limited. PTT Global Chemical is another subsidiary of PTT Public Company Limited–and the company proposing to build a $5B+ ethane cracker complex in Belmont County, OH (see 
The long, slow process of “reorganizing” and emerging from bankruptcy just sped up for Magnum Hunter Resources (MHR). The Marcellus/Utica driller filed for bankruptcy protection in December (see 
Two shale industry members of last year’s ill-fated Pennsylvania Pipeline Task Force have pulled the curtain back to reveal what went on behind the scenes. The sausage-making. And it’s not pretty. Two important facts emerge for their disclosures: (1) most of the members of the task force didn’t (and still don’t) know their heads from their rear-ends when it comes to how the natural gas industry actually works, and (2) nothing useful will come from the 658-page report and its 184 recommendations. We previously predicted that outcome when we said, “Silly libs–they never learn. This initiative was never about actually getting anything done. It was always about the optics–to show that radical leftist Tom Wolf (and his lackey John Quigley) actually care about the hoi polloi” (see 
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. That’s our take anyway. Last week Stone issued an update for 1Q16 in which they disclose their line of credit with the banks has been reduced from $500 million to $300 million (see 
As MDN pointed out earlier this month, EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point (see