Energy Companies

  • | | | | |

    Guest Post: 7 Important Points to Know About Dimock Trial

    By Phelim McAleer

    The Ely and Hubert families of Dimock, Pennsylvania are suing Cabot Oil & Gas for allegedly polluting their water. The case is hugely significant because Dimock has been characterized as “Ground Zero” for water allegedly contaminated by fracking. It was featured in the documentaries Gasland 1 & 2 and has been the subject of national and international news reports. Countless celebrities have also pushed the lie that Dimock’s water was contaminated with fracking fluid. But the case has thrown serious doubts on the narrative being spun by activists. The plaintiffs’ case is looking very shaky, indeed. Here are seven key points that have emerged as the case enters its second day.
    Read More “Guest Post: 7 Important Points to Know About Dimock Trial”

  • | | | | |

    Guest Post: Dimock Plaintiff Exposed Under Cross Examination

    By Phelim McAleer

    The Ely family in Dimock, Pennsylvania is suing an oil and gas company alleging they contaminated their water well through fracking. Dimock has become a focal point for anti-fracking activists with many calling it “Ground zero” for pollution. Dimock and the Ely’s have been featured in national and international news reports and documentaries. Celebrities such as Mark Ruffalo, Yoko Ono, and Susan Sarandon have visited the tiny community to sympathize. But yesterday in the first day of the trial, facts started to emerge that show the truth is much different from the previously reported stories. Questioned under oath, Scott Ely’s claims look a lot less certain and he looks a lot less credible. Below are five facts that emerged during the first day that expose serious problems with Ely’s claims that his water was contaminated by fracking.
    Read More “Guest Post: Dimock Plaintiff Exposed Under Cross Examination”

  • |

    Antero Resources Stands Above the Rest – Nets $941M in 2015

    There’s at least one driller that’s figured out how to continue making money in one of the worst down markets in two generations: Antero Resources. Antero released their “good news” operational update back in January (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). Earlier this month the company issued an update for 2016 that they will cut back spending by 23% (far less than others) with plans to drill 110 wells this year in the Marcellus/Utica (see Antero Resources 2016: Spending 23% Less, Drilling 110 Wells). We thought for sure when they finally got around to sharing their financial numbers it would be red as far as the eye can see. Nope! Yesterday Antero, one of the biggest and best drillers in the Marcellus/Utica, released their fourth quarter and full year 2015 financial update. And guess what? They made more money last year than the year before! Three years ago Antero lost $18.9 million. Two years ago, after expenses, Antero made $674 million. Last year, in 2015, Antero made, after expenses, $941 million. That’s nearly $1 billion in profit! Other drillers need to study Antero closely to see what they’re doing right…
    Read More “Antero Resources Stands Above the Rest – Nets $941M in 2015”

  • |

    Rice Energy 2015: Lost $291M, Production Up 101%

    Rice Energy issued their fourth quarter and full year 2015 financial and operational update yesterday. The company stumbled in 4Q15, losing $281 million, which made last year’s total year loss $291 million (i.e. most of the loss came in 4Q15). That’s the bad news. The good news is that production was up 57% in 4Q15 over 4Q14 and production for the entire year was up 101% over 2014, an average of 552 million cubic feet equivalent per day (Mmcfe/d). Also good for Rice is the price they’ve been getting for their gas. They averaged $3.39/Mcf in 4Q15 and $3.19 for all of 2015. Proved reserves are up 30%. The company also released details for 2016 yesterday. Rice, which is a pure play driller focusing on the Marcellus and Utica Shale region, will spend 14% less this year than they did last year–which is far less of a cut than most drillers. Below are both the 2015 update and the 2016 forecast, with lots of details about their Marcellus and Utica programs…
    Read More “Rice Energy 2015: Lost $291M, Production Up 101%”

  • | | | | | | |

    Marcellus Ethane Export Sets Sail “Within a Week” from Philly

    We’ve been predicting for some time, but the day is almost here when the first export shipment of Marcellus and Utica ethane will leave the Marcus Hook terminal in Philadelphia and head to Norway. Genscape, which monitors pipelines and trucks and ships and uses really cool technology to alert them of when these things are about to happen says the first ethane export from Philly will happen “within a week”…
    Read More “Marcellus Ethane Export Sets Sail “Within a Week” from Philly”

  • | | | | |

    Dimock Lawyers Admit Frack Fluid Didn’t Contaminate Well Water

    court-gavel.jpgYesterday saw opening arguments in the case of two Dimock, PA families who are suing Cabot Oil & Gas with a claim that Cabot’s drilling “contaminated” their well water supplies (see Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot). MDN friend and top film documentary maker Phelim McAleer–creator of the excellent FrackNation documentary–noticed a very important admission by the attorneys for the plaintiffs. In their opening arguments, the attorneys for the landowners admit that there is “no scientific proof” that fracking fluid ever reached or contaminated the plaintiffs’ water wells. We’ve known that and have trumpeted that for years. This case has always been about methane (natural gas itself) “migrating” through the ground into the water wells as a result of Cabot’s drilling program. That’s what is at issue: Did Cabot’s drilling cause methane migration? But the general public, because of propaganda films like Gasland and Gasland II, believe fracking chemicals had somehow seeped into the water wells in Dimock. Not true–and now it’s on the record for all, including Josh Fox, to see. The stunning admission by the landowners’ own lawyers that fracking fluid did not contaminate the wells in Dimock totally refutes false claims by Fox and Hollywood stars like Mark Ruffalo who have tried to use Dimock as a rallying cry…
    Read More “Dimock Lawyers Admit Frack Fluid Didn’t Contaminate Well Water”

  • | |

    Chesapeake Trades Future Royalties on 8,500 Wells for Lump Sum Now

    Haymaker Resources has just signed a deal with Chesapeake Energy to give Chessy $128 million in return for ownership of mineral and royalty interests in 8,500+ wells across 24 states and 324 counties, including wells in the Marcellus/Utica. The mineral/royalty interests Chesapeake is selling are considered “non-core” for the company. These are wells in which Chessy owns an interest, but they didn’t drill it and don’t manage it. They’re a partner in the well. What this deal means is that any royalties generated from those wells will now go to Haymaker instead of Chesapeake. Sort of like those deals we’ve highlighted in the past where a company pays a landowner a lump sum now and then receives all future royalty payments (see Company Targets OH Landowners – Buy Future Royalties for Cash Now). Think of it this way: You win the lottery, $1,000 a week for life. You’re 50 years old and think you’ll live another 30 years, at least. That would be $1.56 million total, IF you live that long. A company comes along and offers you $750,000, right now, in return for taking over the annuity of $1,000 per week (such companies do exist). That’s how we think of this deal. Chesapeake needs money now, to keep from going bankrupt, and they have these assets that bring in money, but in dribs and drabs and it’s not at the center of what they do. So they cash it in and get a chunk of money now instead of waiting for it later. Here’s the Haymaker announcement…
    Read More “Chesapeake Trades Future Royalties on 8,500 Wells for Lump Sum Now”

  • |

    Former Devon Energy CEO Buys Himself a Place in Rubio Campaign

    With Jeb Bush out of the Republican presidential primary, the old-line Republican establishment has closed ranks behind Florida Senator Marco Rubio. Which is why we find him disgusting. We no longer vote for politicians that promise one thing and do another (ex: Bob Dole, John McCain, Mitt Romney, Mitch McConnell, Paul Ryan, Jeb Bush, John Kasich, Marco Rubio). That’s the definition of establishment. They view themselves as the ruling class–something we left behind 240 years ago when we formed this country to rid ourselves of such people. Those in the energy industry are not immune to the siren call of serving the establishment. The co-founder and former CEO of Devon Energy, Larry Nichols, has just become Rubio’s energy advisor in return for “hosting a fundraiser” for the Senator (translation: giving him big piles of money). We call that purchasing a seat at the table. Before you get too outraged, please know that this goes on ALL THE TIME in both parties. And has for years. MDN editor Jim Willis used to work in the Ronald Reagan White House, and we saw it there too. Big monied people donate, and when the candidate wins, those same people either get top posts in the administration, like Secretary of Energy, or they get cushy postings as an ambassador to some country like France, or Belize (in the tropics). We find it disheartening and distressing. But it is the way things are. Unless we change it. Below is the news about Nichols buying himself a place at the Rubio table…
    Read More “Former Devon Energy CEO Buys Himself a Place in Rubio Campaign”

  • |

    Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast

    Carrizo Oil & Gas, a Houston-based driller, issued their fourth quarter and full year 2015 financial and operational update on Monday. Carrizo 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 Monday’s update, they won’t be drilling here in 2016. Not only that, they have curtained (shut-in) some of their Marcellus/Utica production, and they may shut-in even more in the coming months, if prices don’t recover. According to Carrizo’s financials, the company made $226 million in 2014. But in 2015 the company lost $1.2 billion. Here’s a portion of Monday’s update, which says they plan to focus on the Eagle Ford for the time being…
    Read More “Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast”

  • |

    PDC Energy 2015: $68M Loss, Production Up 65% Y/Y

    PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). In December the company announced they would restart Utica drilling in 2016 with plans to drill five wells (see PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells). On Monday PDC released their fourth quarter and full year 2015 financial and operating results. PDC grew production in 2015, substantially, over 2014 (up 65%). Although the company lost money in 2015, as most drillers did, it wasn’t all that much compared to others. In 2014 PDC made $155 million in profit. In 2015, they lost $68 million. With others losing over $1 billion, $68 million is a comparative drop in the bucket. We spot no mention of when they will restart Utica drilling. Here’s the update from PDC…
    Read More “PDC Energy 2015: $68M Loss, Production Up 65% Y/Y”

  • | | |

    Atlas Energy – Rumored Layoff of 30+ People in PA

    cutting jobsUPDATE Feb. 24: MDN posted a follow-up, with more insight/rumor, from a fourth source. See the end of the article.

    For a week now MDN has been hearing rumors that Atlas Energy was about to, or already has, laid off a number of workers. Atlas, you may recall, once seemed to be the golden child–everything they touched turned to gold. They sold much of their Marcellus operation in 2011 to Chevron for $4.3 billion, and later sold another batch of Marcellus assets to Targa Resources for a staggering $7.7 billion. They still have some operations in the Marcellus, but recently the New York Stock Exchange threatened the company with de-listing their stock (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing). In January the company announced an IPO in which they hope to raise $1 billion (see Atlas Energy Subsidiary Threatened with NYSE De-Listing, IPO?!). One week ago we got a tip from an MDN subscriber that there were rumors of a layoff…
    Read More “Atlas Energy – Rumored Layoff of 30+ People in PA”

  • | | | | | |

    Gastar Leaving Marcellus/Utica, Sells Assets to Tug Hill for $80M

    Gastar Exploration is throwing in the towel in the Marcellus/Utica. Gastar is selling its Marcellus/Utica assets–mainly located in Marshall and Wetzel counties in West Virginia, to Tug Hill for $80 million. Gastar has seen the light and that light is in becoming a “pure play” company focused solely on the Oklahoma STACK Play. Why sell what they admit are “high-quality”? Because they can’t get enough money for their gas in the northeast–and they can’t get enough money because there aren’t enough pipelines to move the gas to other markets. So they’re throwing in the towel and calling it quits. In addition to the sad news that they’re leaving the Marcellus, Gastar also delivered the bad news that their proved reserves went down 45% in 2015 due to lower commodity prices…
    Read More “Gastar Leaving Marcellus/Utica, Sells Assets to Tug Hill for $80M”

  • | | | | |

    DEP Gives All Clear for JKLM-Contaminated Water Wells in PA

    Last September MDN told you about an accidental spill (or rather migration) of soap into a local water aquifer in Coudersport, PA (see JKLM Energy Accident Contaminates 5 PA Water Wells with Soap). JKLM Energy was trying to free a drill bit stuck in the hole about 570 feet down. The soap they used migrated into a local water aquifer and contaminated five nearby private water wells with very low levels of soap. Not long after the PA Dept. of Environmental Protection (DEP) issued a Notice of Violation to JKLM (see PA DEP Issues Notice of Violation to JKLM Energy for Spilled Soap). Throughout the “crisis”, if you can call it that, JKLM communicated constantly with local residents to get them what they need, and share full information. Since last October we’d not heard anything about the situation until yesterday when the DEP issued a press release saying two of the wells are now cleared to be used again. Apparently the other three wells belong to the hospital (on whose land JKLM was drilling) and the hospital switched to municipal water so they’re in no hurry to begin re-using those wells again–if ever…
    Read More “DEP Gives All Clear for JKLM-Contaminated Water Wells in PA”

  • | | | | |

    Dimock Plantiffs Warned by Judge to Keep Their Yaps Shut

    Borrowing an old Washington, DC inside joke about Chuck Schumer, the most dangerous place in Scranton, PA is standing between Dimock resident Scott Ely and a television camera. As we told you yesterday, two Dimock families finally made it to their day in court to accuse Cabot Oil & Gas of contaminating their water supplies (see Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot). What was the first thing Scott Ely, one of the landowners, did? On a lunch break, Ely and the other plantiffs headed straight for the reporters to attempt to influence the jury pool with a storyline of being bullied by a big, mean corporation. After lunch, the judge warned the plaintiffs’ attorney that the plaintiffs were not to run their yaps outside of the courtroom…
    Read More “Dimock Plantiffs Warned by Judge to Keep Their Yaps Shut”

  • |

    Stone Energy 2015: $1.1 Billion Loss, Quit Drilling in Marcellus

    Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale. Last year they quit drilling in the northeast and actually shut-in part of their production due to low prices (see Stone Energy 3Q15: Shut Down 110 Mmcfe/d of Marcellus Production). However, Stone does have around 75,000 acres of leases–so they’re an important player in our neck of the woods. So we keep tabs on them. In December Stone said they would spend 3-5% of their $200 million budget in 2016 in the Marcellus/Utica–about enough to drill one well. Which led to our conclusion they’re in maintenance-only mode for this year. And no wonder why. Yesterday Stone released their fourth quarter and full year 2015 operating and financial results, and it’s not a pretty picture. In 2014 Stone lost $190 million for the year. In 2015, they lost a huge $1.1 billion for the year. You can’t rack up losses like that for long. Here’s yesterday’s update from Stone Energy…
    Read More “Stone Energy 2015: $1.1 Billion Loss, Quit Drilling in Marcellus”

  • |

    Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B

    Yesterday we told you that EQT had decided to float a new round of stock–up to 7.5 million shares–hoping to raise a good chunk of cash, $437 million (see EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M). Seems EQT isn’t the only driller taking that approach. Yesterday Cabot Oil & Gas announced their own plan to issue a new round of common stock. This one is a doozy. Cabot originally announced they’re floating 38 million new shares of common stock, with an option to issue another 5.7 million shares to the banks underwriting the offering. That’s a total of 43.7 million shares that may get sold. A short time later Cabot issued a second press release saying they’ve “upsized” the offering–to 44 million shares and an option for another 6.6 million shares for the underwriters. A total of 50.6 million shares. How much is Cabot asking per share? $20/share–which works out to be a staggering $1 billion! Supersize Me baby!…
    Read More “Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B”