Energy Companies

Energy Companies | EQT Corp | Fayette County | Industrywide Issues | Litigation | Wastewater | West Virginia

Federal Judge Rules Fayette County Injection Well Ban Illegal
June 13, 2016June 13, 2016

In January, three liberal Democrat county commissioners from Fayette County, WV, with the backing and help of the radical WV Mountain Party, voted to ban injection wells in the county (see WV County Officially Bans Injection Wells; Children Brainwashed). The ban was intentionally written so broadly it would also ban the operation of more than 500 vertical oil and gas wells in the county. The next day EQT sued to overturn the ban (see EQT Sues WV County that Banned Injection Wells, Seeks Injunction). Not long after, a U.S. District Court judge slapped an injunction on the county preventing them from enforcing the ban at least until a hearing was held (see Judge Stops WV County from Enforcing Injection Well Ban, For Now). One of the chief architects of the ban, from the Mountain Party, admits the ban was intended to stop all oil and gas activity in the county (see Anti Admits Fayette County, WV Ban Aims to Shut Down All O&G Wells). Fearing they would lose the EQT lawsuit, in March the commissioners backed away from the position of banning everything to do with drilling in the county. They revised the proposed ban regulation as a tactic to avoid losing their court case (see Fayette WV Commissioners Change Ban to Focus on Injection Wells). Last Friday a federal judge ruled as we knew he would to toss out Fayette’s illegal ban. That is, EQT just won the case and the taxpayers of Fayette County have three lib Dems to thank for wasting money in legal fees to defend the indefensible…
Read More “Federal Judge Rules Fayette County Injection Well Ban Illegal”
Energy Companies | Halcon Resources

Halcon Resources Strikes Deal to File Chapter 11 Bankruptcy
June 13, 2016June 13, 2016

As MDN told you in May, Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, is preparing to file for bankruptcy (see Another One Bites the Dust: Halcon Resources Filing for Bankruptcy). The company is still preparing. On Friday Halcon outlined how they will go about filing–converting some $1.8 billion of debt into shares of stock/ownership in the company. Here are the specifics of how Halcon will file in the near future, the agreements they have and still seek to reach with existing debtholders…
Read More “Halcon Resources Strikes Deal to File Chapter 11 Bankruptcy”
Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | Pipelines | Southwestern Energy | Tyler County | West Virginia | Wetzel County

Antero Will Use Its Own Midstream Co on Newly Acquired WV Acreage
June 13, 2016June 13, 2016

On Friday MDN reported that Antero Resources has just cut a deal with Southwestern Energy to purchase 55,000 net acres located in Wetzel, Tyler and Doddridge Counties in West Virginia for $450 million (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). As we observed (which no one else reported), Antero paid far less for the acreage than Southwestern did in 2014 when they purchased it from Chesapeake Energy. We spotted an interesting tidbit from SNL Financial: One of the attractions for Antero is that they will use their own midstream company to pipe the gas they produce from the newly purchased property. There are no preexisting contracts in place with another midstream company. So Antero will make money in two ways: by producing the gas, and by transporting it. Smart. Another interesting tidbit: While Antero says the acreage is in its “core” area, a Barclays analyst calls it “second best” acreage for Southwestern…
Read More “Antero Will Use Its Own Midstream Co on Newly Acquired WV Acreage”
Energy Companies | Ethane | Industrywide Issues | Processing Plants | Shell

Shell’s PA Cracker Plant Will Increase Shale Drilling in Region
June 13, 2016June 13, 2016

The euphoria over Shell’s announcement last week committing to building a multi-billion dollar ethane cracker plant in Monaca (Beaver County), PA still hasn’t subsided (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Although the plant won’t be ready for five years–it takes that long to build one–already the plant has been a shot in the arm. As we noted on Friday, commercial real estate is taking off in the region (see Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away). However, there is another reason the Shell cracker is good for PA and for the shale industry: it will encourage more shale drilling. Currently Marcellus and Utica drillers have very limited options when it comes to selling ethane. Ethane is an NGL (natural gas liquid) that comes out of the borehole along with methane and other hydrocarbons. Some estimates say in the NGL-rich area of southwestern PA and eastern OH, some 20% of what comes out of the ground is ethane–at least for some wells. Right now most drillers have to dispose of that ethane–it’s an expense! When the cracker starts up operations, that ethane can be sold to Shell, helping the balance sheet of drillers. If you can get more money from what you’re getting out of the ground, you’ll do more drilling. Pretty basic common sense. In anticipation, CONSOL Energy already has a contract to sell Shell some of its ethane…
Read More “Shell’s PA Cracker Plant Will Increase Shale Drilling in Region”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

How Republican Tom Corbett Convinced Shell to Locate Cracker in PA
June 13, 2016June 13, 2016

Former Gov. Tom Corbett

There’s no question that Tom Corbett was ten times the governor that Tom Wolf is now. Wolf is an undisputed disaster. Good thing Corbett is the one who brokered the deal to get Shell to select Pennsylvania as the location for its multi-billion dollar ethane cracker plant. A big tax incentive helped lure Shell to the Keystone State, no question about it. But that’s not the only reason the company decided on PA. When it comes to business and sales, there are a couple of tried-and-true axioms. One of those axioms is that people do business with people–not companies. Another is this: people buy from people they know, like and trust. Take any one of those elements away, and you don’t make a sale. So how did Tom Corbett “sell” Shell on PA as the location? There were a number of factors, but one way that stands out as a shining example: Corbett treated the Shell execs to a Pittsburgh Steelers game…
Read More “How Republican Tom Corbett Convinced Shell to Locate Cracker in PA”
Antero Resources | Doddridge County | Energy Companies | Southwestern Energy | Tyler County | West Virginia | Wetzel County

Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres
June 10, 2016June 10, 2016

Antero Resources announced yesterday that the company has just cut a deal with Southwestern Energy to purchase 55,000 net acres located in Wetzel, Tyler and Doddridge Counties in West Virginia for $450 million. Antero says the acreage is in the “core” of the Marcellus and some 75% of the acreage also includes Utica Shale rights. The acreage Southwestern is selling is acreage they themselves bought in 2014 from Chesapeake Energy. Chessy originally signed the acreage with landowners for $5 per acre (peanuts). Southwestern paid Chesapeake $12,000 per acre (see Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre). Antero picked up the acreage for $8181 per acre–about $4K/acre (one-third) less than what Southwestern paid for it. Oops. No wonder Antero is crowing about the deal! Here’s the lowdown, with announcements from both Antero and Southwestern…
Read More “Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres”
Antero Resources | Energy Companies

Antero Resources Floats 27M Shares of New Stock to Buy Acreage
June 10, 2016June 10, 2016

As we pointed out in our companion story today, Antero Resources took Southwestern Energy to cleaners in buying 55,000 of Marcellus/Utica acres for about one-third less than Southwestern paid for the acreage just two years ago (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). Antero is purchasing the acreage for $450 million. They don’t just have that kind of cash laying around, so they have to get the cash. In addition to announcing the deal yesterday, Antero also announced a new stock offering–selling off more ownership in the company. Antero plans to float 26,750,000 new shares of stock and hopes to get $762 million for it–covering the cost of the acreage deal with Southwestern plus some extra for “general corporate purposes”…
Read More “Antero Resources Floats 27M Shares of New Stock to Buy Acreage”
Energy Companies | HG Energy | Lewis County | Monongalia County | Preston County | Southwestern Energy | Upshur County | West Virginia

Southwestern Sells More Assets from 2014 Chesapeake Deal
June 10, 2016June 10, 2016

As we report today, Antero Resources is buying 55,000 acres of leases in the Marcellus (and Utica) Shale from Southwestern Energy (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). The acreage that Southwestern is selling comes from the massive $5.375 billion deal Southwestern made with Chesapeake in 2014 (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). The interesting thing is that selling land is not the only recent deal Southwestern has brokered to dump assets from the Chesapeake deal. Southwestern cut a deal (in May) to sell 135 vertical (conventional) and 37 horizontal (shale) wells in West Virginia to HG Energy. Earlier this week Southwestern got approval from the Federal Energy Regulatory Commission (FERC) to sell pipeline contracts to HG Energy too. Which begs the question: How many more Chesapeake deal assets is Southwestern going to sell off?…
Read More “Southwestern Sells More Assets from 2014 Chesapeake Deal”
Economic Impact | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell | Statewide OH | Statewide PA | Statewide WV | West Virginia

Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away
June 10, 2016June 10, 2016

Gentlemen, start your engines! Your economic engines, that is. The news earlier this week that Shell has made the commitment to move ahead and build an ethane cracker plant in Monaca, PA has, as we knew it would, set the region buzzing (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go! and Shell PA Cracker Plant Project a Lot Bigger Than First Thought). With the decision now made, those in the real estate community are salivating over how that decision will reverberate throughout the region. There is now an effort underway to lure manufacturers in Texas and along the Gulf Coast area to consider setting up in the western PA (and eastern OH and northern WV) area instead–to take advantage of being that much closer to the biggest market in the country–the East Coast. One real estate pro says commercial real estate for up to 150 miles away is likely to be impacted by the decision to build the cracker plant in Monaca…
Read More “Shell Cracker Plant Will Spur Real Estate Deals 150 Miles Away”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell PA Cracker Plant Project a Lot Bigger Than First Thought
June 8, 2016June 8, 2016

Artist’s rendering of Shell Monaca Ethane Complex – click for larger version

Yesterday MDN was one of the first to bring you the fantastic news that Shell has decided to move forward with building their multi-billion dollar ethane cracker plant (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Shell mentioned their positive final investment decision (FID) as part of a larger, wide-ranging announcement on their plans for the next few years and beyond. They were slow off the mark, but Shell finally issued a separate press release about the FID for the Monaca, PA ethane cracker plant complex. As usually happens with a story this big, more details have come out after the initial announcement. For example: Shell’s initial estimate for the cost of the project, more than four years ago, was “$2-$3 billion.” Now? They won’t say. But some news sources are reporting it will be closer to a $6 billion investment. One even goes as high as $11 billion! What Shell *is* saying is that construction on the main part of the facility will begin in 18 months, with production expected to flow beginning “early in the next decade”–which we take to mean sometime around 2020 or 2021. Shell says the project will provide work for 6,000 temporary construction workers while it’s being built, and 600 permanent, full-time employees to operate the facility once it is built. Needless to say, local economic and government leaders in the Pittsburgh region are ecstatic with the news. Here’s more details about the Shell ethane cracker coming to PA, along with select reaction and comments…
Read More “Shell PA Cracker Plant Project a Lot Bigger Than First Thought”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Gov Wolf Attempts to Take Credit for Shell Cracker Decision
June 8, 2016June 8, 2016

Former PA Gov. Tom Corbett – the reason Shell decided to build a cracker

You know what’s really sleazy about politicians? When they take credit for something they had NOTHING to do with. Like Pennsylvania Gov. Wolf is doing with the fantastic news that Shell will build an ethane cracker plant in the state (see yesterday and today’s stories). The reason Shell even considered PA in the first place is because of Wolf’s far more able and talented predecessor, Gov. Tom Corbett. Corbett fought tooth and nail to get Shell to locate the cracker in the Keystone state. Part of Corbett’s fight included getting $1.7 billion in tax breaks approved, to lure the plant to PA (see Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break). The cracker decision kept getting delayed during Corbett’s tenure, something he took a lot of heat over. If Shell had committed sooner, PA may have had a different election result (re-electing Corbett instead of the disastrous Wolf). Anywho, that was yesteryear, and today, Tom Wolf is taking credit for something Tom Corbett did. Typical…
Read More “PA Gov Wolf Attempts to Take Credit for Shell Cracker Decision”
American Energy Partners | Chesapeake Energy | Energy Companies

Police Find No Evidence of Suicide in Aubrey McClendon’s Death
June 8, 2016June 8, 2016

Aubrey McClendon

We spotted an interesting article from Oklahoma about Aubrey McClendon’s death (God rest his soul). Everybody, including MDN, read the tea leaves and thought McClendon had committed suicide by vehicle (see McClendon’s Biggest Backer Backed Away the Day Before Car Cras). However, there has always been some doubt (see Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?). A new report from the police investigating Aubrey’s death have pronounced they can’t find “any evidence” that it was actually suicide…
Read More “Police Find No Evidence of Suicide in Aubrey McClendon’s Death”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!
June 7, 2016June 7, 2016

This is the biggest of big news. We’ve been waiting for this day a LONG time. Earlier today Shell held a “Capital Markets Day” (in the Netherlands) and provided an extensive update on “reshaping” the company–for 2020 and beyond. As part of the update, hidden part of the way through their press release, we get this statement from Shell: “In Chemicals, the company already has brownfield growth projects underway on the US Gulf Coast and in China. Today we are announcing the final investment decision on a new, 1.5 million tonnes per annum (mtpa) cracker and polyethylene plant in Pennsylvania, USA, which will use natural gas from shales production as its feedstock. Once these projects are on stream, early in the next decade, Shell’s ethylene capacity should reach around 8 mtpa, compared with 6.2 mtpa today.” The implication is that the FID (final investment decision) is “yes, we’re building it” as evidenced by the phrase “once these projects are on stream…” MDN predicted it (see More Evidence that the Shell Ethane Cracker Plant in PA is a Go). You don’t spend half a billion (out of $2-$3 billion) and not move forward. Still, it’s fantastic to have Shell finally, after five years, say “Yes, we’re building it.” Another fascinating bit of news from today: Shell says shale will be very important to the future of the company, after 2020…
Read More “Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!”
Carrizo Oil & Gas | Energy Companies

Carrizo O&G Top Management Dumps Another $646K in Company Stock
June 7, 2016June 7, 2016

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 (see Carrizo O&G 1Q16: Still Not Active in the Marcellus, Prod. Down). However, we expect at some point Carrizo will return to northeast drilling–so we keep track of the company. Last year we noted that Carrizo’s top mangement was engaged in dumping the company’s stock (see What’s Up with Carrizo Top Mgmt Continued Selling of Co. Stock?). They’re at it again. Three of Carrizo’s top managers, including the CEO, COO and a VP, along with a board member, have just sold off a collective 17,082 shares worth $646,280. Hey, we have absolutely no issue with those who help a company succeed, in profiting from that success. Top managers are often awarded stock bonuses and it’s not uncommon to cash them in. But we get nervous when we see the people running a company selling large tranches of stock, repeatedly. Makes us wonder what they know that we don’t!…
Read More “Carrizo O&G Top Management Dumps Another $646K in Company Stock”
Energy Companies | Warren Resources

Warren Resources Files for Bankruptcy, Wiping Out Stockholders
June 6, 2016June 6, 2016

Warren Resources, a small driller that drilled and brought online their first two Marcellus Shale wells last year, is based in Houston and operates in California, Colorado, Wyoming and Pennsylvania. In February MDN told you that Warren missed an important $7.5 million payment, the first ominous signal of what was to come (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). The next week the company announced no new drilling, anywhere, in 2016–hinting they might have to file for bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). In March the New York Stock Exchange threatened to de-list Warren’s stock (see Pretty in Pink? Warren Resources Put on Notice for Stock Delisting). In April, the board changed the definition and role of the company’s CEO to become CRO–Chief Restructuring Officer–a sure sign of what was ahead (see Warren Resources Preps for Bankruptcy, New Role for CEO). Indeed, this one was pretty easy to predict. Last week Warren filed for Chapter 11 bankruptcy protection and has worked out a deal to transfer ownership of the company to two debt-holders: 82.5% of the company will now be owned by GSO Capital (owed $248 million), and the rest will go to Claren Road Asset Management (owed $57 million). Claren isn’t happy with the deal. Current/existing stockholders? They get zip. Wiped out. Screwed. That’s how it works in our great country–debt-holders get to take over and equity-holders (i.e. owners) get taken to the cleaners…
Read More “Warren Resources Files for Bankruptcy, Wiping Out Stockholders”
Energy Companies | Halcon Resources

NYSE Threatens Halcon Resources with De-Listing of Stock
June 3, 2016June 3, 2016

The bad news just keeps coming for Halcon Resources, a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of its Utica acreage. Earlier this month we reported that Halcon has cut a deal to file for bankruptcy (see Another One Bites the Dust: Halcon Resources Filing for Bankruptcy). In January the company quit paying dividends on its preferred stock (see Halcon Resources Suspends Dividend Payments for Preferred Stock). Last December, in a bid to keep the price of the stock from slipping below $1 per share, Halcon did a 1-for-5 reverse stock split, combining 5 shares into a single share (see Halcon Resources Announces 1-for-5 Stock Split to Avoid De-Listing). Oops. That strategy didn’t work out so well. Halcon has just received notice from the New York Stock Exchange that unless the company can get the share price above $1 for 30 consecutive days, the stock will be de-listed from the NYSE…
Read More “NYSE Threatens Halcon Resources with De-Listing of Stock”