Energy Companies

Ascent Resources | Belmont County | Energy Companies | Energy Services | Industrywide Issues | Jefferson County (OH) | MarkWest Energy | Ohio | Pipelines | Utica Shale

MarkWest to Build $1B OH Utica Dry Gas Gathering System for Ascent
August 13, 2015August 13, 2015

Although it seems there is no end of bad news in drilling company financials right now, here’s a spot of good news: MarkWest Energy, the premier midstream/pipeline company in the Marcellus/Utica (selling itself to Marathon Petroleum), has just announced they are investing $1 billion over the next three years to install a new gathering pipeline system in eastern Ohio–particularly in Belmont and Jefferson counties–mostly for Ascent Resources. Ascent, backed by major investor EMG, was once Aubrey McClendon’s subsidiary company called American Energy Appalachia Holdings that has since broken free of McClendon and American Energy Partners and is now its own 100% standalone company. The MarkWest/Ascent deal is to build a 250-mile pipeline system in the Utica dry gas region that will gather more than 2 billion cubic feet per day (Bcf/d) of natural gas not only from Ascent, but also from other producers in the area. Here’s the details from MarkWest…
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Eclipse Resources | Energy Companies

Eclipse Resources 2Q15: Revenue Up, Bleeding Less than Last Year
August 13, 2015August 13, 2015

Eclipse Resources, a smaller but important Utica/Marcellus driller based in State College, PA (but mostly drilling in eastern Ohio) released an operational but not financial update at the end of July (see Eclipse Resources Releases Operations but not Financial Update). We noted at the time that typically the operations update is the “good news” and the financial update would likely be the “bad news.” Eclipse released their financial update yesterday and hey, contrary to other companies, the news is pretty good. Let’s get the bad news out of the way first: Yes, they lost money in second quarter 2015–$42.0 million. But the net loss was much less than 2Q14 when it was $112.6 million. The good news? Revenue was up 181% to $73.4 million (amidst a price collapse over the past year), net production was up 374% to 198.6 million cubic feet equivalent per day (MMcfe/d), and Eclipse increased their estimates of production for 2015 by another 5% over last year…
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Energy Companies | EXCO Resources

EXCO Resources #1 Stockholder and his “Distressing” Investment
August 13, 2015August 13, 2015

EXCO Resources, a sizable independent driller with operations in several shale plays including the Marcellus Shale, is a company in trouble. The price of EXCO’s stock has dropped 96% during the last 5 years, 71% since the beginning of this year, and 86% during the last 12 months. EXCO appeared on David Fessler’s “Death List” of oil and gas companies earlier this year (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In April, EXCO experienced a major shake-up and saw the installation of new leadership managing the company and new members on the board of directors (see Bluescape Pulls Strings Installs New CEO, COO at EXCO Resources). The numbers for second quarter weren’t so hot (see EXCO 2Q15: Marcellus Production Down 23%; Net Income Down 1,991%), and the New York Stock Exchange has put the company on notice their stock is about to be de-listed (see More Trouble for EXCO Resources – NYSE Threatens to De-List Stock). We ran across an interesting reference to who owns the most stock in EXCO. Turns out the #1 stockholder is Wilbur L. Ross, Jr., founder of private equity firm WL Ross & Co.–someone known for investing in “distressed” companies. How much EXCO stock does Ross own and how much value has that stock lost for Ross?…
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Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania | Pipelines

Hilcorp Enclosing PA Compressor Station to Please the Neighbors
August 13, 2015August 13, 2015

Hilcorp Energy is doing the right thing in Lawrence County, PA. Back in June, MDN told you the story of residents living near a compressor station owned by Hilcorp in Mahoning Township, Lawrence County (see Tackling a Tough Issue: Compressor Stations Near Populated Areas). Residents living near the compressor station said the noise level is intolerable. It took a few months, but Hilcorp has agreed to build a new structure around the compressor station lined with special noise-deadening blankets that should take care of the problem. Kudos to Hilcorp for doing the right thing for the neighbors on Baird Road…
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American Energy Partners | Ascent Resources | EMG | Energy Companies | Energy Services | Industrywide Issues | Litigation

Ascent Resources/EMG Sues Aubrey McClendon’s Law Firm for Fraud
August 12, 2015August 12, 2015

Everybody’s suing everybody. That about sums up the mess created (sadly) by none other than Aubrey McClendon. The subsidiary businesses that were once part of McClendon’s new company, American Energy Partners (AEP), continue to run away from Aubrey as fast as they can. On Monday, Ascent Resources, once called American Energy Appalachia Holdings but separated from the AEP mothership in June (see Big McClendon News: Sells 35K Utica Acres, Creates New Company), sued the law firm representing Aubrey in the “stolen data” case brought by Chesapeake Energy. Yes it’s complicated and it’s a mess. We’ll attempt to sort this all out so it’s understandable…
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Commodity Price | Energy Companies | EV Energy Partners | Industrywide Issues

EVEP’s John Walker: NatGas Demand & Prices Heading Higher in 2016
August 12, 2015August 12, 2015

EV Energy Partners (EVEP) is a master limited partnership, or MLP, which distributes profits to “unit holders” instead of plowing profits into more projects. They like to invest in mature, already drilled wells and pipeline companies–things that act like an annuity throwing off profit with very little risk. Over the years EVEP amassed a huge amount of acreage in Ohio–before the Utica was known–mostly for conventional (vertical only) wells. That acreage is held by production and can also be drilled for unconventional/Utica Shale wells. Since 2009 EVEP has been trying to sell some/most of their Utica acreage. Seems like every year we hear “this is the year” from EVEP. Will 2015 be that year? Possibly. EVEP Chairman John Walker, in wide-ranging remarks during a quarterly earnings analyst conference call on Monday hints that new deals are coming, both third party and “drop down” deals where they sell things to themselves on paper. Most interesting to MDN were Walker’s remarks that he believes demand for natural gas will begin to really take off in 2016, and along with it, prices will go higher (more demand than supply)…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter About to Close 2 Deals Worth $1 Billion Cash
August 11, 2015August 11, 2015

Last Friday Magnum Hunter Resources CEO Gary Evans along with other top MHR executives held a quarterly earnings call. On that call we learned some very important information. According to Evans, MHR is very close to raking in around $1 billion in cash from two initiatives: a joint venture on their Utica Shale acreage, and the sale of MHR’s ownership in their midstream subsidiary Eureka Hunter. Here is what Evans said about the two initiatives, their timing, and potential partners/buyers…
Read More “Magnum Hunter About to Close 2 Deals Worth $1 Billion Cash”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter to Restart Marcellus/Utica Drilling Later This Year
August 11, 2015August 11, 2015

MDN reports in a related story today that Magnum Hunter Resources (MHR) is “this close” to closing two separate deals that will bring in around 1 billion big ones. What do they plan to do with all that money? About half of it–somewhere around $550 million of it, will be used to restart MHR’s drilling program in the Utica and Marcellus. When? Sometime in the late third to mid-fourth quarter of this year, says MHR CEO Gary Evans. Along with his comments on timing for MHR to restart their currently stalled drilling program, Evans gave the following inside information on how much (or how little) you can contract a drilling rig for these days in the Marcellus/Utica region. Used to be it cost $24,000 a day for a rig to drill your wells. But that was last year. Now?…
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Allegheny County | Energy Companies | Pennsylvania | Shell

Shell Lays Off 6,500 Worldwide – But Where?
August 11, 2015August 11, 2015

Shell recently announced that the company would reduce spending by $7 billion in 2015–a 20% cut from 2014 spending levels. Ouch. Even more painful, Shell said they are cutting more than 6,500 jobs globally (they employ 94,000) in preparation for a long period of low oil prices. How will Shell’s announcement affect their northeast drilling program (SWEPI) and the planned ethane cracker plant in Beaver County, PA? We don’t know. There are rumors circulating about Shell’s Pittsburgh office–but since we can’t verify those rumors, we won’t repeat them. As for the ethane cracker plant, there’s never a shortage of rumors that say it will, and won’t, get built. Here’s what is known…
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Energy Companies | Gastar Exploration

Earnings Call Reveals More Details on Gastar’s Marcellus/Utica Plans
August 10, 2015August 10, 2015

Last week we reported the very brief comments in Gastar Exploration’s 2Q15 update with respect to the Marcellus/Utica (see Gastar 2Q15: No New Marcellus/Utica Wells, Production Increased Anyway). Last Friday Gastar’s executives held a conference call with analysts and from that call we get a bit more color commentary on what’s happening with Gastar’s northeast drilling program, including an interesting question/answer about Gastar’s Marcellus East acreage actually being a good prospect for Utica development and a discussion about EQT’s monster Utica well in Pennsylvania…
Read More “Earnings Call Reveals More Details on Gastar’s Marcellus/Utica Plans”
Energy Companies | Rice Energy

Vote of Confidence: 2nd Rice Energy Exec Purchased Company Stock
August 10, 2015August 10, 2015

We’re always a little bit troubled when we see senior management at a company selling their shares of stock in the company they continue to manage. Not long ago four top Carrizo Oil & Gas executive officers, including the CEO, dumped 50,000 shares of stock (see 4 Top Carrizo O&G Officers, Incl CEO, Sell 50K Shares of Company Stock). Not long after that, Carrizo’s CEO Chip Johnson dumped another 6,000 shares (see Carrizo CEO Chip Johnson Sells Another 6K Shares of Stock). Then there are some companies where senior management continues to buy shares of stock. One such company is Marcellus/Utica driller Rice Energy. In May, Rice Energy senior VP and CFO Grayson T. Lisenby bought 6,000 shares of Rice Energy Midstream (see Rice Energy CFO Buys Another 6K Shares of Rice Midstream Stock). We’ve just learned (albeit late) that another Rice Energy executive–James Rogers, senior VP and chief accounting & administrative officer–also purchased stock in Rice Energy Midstream in May…
Read More “Vote of Confidence: 2nd Rice Energy Exec Purchased Company Stock”
Antero Resources | Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | EQT Corp | Gastar Exploration | Gulfport Energy | Range Resources Corp | Rice Energy | Utica Shale

Top 10 Dry Gas Utica Shale Wells of All Time (as of Aug 2015)
August 7, 2015August 9, 2015

A slide we spotted in a Gastar presentation got us to thinking: What are the top 10 Utica Shale wells? Who drilled them? And how much was their initial production (IP) rates? So we went searching and came up with the handy list below. This list is current as of August 2015. A few caveats: First, some of the wells in the list produced not only methane (“dry gas”) but also oil, condensate and natural gas liquids–i.e. other hydrocarbons. However, the numbers in the list below are for the methane/dry gas only portion of what the well flowed during an initial period of time (typically the first 24 hours). So keep that in mind. These are not necessary dry gas only wells, but the numbers are for the dry gas portion coming from the well. Second, we scoured the MDN archives and other sources to compile the list. If you believe we’ve overlooked a well–let us know! We would be happy to correct the list. As it is, we believe it to be accurate. It tells a pretty incredible story. Below the Top 10 list is another list–of MDN stories covering the details for the wells in the Top 10 list…
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Energy Companies | Energy Services | Rice Energy | Rice Midstream

Rice Energy 2Q15: Another PA Utica Monster Well on the Way?!
August 7, 2015August 7, 2015

Rice Energy, a relatively young but rapidly growing and important driller in both the Marcellus and Utica Shale plays, turned in their second quarter 2015 update yesterday. Like virtually every other North American driller the bad news is Rice experienced a net loss after expenses of $63.5 million in 2Q15 vs. a net loss of $7.9 million in 2Q14. But there was plenty of good news in the Rice update. For one thing, 2Q15 production was up an amazing 120% over 2Q14–to an average 529 million cubic feet equivalent per day (MMcfe/d). For another thing, Rice turned in to sales 11 operated Ohio Utica and 14 operated Pennsylvania Marcellus wells–the most active quarter in the company’s young history. Perhaps most exciting of all, Rice reports they have drilled their first Pennsylvania Utica well in Greene County and will hook that well up to sales sometime in the next month or two. Greene County is the location for the current ruling champ of Utica wells, drilled by EQT (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!). Will this Rice well beat it? Come close? We’re on pins and needles waiting to see!…

UPDATE: Rice Energy said on their earnings call yesterday that although they will hook up their new Greene County, PA Utica well to production in 3Q15, they will not run an initial production (IP) test on the well. Why? “Recently reported IP tests in close proximity to our position have proven our geologic model’s expectation that this area is highly prospective for Utica development. From other data we’ve gathered during the drilling and completion of this well, we would fully expect similar IP results, but our main focus is determining long-term production potential.” Bummer!
Read More “Rice Energy 2Q15: Another PA Utica Monster Well on the Way?!”
Air Quality | Anti-Drilling/Fossil Fuel | Beaver County | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Shell

Big Green Groups File to Block Shell Cracker Air Quality Permit
August 7, 2015August 7, 2015

Simply amazing. Two Big Green environmental groups–the Philadelphia-based Clean Air Council and the Washington, DC-based Environmental Integrity Project–are trying to scuttle the Shell ethane cracker in the Pittsburgh area that would bring thousands of new jobs and eventually pump something like $20 billion into the regional economy, with a ripple effect of jobs and prosperity for the entire tri-state region. The two groups have just filed an appeal with state regulators saying the PA Dept. of Environmental Protection (DEP) erred when granting an air quality permit that will allow the plant to operate (see Shell Receives Air Quality Permit from PA DEP for Cracker Plant). These two litigious Big Green groups hope to tie the whole matter up in court and “encourage” (scare) Shell away from its investment. It’s hard to put into words the depth of depravity of people who do disgusting things like this…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter 2Q15: Rev Down 60%; Eureka Hunter Still Not Sold
August 7, 2015August 7, 2015

Magnum Hunter Resources (MHR) released their second quarter 2015 update today, with plenty of information. MHR reports oil and gas production year over year in the second quarter was up 20%. But because of the price collapse over the past 12 months, MHR’s revenue for that production decreased 60% year over year. One of the juicy tidbits we pick up from the update deals with an impending sale of MHR pipeline subsidiary Eureka Hunter. You may recall that MHR CEO Gary Evans, speaking at the Hart Energy DUG East conference in Pittsburgh in June implied the company had cut a deal to sell their ownership stake in Eureka Hunter (see Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs). It seems that was the wrong (misleading?) impression. In today’s 2Q15 update we learn that MHR “is in discussions with a number of third parties regarding this potential sale transaction.” So no, the sale of Eureka Hunter is not a done deal–not yet. What else do we learn?…
Read More “Magnum Hunter 2Q15: Rev Down 60%; Eureka Hunter Still Not Sold”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

New COO for Magnum Hunter Raises a Few Interesting Questions
August 7, 2015August 7, 2015

Magnum Hunter Resources (MHR) announced a change in upper management yesterday that caught our attention. Keith Yankowsky, 50, has been hired as Executive Vice President and Chief Operating Officer reporting to CEO Gary Evans. It caught our attention for a couple of reasons. Number one, Yankowsky was hired away from Chesapeake Energy. It was just two days ago we heard about another high level defection from Chesapeake–Aubrey McClendon hired away one of his old mates to become CFO of his new company (see McClendon’s American Energy Partners Gets a New CFO). Now we have a second very high level defection from Chesapeake with Yankowsky, who was serving as Vice President of the Appalachia South Business Unit, to join a much smaller (and financially troubled) company. Two defections does not a trend make, but we have to ask: What do they know that we don’t? Hmmmm. The second thing we notice is that this appears to be a completely new position at MHR, shifting some of the responsibility for day to day operations off from Gary Evans’ plate and onto Yankowsky’s plate. Was this Gary saying, “Hey board, I need some help,” or the board saying, “Hey Gary, you NEED some help”? Hmmmm…
Read More “New COO for Magnum Hunter Raises a Few Interesting Questions”