Energy Companies

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

EQT Floats IPO to Sell Off Some Ownership of Midstream Division
May 5, 2015May 5, 2015

Looks like the mad dash to raise cash has not yet ended. Major Marcellus driller and midstream company EQT announced yesterday they are, using a subsidiary company (EQT GP Holdings) floating an initial public offering of 20 million units (roughly equivalent to shares of stock). The new company, EQT GP, is a holding company that will invest the money it raises into EQT’s midstream operations. On paper EQT’s midstream operations are run by a different entity with the stock ticker symbol of EQM (EQT Midstream). It’s all under one roof, but split on paper for tax and high finance purposes. If you net it all out, it appears to us (warning: we are neophytes with this high finance stuff) that EQT is selling off some of the ownership of EQT Midstream without exactly saying so. How much does EQT hope to raise? They don’t say in the announcement (below). But EQM’s current stock price is running at $86.45 per share as of close of business yesterday. Let’s say EQT gets, oh, $70 per unit for this new IPO. That would be a huge $1.4 billion. What if they get just $50 per unit? That would be an even $1 billion. However you slice it, EQT is looking to raise some major cash by selling off ownership of EQM…
Read More “EQT Floats IPO to Sell Off Some Ownership of Midstream Division”
Chesapeake Energy | Energy Companies

Chesapeake Energy Appoints New VP Exploration, Prev Guy “Retires”
May 5, 2015May 5, 2015

Chesapeake Energy’s CEO Doug Lawler, the man who loves to swing the ax to make his corporate raider boss Carl Ichan more money (see The Great Chesapeake Massacre: Lawler Fires 800 People in One Day), continues to raid his old company, Anadarko, for new (i.e. loyal) lieutenants. Doug’s latest hire is for the very important position of Executive Vice President – Exploration, Land and Subsurface Technology. The guy who previously held that position, John Kapchinske, doesn’t get much of a mention in the announcement. The press release says Kapchinske “recently retired from the company” and that’s all it says. We find it interesting because Kapchinske was just promoted to that position in January 2015! And four months later he retires? Perhaps he’s “retiring” because he served under Aubrey McClendon and Doug is still swinging the ax and purging the company…
Read More “Chesapeake Energy Appoints New VP Exploration, Prev Guy “Retires””
Energy Companies | Stone Energy

Stone Energy 1Q15: No New Marcellus Drilling, But More Production
May 5, 2015May 5, 2015

Stone Energy, one of the smaller drillers in the Marcellus/Utica region, released their first quarter 2015 update yesterday. Previously Stone announced they would hit the pause button on any new Marcellus drilling after 1Q15 (see Stone Energy Will Suspend Marcellus/Utica Drilling after 1Q15). Even though Stone is not drilling any new wells, they did begin bringing 8 Marcellus wells online that were previously drilled, which led to a slight bump up in Marcellus production to an average of 130 million cubic feet per day during 1Q15. Below are select portions of yesterday’s update that touch on the northeast…
Read More “Stone Energy 1Q15: No New Marcellus Drilling, But More Production”
Energy Companies | Forest County | Lease & Royalty Payments | Pennsylvania | SWEPI | Tioga County (PA)

PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks
May 4, 2015April 30, 2018

In February 2015, MDN did a deep dive into the issue of Pennsylvania leasing underneath rivers and streams to allow Marcellus/Utica Shale drilling (see PA DCNR Program Leases Under Rivers/Creeks for Marcellus Drilling). PA maintains the state owns the land underneath any river or creek that is “navigable” and therefore has the right to lease it for drilling, denying the landowners who own the land along the banks of that stream signing bonuses and royalties. It is a thorny issue. Does the state actually “own” the land under rivers and creeks? It’s an issue that (seems to us) should be litigated and decided. In that story in February MDN brought you a list of river and creek deals signed, as of early January, with an indication of who signed and how much the signing bonus was for. At the bottom of that list (we’ve included the list below for your convenience) are six deals with Shell’s SWEPI–five of the deals for tracks of river/creeks in Tioga County, PA, and one in Forest County, PA. Interestingly, the Dept. of Conservation and Natural Resources (DCNR), the state agency doing the leasing on behalf of the state, has just published notification for those six SWEPI deals in the May 2 Pennsylvania Bulletin which include the full details for each deal…
Read More “PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks”
Energy Companies | EXCO Resources

EXCO Looks to “Restructure” (Sell?) 150K Marcellus Acres
May 1, 2015May 1, 2015

Just yesterday we brought you the news that (no surprise) EXCO Resources has suspended any more drilling in their 150,000 acres of Marcellus acreage (see EXCO Resources Continues Marcellus Drilling Moratorium in 1Q15). EXCO’s newly appointed executive chairman, who also happens to be Bluescape’s executive chairman (along with other EXCO top management), held an analyst call to discuss first quarter results and the call was peppered with references to “restructuring.” We count at least 15 “restructuring” references in the call transcript. Among the things that will potentially get “restructured” is EXCO’s Marcellus joint venture with BG Group. BG is being bought out by Shell (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). In light of that buyout, EXCO is looking to “restructure” their deal–by which we take to mean they’re shopping their Marcellus acreage. The term “Appalachia” came up a few times on Wednesday’s analyst phone call…
Read More “EXCO Looks to “Restructure” (Sell?) 150K Marcellus Acres”
Energy Companies | Pennsylvania | Range Resources Corp | Washington County

Range Resources Drills #1 Producing Marcellus Shale Well in 1Q15
April 30, 2015April 30, 2015

Range Resources released their first quarter 2015 results on Tuesday. We’ve spotted a several news outlets trumpeting the “news” in the release that Range has drilled the highest-ever initial producing Utica Shale well at 59 million cubic feet per day (Mmcf/d)–the Claysville Sportsman’s Club No. 1 well in Washington County, PA. Thing is, we reported that news back in December (see Range Resources Drills Highest-Ever Initial Producing Utica Well). The Claysville Utica well is not new news. However, Range did report some new news on Tuesday: Range has drilled what they claim is the highest ever initially-producing Marcellus Shale well. This Marcellus monster well is a wet gas well that produced an initial rate of 43.4 million cubic feet equivalent per day (Mmcfe/d). Range does not identify the well by name but says it, like their monster Utica well, is located in Washington County, PA. Range reports production in 1Q15 hit a record high of 1,328 Mmcfe per day–26% higher than 1Q14. On the financial side, revenues for Range were up 1% in 1Q15 vs 1Q14, but net income was down 15%…
Read More “Range Resources Drills #1 Producing Marcellus Shale Well in 1Q15”
Allegheny County | CONSOL Energy | Energy Companies | Greene County (PA) | Marshall County | Monroe County | Noble County | Ohio | Pennsylvania | Utica Shale | Washington County | West Virginia | Westmoreland County

CONSOL Energy Narrows Future Marcellus/Utica Dev to 5 Counties
April 30, 2015April 30, 2015

CONSOL Energy released its first quarter 2015 update on Tuesday. Like virtually every other Marcellus/Utica driller, CONSOL’s 1Q15 profits dropped quite a bit–in this case 32%. But there was plenty of good news in Tuesday’s update. CONSOL reports Marcellus Shale production was up an impressive 75% year over year for the first quarter. They cut their costs in the Marcellus–from $3.18 per Mcfe in 1Q14 to $2.62 per Mcfe in 1Q15–$0.56 per Mcfe improvement (18%). The company achieved all-in cash costs of only $1.67 per Mcfe in the Marcellus Shale, which “continues to be the growth engine of the company.” Meanwhile, CONSOL continues to ramp up their Utica program. The company is currently drilling Utica wells in four counties: Greene and Westmoreland counties in PA; Monroe County, OH; and Marshall County, WV. CONSOL says the Utica wells they are currently drilling will come online in the second half of this year. However, given the current low price climate and cutbacks, CONSOL streamlined both its Marcellus and Utica operations in 1Q15. They’ve narrowed future Marcellus development to primarily Greene, Washington and Allegheny counties in PA; wet Utica development to Noble County, OH; and dry Utica development to Monroe County, OH…
Read More “CONSOL Energy Narrows Future Marcellus/Utica Dev to 5 Counties”
Antero Resources | Energy Companies

Antero’s Daily Natgas Production Surpasses Range in 1Q15
April 30, 2015April 30, 2015

Antero Resources, one of the largest Marcellus/Utica drillers, issued their first quarter 2015 update yesterday. They report an incredible 89% increase in average daily production for 1Q15 over 1Q14. Antero’s average daily production for 1Q15 was 1,485 Mmcfe/d (million cubic feet equivalent per day). Compare that to Range Resources, that had 1,328 Mmcfe/d. Antero’s daily output was 12% higher! The impression one always gets is that Range is the big boy in the Marcellus. While true, it’s interesting that Antero has now eclipsed Range in daily production. Something worth noting. It’s not all good news for Antero, however. Like other drillers, net income for Antero went down 20% year over year for the first quarter. Here’s the Antero update…
Read More “Antero’s Daily Natgas Production Surpasses Range in 1Q15”
Energy Companies | EXCO Resources

EXCO Resources Continues Marcellus Drilling Moratorium in 1Q15
April 30, 2015April 30, 2015

EXCO Resources, a sizable independent driller with operations in a number of locations, has (for the time being) suspended drilling in the Marcellus Shale. EXCO has been a company in trouble. We reported earlier this month a major shakeup at the company (see Bluescape Pulls Strings Installs New CEO, COO at EXCO Resources). At the end of 2014, EXCO suspended dividend payments for shareholders (see EXCO Resources Suspends Dividend Payments to Shareholders). Also in December, the company appeared on Debtwire’s “Distressed Watchlist” (see 4 Marcellus Companies Debut on Debtwire’s Distressed Watchlist). In February, EXCO was listed on “The Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). So it’s not all that surprising that EXCO did no new drilling, and only completed one outstanding well already drilled, in the Marcellus during the first three months of 2015. Here’s what EXCO said about Appalachia in their quarterly update from earlier this week…
Read More “EXCO Resources Continues Marcellus Drilling Moratorium in 1Q15”
Energy Companies | Pennsylvania | Rice Energy | Washington County

Rice Energy Signs Lease for New 150K Sq Ft HQ in Canonsburg
April 30, 2015April 30, 2015

Rice Energy is expanding their office and staff–big time. According to the Pittsburgh Business Times, Rice Energy has just signed a lease agreement to take 150,000 square feet of new office space at the Southpointe II complex in Canonsburg (Washington County), PA. The new digs mean Rice can put all of their office people together, under one roof. Right now the Rice work force numbers around 335. By the time they are done expanding, they hope to employ around 700. Get those resumes ready!…
Read More “Rice Energy Signs Lease for New 150K Sq Ft HQ in Canonsburg”
Energy Companies | EQT Corp | Greene County (PA) | Industrywide Issues | Pennsylvania | Sand/Proppant | West Virginia | Wetzel County

EQT Call: Fracking 1st Utica Well in June; Changing Proppant
April 29, 2015April 28, 2015

Last week MDN brought you EQT’s report on their first quarter earnings and performance (see EQT 1Q15: Production Volume Up 37%, but Price Received Down 33%). As is often the case with publicly traded companies, EQT’s top management hopped on an analyst phone call to discuss the results. And as sometimes happens, extra details came out on the call. During last Friday’s call, EQT management revealed in prepared comments and in a series of questions and answers that: (1) the company will begin fracking its first Utica well (in Greene County, PA) in early June; (2) the second Utica well EQT plans to drill will be in Wetzel County, WV; and (3) the company is considering a change to ceramic proppant instead of using sand–a move that will cost them an average of $2.5 million more per well than what they pay now using sand…
Read More “EQT Call: Fracking 1st Utica Well in June; Changing Proppant”
American Energy Partners | Energy Companies

Aubrey McClendon’s New “Blank Check Company” Looks to Raise $200M
April 28, 2015April 28, 2015

Ever hear of a special-purpose acquisition company, or SPAC? How about a “blank check company”? No, neither had we. The man who once described himself as the biggest fracker in the world, Aubrey McClendon, filed paperwork with the Securities and Exchange Commission (SEC) on April 7 to float an initial public offering (or IPO) for a company called Avondale Acquisition Corp., which describes itself in the filing as a “newly organized blank check company” that will “focus on potential mergers or other deals with existing businesses in the onshore U.S. oil and gas sector.” It is, in a sense, just a different pocket being sewn onto Aubrey’s trousers from which he can dip his hand in and pull out money placed there by other people–to buy more leases and operations in places like the Utica and Marcellus. How much money does Aubrey hope to find in that pocket? About $200 million…
Read More “Aubrey McClendon’s New “Blank Check Company” Looks to Raise $200M”
Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Summit County

Munroe Falls, OH Repeals “Home Rule” O&G Regulations
April 28, 2015April 28, 2015

In March 2011 Beck Energy drove a bulldozer onto private property in Munroe Falls (Summit County), OH with the intent of building a road to a drill pad where Beck had proper permits and permission from the Ohio Dept. of Natural Resources (ODNR) to drill a well. Munroe Falls slapped Beck with a stop work order and said, in essence, “Uh uh uh, you need to jump through our municipal ‘Mother May I?’ hoops and get our permission for everything you do before you can proceed.” Beck pushed back and sued Munroe Falls and the case was appealed, eventually, all the way to the Ohio Supreme Court. In February of this year, the Ohio Supremes ruled that Munroe Falls cannot impose so-called “home rule” laws over top of the ODNR’s rules with respect to oil and gas drilling (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). Last week Munroe Falls finally repealed their onerous oil and gas regulations, a fitting end to this years-long story…
Read More “Munroe Falls, OH Repeals “Home Rule” O&G Regulations”
Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation | Michigan | Statewide MI

Michigan Succeeds in Shaking Down Chesapeake for Measly $25M
April 28, 2015April 28, 2015

The shakedown is complete. In June 2012 Reuters tried to stir up trouble against Chesapeake Energy by broadcasting “leaked” (Watergate anyone?) emails that somehow magically appeared on the Reuters doorstep that supposedly show Chesapeake trying to collude with Encana Energy to keep the price of Michigan state land oil and gas leases artificially low (see Did Reuters Break the Law with Latest Chesapeake Story?). Eventually Michigan Attorney General Bill Schuette filed charges against Chesapeake, even though the federal government investigated and didn’t find anything worth pursuing. Schuette put his reputation on the line and was hell-bent to ensure he got something/anything out of Chesapeake. Schuette finally has a settlement–for a measly $25 million. It likely cost his department more than that to pursue Chesapeake. But, Schuette’s shakedown for $25M lets him save face, and it lets Chesapeake move on from this sham charge in Michigan…
Read More “Michigan Succeeds in Shaking Down Chesapeake for Measly $25M”
Energy Companies | Gilmer County | Roane County | Standard Oil Co | Statewide WV | West Virginia

New Marcellus/Utica Driller in WV: Standard Oil Co.
April 27, 2015April 27, 2015

A 16 year-old company, Standard Oil Co of West Virginia, has just purchased the assets of Mountain Country Partners for an undisclosed amount of money for 12,750 acres in Roane County, along with interests in about 395 oil and gas wells in Roane and Gilmer counties. Standard bought out Mountain Country Partners in bankruptcy court. With the new acreage, Standard now owns more than 30,000 acres in WV, OH and KY, with the majority of it in WV. According to Standard’s CEO Andrew Zelnar, the company has “substantial Marcellus and Utica shale leases” that it intends to begin drilling after the company floats an initial public offering to raise cash…
Read More “New Marcellus/Utica Driller in WV: Standard Oil Co.”
Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

Cabot Continues to Lower Cost/Mcf, Plans for Constitution in 2016
April 27, 2015April 27, 2015

Last Friday the Cabot Oil & Gas management team held an analyst call to discuss first quarter 2015 results–and look forward to the rest of 2015. There is a lot of good stuff to read in the transcript from the call. We can’t include it all (much as we would like to). Two things really stood out to us as we scanned through the prepared remarks by Cabot personnel and in the question and answers that followed. (1) Cabot’s direct cost to drill and extra natural gas (and oil) continues to drop thanks to their diligence. That cost is now $1.22 per thousand cubic feet equivalent. That number does not (we assume) include the cost to transport and process the natural gas. What it means is that even at somewhere around $1.75-$2.00 per Mcf (our estimate), Cabot is at break even and starts to make money. (2) The Constitution Pipeline is still on track and Cabot predicts it will be operational in mid-2016. Cabot CEO Dan Dinges had some interesting things to say about the Constitution and whether or not they intend to send current production through it–or bring online new production to help fill the Constitution…
Read More “Cabot Continues to Lower Cost/Mcf, Plans for Constitution in 2016”