Energy Companies

Energy Companies | Halcon Resources | Ohio | Trumbull County

False Alarm: Halcon Resources has NOT Resumed Utica Drilling
June 18, 2015June 18, 2015

In January, Halcon Resources said it was slashing its drilling budget and would do no drilling in the Ohio Utica in 2015 (see Halcon Resources: Slashes Drilling Budget 50%, No Utica for 2015). In February, Halcon CEO Floyd Wilson, famous for speaking his mind, responded to an analyst question about their plans for the Utica by joking (see Halcon CEO Floyd Wilson: “What’s the Utica?”). So imagine everyone’s surprise when the Ohio Dept. of Natural Resources (ODNR) released a report recently that listed a permit for a Halcon site in Trumbull County (the northern Utica where Wilson once said he wouldn’t drill any more sh***y wells) with a status of “DRILLING”. The Youngstown Business Journal understandably trumpeted this big news (see their story: Halcon Resumes Drilling in Trumbull County). Halcon was quick to respond. It seems that there is no active drilling at that site in Trumbull County–they wanted the permit re-issued just in case they may one day resume drilling. The designation of “DRILLING” in the ODNR report was inaccurate…
Read More “False Alarm: Halcon Resources has NOT Resumed Utica Drilling”
BG Group | Energy Companies | Industrywide Issues | M&A | Shell

Shell-BG Megamerger Approved by US Federal Trade Commission
June 18, 2015June 18, 2015

Well that was quick! On Tuesday Shell announced they’re received approval by the U.S. Federal Trade Commission to proceed with their buyout/takeover of BG, the former British Gas. You may recall we brought you the news about the Shell-BG deal in April, pointing out at the time the deal is mainly about LNG (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). Getting approval from the FTC this fast is a good sign, according to Shell CEO Ben van Beurden. Shell needs to obtain approval from every country where BG does business–not just the U.S. According to Shell, they’re still on track to complete the merger in “early 2016″…
Read More “Shell-BG Megamerger Approved by US Federal Trade Commission”
Energy Companies | Industrywide Issues | Lycoming County | Pennsylvania | Range Resources Corp | Regulation

PA DEP Slaps Range with Record $8.9M Fine for Methane Migration
June 17, 2015June 17, 2015

Last September Range Resources was assessed a then-new record high fine of $4.15 million for a series of leaking frack wastewater impoundments in southwestern Pennsylvania (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). A short time later, in October 2014, EQT replaced Range as the “highest ever” fine when the Dept. of Environmental Protection (DEP) assessed EQT a $4.53 million fine for a leaky wastewater impoundment in northeastern PA, in Tioga County (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). There’s a new mafia don, er a, “sheriff” in town–PennFuture DEP Secretary John Quigley–and he’s just slapped Range Resources with a new highest-ever fine nearly double EQT’s fine: $8.9 million. The offense? Methane migration from a well in Lycoming County, PA. The DEP says the Range well, drilled in 2011, has been leaking methane since at least 2013 (improperly cemented well casing) and the methane has “contaminated the groundwater-fed wells of private water supplies, and a nearby stream.” The DEP doesn’t say how many water wells have been affected nor which stream is affected…
Read More “PA DEP Slaps Range with Record $8.9M Fine for Methane Migration”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Buys Beaver County, PA Property for Future Cracker Plant
June 17, 2015June 17, 2015

Another positive sign that Shell may move forward with building a $2-$3 billion ethane cracker plant in Beaver County, PA. Yesterday it was reported that Shell closed on the former Horsehead zinc smelter property in Potter that would be the primary location of the cracker plant. Previously Shell extended their option to buy the property–three different times. They’ve finally bought the property–for $13.5 million according to the deed transfer, although it’s quite possible Shell paid way more than that for the property. One real estate expert in the area said the property is worth $75-$100 million. In addition to buying the old Horsehead site, Shell, over time, has also purchased 12 other parcels in the area…
Read More “Shell Buys Beaver County, PA Property for Future Cracker Plant”
American Energy Partners | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Problematic: McClendon’s AEP Not Paying Some of its Bills
June 15, 2015June 15, 2015

Does Aubrey McClendon’s American Energy Partners (AEP)–the new company he founded after being unceremoniously booted from Chesapeake Energy–have cash problems? You certainly wouldn’t think so. At last check in May 2014, McClendon had raised a staggering $8.7 billion in little more than a year (see Aubrey McClendon Raises Huge $8.7B for Shale Drilling…So Far). But the evidence keeps piling up that Aubrey isn’t paying his bills. In April, McClendon created a “blank check” company to raise $200 million in cash (see Aubrey McClendon’s New “Blank Check Company” Looks to Raise $200M). In May, Paloma Resources said a 3-way deal including McClendon’s AEP to lease 130,000 acres in the Ohio Utica Shale went bust because Aubrey didn’t have enough money to close the deal (see McClendon Running Out of Money?! Paloma Utica Deal Goes Bust). Last week MDN told you about a contractor working for AEP with several hundred thousand dollars in outstanding invoices that have gone unpaid–for more than 120 days (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Now the latest: a group of Ohio landowners have sued McClendon’s AEP along with an affiliate company and a land services company working for AEP, for non-payment of lease bonuses…
Read More “Problematic: McClendon’s AEP Not Paying Some of its Bills”
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Snyder Brothers | Statewide PA | Taxation

PA PUC Sues Snyder Bros to Collect $500K in Unpaid Impact Fees
June 15, 2015June 15, 2015

CORRECTION: The PUC misspoke in the figures given to the Pittsburgh Post-Gazette. Snyder Brothers were actually fined a total of $499,520 — $390,250 for impact and administrative fees, $11,707.50 in interest and a fine of $97,562.50. Our thanks to NGI’s Shale Daily for tracking down the mistake and alerting us to it!

Last year we brought you the interesting story of strippers in the Marcellus–stripper wells, that is (see High-Priced Strippers in PA: Semantic Gymnastics with Impact Fee). Synder Brothers is an oil/gas producer in Pennsylvania. Most of the wells they drill are vertical-only wells. Among them are 24 wells from 2011 and 21 wells from 2012 that are vertical only–but all targeting the Marcellus. According to the definition of a stripper well under the Act 13 law passed in 2012, a well qualifies as a stripper well if it doesn’t produce over 90 thousand cubic feet (Mcf) of natural gas per day. Synder Bros. says their wells don’t, ergo their wells are stripper wells and not liable to pay an impact fee. The PA Public Utility Commission (PUC), charged with evaluating what does and does not qualify, says nope–your wells target the Marcellus formation and produced above 90 Mcf for at least one month out of the year, therefore must pay the impact fee. So the PUC has sued Snyder Bros. and intends to collect $500,000 in unpaid fees in the next 20 days, PLUS a $50,000 fine for inconveniencing the PUC…
Read More “PA PUC Sues Snyder Bros to Collect $500K in Unpaid Impact Fees”
Anti-Drilling/Fossil Fuel | Energy Companies | EQT Corp | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Why Haven’t Anti Groups Opposed Andrew Place for PA PUC?
June 15, 2015June 15, 2015

Surprisingly, a very perceptive article in the Harrisburg Patriot-News asks the question, Why hasn’t there been a peep on the part of anti-drillers over the nomination of EQT’s Andrew Place to become a member of the board for the state’s Public Utility Commission (PUC)? Indeed, it’s a great question. EQT is a major Marcellus Shale driller based in Pittsburgh. The PUC is charged with collecting impact fees from shale drillers. The author of the article says imagine this headline, if it were 2014: “Corbett administration taps shale industry exec for key regulatory post.” Mainstream (Democrat) media would have a field day! We would have been treated to nonstop exposés on how Tom Corbett is in the back pocket of the drilling industry…political payoff…political patronage…backroom dealing…conflict of interest…et cetera ad nauseam. A year later it’s a Democrat governor doing the appointing, so the obedient Democrat media hasn’t breathed a word questioning the appointment. We’ve seen wingnut groups disagree with Wolf when it comes to drilling–they’d rather have no drilling than tax it, given the option. So why are these same “environmental” groups, like PennFuture which is opposed to the drilling industry and anyone/anything connected to it, apparently OK with the nomination of Andrew Place?…
Read More “Why Haven’t Anti Groups Opposed Andrew Place for PA PUC?”
Eclipse Resources | Energy Companies

Eclipse Resources Floats $650M in New IOUs
June 15, 2015June 15, 2015

Eclipse Resources, the State College, PA-based pure play driller that drills mostly in the Ohio Utica Shale, is the latest contestant to enter the mad-dash-for-cash sweepstakes. On Friday Eclipse announced they are floating a round of “senior notes” (essentially IOUs) with the aim of raising $650 million in cash. They’ll use some of the money to pay off older debts/IOUs…
Read More “Eclipse Resources Floats $650M in New IOUs”
Broome County | Energy Companies | Energy Services | Hilcorp Energy | Industrywide Issues | Lawrence County | New York | Pennsylvania | Pipelines | Williams

Tackling a Tough Issue: Compressor Stations Near Populated Areas
June 12, 2015June 12, 2015

There’s no denying that compressor stations located in populated neighborhoods create problems. We have two examples to share–one from Lawrence County, PA, and one from Broome County, NY (MDN’s backyard). The usual complaint about compressor stations–required to compress natural gas and send it on its way through a pipeline system–is the noise. Noise seems to be the chief issue with a compressor station in Lawrence County, PA where landowners, many of them (most? all?) have signed leases with Hilcorp, the company that owns the compressor station in Mahoning Township, a township that borders Ohio. Although noise has also been an issue at the compressor station in the Town of Windsor, NY (Windsor borders Pennsylvania)–about five miles from the border of the City of Binghamton–noise at the Williams compressor station is now largely mitigated. In the case of the Williams compressor, the concerns by those who live closest to it are regular releases of mercaptan and constant truck traffic to and from the station…
Read More “Tackling a Tough Issue: Compressor Stations Near Populated Areas”
Butler County | Energy Companies | Pennsylvania | Rex Energy | Upper Devonian Shale

Rex Energy Marcellus vs Upper Devonian – Which Produces More?
June 12, 2015June 12, 2015

An interesting update from Rex Energy yesterday on production results for two of their wells in Butler County, PA. Rex drilled four wells on the Renick well pad–three of them in the Marcellus layer, one of them in the Upper Devonian layer. The well results reported were for one of the Marcellus wells and the Upper Devonian well. What is fascinating to MDN is that the initial production rates for the two wells–one Marcellus and one Upper Devonian are quite different. Question: Which layer do you think produced more natural gas–the Marcellus or the Upper Devonian?…
Read More “Rex Energy Marcellus vs Upper Devonian – Which Produces More?”
Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Regulation

Bradford County, PA May Join Royalty Lawsuit Against Chesapeake
June 12, 2015June 12, 2015

In 2013, a group of Bradford County, PA landowners joined a lawsuit against Chesapeake Energy over Chessy’s apparent cheating them out of royalties using a ploy to pay high fees for pipelines in return for investments from that pipeline company later on (see Bradford County, PA Landowners Sue Chesapeake over Royalties). Some Bradford landowners were getting royalty checks from Chessy for a few dollars–literally. At issue is a state law that stipulates drillers must pay a minimum of 1/8 of revenue from gas and oil in royalties to the landowner. The controversy comes in that Chesapeake claims their contracts allow them to deduct reasonable expenses, like getting the gas to market, from the total. And with low prices–oh well–those royalty checks go far below 1/8. So what is at issue is how you define 1/8 for the purposes of paying royalties. Is it 1/8 of the gross? Or 1/8 of the net? And what would be allowed to be deducted for the net number? MDN previously told you about PA House Bill (HB) 1684 meant to clear up the confusion. HB 1684 went no where in the legislature last year (see Does PA Royalty Bill 1684 Still Have a Chance This Year?). Looks like the bill will come back around again this year–but before it does, the supervisors of Bradford County, which has land under lease with Chesapeake, are seriously considering joining the lawsuit against Chesapeake. They’re tired of waiting for 1684 to become law and tired of being shorted on their royalties…
Read More “Bradford County, PA May Join Royalty Lawsuit Against Chesapeake”
Energy Companies | Seneca Resources

National Fuel Gas’ Appoints New Bd Member from Colorado – Why?
June 12, 2015June 12, 2015

One of MDN’s favorite pastimes is reading the tea leaves. Connecting the dots. Warning: sometimes the dots we connect end up not connecting. 🙂 We don’t bring you every personnel announcement, especially new appointments to boards of directors, because, well, how does that affect the average landowner, driller or business that wants to profit from the Marcellus/Utica? We try to bring you relevant news–things that impact you. Today we have an observation–purely speculative–about a new board of directors appointment. National Fuel Gas Company, a Buffalo, NY-based utility that also has a big drilling division (Seneca Resources) and a large midstream (pipelines) operation, has just named Joseph N. Jaggers to its board of directors. Who is he and what does his appointment portend?…
Read More “National Fuel Gas’ Appoints New Bd Member from Colorado – Why?”
About MDN | Energy Companies | Industrywide Issues | Maryland | MDN Resources | New York | Ohio | Pennsylvania | Research | Statewide MD | Statewide NY | Statewide OH | Statewide PA | Statewide WV | West Virginia

MDN Launches 2015 Marcellus/Utica Databook – 4th Year!
June 11, 2015June 23, 2015

Earlier this week Marcellus Drilling News launched the fourth series of our Marcellus and Utica Shale Databook. The 2015 edition of the Databook, Volume 1, officially launched on Tuesday. Never in our wildest dreams did we think back in 2012 that the Databook would become so popular. We’ve now published three complete series–the 2012, 2013 and 2014 series (3 volumes each, or nine volumes total) and this week begins the fourth series–for 2015. The heart and soul of the Databook is a series of maps–one for every county where permits for drilling have been issued–throughout Pennsylvania, West Virginia and Ohio. The “secret sauce” for the Databook is to visually, through maps and charts (89 of them in this edition), show you who is drilling right now or soon will be–and where they are drilling…
Read More “MDN Launches 2015 Marcellus/Utica Databook – 4th Year!”
Energy Companies | Energy Services | EV Energy Partners | Industrywide Issues | M3 Midstream | Momentum | Ohio | Pipelines | Processing Plants | Statewide OH | Williams

Williams Buys Less of Utica East Ohio than Previously Planned
June 11, 2015June 11, 2015

In April MDN told you that Williams would buy out EV Energy Partners 21% share in Utica East Ohio (UEO)–a midstream/pipeline company operating in Ohio (see Williams Buys Out EVEP Interest in Utica East Ohio Midstream for $575M). The original press releases in April, from both Williams and EVEP, clearly state that Williams would buy the entire 21% EVEP share in UEO. But that didn’t happen. Yesterday Williams announced they have closed on an additional 13% from EVEP (not 21%) and for $357 million (not $575 million). The Williams press release says the other 8% share went to the other partner in the venture. You have to read the EVEP press release to learn that the other partner is M3 Midstream, otherwise known as Momentum. Seems a funny thing happened on the way to the forum…
Read More “Williams Buys Less of Utica East Ohio than Previously Planned”
Energy Companies | MDS Energy

Marcellus Driller MDS Sets up Financial Subsidiary in Denver, CO
June 11, 2015June 11, 2015

A small Marcellus-focused drilling company based in western Pennsylvania is expanding–to Denver, Colorado! But not to drill wells. MDS Energy was established in 2005 by Michael D. Snyder. By 2006 the company offered its first investment partnership. Drilling companies today are as much about investments and finance as they are about sinking holes in the ground. MDS quickly grew and in 2007 founded a sister company to concentrate on oilfield services (drilling, construction, etc.) called First Class Energy. First Class has gone on to drill over 1,000 wells, mostly for MDS competitors since MDS themselves haven’t drilled all that many wells–we count 39 permits in PA, some of which are likely duplicates, issued to MDS Energy from January 2013 through April 2015, according to the newest edition of the Marcellus and Utica Shale Databook just released. In 2011 MDS formed MDS Energy Development, LLC, an investment firm concentrating on oil and gas investments. In order to offer investments as a broker-dealer (able to execute trades for themselves or others), MDS formed the subsidiary MDS Securities, LLC. It is MDS Securities that is expanding and moving its headquarters to Denver…
Read More “Marcellus Driller MDS Sets up Financial Subsidiary in Denver, CO”
American Energy Partners | Ascent Resources | Belmont County | Energy Companies | Gulfport Energy | Jefferson County (OH) | Monroe County | Ohio | Utica Shale

Big McClendon News: Sells 35K Utica Acres, Creates New Company
June 10, 2015June 10, 2015

We have major news coming from Aubrey McClendon’s American Energy Partners (AEP). A lot of news. So buckle in. First we’ll tell you the news, then we’ll give you our take on that news–what it means. In brief, the news coming from AEP HQ in Oklahoma City is this: (1) AEP’s Marcellus/Utica AEP subsidiary, American Energy Appalachia Holdings, has been spun out into a 100% standalone company and has changed its name to Ascent Resources; (2) the CEO of Ascent is the same guy who was the CEO of American Energy Appalachia Holdings–trusted McClendon lieutenant Jeffrey A. Fisher; (3) Ascent has cut a deal with Gulfport Energy to sell 35,000 prime Utica Shale acres for $407 million; and (4) Ascent has just sold shares in the company and taken out new loans for $977 million, giving them $700 million in cash after they pay off certain other loans. Whew! Here’s the details, along with a little news of our own about AEP…
Read More “Big McClendon News: Sells 35K Utica Acres, Creates New Company”