Energy Companies

Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Range Resources Corp | Statewide PA

Range Resources Chops 11% of Workforce (so Far) in 2015
July 31, 2015July 31, 2015

The low price drillers receive for natural gas, NGLs and oil, and the results those prices have on revenues for drillers, continues to take a big bite out of the industry. Companies, rightly or wrongly, reduce head count in order to keep the balance sheet less red than it otherwise would be. One of the easiest and quickest ways to improve finances at big companies is to cut head count. Two weeks ago CONSOL Energy laid off 10% of its workforce–some 470 people (see CONSOL Slashes 10% of Workforce – 470 Jobs Gone). Range Resources is latest to confirm company-wide layoffs. So far this year Range has cut 11% of its workforce. In May, Range laid off 41 people in the Marcellus/Utica region…
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Antero Resources | Energy Companies

Antero Resources 2Q15: Production Up 67%, Continues to Bleed $$
July 30, 2015July 30, 2015

Antero Resources, one of the biggest drillers in the Marcellus/Utica and a company totally focused on northeast shale drilling filed its second quarter financial update yesterday. On the positive side, Antero’s natural gas production rose 67% year over year to 1.5 billion cubic feet per day equivalent (Bcfe/d) in 2Q15. Looking forward, Antero says they expect when you compare all of 2015 production with all of 2016 production you will see an increase of 25-30% for 2016. The company continues to drive down costs–9% lower in 2Q15 from a year ago. On the negative side, Antero continues to bleed (a lot of) money. In 2Q14, Antero had a net loss of $42 million. In 2Q15 that expanded to a net loss of $145 million–a 245% increase in the wrong direction, down. Antero is a company with great assets and a solid operation, but losing money. Antero, backed by Warburg Pincus LLC, has been mentioned in the past as a possible target for a takeover (by Spanish energy giant Repsol, but Repsol ended up buying Talisman Energy instead). No, we’ve not heard any recent rumors, specific or unspecific. But don’t be surprised if one of the majors makes a play for Antero. Here’s their 2Q15 update…
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Energy Companies | Rex Energy

Rex Energy 2Q15: Production Up 61%, MDN Provides Missing Rev # s
July 30, 2015July 30, 2015

Yesterday Rex Energy issued a second quarter 2015 “production and price realization” update–the first such update we’ve seen like it. It’s sort of a cherry-picking of the data and presenting only portions–perhaps in advance of poor financial information they’ll issue for 2Q15? Rex, our “little energy company than can and does” has plenty to boast about. Production for all hydrocarbons year over year increased an impressive 61%, from 128.8 million cubic feet equivalent per day (MMcfe/d) in 2Q14 to 206.8 MMcfe/d in 2Q15. But the second part of this brief update, in chart form, shows the prices they receive by hydrocarbon. Those prices are lot lower–through no fault of Rex’s–year over year. MDN has done some arithmetic to compare Rex’s revenues in 2Q14 and 2Q15. Here’s what we found…
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Commodity Price | Energy Companies | Industrywide Issues | Pipelines | Range Resources Corp

2 Pipelines Will Raise Gas Sale Price by $1 for Range Resources
July 30, 2015July 30, 2015

As we told you yesterday, Range Resources is excited about two pipeline projects that will go online soon–Spectra Energy’s Uniontown to Gas City (U2GC) Project and Mariner East I–Sunoco Logistics’ NGL pipeline from western PA to the Marcus Hook refinery near Philadelphia. On the quarterly analyst conference call yesterday, Range Resources CEO Jeff Ventura led off with a discussion about those two projects. To point out the importance of pipelines, these two projects will mean, according to Ventura, that Range will get $1 per Mcf more for their production once the pipelines go online. That’s a huge increase–as much as 33%–over what they receive now. Here are Ventura’s enlightening comments from yesterday’s conference call…
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Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Range Resources Corp | Statewide PA | Washington County

PA Court: Gas Storage Fields Lock Up Property for Drilling Too
July 30, 2015July 30, 2015

In some locations there are small or large underground storage fields for natural gas located in the Marcellus/Utica. We’ve covered stories in the past about one such field–the Brinker Storage Field, a 35,000 acre area in Columbiana County, Ohio that Columbia has used to store natural gas going back more than 50 years (see Some Brinker Field (OH) Leases Revised, Others in Lawsuit). More often than not these fields seem to be a flash point with respect to leases and potential drilling under them. Because the fields were leased years ago, there are disagreements about what the leases say about royalties for any gas drilled under them. Little did we know (in fact we didn’t know) there are such storage fields located in Pennsylvania too. A case went to court challenging the right of Range Resources and NiSource (their Columbia Gas subsidiary) to retain lease rights for both storing natural gas and drilling for natural gas for property partially included in a unit that includes a 14,000 underground Donegal Storage Field operated by NiSource in Washington County, PA. The landowners have just lost the case–meaning units with storage fields under them can “hold by production” undrilled land in the unit solely because there is gas stored…
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CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale | Westmoreland County

CONSOL Drills 2nd Best Utica Well Ever in PA, Flows 61 Mmcf/d!
July 29, 2015July 30, 2015

Yesterday CONSOL Energy’s management team hosted their second quarter 2015 analyst and investor conference call. There was major information contained in that call. The big news is that CONSOL just hooked up and tested a new Utica Shale well in Westmoreland County, PA that is the second best initial producing Utica well ever. Just last week MDN told you about the #1 Utica well drilled so far, by EQT (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!). The EQT monster Utica well is located in Greene County, PA. The CONSOL well just brought online ~~is located about four miles away from that well~~–and is initially producing and flowing at 61 million cubic feet per day! [Correction: CONSOL’s 61 MMcf/d gusher is the Gaut 4IH. CONSOL is right now drilling the GH9 well that is four miles from the big EQT monster well.] This is really big news and is the reason that Utica drilling has turned CONSOL’s head away from Marcellus drilling…
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Atlas Energy | Carrizo Oil & Gas | Chevron | Energy Companies | Pioneer Resources | Reliance Industries

Indian Giant RIL Looking to Dump its Marcellus Joint Ventures
July 29, 2015July 29, 2015

The single largest company in India, and one of the largest energy companies in the world, is Reliance Industries Limited (RIL). As of July 2013, RIL had invested a massive $5.7 billion in three shale joint ventures–the bulk of that in the Marcellus Shale. The company was planning to double it’s shale investment to over $10 billion! But a funny thing happened on the way the Forum. Prices for oil and gas started to slump, and RIL’s return on their shale investments slumped with it. RIL invested $3.5 billion in a Marcellus joint venture with Atlas Energy in 2010 (see Joint Venture Between Reliance Industries and Atlas Energy Worth $3.5 Billion Over 10 Years). RIL later battled Chevron to buy Atlas–but Chevron won, so RIL became a jv partner with Chevron (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). RIL currently has 3 jv’s, the Chevron jv in the Marcellus (owns 40% of that acreage), a jv with Carrizo Oil & Gas in the Marcellus (owns 60% of that acreage), and a jv with Pioneer Natural Resources in the Texas Eagle Ford (owns 45% of that acreage). Now comes word that RIL wants to exit all of their jv’s and wash their hands of U.S. shale, a 180 degree reversal from just a few years ago…
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Energy Companies | Range Resources Corp

Range Resources 2Q15: Record High Production, Net Inc. Drops 168%
July 29, 2015July 29, 2015

Range Resources Corporation, the very first Marcellus driller and one of the largest, continues to focus primarily on the Marcellus/Utica region. They also drill in the Midcontinent region, but most of their effort and time is spent in the Appalachian Basin. Yesterday Range released their operating and financial update for second quarter 2015. Among the highlights: Production averaged 1.373 billion cubic feet per day equivalent (Bcfe/d), a 24% increase over 2Q14 and a new record high for the company. Range reduced drilling costs by 11% year over year. However, the company is clearly scaling back in 2015. Range drilled and completed 89 wells in the Marcellus/Utica region during the first half of 2015, but they plan to cut that in half for the second half of 2015–planning to drill and complete an additional 44 wells. Low prices have affected Range like all of the other E&Ps we’ve covered thus far. Quarterly revenues dropped 68% year over year–from $765.5 million in 2Q14 to $247.5 million in 2Q15. Adding in expenses, Range’s net income for 2Q14 was $171.4 million in 2Q14 and dropped to minus $118.6 million in 2Q15–a 169% drop. But help on the price front for Range is on the way according to the update, in the form of two pipeline projects Range expects to go online soon…
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Energy Companies | Range Resources Corp

Range Resources Updated PowerPoint Presentation for 2Q15
July 29, 2015July 29, 2015

In addition to providing a quarterly update yesterday, Range Resources also updated its investor presentation with expected well economics, rates of return and other operational information. We have a copy of that newly updated PowerPoint below, along with a list of slides to check out…
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Eclipse Resources | Energy Companies

Eclipse Resources Releases Operations but not Financial Update
July 29, 2015July 29, 2015

Using the same strategy used by Gulfport Energy that we noted yesterday, Eclipse Resources, a smaller but important Utica/Marcellus driller based in State College, PA but drilling mostly in the Ohio Utica, released an operational update yesterday–but not their financials. Typically the operations updates are the good news, and the financials are the bad news. Eclipse’s operations update boasts an impressive 374% increase in production to 198.6 million cubic feet equivalent (MMcfe) per day in 2Q15 over 2Q14. Of particular note: Eclipse drilled a dry gas Utica well in eastern Monroe Country, OH with a 10,220 foot lateral (21,330 foot total measured depth), its longest lateral and deepest well to date–in just 17 days from Spud to Total Depth…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Wastewater

GreenHunter Brings 2 New Injection Wells Online in Meigs County, OH
July 28, 2015July 28, 2015

Big news for GreenHunter Resources: They finally have two more wastewater injection wells up and running at their Mills Hunter facility in Meigs County, OH. In May we reported that GreenHunter was hoping to have four new injection wells operating at the Mills Hunter facility by the end of June, for a total of six operating wells (see GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells). However, Mills Hunter has just two new wells now operating, for a total of four, and it’s nearly August. GreenHunter’s COO Kirk Trosclair continues to express his frustration at delays from the Ohio Dept. of Natural Resources (ODNR), saying instead of taking 30-45 days for approvals (which is what it used to take), it’s now taking ODNR more than 90 days to issue approvals. GreenHunter has two more wells at the Mills Hunter facility working their way through the approval process now. But let’s not dwell on the negatives…
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Energy Companies | Southwestern Energy

Southwestern Energy 2Q15: Production Up 30%, Net Inc. Down 481%
July 28, 2015July 28, 2015

Southwestern Energy, one of the largest natural gas producers in the Marcellus Shale and the fourth largest natural gas producer in the Lower 48 States, issued their second quarter 2015 update yesterday. There is a lot to digest in this massive update. Southwestern, you may recall, added to their already-considerable northeastern Pennsylvania Marcellus holdings by purchasing WPX’s NEPA leases, wells and operations in a $300 million that closed in February of this year (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). So this 2Q15 update will be the first full quarter to include numbers from the WPX purchase. Late last year Southwestern picked up a massive amount of new acreage and already-drilled wells in the southwestern portion of the Marcellus–most of it in West Virginia–in a $5.375 billion deal with Chesapeake Energy (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Yes, Southwestern is serious about the Marcellus! What do the 2Q15 numbers for Southwestern show?…
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Energy Companies | Southwestern Energy

Southwestern Energy Slide Deck w/MDN’s Favorites Identified
July 28, 2015July 28, 2015

Southwestern Energy Company turned in their latest quarterly update yesterday (see our companion story today). Perhaps the biggest eye-opener for us is learning that Southwestern is now the fourth largest natural gas producer in the United States (lower 48 states). In addition to yesterday’s quarterly update, Southwestern released their latest PowerPoint presentation for analysts a couple of weeks ago. We have a copy of that presentation below along with our list of favorite slides. Lots of charts and graphs and yes, even useful information for landowners, investors, supply chain companies and competitors…
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Energy Companies | Gulfport Energy

Gulfport Releases Half of 2Q15 Update – The Good News Part
July 28, 2015July 28, 2015

Gulfport Energy released their second quarter 2015 operational (but not financial) update yesterday. Among the highlights: Production was up a huge 196% year over year–to an average 473.9 million cubic feet equivalent per day (MMcfe/d). Of that number, 457.6 MMcfe/d (97%) came from the Utica Shale. Gulfport’s current production mix is 77% natural gas, 13% natural gas liquids and 10% oil. How much money did Gulfport get for their products? They received, on average, $1.99 per Mcf for natural gas, $0.30 per gallon for NGLs, and $47.40 per barrel of oil. If you average it all together, it works out to be $2.60 per Mcfe. Gulfport is clever. They released the good news yesterday–how much production is up, etc. But they haven’t released the bad news about earnings–yet. The bad news shoe will drop on August 5th when Gulfport publishes their 2Q15 financial report. Meanwhile, let’s bask in the glow of good news…
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CONSOL Energy | Energy Companies

CONSOL Energy 2Q15: Marcellus Production Up 64%, CNX Rev Down 12%
July 28, 2015July 28, 2015

CONSOL Energy released their second quarter 2015 operating and financial update today. No mention of the pressure they are currently under by their #1 shareholder to spin off or sell off the gas drilling division (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). There are some bright spots from CONSOL for 2Q15, including a 64% increase in Marcellus Shale production (39 billion cubic feet equivalent in 2Q15) and a 524% increase in Utica Shale production (1.7 Bcfe in 2Q14, 10.6 Bcfe in 2Q15). If you read through the update you’ll find CONSOL believes Utica dry gas may be where they focus their future efforts, given recent results from some of their drilling. CONSOL is a complicated company–a lot of their operations and revenue deal with coal. It was a coal company long before it began drilling for natural gas. To analyze their financials–separating out the gas from the coal–is not easy. What we can tell you is that revenue from natural gas, NGLs and oil went down year over year, from $229.7 million in 2Q14 to $201.9 million in 2Q15 (12%), which isn’t nearly as bad as some of the other drillers in the Marcellus/Utica…
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Coterra Energy (Cabot O&G) | Energy Companies | Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

Cabot Says Constitution Pipeline Construction to Begin this Fall
July 27, 2015July 27, 2015

Last Friday during the Cabot Oil & Gas quarterly earnings call update with analysts, Cabot’s CEO Dan Dinges provided an important update on the Constitution Pipeline, a 125-mile pipeline that will stretch from the gas fields of Susquehanna County, PA into New York, to Schoharie County. It is a critically needed pipeline to get Cabot’s natural gas in Susquehanna County to markets throughout the northeast and New England. Although Williams is the lead company building the pipeline, Cabot is the other primary partner in the project. Currently the Constitution is 100% FERC authorized and they have 100% of the rights of way leases signed for the project. The only hold-up is the New York State Dept. of Environmental Conservation in granting 401 Water Quality Certificates that allows the Constitution to lay pipe through and under swamps, creeks and other bodies of water. According to Dinges, they expect NY to issue those permits any day now…
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