Energy Companies

Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream

EQT Midstream 2Q15: Lots of Pipeline Projects Still Coming
July 24, 2015July 24, 2015

While EQT Midstream numbers were included in today’s MDN story about EQT’s second quarter financial and operating results, the company also issued a second, separate update for EQT Midstream. We include a portion of that update below because it outlines the many pipeline projects the company is actively pursuing with their investment dollars. Those projects include building the new Allegheny Valley Connector; expanding existing gathering systems, including the Jupiter and Northern WV Marcellus Gathering systems; investment in the Ohio Valley Connector; investment in the Antero Resources east side expansion project; building the Mountain Valley Pipeline; and a new project announced yesterday–a new natural gas header pipeline for Range Resources (see today’s story on the Range announcement)…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream | Industrywide Issues | Pennsylvania | Pipelines | Range Resources Corp | Statewide PA | Washington County

EQT Midstream Building $250 Million Pipeline – for Range Resources!
July 24, 2015July 24, 2015

In a show of “coopetition” or cooperative competition, EQT Midstream, a division of major Marcellus/Utica driller EQT Corporation, is going to build a $250 million, 32-mile “header pipeline” for arch-rival Range Resources in southwestern Pennsylvania to “support Range’s dry Marcellus and Utica development.” The new pipeline, which will be built in two phases in 2016 and 2017, will provide Range with more than half a billion cubic feet of natural capacity per day…
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Beaver County | Electrical Generation | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Will Build Gas-Fired Electric Plant to Power PA Cracker
July 24, 2015July 24, 2015

If Shell builds an ethane cracker plant in Beaver County, PA, as they’ve been teasing since 2011, the massive plant will require a lot of electricity to power it–enough electricity to power 100,000 homes. Shell does not plan to just hook up to the local utility for its electricity. Instead, they will build their own natural gas-powered electric generating plant on location. Any electricity they generate but can’t use will be sold to the local power grid…
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CNX Resources | CONSOL Energy | Energy Companies | Industrywide Issues | M&A

CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It
July 22, 2015July 22, 2015

The plot thickens. Last week MDN was the first, and until now the only, source reporting on rumors that CONSOL Energy may sell it’s CNX Gas division (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). We were roundly criticized (privately) for our speculation and reportage of gossip heard round the water cooler–even though we made it clear it’s just rumor and speculation. We told you on Monday that rumors continue to persist (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Indeed, the rumors of a CNX sale DO continue to persist–but now it’s not just some obscure industry blog like MDN doing the speculating. Now it’s none other than CONSOL Energy’s #1 investor–corporate raider Mason Hawkins–the guy who owns 21% of CONSOL’s stock. Yes, the same Mason Hawkins who conspired with villainous corporate raider Carl Icahn to oust Aubrey McClendon from Chesapeake Energy and has since caused Chessy to sell off many of its assets. According to an SEC filing on July 20, Hawkins is actively talking to CONSOL and to potential buyers of the CNX Gas division. Hawkins is telling CONSOL to either spin off CNX Gas into its own company–or sell it…
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Energy Companies | Energy Services | Equinor/Statoil | GE Oil & Gas | Industrywide Issues | Research | Sand/Proppant

GE/Statoil Announce Winners of Sand-Alternatives Contest
July 22, 2015July 22, 2015

Quick–what two things do you need in abundance in order to horizontally drill and frack a well? Yep–water and sand. The two together make up 99.5% of what goes down the borehole to drill and frack a shale well. Water is used to fracture or break open the rock and deliver the sand, which is called a proppant because some of it stays behind and “props open” the fractures in the rock, allowing gas and oil to escape into the borehole. The vast majority of truck trips to a well pad are to deliver water and sand. GE and Norwegian giant Statoil have teamed up to run an “Open Invitation Challenge” which is a contest for technology innovators to propose alternatives to water and sand, to reduce the amount of each and therefore reduce truck trips to and from well pads. The results are in for the sand challenge and five winners will each take home a check for $25,000. The winners have some fascinating technologies and if they meet certain other criteria are eligible for more money to develop and commercialize their technologies. And what are some of these interesting bits of tech? How about a polymer that swells to 10 times its initial size when liquid is added. Or a ceramic proppant that’s shapped in the form of an X acting like a tiny steel girder to keep rock fractures propped open. This is truly creative and potentially industry changing stuff…
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Butler County | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | XTO

PA Landowners Sue XTO Energy for Shorting Them on Royalties
July 21, 2015July 21, 2015

Two Butler County, PA landowners with a combined 245.7 acres of land leased to XTO Energy have sued XTO claiming that XTO is breaking the lease agreement by paying royalties below 1/8 of what XTO receives in revenue for the gas. So far we’ve heard about Chesapeake Energy being the focus of these types of lawsuits for their shenanigans of inflating post-production costs from the pipeline company and then receiving a “kick back” of investments by the same pipeline company (see Chesapeake Shafting Landowners out of Royalties Mess Gets Messier). Although we don’t believe the XTO lawsuit claims the exact same thing, what it does claim is that the lease signed with the landowners does not include language that would allow XTO to deduct certain charges that they are now deducting. That’s the claim. Of course you need lawyers to sue and the lawyers in this case aren’t content with representing just two landowners. They want to turn this into a massive class action and represent hundreds of landowners (cha ching!)…
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Antero Resources | Energy Companies | Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

Muskingum Watershed District Royalties Fall 73% in 6 Months – Why?
July 21, 2015July 21, 2015

Ace reporter and MDN friend Bob Downing from the Akron Beacon Journal has written an insightful article about the dramatic decrease in royalty payments being received by the Muskingum Watershed Conservancy District (MWCD). The MWCD was organized in 1933 to reduce the effects of flooding and conserve water for beneficial public uses, and oversees 16 dams and reservoirs across 22 counties in Ohio, covering 20% of the state. It is a massive area of Ohio under the oversight and control of the MWCD. They’ve leased thousands of acres to Antero Resources for Utica Shale drilling and currently there are 13 Utica Shale wells drilled on MWCD property. Here’s the bombshell: Over the past six months, royalty payments to the MWCD for production from those 13 wells has dropped 73%, from just over $1 million per month last December to just under $275,000 in May. Why? That’s the question Bob set out to answer…
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CONSOL Energy | Energy Companies

CONSOL to Announce 2Q15 Earnings Loss & Future Plans on July 28
July 21, 2015July 21, 2015

A brief statement was issued yesterday from CONSOL Energy, the mothership of CNX Gas and center of ongoing rumors about whether it may either sell CNX or possibly sell it’s controlling interest in its 50/50 joint venture in some 663,350 of 750,000 net acres it owns in the Marcellus/Utica to jv partner Noble Energy (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Yesterday CONSOL telegraphed to investors that during a forthcoming July 28 second quarter earnings announcement it will show a loss from operations because of the low commodity price of natural gas. CONSOL also said in the July 28 it will discuss a plan “to generate free cash flow over the next 18-months, beginning in the second half of 2015, while maintaining annual gas production guidance at 30% growth for 2015 and 20% for 2016″…
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Energy Companies | Industrywide Issues | M&A | Noble Energy

Noble Energy Completes Buyout of Rosetta Resources
July 21, 2015July 21, 2015

Noble Energy, the company that with a 50/50 joint venture with CONSOL Energy in some 663,350 acres of Marcellus and Utica Shale leases in the northeast and rumored to be interested in either taking over all of the acreage (becoming the company of record on the acreage and doing the drilling on that acreage) or possibly buying the gas division of CONSOL Energy, one of America’s oldest and biggest coal companies, just closed on buying out Rosetta Resources Inc. Noble purchased Rosetta for its Eagle Ford and Permian Basin acreage–over 100,000 acres total (located in Texas). Here’s the details of that purchase…
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CONSOL Energy | Energy Companies | Industrywide Issues | M&A | Noble Energy

CONSOL Energy/Noble Energy Rumors Continue to Swirl
July 20, 2015July 20, 2015

Following up on our CONSOL Energy/Noble Energy rumor from last Friday, MDN now has a second source that delivers a bit more information about the rumor–refining it for us. We told you on Friday that a persistent rumor among those working for or with CONSOL Energy is that Noble Energy is lining up to buy the gas division, CNX (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A new source tells MDN that a complete buyout of CNX is not necessarily in the cards–but that Noble Energy is “taking over” the joint venture acreage the two currently hold in a 50/50 deal in the Marcellus/Utica…
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Blue Ridge Mtn Res/Magnum Hunter | Carrizo Oil & Gas | Coterra Energy (Cabot O&G) | Energy Companies | Equinor/Statoil | Exxon Mobil | Industrywide Issues | M&A | Range Resources Corp | Research | Rice Energy

Goldman: Cabot O&G, Range Resources Among Top Takeover Targets
July 20, 2015July 20, 2015

With all of this talk about CONSOL Energy and Noble Energy and mergers/acquisitions and workforce reductions, we came across an interesting story and analysis by SNL Financial summarizing a Goldman Sachs Global Investment Research report issued last Friday. The Goldman report evaluates 38 exploration and production (E&P) companies on their suitability and desirability as mergers and acquisitions candidates based on asset quality, potential upside returns to the buyer as oil and gas prices improve, and low break-even operations. That is, of all the E&Ps out there, which ones are most likely to be targeted for a takeover, and by whom? The surprising answer is that Cabot Oil & Gas and Range Resources, both huge Marcellus drillers, are among the takeover targets. And the super majors interested in doing the taking over? Exxon Mobil and Statoil…
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Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania | Regulation

Hilcorp Well Pad Approval Conundrum in Lawrence County Resolved
July 20, 2015July 20, 2015

In May MDN told you about an unusual case in Pulaski Township (Lawrence County), PA where all three Board of Supervisors had a potential conflict of interest if they proceeded to approve a well pad for Hilcorp (see Conflict of Interest Prevents Hilcorp Wellpad Approval, What Now?). The proposed well pad would sit on one of the supervisors’ property. A second supervisor owns land adjacent to the first and his land would presumably be located in the first’s drilling unit. So they were both out of the running to make a motion. The third supervisor works for Hilcorp, so she couldn’t make the motion. We asked the question, what next? Now we know. A provision in Pennsylvania state law, according to a legal notice filed by Hilcorp, states that a decision “is deemed to have been rendered in favor of the applicant” after Hilcorp published legal ads on July 9 and 16. Anyone who wants to challenge it has 30 days to do so in the PA Court of Common Pleas (county court). No comment from anti-drillers at The Fracking Resistence, Lawrence County, PA (so far) other than to note that on their Facebook page that Supervisor Sam Varano will get a well pad after all…
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Energy Companies | Stone Energy

Stone Energy’s Marcellus Production Pleasantly Surprises in 2Q15
July 20, 2015July 20, 2015

Two weeks ago Stone Energy Corporation, one of the smaller drillers in the Marcellus Shale region, issued a drilling and production update. No, Stone has not suddenly begun drilling in the Marcellus again. As we told you earlier this year, Stone hit the pause button on new drilling in the Marcellus after 1Q15 (see Stone Energy 1Q15: No New Marcellus Drilling, But More Production). The recent drilling/production update from Stone is mostly about their Gulf of Mexico deepwater operations. But notice the final paragraph where they mention Marcellus (Appalachia) production…
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Energy Companies | Warren Resources

Warren Resources Boasts Lowest Breakeven Cost in Marcellus
July 20, 2015July 20, 2015

Last week MDN told you that Warren Resources, a small, independent exploration and production company headquartered in New York City with a very small Marcellus drilling program (just two wells this year) is looking for a new CEO (see Help Wanted: Warren Resources Launches Search for New CEO). Warren Resources also issued an operations update last week. The update shows Warren is done drilling their two planned Marcellus Shale wells for 2015 and has now begin the completions process, which is expected to be done sometime in August. Below is the introduction and Marcellus portions of Warren’s operational update from last week, which includes the boast that Warren has the lowest breakeven cost in the Marcellus…
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CONSOL Energy | Energy Companies | Industrywide Issues | Jobs | M&A | Noble Energy

Rumors Circulate that CONSOL May Sell Itself to Noble Energy
July 17, 2015July 17, 2015

MDN doesn’t do this (too) often, but we’re going to engage in a little Friday idle speculation. A tad bit of rumor mongering. So take this for what’s it worth. MDN has a contact in the Pittsburgh region that tells us that *all* of CONSOL Energy’s field engineers received an email at 3:30 am–this morning–requesting that they report to the center in Canonsburg, PA to discuss dismissal packages. Our contact says CONSOL’s plan is to lay down the rest of their active drilling rigs as soon as existing wells are completed and that they will not drill any new wells for the next 18 months. The really big bombshell is this: rumors are swirling that CONSOL’s CNX gas division is getting ready to sell itself to Noble Energy…
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Energy Companies | Energy Services | Hilcorp Energy | Kinder Morgan

Big Oil & Gas Money Flows to Jeb Bush Campaign, Disappointingly
July 17, 2015July 17, 2015

We promise not to wade too far in to presidential politics this year and next. But when the race to replace Obama–and reverse his disastrous decisions–impacts the oil and gas space, we may have a thing or two to say. Like today when we read that big money Texas oil billionaires like Boone Pickens, Hilcorp Energy Co. founder Jeffery Hildebrand and Richard Kinder of Kinder Morgan are financially backing Jeb Bush–a major disappointment in our book. Jeb is a RINO–we’ll NEVER swing a lever for him, even if he’s the Republican Party pick for 2016…
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