Anti-Driller Wins Right to Nominate Candidates for CONSOL’s Board
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…
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Rex Energy Corporation released its first quarter 2016 update yesterday. The company reported operating revenues were down 44% year over year. Although Rex lowered some of their expenses, the company lost $62 million in 1Q16. Production during the first three months of the year stayed just about the same as 1Q15–approximately 200 million cubic feet equivalent per day (Mmcfe/d). Rex spent $30.6 million drilling and completing wells in their various locations in the Utica and Marcellus during 1Q16–so at least they’re one driller who’s still drilling in our region. Here’s the update with details…
An MDN reader recently alerted us to a little-known fact: JKLM Energy has successfully drilled and is flowing gas from Potter County, PA’s first Utica Shale well. JKLM is owned by Terry Pegula, the guy who sold most of his Marcellus assets and used the money to buy the Buffalo Bills (see 
Chesapeake Energy, the second largest natural gas driller in the U.S. (behind Exxon Mobil) and one of the largest in the Marcellus/Utica, has been on a roller coaster for the past few years. Corporate raider Carl Icahn bought himself a big slice of the company, and along with another corporate raider/Chesapeake investor, Mason Hawkins, they tossed CEO Aubrey McClendon out the door. The two then installed their own guy, Doug Lawler, who proceeded to slash jobs and sell assets–all in a bid to prop up the company’s stock price so these two corporate raiders can make a buck on their investment. We call it disgusting. Others call it business as usual. The result? Chesapeake’s stock tanked and there were rumors of an impending bankruptcy (see 
As we reported in March, EV Energy Partners (EVEP)–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–is in survival mode (see 
This is the tale of landowners who negotiated a lease without consulting a qualified oil and gas attorney, and later regretted the decision. In 2008 the owners of a small hunting and fishing camp in Tioga County, PA negotiated and signed a lease with East Resources, which was later sold to SWEPI (i.e. the shale drilling arm of Shell). The lease, so the landowners thought, guaranteed that 11 wells would be drilled on the 240-acre property, and that a pipeline would be used to flow gas only from those wells. The landowners got a nice signing bonus–$287,000. They also got $164,000 for a pipeline right-of-way. But only one well was ever drilled–and it’s capped. And there is a pipeline–flowing other people’s gas through it. The landowners sued and a district court judge ruled last week that the landowners don’t have a case for their “shattered dreams” as they thought they did. It all comes down to a poorly worded lease and signing a lease without running it by a lawyer first…
Crestwood Equity Partners (nee Crestwood Midstream) issued its first quarter 2016 update last week. In April Crestwood announced that New York City utility giant Consolidated Edison Inc. has formed a 50/50 joint venture to purchase ownership of pipelines and storage facilities in the PA and NY Marcellus region (see 
Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (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, and according to their 2015 year-in-review udpate, they won’t be drilling in the Marcellus/Utica in 2016 (see 
Gulfport Energy, a sizable driller in the Utica Shale, lost a lot of money last year (see 
The muckety-mucks from Shell held their quarterly earnings phone call with analysts yesterday–and there is what we consider big news to report coming from that call. In response to a question from an analyst, Shell’s Chief Financial Officer, Simon Henry, commented there are four major “chemicals” projects currently under consideration by Shell. He also said a decision on the PA cracker plant project planned in Beaver County will likely be the first decision to be made because of “the timing of certain commitments that are already in place.” He added these glowing words about the PA cracker: “It’s an excellent project…[that] provides quite some portfolio resilience relative to the rest of the opportunities.” He later said “It’s a very strong and robust project.” If the price of oil were higher than the current $40, pulling the trigger on the PA cracker would be “a very easy decision.” When you read his comments, it’s hard to miss the enthusiasm at the highest echelons inside Shell…
Rice Energy, one of the newest and brightest drillers in the Marcellus/Utica, released their first quarter 2016 update yesterday. The company reports production averaged 675 million cubic feet equivalent per day (Mmcfe/d) during 1Q16, a 53% increase over 1Q15 (and up 8% from 4Q15). On the financial side the company lost $21 million during 1Q16, versus making $152,000 in 1Q15. Pretty mild compared to most. During 1Q16 Rice drilled 11 new Marcellus wells and 8 new Utica wells. Good to see someone is still drilling! Here’s the update, along with a great PowerPoint slide deck…
Eclipse Resources released their first quarter 2016 update yesterday. Although Eclipse, a Marcellus/Utica pure play driller headquartered in State College, PA (but drilling mostly in Ohio), has curtailed or shut-in some of it’s production given low prices for gas, they still posted an impressive 26% increase in production in 1Q16 over 1Q15. While we’ve heard of Prince and his “Purple Rain,” we hadn’t heard of Eclipse’s “Purple Hayes”–which is a Utica well with an underground lateral reaching out 18,500 feet–3.5 miles! During 1Q16 Eclipse drilled their Purple Hayes well in under 18 days. Amazing! Even more amazing–the well was completed with 124 frac stages. It is believed to be the longest onshore later well ever drilled. Kudos to Eclipse! On the downside, the company lost $41 million in 1Q16…