Energy Companies

BP | Energy Companies | Industrywide Issues | M&A | Penn Virginia Corporation

BP Makes Offer to Buy Penn Virginia, Other Majors Interested Too
June 26, 2015June 26, 2015

Although headquartered in Radnor, Pennsylvania (near Philadelphia), Penn Virginia Corporation is an oil and gas driller (i.e. “producer”, i.e., E&P company) with only a small presence in the Marcellus Shale: 21,700 net acres with no drilled wells. They concentrate on oil drilling the Texas Eagle Ford Shale play. MDN told you in March that Democrat billionaire corporate raider George Soros, one of the most vile big money investors in the world who has repeatedly damaged not only corporations but entire country’s economies, had taken a 9.1% ownership position in Penn Virginia in order to force it to sell and was doing exactly that (see George Soros Finally Bullies Penn Virginia into Selling Itself). Since March all has been quiet, until yesterday when somebody leaked the rumor that oil and gas giant BP has made an offer to buy Penn Virginia, driving the stock price up over 20% at one point. However, another rumor says Penn Virginia rejected BP’s offer as too low and is holding out for more. In addition to BP, Exxon Mobil and Chevron are also said to be interested in buying Penn Virginia. All of this buyout talk is driving Penn Virginia’s stock price up, putting a big smile on George Soros’ face…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs
June 26, 2015June 26, 2015

On Monday, MDN told you that Magnum Hunter Resources (MHR) was having trouble scraping together $9.4 million to meet liquidity demands by creditors (see Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else). Today we report that one of MHR’s major investors has sold off millions of shares of the company’s stock (see Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock). There’s no ignoring that MHR, a mid-sized Marcellus/Utica driller, is a company in financial trouble. So perhaps it was not surprising that at yesterday’s closing day of the Hart Energy DUG East conference in Pittsburgh, MHR CEO Gary Evans announced that the company has a plan to rake in some big bucks. Number one, MHR has cut a deal to sell their Eureka Hunter pipeline subsidiary for $600-$700 million. Number two, Evans said MHR is working on two joint ventures for other companies to drill on or finance MHR’s drilling on MHR acreage in Ohio and West Virginia. The Ohio deal would bring in around $500 million, and the West Virginia deal around $100 million…
Read More “Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock
June 26, 2015June 26, 2015

It’s not exactly penny stock level–yet–but Magnum Hunter Resources’ (MHR) stock price has been heading in that direction. A year ago MHR’s stock was trading at $8.31 per share. Yesterday it closed at $1.86 per share, down 78% in one year (see the chart below). MDN is not a “stock picking” site, although a number of investors from some of the world’s largest banks and investment firms do subscribe. We don’t often talk about the price of a company’s stock or who’s buying and selling a company’s stock–unless major investors (or management) is doing the buying or selling. A company’s stock price is a relative indicator of the company’s financial health. It’s no secret that the oil and gas industry’s “upstream” or drilling sector has been hard hit over the past 12 months and stock prices for companies in the sector have dropped. MHR is one of those stocks hard hit, not least of which because they owe a heck of lot more money than they’re making (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). So it caught our eye when we saw that one of MHR’s major stockholders, Relational Investors, dumped 6.3 million shares of MHR earlier this month–at a price of $1.29-$1.31 per share…
Read More “Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock”
Energy Companies | Greene County (PA) | Pennsylvania | Rice Energy | Utica Shale

Rice Energy Exec: 90% of Utica Gas Will Come from 3-4 Counties
June 25, 2015June 25, 2015

An update on what Rice Energy is up to, from none other than Rice’s vice president in charge of exploration, Derek Rice. Derek said at yesterday’s Hart Energy DUG East conference in Pittsburgh that his company is, this week, finishing up work on a Utica Shale well in Greene County, PA. Derek admitted there’s differing opinions within the company about whether or not they should be drilling Utica wells in PA. He says the rock is great, they’re convinced of that. The “problem” is that it costs a heck of a lot more to drill a deep Utica well than it does a Marcellus well. If Rice can squeeze more costs out of drilling a Utica well, it will be profitable. He also said something very interesting about the geography of the Utica–that he believes 90% of the gas that will come out of the Utica play will come from just three or four counties…
Read More “Rice Energy Exec: 90% of Utica Gas Will Come from 3-4 Counties”
Allegheny County | CNX Resources | CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale

CONSOL Energy May Add More Utica Wells to Pitt. Airport Project
June 25, 2015June 26, 2015

Correction: The information MDN used for this post was derived from an inaccurate news account that misstated CONSOL received a permit to drill one Utica well at the Pittsburgh Airport. That was factually incorrect. CONSOL has received no permits for a Utica well–only permits for Marcellus and Upper Devonian wells. If they pursue drilling Utica wells at the airport, they will likely need a new environmental impact study done first. Our thanks to CONSOL for contacting us to clarify.

From the “Hmmm, that’s interesting” department: Speaking at yesterday’s Hart Energy DUG East conference in Pittsburgh, CONSOL Energy vice president Craig Neal said the company is considering requesting a change in its drilling plan at the Pittsburgh International Airport. CONSOL, as you may recall, is in the midst of a multi-year program to drill 45 Marcellus Shale wells and a handful of ~~Utica and~~ Upper Devonian wells at the Pittsburgh Airport (see Sky is the Limit: CONSOL Begins Drilling at Pittsburgh Airport). The permits and plan call for ~~a single~~ no Utica Shale wells, but yesterday Neal said the company is mulling over the possibility of swapping out some of the Upper Devonian wells they had planned to drill on some pads with deeper Utica wells instead…
Read More “CONSOL Energy May Add More Utica Wells to Pitt. Airport Project”
Energy Companies | Vantage Energy

Marcellus Driller Vantage Energy Puts Itself Up for Sale
June 23, 2015June 23, 2015

Vantage Energy, a driller with operations in the Marcellus (in southwestern Pennsylvania) and in the Texas Barnett Shale, has had a bumpy ride over the past year or so. In 2014 Vantage planned to launch an initial public offering (IPO), hoping to raise $600 million–but later scraped that plan (see Vantage Energy Postpones IPO Citing Unfavorable Market Conditions). In December, the company was assessed a hefty fine by the PA Dept. of Environmental Protection (see Vantage Energy Fined $1M for Multiple Errors at Greene County Site). And in February of this year, Vantage had the dubious distinction of being one of the companies on David Fessler’s oil & gas company “death list” of companies with debts four times or higher than earnings (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). [MDN Note of Apology: The Vantage in David Fessler’s list is Vantage Drilling, NOT Vantage Energy–in no way connected to Vantage Energy. We regret the error!] So it was no surprise for MDN to read that Vantage has put itself up for sale. The company has hired Barclays to help find a suitor to buy them. Among the potential suitors are several Marcellus drillers…
Read More “Marcellus Driller Vantage Energy Puts Itself Up for Sale”
American Energy Partners | Energy Companies | Energy Services | Traverse Midstream

McClendon’s New Empire Continues to Separate and Leave
June 23, 2015June 23, 2015

Aubrey McClendon’s new American Energy Partners continues to shed its component parts. Just two weeks ago MDN brought you the news that the largest subsidiary of the company in the Marcellus/Utica region, American Energy Appalachia Holdings, is being spun out into a 100% standalone company, changing its name to Ascent Resources (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Aubrey himself is still on the board of Ascent, but virtually everything about the new company, we’ve been told, has nothing to do with McClendon. It’s as if they’re running as far and fast as they can away from McClendon. Now, a second large subsidiary of American Energy Partners–the midstream part of the company–is doing the same thing. American Energy – Midstream, LLC announced today it is changing its name to Traverse Midstream Partners LLC (Traverse Midstream). Traverse is transitioning to a 100% standalone company, fully independent of the mother ship American Energy Partners. According to the press release, the spin-off into a new company was “contemplated since the company’s founding in June 2014.” The new company will be totally and completely separated effective July 1, 2015…
Read More “McClendon’s New Empire Continues to Separate and Leave”
Air Quality | Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Regulation | Shell | Statewide PA

Shell Receives Air Quality Permit from PA DEP for Cracker Plant
June 23, 2015June 23, 2015

Finally, after months and months of waiting, the Pennsylvania Dept. of Environmental Protection (DEP) has granted an air quality permit that allows Shell to operate a proposed ethane cracker plant in Monaca (Beaver County), PA. MDN told you the DEP signaled they would approve the air quality permit back in March (see PA DEP Signals Approval for Shell Ethane Cracker Air Quality Plan). Three months later the DEP finally issued the permit–no small miracle given the agency is now run by PennFuture DEP Sec. John Quigley. Shell had stated getting the permit would be a “critical” step in the process to moving forward. Now that they have the permit, what kinds of encouraging words do we have from Shell? The permit “does not mean we have made a final decision to build the project.” Which is the same standard line they’ve delivered since 2011 when this whole process began (see Shell Commits to Building a Billion Dollar Chemical Plant in the Marcellus Region of U.S.). Four years of being teased with this project has led us to think we’ve contracted post traumatic cracker disorder (PTCD)…
Read More “Shell Receives Air Quality Permit from PA DEP for Cracker Plant”
Chesapeake Energy | Energy Companies

Are the Buyout Sharks Starting to Circle Chesapeake Energy?
June 23, 2015June 23, 2015

The buyout sharks are circling midstream behemoth Williams, as we reported yesterday (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). For some time, there have been rumors that the upstream sector may also see more buyout activity. Specifically, Chesapeake Energy is a favorite name that keeps reappearing. Are the buyout sharks starting to circle Chesapeake? MDN spotted an open letter to corporate raider Carl Ichan on the Seeking Alpha website. Icahn is the second largest investor in Chesapeake. We think the letter illustrates what’s wrong with capitalism, if we might be so bold as to say so. The letter writer encourages Ichan to make a bid for Chessy since the company’s stock is priced half today what it was a year ago. The letter writer predicts a buyout bid by Ichan would create a bidding war and somebody else would buy the company for big bucks, enriching Ichan and other investors (and no doubt lead to more Chesapeake employees losing their jobs). What if Ichan himself wins the bidding war he starts? No sweat. Just wait 6-12 months, says the letter writer, and then break the company apart into pieces and sell it off piece by piece and make 3-4x your original investment. We think that’s a phenomenally poor idea…
Read More “Are the Buyout Sharks Starting to Circle Chesapeake Energy?”
Clay County | Cunningham Energy | Energy Companies | West Virginia

Cunningham Strikes Oil in West Virginia’s Big Injun Territory
June 22, 2015June 22, 2015

Back in 2013 we warned you that the injuns were coming–the Big Injun sandstone formation in West Virginia (see The Injuns are Coming! Injun Formation Drilling, that is). We told you then that Cunningham Energy of Charleston, WV was about to drill several shallow horizontal wells in the politically incorrectly named Big Injun Formation. We thought Cunningham was drilling for natural gas, but as it turns it, it was oil they were after. And, according to a press release, it’s oil that Cunningham has struck in the Big Injun…
Read More “Cunningham Strikes Oil in West Virginia’s Big Injun Territory”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else
June 22, 2015June 22, 2015

Magnum Hunter Resources’ (MHR) creditors (the bankers) want to be sure the company has enough money on hand to a) pay them back, and b) stay out of bankruptcy. So the creditors gave MHR a deadline of last Friday, June 19th, to make sure they have $65 million cash on hand. MHR couldn’t do it–so the creditors gave them a new deadline–July 10th. The company says they’ve already raised $55.6 million–so they just need a measly $9.4 million to meet the requirement by the new deadline. Or else…
Read More “Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else”
Beaver County | Belmont County | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell

Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope
June 22, 2015June 22, 2015

In April Ohio officials announced Belmont County, OH has been chosen as the site of a potential ethane cracker plant (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Which led us to admit that since we’ve been teased with a cracker for over three years now–with NO ONE actually committing to such a plant–we’re experiencing “cracker fatigue.” But not long after Shell made some serious moves toward committing to build a cracker plant in western Pennsylvania, not far from Pittsburgh. The most recent positive sign is that Shell finally, after three years of faffing about, earlier this month purchased the property the plant would be built on (see Shell Buys Beaver County, PA Property for Future Cracker Plant). Does a Shell cracker reduce the likelihood of an cracker plant being built less than two hours away in Belmont County, OH? Not according to officials in Ohio. In fact, they’re not worried at all…
Read More “Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope”
Eclipse Resources | Energy Companies

Eclipse Lowers IOU Offering Expectations – by $100M
June 22, 2015June 22, 2015

Last week Eclipse Resources, a small but important driller primarily focused on the Ohio Utica Shale play, announced they are floating senior notes (IOUs) in an attempt to raise $650 million (see Eclipse Resources Floats $650M in New IOUs). Poof! There goes $100 million. On Friday Eclipse said they thought about it and they now want to raise $550 million with those notes, not $650 million as previously advertised…
Read More “Eclipse Lowers IOU Offering Expectations – by $100M”
Blue Ridge Mtn Res/Magnum Hunter | EdgeMarc Energy | Energy Companies | Ohio | Washington County (OH)

More Utica Drilling on the Way in Washington County, OH?
June 19, 2015June 19, 2015

We’re always on the lookout for signals–little things that we notice that may indicate where drilling will increase or decrease. We think we’ve found another one. EdgeMarc Energy is a small driller headquartered in the Pittsburgh area, formed in 2012. The company, according to their website, now has 50,000 acres leased in the Marcellus and Utica Shales. In checking our Marcellus and Utica Shale Databook series, we’ve not found a single permit issued to EdgeMarc, ever, but we have found a reference on MDN to a joint venture with Magnum Hunter Resources (see Magnum Hunter JV Deal with EdgeMarc to Drill 1,080 Acres in OH). EdgeMarc’s jv with MHR is interesting because the 1,080 acres targeted for jv drilling are in Washington County, Ohio, a county that has seen some, but not a lot, of Utica Shale drilling in the past (an average of 1 permit a month). Here’s the signal we’ve found that perhaps EdgeMarc, or jv partner Magnum Hunter, is about to ramp up more drilling in Washington County, Ohio…
Read More “More Utica Drilling on the Way in Washington County, OH?”
Anti-Drilling/Fossil Fuel | Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Regulation | Wastewater

FWAP Asks SEC to Investigate GreenHunter for False Statements
June 19, 2015June 19, 2015

The anti-fossil fuelers are getting desperate. They’re concerned that GreenHunter Resources, a fresh water and frack wastewater company operating in the Marcellus/Utica, may actually pull it off and begin to barge frack wastewater (brine, actually) down the Ohio River. MDN was the first to disclose that GreenHunter is going to push back against the ongoing delays coming from the Obama White House in pressuring the U.S. Coast Guard to delay granting permission to GreenHunter to barge brine. We analyzed and told you what’s happening–that GreenHunter is using the Coast Guard’s own regulations from 1987 against them, using the definition of oilfield wastes to apply to brine from shale wells (see GreenHunter/Coast Guard War of Words — MDN Explains It). Essentially GreenHunter is daring the Coast Guard to take them to court to try and stop them (a brilliant move). GreenHunter says they will begin barging in three months’ time (see GreenHunter Says OH River Wastewater Barging to Begin September). Along comes the virulent anti-drilling organization FreshWater Accountability Project (FWAP, which we pronounce “fuh-wop”) with their own twist to try and stop GreenHunter. FWAP has asked the U.S. Securities and Exchange Commission (SEC) to investigate GreenHunter for making false statements to investors about their permission (or lack thereof) to begin barge shipments of brine…
Read More “FWAP Asks SEC to Investigate GreenHunter for False Statements”
Energy Companies | Energy Services | Keystone Clearwater Solutions | Rex Energy

Rex Energy Sells Keystone Water Subsidiary to American Water Works
June 19, 2015June 19, 2015

In April MDN told you that Rex Energy was shopping its 60% ownership of Keystone Clearwater Solutions, the company’s water service subsidiary (see Rex Energy: 1Q15 Production Up 60%; Still Selling Keystone Clearwater). Rex has found a buyer and is selling to American Water Works (AWW). AWW is buying the whole enchilada, not just Rex’s part, for $130 million. Rex’s portion of the sale price will be $66 million, which Rex plans to use to pay down debt and for “general corporate purposes”…
Read More “Rex Energy Sells Keystone Water Subsidiary to American Water Works”