Energy Companies

Energy Companies | Warren Resources

Warren Resources Preps for Bankruptcy, New Role for CEO
April 7, 2016April 7, 2016

We’ve heard of a Chief Executive Officer (CEO), a Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Marketing Officer (CMO) and Chief Risk Officer (CRO). But until now, we’d never heard of a Chief Restructuring Officer. Somebody who’s full-time job it is to work on keep the company from shutting its doors and liquidating the assets. Warren Resources has just appointed it’s current CEO and President, James Watt, as the company’s Chief Restructuring Officer. In February MDN reported that Warren–a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale–had missed a $7.5 million payment (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). At the time, Warren said if the company could not come to a workable agreement regarding an out-of-court restructuring, it would have to seek protection from its creditors through a bankruptcy proceeding. In Warren’s announcement yesterday, they once again warned of potential bankruptcy–for the third time. Without saying outright “we’re about to file for bankruptcy,” the company issued a very clear and loud signal that’s just what they’re about to do…
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Energy Companies | Halcon Resources

Halcon Update on “Charting a New Course” – I Feel Good!
April 7, 2016April 7, 2016

In March MDN reported Halcon Resources had hired a prominent law firm with a specialty in bankruptcies to assist the company to “chart a course” through the current downturn in gas and oil prices (see Halcon Resources Hires Bankruptcy Law Firm to Help “Chart Course”). Yesterday Halcon issued an update on their progress. According to the update, the company is “in discussions” with “certain stakeholders” to negotiate terms of a “potential transaction” to “materially reduce the Company’s indebtedness.” What does all of that coded language mean? You would think the company whose CEO is famous for his blunt language would just spit it out (see Halcon CEO Says No More S***** Wells in Northern OH Utica). We’re left to wonder…
Read More “Halcon Update on “Charting a New Course” – I Feel Good!”
Energy Companies | Greene County (PA) | Industrywide Issues | Pennsylvania | Regulation | Rice Energy | Statewide PA | Washington County

Rice Energy Fined ~$400K by PA DEP for Not Asking “Mother May I?”
April 6, 2016April 6, 2016

The Pennsylvania Dept. of Environmental Protection (DEP) has slapped Rice Energy and a couple of Rice’s subsidiary companies with a hefty fine of $393,500. Egads! Must be Rice did some very nasty things, right? Turns out most of the reason why the DEP fined Rice was for not playing “Mother May I?” with the DEP. In one case Rice installed a waterline between a well pad and an impoundment–without “Mother May I?” permission from the DEP. In another case Rice built a pipeline through a swamp (i.e. “wetland”) without getting DEP “Mother May I?” permission. And in yet another case Rice installed three waterlines under a creek instead of one. Rice’s midstream subsidiary was cited for “not using best management practices”–a severe no no for the DEP. Rice Midstream’s lack of management practice decorum led to a small incidence of erosion that briefly turned a creek brown. Call in the EPA! That’s your PA DEP hard at work for the people–always on the job ensuring those nasty drillers tow the line and pay big fines…
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Elk County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Seneca Resources | Wastewater

Judge Rules Seneca May Challenge Injection Well Ban in Elk County
April 5, 2016April 5, 2016

There is a new development in the case of an illegal ban on injection wells passed by Highland Township in Elk County, PA. In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced enough ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to prevent the lawsuit. Last week U.S. Magistrate Judge Susan Paradise Baxter ruled that Seneca has standing to sue and the lawsuit will now go forward. By the way, in October of 2015, Judge Baxter ruled in an almost identical case in Grant Township (located in nearby Indiana County) that the town’s injection well ban was illegal (see Fed Judge Overturns Grant Twp, PA Ban on Injection Wells). Even the dullards who enacted the ban in Highland should be able to see the writing on the wall. They’re about to lose. Taxpayers in Highland who are footing the bill (since the CELDF doesn’t pay for legal fees and judgments) are the biggest losers. They may want to remember that come election time…
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Energy Companies | EV Energy Partners

EV Energy Partners Lowers Borrowing Base by 28%
April 5, 2016April 5, 2016

As we reported in March, EV Energy Partners–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–is in survival mode (see EV Energy Partners: No New Utica Wells in 2016, in Survival Mode). EVEP has no plans to drill new Utica wells in 2016. The company is on an austerity budget–only spending to complete 10 already-drilled wells in the Texas Barnett Shale. Yesterday EVEP announced they have had to decrease their borrowing base from $625 million to $450 million–down 28%. A company’s borrowing base is the value of its assets–in this case the value of the leases and oil/gas wells EVEP owns. Those assets are used as collateral to back up loans and IOUs. A lower borrowing base means a) they can borrow less money, and b) they will pay more in interest for the money they do borrow. Here’s yesterday’s EVEP announcement…
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Chevron | CONSOL Energy | Energy Companies | Energy Corporation of America | EQT Corp | Noble Energy | Pennsylvania | Range Resources Corp | Rex Energy | Rice Energy | Statewide PA | Vantage Energy | XTO

Top 10 Marcellus/Utica Drillers in SWPA – Ranked by Production
April 4, 2016April 4, 2016

Everybody loves a list. We do too! We spotted a ranking in a recent issue of the Pittsburgh Business Times that lists the top 37 shale gas producers in southwestern Pennsylvania, based on the amount of gas they produced in 2015. We pulled the names of the top 10, listed in order from most to least…
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Energy Companies | Industrywide Issues | Lycoming County | Pennsylvania | Range Resources Corp | Regulation

PA DEP’s $8.9M Methane Migration Fine Appealed by Range Resources
April 4, 2016April 4, 2016

Last June the Pennsylvania Dept. of Environmental Protection (DEP) sent Range Resource a notice they planned to fine the company a whopping $8.9 million for methane migration into water wells and a nearby stream in Lycoming County, PA (see PA DEP Slaps Range with Record $8.9M Fine for Methane Migration). The DEP said the Range well, drilled in 2011, had been leaking methane since at least 2013 (improperly cemented well casing) and the methane had “contaminated the groundwater-fed wells of private water supplies, and a nearby stream.” But the DEP never actually sent a bill for the fine to Range. Why? Because Range immediately appealed the DEP’s initial notice to the PA Environmental Hearing Board. It now appears the appeal process will drag on at least until the dog days of summer–in July…
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Energy Companies | Rex Energy

Sigh of Relief for Rex Energy: Noteholders Agree to 2nd Lien Deal
April 4, 2016April 4, 2016

As we previously reported, Rex Energy, a small Marcellus/Utica driller headquartered in State College, PA, had offered to refinance its notes (i.e. IOUs) so the notes expire later, meaning they don’t have to cough up cash sooner to pay off the debt (see Rex Energy Offers to Refinance Outstanding IOUs). With few takers for a second lien, Rex then offered to sweeten the deal (see Rex Energy Extends & Sweetens Offer to Refi Outstanding IOUs). Rex finally closed out the offer last week. They had hoped to refi up to $675 million worth of outstanding notes. In the end, they got 94% of the noteholders to spring for the deal (sigh of relief at Rex)…
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Energy Companies | EXCO Resources

EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%
April 4, 2016April 4, 2016

On March 1 EXCO Resources issued a press release with fourth quarter and full year 2015 results. In the release EXCO, once a sizable player in the Marcellus with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells, said there would be no new Marcellus drilling in 2015 (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). Last week EXCO reaffirmed that sentiment, saying they are cutting capital expenditures by 69% in 2016 over what they spent in 2015. EXCO spent $277 million last year, and now plans to spend $85 million this year. The only place they plan to spend money on drilling is a few wells in the Haynesville Shale. Also of note, their borrowing base went down…
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Ascent Resources | Belmont County | Chesapeake Energy | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Greene County (PA) | Ohio | Pennsylvania | Range Resources Corp | Rice Energy | Susquehanna County | Washington County

Top 10 Shale Wells of 2015 for Marcellus, Utica, Entire Country
April 1, 2016April 1, 2016

Rystad Energy Ranks, a data company based in Norway, hosts web-based portal with easy-to-use access data on oil and gas wells around the globle. They call their service “Rystad Energy cubes.” Rystead has made a wealth of data available in predefined “ranking lists” where the user can change filter settings to drill into and slice and dice the data. They call it their “database list format Ranks.” Up to now, Rystad Energy cubes have been available only through Rystad Energy’s proprietary Cube Browser. With “Ranks” users can now access predefined analyses based on the same databases. The really cool thing? They offer the “top 10” for various queries absolutely free. No registration required. We took it for a spin and produced Top 10 lists for Marcellus Shale well production in 2015, Utica Shale well production in 2015, and all American shale wells for 2015. As you might imagine being an MDN reader, most of the wells in the “all American” list are wells located in the Marcellus/Utica…
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Chesapeake Energy | Energy Companies

Chesapeake’s Doug Lawler Gave Himself a Raise After Firing 1,500+
April 1, 2016April 1, 2016

This is rich. We spotted a reference in a Seeking Alpha story that Chesapeake Energy CEO Doug “the ax” Lawler–the guy who’s fired more than 1,500 people (see The Great Chesapeake Massacre II: Lawler Fires Another 740 People)–that guy gave himself a pay raise last year. He made $15.4 million last year–more than Shell’s CEO…
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Energy Companies | Gastar Exploration | Marshall County | Tug Hill Operating | West Virginia | Wetzel County

Gastar Leaving the Marcellus/Utica “on or before” April 8th
March 31, 2016March 31, 2016

As MDN previously told you, Gastar Exploration has found a buyer for its Marcellus/Utica wells and leased acreage located mainly in Marshall and Wetzel counties in West Virginia–for $80 million (see Gastar Leaving Marcellus/Utica, Sells Assets to Tug Hill for $80M). Gastar expected the sale to be completed long before now–but ran into issues with one landowner. Gastar says it’s all patched up now and the transaction will be complete “on or before” April 8th…
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Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | Pipelines | Pleasants County | Regulation | Ritchie County | Tyler County | West Virginia

WV DEP Fines Antero Resources $93K for “Pollution” of Streams
March 31, 2016March 31, 2016

The West Virginia Dept. of Environmental Protection has gotten a signed consent order from Antero Resources assessing a fine of $93,000 on the company for “pollution” of waterways in several WV counties related to installing pipelines. So says a single Associated Press article. We can find nothing about this story from another other news source than the AP. Not on the WV DEP website. Not on Antero’s website. We scoured the web. We scoured our own MDN archives. Nada. Just a single AP story currently running in dozens of newspapers and in other media outlets/websites across the country. Here is the entire, very brief AP story with sparse details…
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Atlas Energy | Energy Companies

Atlas Energy Rejiggers Outstanding Debt, Converts 1st to 2nd Liens
March 31, 2016March 31, 2016

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). The new news for Atlas is that the company announced yesterday they’ve rejiggered their debt–restructuring some of it as second liens…
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Coterra Energy (Cabot O&G) | Energy Companies | Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

Constitution Pipeline Reps Met with Cuomo Aide – April Deadline
March 29, 2016March 29, 2016

The Constitution Pipeline is a badly needed natural gas pipeline that would run ~125 miles from the gas fields of Susquehanna County, PA up into New York–all the way to Schoharie County, NY–where it would intersect with the Iroquois Pipeline and the Tennessee Gas Pipeline. The $683 million project would pump 650 million cubic feet per day (MMcf/d) of PA shale gas to markets throughout the northeast and potentially into New England. The Federal Energy Regulatory Commission (FERC) approved the project in 2014. Pennsylvania cleared the way for the pipeline in 2015. New York is holding it up–the tail wagging the dog–by not issuing stream and swamp crossing permits. We have repeatedly called on Williams, the main sponsor of the project, to take New York to court to strip them of their right to have any say in the matter since Cuomo is intentionally stopping the project for political reasons (see Time to Force NY DEC to Issue Permit for Constitution Pipeline). We’re just now hearing that representatives from the Constitution met with a top Cuomo aide in February to answer questions. The clock is ticking and Cuomo is almost out of time. New York has until April 29 to issue the permits or the application made to the state one year ago will expire. Perhaps that will be the triggering event for a massive lawsuit against the state…
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Coterra Energy (Cabot O&G) | Energy Companies | Pennsylvania | Susquehanna County

Go Big or Go Home: Cabot O&G Wells Average EUR of 27 Bcf
March 29, 2016March 29, 2016

The indefatigable Cabot Oil & Gas continues to improve efficiency, increase production and lower costs–all at the same time. Last week Cabot presented at the Soctia Howard Weil Energy Conference in New Orleans. We have a full copy of the PowerPoint slides used during the presentation (below). What did Cabot have to say? They plan to complete 40 wells in the Marcellus this year and grow production slightly–up to 7% in 2016 over 2015. We also learn that the length of Cabot’s horizontal wells–their “laterals”–are getting longer, an average 7,000 feet long in 2016 vs. 5,900 feet in 2015. Perhaps most astonishing is that the average Cabot well is expected to see an average EUR (estimated ultimate recovery) of 27 billion cubic feet. How much is that? That’s enough natural gas that, if used to generate electricity, would power 656,000 homes for a whole year. From one well! Think about 40 new such wells going online this year. Collectively those 40 wells will end up providing enough energy for 26 million homes. Coming from one small county in northeastern PA. That is the awesome miracle of fracking for Marcellus Shale gas…
Read More “Go Big or Go Home: Cabot O&G Wells Average EUR of 27 Bcf”