Energy Companies

Energy Companies | EQT Corp | Utica Shale

EQT’s Change of Heart: Drilling 72 Marcellus, 5 Utica Wells in 2016
December 8, 2015December 8, 2015

On Monday EQT released a preliminary 2016 operational forecast. The company plans to spend $1 billion on drilling next year, which is half of what they spent this year. Although EQT’s top brass previously said they were dumping the Marcellus and concentrating on the Utica Shale instead (see EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016), it seems they’ve had a change of heart. Yesterday’s forecast says EQT will drill 72 Marcellus wells in 2016 and just 5 Utica wells. What happened? We don’t know–but we suspect EQT is finding it more of a challenge than they thought to get the price of a deep Utica well down to the $12.5 to $14 million range they predicted they could get it to. Here’s the details on what EQT plans to do in 2016…
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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells
December 8, 2015December 8, 2015

PDC Energy, with leased acreage in the Ohio Utica Shale, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC issued their preliminary drilling budget for 2016 yesterday. As in 2015, the company’s focus will largely focus on the Wattenberg Gas Field, part of the Denver Shale basin in central Colorado. PDC plans to invest $440 million to drill somewhere between 135-160 Wattenberg wells in 2016. However, they also will un-pause their Utica program. PDC says they will spend $34 million to drill and bring online five new Utica wells in 2016…
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Anti-Drilling/Fossil Fuel | Energy Companies | Industrywide Issues | Inflection Energy | Litigation | Lycoming County | Pennsylvania

Inflection Energy Defeats Delaware Riverkeeper in Lycoming Co.
December 8, 2015December 8, 2015

It doesn’t happen often enough, which is why we make a big deal of it when it does: An energy company (in this case Inflection Energy) completely, utterly, and humiliatingly defeated THE Delaware Riverkeeper in an important court case in Lycoming County, PA. Less than a month ago we brought you the news that a Lycoming County judge had told an anti-driller, backed by Delaware Riverkeeper and Riverkeeper attorney Jordan Yeager, that the case they had filed to prevent Inflection Energy from drilling a legally permitted well was frivolous. The judge said he would allow the case to go forward, but only if the anti (and Riverkeeper) put up big bucks as collateral for the eventuality that they would likely lose (see PA Judge to Antis Seeking Drilling Delay: Put Up $5.69M or Shut Up). Turns out making these sleazeballs put their money where their mouth is, is good medicine. Riverkeeper and its “client” (the local anti-driller) have bowed out. The case is now closed and can’t be re-opened–and it sets a precedent for similar cases. In other words, the good guys won this time!…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Washington County | Wastewater

DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well
December 8, 2015December 8, 2015

Another “Range Resources impoundment leak polluted my water well” case was quietly resolved just a few days ago. You may recall that for some time we’ve been following the back and forth between Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who is suing Range in civil court. The problem is, the DEP found that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing just came back and closes the door, once and for all, on the case…
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Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH

The Unsettled Issue of Home Rule in Ohio
December 8, 2015December 8, 2015

A law professor from Cleveland State University, writing a guest viewpoint in Crain’s Cleveland Business, does an excellent job in outlining the precarious and unsettled issue of so-called home rule in Ohio with respect to the right of local municipalities in layering on their own zoning regulations that control oil and gas drilling. In early 2015 the Ohio Supreme Court ruled that Munroe Falls could not add to or otherwise layer on their zoning regs that interfere with state regulations that govern oil and gas drilling (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). As we later wrote, Beck Energy, the driller in the case, asked the Supreme Court to essentially strike down Munroe Falls’ entire zoning scheme as being unconstitutional. In November the Supremes declined to do that, leaving everyone scratching their collective heads (see OH Supreme Court Sends Mixed Signal on “Home Rule” Issue). Law prof Heidi Gorovitz Robertson takes it from there…
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Chesapeake Energy | Energy Companies

The Honeymoon is Over for Chesapeake CEO Doug Lawler
December 7, 2015December 7, 2015

It seems that Doug Lawler, the embattled CEO of Chesapeake Energy, just can’t catch a break. We frequently bust on Lawler for his mass-firings when he took the helm at the company–at the prompting of his overlords, the corporate raider brothers Mason Hawkins and Carl Icahn, Chessy’s two largest stockholders. In a recent Wall Street Journal interview, Lawler blames his predecessor, Aubrey McClendon, for his inability to dig Cheapeake out of the hole it’s in (see WSJ: Chesapeake’s Boss Faces Tall Order). Never a good sign when you start blaming the person who held the job before you–a sign of weakness and a character flaw if you ask us. Although Lawler enjoyed a honeymoon with the financial press and with analysts, that period is now officially over. Some analysts are turning against Lawler and his lackluster performance at the helm of Chesapeake. Chesapeake’s stock (i.e. equity) has plunged 77% this year alone. On Friday, Moody’s Investors Service downgraded Chesapeake’s bonds and notes (i.e. debt) to junk bond status. Just to add insult to injury, one analyst writing for The Motley Fool nominated Doug Lawler for “Worst CEO in the Energy Sector” for 2015. If old Doug isn’t careful, the ax he likes to swing may boomerang back…
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Allegheny County | Anti-Drilling/Fossil Fuel | Energy Companies | EQT Corp | Industrywide Issues | Pennsylvania

Jefferson Hills, PA Antis Oppose EQT Well Near Future School Site
December 7, 2015December 7, 2015

A battle is heating up in Jefferson Hills (Allegheny County), PA where EQT has (so far) applied to drill a single shale well, near where a new school will be built. Because notifications of the neighbors requires EQT to list the maximum number of wells that may eventually get drilled at the well pad site, EQT has said that eventually that pad may support 20 wells. Note they are not planning on drilling 20 wells at the site. Further note: we’ve never even heard of 20-well site drilled anywhere in the state! Facts don’t matter in this debate. Anti-drilling radicals have latched on to the 20-well number and are raising a fuss, attempting to stop EQT from drilling even a single well. The primary objection seems to be because it will be near a school–a school not yet built…
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Energy Companies | EXCO Resources

EXCO Resources Director Continues Stock Buying Spree
December 7, 2015December 7, 2015

Last month MDN told you about EXCO Resource board member John Wilder and his stock buying bender–snapping up large amounts of EXCO stock, which is very cheap right now at $1.08 per share (see EXCO Board Member Goes on Company Stock Buying Bender). A sharp MDN reader pointed out that Wilder, who is Executive Chairman of Bluescape Resources, which essentially runs EXCO, is contractually obligated to buy $40 million worth of EXCO stock within a year after the deal they closed with EXCO. So it’s no surprise that Wilder continues to buy EXCO stock at a brisk pace. The latest round came last week when he grabbed another 540,000 shares for $685,800…
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Crime | Energy Companies | Industrywide Issues | Statewide WV | West Virginia | XTO

Former XTO Marcellus Landman Gets 5+ Years in Prison for Fraud
December 4, 2015December 4, 2015

In a somewhat complicated scam, a former landman for XTO Energy, Steven E. Fisackerly (33 years old) defrauded XTO out of more than $1 million with fake lease deals in the West Virginia Marcellus Shale region. He cooked up bogus documents and passed them off as real, pocketing commissions. He even worked with a supposed/fake mineral rights owner to pocket kickbacks from lease payments sent to the fake rights owner. It was elaborate and convoluted–and ultimately stupid. Fisackerly plead guilty in May and will enter prison on January 4. His sentence? Pay back more than $1 million he defrauded from XTO, and serve 63 months (over 5 years) in federal prison…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Industrywide Issues | Litigation

Magnum Hunter Investor: We’ll Sue to Stop Bankruptcy Filing
December 4, 2015December 4, 2015

Dallas Salazar

A developing situation with Magnum Hunter Resources (MHR). As you know, analysts we’ve read believe MHR is about to file for bankruptcy. In fact, MHR itself indicates bankruptcy is a very real (likely?) option, judging from comments they make in a recent filing they made with the SEC (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). However, one of MHR’s largest stockholders, Dallas Salazar, CEO of Austin, TX-based Atlas Consulting, is telling MHR to hold on (see Activist Investor Threatens Magnum Hunter with Takeover Unless…). Salazar and a growing list of supporters will fight an MHR bankruptcy tooth and nail. Salazar has assembled a team of investors who will sue MHR should the company file for bankruptcy. Salazar’s legal team is the same team that previously (and successfully) sued Washington Mutual on behalf of shareholders. Salazar, in very frank language, has sent a letter to MHR management to let them know bankruptcy is not an option (see the letter below)…
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Chesapeake Energy | Energy Companies

Chesapeake Energy Floats Plan to Exchange $1.5B Worth of IOUs
December 4, 2015December 4, 2015

On Wednesday Chesapeake Energy announced a “private exchange offer for senior notes.” Disclaimer right up front: We’re not high finance people here at MDN. Some of this stuff befuddles us. However, we’ll try to make sense of what Chessy is offering. If we can boil it all down, Chesapeake is offering to exchange senior notes, or IOUs that are coming due in the next few years, with something called second lien (or secured) notes. Second lien notes are, of course, lower in priority for payback (should there be a default) than more senior notes. Chesapeake is hoping to entice current unsecured (no guarantee of a payback) noteholders with notes currently due in 2017/2018 with secured notes due in 2022 with a more favorable interest rate. The secured notes, as we noted, are second-in-line to other notes and debt obligations. Chesapeake is hoping to exchange up to $1.5 billion of new 8% senior secured second lien notes due in 2022 for certain outstanding unsecured notes. Will they be successful?…
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Energy Companies | EQT Corp

EQT’s Steve Schlotterbeck Becomes President, Heir Apparent
December 4, 2015December 4, 2015

Looks to us like we now know who is next in line to run EQT–one of the largest drillers in the Marcellus/Utica and driller of (so far) the single most productive shale well ever, the Scotts Run 591340 dry Utica well in Greene County, PA producing 72.9 million cubic feet per day initially (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!). Until now David Porges has held the office of president and CEO of EQT. Porges will retain the CEO title, but Steve Schlotterbeck, previously executive vice president and president of exploration & production will take on the role of president for the entire company. Which makes him the heir apparent when Porges decides to retire…
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Cameron County | Elk County | Energy Companies | McKean County | Pennsylvania | Seneca Resources

Seneca Res. Cuts Deal with IOG Capital to Fund Up to 80 PA Wells
December 3, 2015December 3, 2015

Yesterday National Fuel Gas Company, the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, announced that Seneca has partnered up with energy investor IOG Capital to essentially fund Seneca’s Marcellus drilling program in Elk, McKean and Cameron counties in north-central Pennsylvania. The outlines of the deal are thus: IOG will provide the cash and Seneca will do the drilling on up to 80 Marcellus wells on 10,500 acres in the Clermont/Rich Valley area of PA. IOG will get an 80% working interest in the wells. In addition to drilling the wells, National Fuel’s midstream subsidiary will connect the wells and get the gas to market. What this deal means is that Marcellus drilling activity in the Clermont/Rich Valley area will pick up over the few years. Here’s the details of this somewhat complicated deal…
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Coterra Energy (Cabot O&G) | Energy Companies

Marcellus Driller Cabot Oil & Gas Gets 2 New Board Members
December 3, 2015December 3, 2015

Cabot Oil & Gas, one of the largest and one of the most important Marcellus drillers, has just added two more people to their Board of Directors. One of the two is Dorothy Ables, Chief Administrative Officer of midstream (pipeline) giant Spectra Energy. Cabot’s CEO Dan Dinges calls Dorothy a midstream expert that will help guide them as midstream becomes critical moving forward. The second new member is Robert Boswell, Chairman and CEO of Laramie Energy II, a privately held oil and gas exploration and production company headquartered in Denver. Boswell has started–and successfully sold–several previous drilling companies before starting Laramie Energy II, focused on the Piceance Basin in Colorado, in 2007. Boswell is there to replace board member Robert Keiser who is retiring from the board next year. Here’s the announcement…
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CONSOL Energy | Energy Companies

Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others
December 3, 2015December 3, 2015

We’re not above admitting when we’ve been wrong. Last July MDN shared a rumor–and stressed it was a rumor–that CONSOL Energy was in talks to sell it’s CNX Gas division to Noble Energy (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A few days later we modified that rumor to say that Noble Energy would take over the joint venture acreage the two have together (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Neither of those things ended up happening–at least not yet. However, CONSOL’s largest single investor, corporate raider Mason Hawkins (who in league with corporate raider Carl Ichan have been screwing with Chesapeake Energy) told CONSOL to separate their coal business from the natural gas business, which they’ve begun to do (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Parent company CONSOL’s stock is traded as CNX. A new coal division (for investors) was created, CNX Coal (CNXC), although some (much?) of the coal assets are still part of the CNX entity. CONSOL’s midstream/pipeline business, called CONE Midstream (a jv with Noble Energy) is traded as CNNX. Yes, it’s all a mish mash. We mention all of this as background to an article by a trader commenting on CONSOL’s CNX stock which has literally crashed over the past year–down more than 80% in value. The trader calls the CNX stock a “widow maker”–meaning if you have the chops and can stick it out, there may be money to be had by investing in CNX stock. But, it’s a huge gamble, and not for the feint of heart, according to this trader…
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Allegheny County | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Shell

Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX
December 2, 2015December 2, 2015

Shell is closing its Pittsburgh-area office and moving “most of” the 180 workers who worked there to its U.S. HQ in Houston, Texas–so says a Shell spokesperson. A few workers may remain and redeploy to various field offices that Shell intends to keep open–including a field office in Tioga County, PA where they have an active drilling program. Shell drilled just eight wells in PA this year, compared to 17 last year and 31 the year before that. Notice a pattern? Perhaps most importantly Shell stresses the office closure has nothing to do with the work on a proposed ethane cracker plant in Beaver County…
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