Energy Companies

Energy Companies | Energy Services | Industrywide Issues | M&A | Marathon Oil | Marathon Petroleum | MarkWest Energy | Pipelines | Processing Plants

Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum
July 14, 2015July 14, 2015

While all eyes have been on the possible hostile takeover of midstream giant Williams by another midstream giant, Energy Transfer Equity (see Williams Continues to Resist ET Offer, Talks with Other Suitors), another midstream (i.e. pipeline company) merger was quietly being arranged that has rocked the midstream world. Yesterday MarkWest Energy, with major operations in the Marcellus/Utica–MDN would call it the premier midstream company in the northeast–announced it is selling itself to Marathon Petroleum Corp.’s midstream division MPLX, a master limited partnership or MLP. The “merger” (i.e. sale of MarkWest to Marathon) will create the fourth largest MLP in the United States–worth $21 billion in market capitalization. MarkWest is twice the size of MPLX, which makes this an interesting story and truly big news for the Marcellus/Utica…
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CONSOL Energy | Energy Companies | Industrywide Issues | Jobs

CONSOL Energy Swings the Ax Again – New Round of Layoffs
July 14, 2015July 14, 2015

In April MDN was the first source to break the news that CONSOL Energy was laying off nearly 5% of its workforce, including 170 lost jobs in its CNX gas division (see CONSOL Energy Lays Off Workers in CNX Gas Division in WV/PA). Barley three months later and CONSOL has swung the ax again. We don’t know how many layoffs there have been (CONSOL won’t say), but according to the Pittsburgh Business Times, a new round of layoffs has begun…
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Energy Companies | Greene County (PA) | Pennsylvania | Vantage Energy

Vantage Energy Cuts $30M Deal to Expand Water Plant in Greene Co.
July 14, 2015July 14, 2015

An interesting story from southwestern Pennsylvania. Vantage Energy has signed a $30 million deal with the Southwestern Pennsylvania Water Authority (SPWA) in Greene County to expand the SPWA’s water plant. The expansion will allow the plant to increase water deliveries from 9.2 million gallons per day to 16.1 million gallons. The expansion will also mean new water pipelines will be run to areas not previously covered by SPWA. Vantage will get access to water for its active drilling program in the county (they own 48,000 net acres in Greene County) along with some revenue from a surcharge that will be levied to other oil and gas drillers who want to purchase water from SPWA. The SPWA will get a major expansion and new pipelines to service residents in the county not currently served–along with a new revenue source in selling more water to drillers. The SPWA gets its water from the Monongahela River. Sounds like a good deal with winners all around–except last month Vantage Energy put itself up for sale (see Marcellus Driller Vantage Energy Puts Itself Up for Sale). So how does spending $30 million square with a company attempting to sell itself?…
Read More “Vantage Energy Cuts $30M Deal to Expand Water Plant in Greene Co.”
Energy Companies | Rex Energy

Rex Energy Reshuffles the Top Management Deck after COO Departs
July 14, 2015July 14, 2015

A reshuffling of senior management has taken place at Rex Energy. The current president and chief operating officer (COO), Pat McKinney, is leaving the company “to pursue an opportunity in the investment banking industry.” Rex’s CEO, Tom Stabley, will assume the role of president and will henceforth become president & CEO. Robert Ovitz, senior vice president for operations at Rex since only last fall, will become the new COO. Ovitz previously worked for Noble Energy for 13 years and was the guy who established Noble’s presence in the Marcellus Shale in PA and WV…
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Accidents | Energy Companies | Industrywide Issues | Jay-Bee Oil & Gas | Pipelines | Tyler County | West Virginia

Pipeline Ruptures & Burns at Jay-Bee Well Pad in Tyler County, WV
July 13, 2015July 13, 2015

There was a rupture of a gas pipeline at a Jay-Bee Oil and Gas drill pad in the Big Run area of Tyler County, WV early Friday morning. There was no explosion, and no one was injured–but there was a fire and the fire could be seen for miles in the dark early morning. The fire from the ruptured pipe (cause still being investigated) burned for an hour before it was extinguished. The wells on the pad are currently shut-in while the WV Dept. of Environmental Protection investigates. This is not the first Jay-Bee accident in the Big Run area…
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Anti-Drilling/Fossil Fuel | Butler County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Rex Energy

ACLU Bullies Threaten Butler County Landowners over Martian Lawsuit
July 13, 2015July 13, 2015

The most anti-American group on the planet that we know of, aside from ISIS/ISIL/Al-Qaeda, is the American Civil Liberties Union (ACLU). So we find it truly rich that the ACLU–always on the lookout to squash anything to do with the American way and freedom and apple pie–has now involved itself in what we loving call “the Martian controversy.” A small group of rabidly anti-drilling (and liberal) parents in the Mars School District in Middlesex Township (Butler County), PA want to prevent the legal, legitimate, and now fully permitted right of Rex Energy to drill a few Marcellus Shale wells three-fourths of a mile away from the Mars School. We’ve long chronicled this battle (see MDN’s list of Mars School stories). Four local residents used two non-profits backed by Big Green money and from the opposite side of Pennsylvania–THE Delaware Riverkeeper and the Philadelphia-based Clean Air Council–to file a lawsuit against the little town of Middlesex to stop any kind of drilling, a move that has so far cost local taxpayers over $35,000 in legal defense fees (see Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+). So a group of 12 Middlesex landowners and a business launched their own lawsuit against the two Big Green groups and the four local residents claiming (rightly) that they are being economically harmed (see Shoe Now on Other Foot: Landowners Sue Martian Anti-Drillers). What do the anti-drilling, liberal, wacko parents and Big Green groups do? They go crying like little girls to the ACLU and now the Big Bully ACLU has ridden into town to tell the 12 landowners and local business they have no right to file a lawsuit! In America!!!…
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Energy Companies | Lawrence County | Pennsylvania | Rex Energy | Utica Shale

Rex Energy Drilling 1st Utica Shale Well in Lawrence County, PA
July 13, 2015July 13, 2015

Exciting news from “the little drilling company that could…and does,” as MDN likes to call Rex Energy. Last week Rex released an operational update with the big news that they will drill their very first dry gas Utica Shale well in Lawrence County, PA (near the Ohio border) in the third quarter of 2015. Rex also brought online another two Marcellus Shale wells in Butler County, PA…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Dodges Another Bullet, Banks Relax Cash Requirement
July 13, 2015July 13, 2015

In June MDN told you that Magnum Hunter Resources (MHR) was being told by its big bank creditors to get $65 million cash in hand by July 10th, or else (see Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else). Or else what? Guess we’ll never know. Last week MHR announced they had gotten $55.6 million in hand and the bankers said aaaah, good ‘nuf. Whew. MHR dodged another bullet and can keep the doors open for a while longer…
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Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Regulation

Chesapeake Energy’s Theft of PA Landowner’s Royalties
July 6, 2015July 6, 2015

It’s no wonder Pennsylvania landowners are up in arms over their treatment by Chesapeake Energy. Two weeks ago MDN told you about a new bill, HB 1391, that will ensure Pennsylvania landowners receive a minimum 12.5% in royalties for any gas or oil taken from their land (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). The reason such a bill is necessary is because landowners are being robbed by some (not all) drillers who are deducting certain “post production” expenses from royalty checks–essentially stealing money that belongs to landowners. Here is a perfect example from Bradford County, PA–the most drilled Marcellus county in the state…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Industrywide Issues | Pipelines

Eureka Hunter Pipes Hits 700 Mmcf/d, MHR Still Looking to Sell It
July 6, 2015July 6, 2015

Apparently looking to pump up the value and sex appeal of one of its major assets, this morning Magnum Hunter Resources (MHR) issued a press release about its pipeline subsidiary Eureka Hunter calling attention to the news that the midstream operation has increased its throughput to an average of 700 million cubic feet of natural gas per day (700 Mmcf/d, or put another way, 700,000 million Btus, or 700,000 MMBtus). The last time MHR issued a press release about the throughput of Eureka Hunter was in March, when it had achieved an average of 623 Mmcf/d (see Eureka Hunter Pipeline Volume Continues to Expand, now 623 Mmcf/d). Just two weeks ago, facing a cash crunch, MHR announced they are looking to sell 100% of their stake in the Eurkea Hunter subsidiary (see Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs). While hitting 700 Mmcf/d is certainly a noteworthy milestone, today’s press release has the look and feel of publicity meant to influence investors rather than news meant to inform…
Read More “Eureka Hunter Pipes Hits 700 Mmcf/d, MHR Still Looking to Sell It”
Alpha Natural Resources | Energy Companies | Greene County (PA) | Pennsylvania

Alpha Natural Res. Expands in Marcellus, Drilling Begins in 30d
July 2, 2015July 2, 2015

Coal company Alpha Natural Resources is expanding their operation in the Marcellus Shale natural gas business. Yesterday Alpha announced its wholly-owned subsidiary, Pennsylvania Services Corporation (PSC), has purchased back a 50% interest in its natural gas exploration and production joint venture, Pennsylvania Land Resources Holding Company (PLR) from joint venture partner EDF Trading Resources (EDFTR) for $126 million. Alpha’s PSC subsidiary now becomes the the sole owner and operator of the PLR joint venture (which is no longer joint). Lots of acronyms of subsidiaries owning subsidiaries! Bottom line: Alpha can now control and expand a highly economic natural gas development program with 25,000+ net acres AND associated infrastructure–in the Marcellus Shale. Alpha’s EVP Brian Sullivan says they plan to begin drilling in their Marcellus acreage position (in Greene County, PA) in the next 30 days…
Read More “Alpha Natural Res. Expands in Marcellus, Drilling Begins in 30d”
Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA | Susquehanna County

PA Court Decision: Leases Don’t Go on Pause When Landowners Sue
July 2, 2015July 2, 2015

Put on your hip boots, we have some deep waters to wade through with respect to an important court decision in Pennsylvania that affects landowners and drillers. Last October MDN told you about an important lawsuit that went to the Pennsylvania Supreme Court, a case called Harrison v Cabot Oil & Gas (see Important Landowner/Driller Case Heads to PA Supreme Court). In brief, Susquehanna County, PA landowners Wayne and Mary Harrison signed a lease with Cabot Oil & Gas for $100 per acre and 12.5% royalties in 2010. Learning that others in their area got better deals and feeling they were not only hoodwinked but pressured into signing, they sued Cabot halfway through the lease (before any drilling was done) to dissolve the lease. Ultimately that lawsuit was decided in favor of Cabot. But by the time the lawsuit was done and dusted, the original 5-year term had expired without Cabot drilling. The Harrisons claimed since Cabot hadn’t drilled, the lease is now over with. Cabot said the lease went on “pause” when the Harrison’s sued–you can’t very well drill with an active lawsuit. This “lease on pause” case was appealed all the way to the Supreme Court in PA, and in February the Supreme Court ruled that just because there is ongoing litigation, Cabot didn’t have the presumption that the lease was paused (see Cabot O&G Loses PA Supreme Court Case to Extend Lease). That is, Cabot lost the case. But it was referred back to the Third Circuit Court of Appeals for more work before a final final ruling. We now have that final final ruling…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Greenlights Offshore Platform – Good Sign for PA Cracker?
July 2, 2015July 2, 2015

Time, once again, to haul out the tea leaves to see if there’s anything we can divine from an announcement yesterday by Shell that they’ve made a “final investment decision” (or FID) to move forward with a multi-billion dollar project to build a new deep-water offshore drilling platform in the Gulf of Mexico. What in the world does that have to do with the Marcellus/Utica? Good question! Let us read the tea leaves and connect some dots for you…
Read More “Shell Greenlights Offshore Platform – Good Sign for PA Cracker?”
Energy Companies | Gastar Exploration | Marshall County | Utica Shale | West Virginia

New Gastar Utica Well in West Virginia Hits Peak of 36.8 Mmcf/d
July 1, 2015July 1, 2015

Yesterday Gastar Exploration announced production rates for their second Utica well–drilled in Marshall County, WV. The Blake U-7H well production initially spiked at a high of 36.8 million cubic feet per day (MMcf/d) early in its first 30 days of being online. The overall average production rate during the first 30 days of going online was 20.2 MMcf/d. Following the first 30 days, the average production over the most recent 5 days was 14.8 MMcf/d. Which kind of gives you an idea of just how quickly well production tappers off…
Read More “New Gastar Utica Well in West Virginia Hits Peak of 36.8 Mmcf/d”
Energy Companies | Industrywide Issues | M&A | Penn Virginia Corporation

Major Investor Tells Penn Virginia to Take BP’s Money and Run
June 30, 2015June 30, 2015

Last week MDN told you that vile big money investor George Soros has finally forced Penn Virginia Corp.–a driller for which he owns 9.1% of the shares, likely the biggest single outside investor–to consider offers to sell itself. BP has made such an offer (see BP Makes Offer to Buy Penn Virginia, Other Majors Interested Too). Rumor has it that Penn Virginia rejected BP’s offer as too low and is holding out for more. That doesn’t sit well with another shark, er a, big money investor in the company, Lone Star Value Management, which owns 2 million shares of Penn Virginia (2.8%). In a press release, Lone Star essentially asks Penn Virginia if they’re nuts. Lone Star points out the BP offer, if it is what is rumored, is 80% above where the stock has been bumping along. Cha-ching! Lone Star is seeing big bucks swimming before their eyes and they’re hungry for it…
Read More “Major Investor Tells Penn Virginia to Take BP’s Money and Run”
Chesapeake Energy | Energy Companies | Energy Services | Halliburton | Industrywide Issues | Range Resources Corp | Sand/Proppant | Schlumberger

DUG East Panelists Discuss the Critical Role of Sand in Drilling
June 29, 2015June 29, 2015

Some interesting tidbits from a roundtable discussion at last week’s Hart Energy DUG East conference. The panelists included reps from Chesapeake Energy, Range Resources, Halliburton and Schlumberger. Really, the biggest of the bigs when it comes to producers and oilfield services companies in the Marcellus Shale. A lot of the discussion seemed to revolve around the lowly grain of sand. It may surprise you (as it did us) to learn just how much sand is now being used per well in the Marcellus/Utica…
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