Energy Companies

Energy Companies | Rex Energy

Hedge Fund Buys ~5 Million Shares of Rex Energy – 9% of Stock
May 28, 2015May 28, 2015

We’ve long written about, and have been fans of, a small driller by the name of Rex Energy. Rex has its headquarters in State College, PA and concentrates on just the Marcellus and Utica Shale region. Over the past year as prices have gone down for natural gas, Rex has sold off various subsidiaries and non-core holdings. The company now concentrates on drilling in just three counties–one in OH and two in PA (see Rex Energy to Sell Acreage in OH & PA, Focus on 3 Counties). Rex has had its financial struggles. In fact, in February it landed on David Fessler’s “Oil Company Death List,” an indication Rex’s debts may overwhelm its revenues (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). But Rex has soldiered on, trimming and cutting back. Yesterday we told you Rex announced a new addition to the board of directors (see Unusual Move: Rex Energy Adds Analyst to its Board of Directors). Seems like a good fit. But we asked the question, is something more at work here than just adding a new expert to the team? We have no proof of a connection, but not long ago a private investment hedge fund run by Zac Hirzel–Hirzel Capital Management–filed a Form 13G with the Securities and Exchange Commission to declare the fund has purchased nearly 5 million shares of Rex–or 9% of all outstanding shares…
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Energy Companies | Pennsylvania | Statewide PA | WPX Energy

WPX Completes $200M Sale to Still-Unnamed Buyer in NE Marcellus
May 28, 2015May 28, 2015

Earlier this month MDN told you that WPX Energy had sold contracts and contracted capacity to buy and sell natural gas on on Transco’s Northeast Supply Link pipeline for $200 million to an undisclosed buyer (see Mystery Buyer to Pay WPX Energy $200M for NE Marcellus Assets). We told you our best guess for who the buyer likely is: Southwestern Energy, the same company that just completed purchasing WPX’s leases and wells in Susquehanna County in February for $300 million (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). Yesterday WPX issued a press release to say the deal is now done and the money in the bank–but they still don’t/won’t name who the buyer was…
Read More “WPX Completes $200M Sale to Still-Unnamed Buyer in NE Marcellus”
Anti-Drilling/Fossil Fuel | Energy Companies | Exxon Mobil | Industrywide Issues | New York | Tompkins County

Park Foundation Resolution Defeated by ExxonMobil Shareholders
May 28, 2015May 28, 2015

It’s not often (enough) that the odious and disgusting Park Foundation suffers a total defeat–so we do a happy dance when it happens. It happened yesterday at ExxonMobil’s annual meeting where shareholders handed the Park Foundation (of Ithaca, NY) a humiliating defeat of their resolution that Exxon compose a cockamamie report every year detailing the so-called “risks” involved with unconventional drilling. Apparently the self-loathing Park Foundation wants Exxon to become self-loathing too–to produce a report that essentially says they’re creeps destroying Mother Earth by fracking. Three-fourths of Exxon shareholders said “no thanks.” Shareholders also voted down an idiotic proposal by a group of Catholic priests from Milwaukee who have lost their first love (Jesus Christ) in favor of a new love (Global Warming) to put a global warming expert on the board of directors. Ah, excuse us Fathers, whatever happened to your vow of poverty? Seems the priests of Milwaukee now have more money than the Lord Himself and want to throw their weight around at shareholder meetings rather than save souls…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Triad Hunter | Tyler County | West Virginia

Magnum Hunter Sells 5K Acres for $41M in Tyler County, WV
May 27, 2015May 27, 2015

Magnum Hunter Resources’ drilling subsidiary, Triad Hunter, is selling 5,210 net acres of leases in Tyler County, WV to an undisclosed competitor for $40.8 million, the company announced yesterday. The sale will take place tomorrow. According to MHR, the acreage is “non-core,” “undeveloped,” and “unproven.” The leases on the acreage are also set to expire soon, so it’s drill now or never–and for MHR, it was never. Why not convert that acreage into some cold, hard cash? Incidentally, if you do the math, it works out to be a sale price of $7,831 per acre…
Read More “Magnum Hunter Sells 5K Acres for $41M in Tyler County, WV”
Energy Companies | Pennsylvania | Range Resources Corp | Washington County

Washington, PA Neighborhood Concerned about Range Drilling Plan
May 27, 2015May 27, 2015

There are, in MDN’s book, two types of opposition to shale drilling–legitimate and illegitimate. Under the illegitimate heading are the nutters who want to ban shale drilling because it extracts a fossil fuel. We call them global warming Kool Aid drinkers. They lie about shale drilling at every turn in an attempt to enlist the support of the hoi polloi, the common folk, to oppose it. That’s what’s happened in New York. Then you have what we would call legitimate opposition–or perhaps a better word is “concern” about shale drilling. That comes from people who live in residential neighborhoods who aren’t thrilled about the truck traffic, noise, dust, nighttime lights and other negatives that come with shale drilling. The adult approach is to try and find a compromise–a way to accommodate shale drilling but reduce its impact on those who live nearby. Range Resources faces such a situation with a plan to drill a 3-well pad that may eventually go to 10 wells in a residential area of Chartiers (Washington County), PA. The pad would be about 1,000 feet from the nearest home–less than 2/10ths of mile. The neighbors are understandably concerned…
Read More “Washington, PA Neighborhood Concerned about Range Drilling Plan”
Energy Companies | Rex Energy

Unusual Move: Rex Energy Adds Analyst to its Board of Directors
May 27, 2015May 27, 2015

Rex Energy has a new member on its board of directors–Jack N. Aydin. We don’t typically report on new additions to boards of directors, but this one is unique and different. Normally board members (of exploration and production companies) have experience working for other E&Ps. Or board positions are awarded to major stockholders–sometimes referred to as “activist investors” (what used to be called corporate raiders). Jack Aydin is the only person we’ve heard of that has made the transition from E&P analyst to the board room…
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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC May Un-pause OH Utica Shale Drilling Earlier than Expected
May 26, 2015May 26, 2015

PDC Energy announced at the end of 2014 they would not drill any new wells in the Ohio Utica Shale in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). Not long after that, PDC announced early results from an Ohio Utica well pad they named (we kid you not) “Dynamite” (see PDC Energy’s Interesting 2014 – “Dynamite” in the Utica). Kind of a twisted sense of humor, no? Because of the results PDC continues to get from the Dynamite well pad, they told analysts on an earnings call earlier this month they may un-pause drilling in the Utica sooner than anticipated. When? If the price of crude oil hits $70 per barrel (right now it’s just shy of $60/barrel), PDC has said it will likely begin drilling again in the Utica. However, even if the price is in the mid- to high-sixties, that may be enough to tempt them to re-enter the Utica, given their “Dynamite” results…
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Energy Companies | Rice Energy

Rice Energy CFO Buys Another 6K Shares of Rice Midstream Stock
May 26, 2015May 26, 2015

Grayson T. Lisenby, senior vice president and chief financial officer for Rice Energy, likes what he sees in the company he works for. Lisenby recently bought another 6,000 shares of Rice Energy Midstream stock, which makes his total stake in the midstream subsidiary 27,652 shares, worth $457,000. It’s always a good sign when management eats its own dog food. In particular, if the money guy, the CFO, likes what he sees enough to put his own money at risk, that’s a really good sign…
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Allegheny County | Energy Companies | Lease & Royalty Payments | Olympus/Huntley & Huntley | Pennsylvania | Range Resources Corp

Deer Lakes School Signs Lease for $3,100/Acre + 18% Royalties
May 21, 2015May 21, 2015

Attention Martian parents from the Mars School District in Middlesex Township (Butler County), PA: In Allegheny County (bordering Butler County on the south) the Deer Lakes School District has just signed a lease to allow shale drilling under school property. Why are you Martians so afraid of shale drilling? (see Martian Arrogance: Town MUST “Protect Us” from Drilling via Zoning) At Tuesday night’s school board meeting, Deer Lakes board members voted to lease 110 acres of school property for drilling under (not on) with Huntley & Huntley, Inc. The lease terms are $3,100 per acre in a signing bonus and 18% royalties–yielding a nice check for $341,000 to the school just for signing. Those terms are not quite as rosy as last year’s deal struck by Allegheny County Executive Rich Fitzgerald who negotiated what turns out to be close to $4,000 per acre (and an 18% royalty) for leasing 1,180 acres in Deer Lakes Park (see Allegheny Co Exec Bests Range on Deer Lakes Park Lease Deal). The county park is literally a stone’s throw from the school…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream

EQT Midstream IPO Nets $621M, “Better than Expected”
May 20, 2015May 20, 2015

A few weeks ago MDN brought you the news that EQT was floating yet another initial public offering (IPO), this time doing it with a newly formed subsidiary (EQT GP) with an eye to selling more ownership in its midstream division (see EQT Floats IPO to Sell Off Some Ownership of Midstream Division). We used EQT’s existing stock price as a potential yardstick to measure what they might bring in. We thought on the low end it might be $1 billion. We were off, by a lot. We thought they would look for $50 per unit (think share of stock). Instead, they were looking for $21-$24 per unit. When the units went on sale, they got $27 per unit, which was more than they expected…
Read More “EQT Midstream IPO Nets $621M, “Better than Expected””
Anti-Drilling/Fossil Fuel | Butler County | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy

Martian Arrogance: Town MUST “Protect Us” from Drilling via Zoning
May 19, 2015May 19, 2015

Those trouble-making Martians are at it again. Four virulently anti-fossil fuel parents from the Mars School District in Middlesex Township (Butler County), PA are being assisted–we maintain illegally–with support from THE Delaware Riverkeeper (violating its own charter of operating on the other side of the state in the Delaware River Basin) and by the Philadelphia group Clean Air Council. Riverkeeper’s interference in Butler County invalidates their tax-exempt status. Get this, using money from Riverkeeper and the Clean Air Council, the four Middlesex residents are trying to FORCE locally elected leaders in Middlesex to “protect them” from an activity that’s harmless–drilling a shale well 3/4 of a mile away from the local Mars School. It’s the same type of “sue and settle” being used at the national level, being tried locally. Seven selfish PA townships sued the state (and won) to retain the right to zone where drilling can and can’t take place. Now the Martians want to (ab)use the same Act 13 law to force the town to enact zoning that this small group of residents wants regardless of what a majority of town residents want. In other words, there is only one outcome (for them) allowed under Act 13: no drilling. It is an amazingly arrogant position and needs to be vigorously opposed legally, morally, via popular opinion–in any way possible…
Read More “Martian Arrogance: Town MUST “Protect Us” from Drilling via Zoning”
Accidents | Chesapeake Energy | Columbiana County | Energy Companies | Industrywide Issues | Ohio | Utica Shale

Utica Rig Being Moved Leaked Drilling Oil for 27 Miles on OH Roads
May 18, 2015May 18, 2015

Traffic along an extended stretch of two Ohio highways in Columbiana County, OH was closed for nearly five hours on April 23 because a drilling rig that was moved leaked “a mineral-based synthetic, a non-hazardous drilling oil compound” for 27 miles as it was moved. Ouch. Somebody’s head will roll. The rig was being moved by a contractor for Chesapeake Energy. You might think somebody would notice something leaking over the course of 27 bloody miles! But apparently not. Fortunately the fluid/oil was not toxic or dangerous in any way, other than perhaps slipping on it…
Read More “Utica Rig Being Moved Leaked Drilling Oil for 27 Miles on OH Roads”
Energy Companies | Rex Energy

Rex Energy CFO Buys Another 10K Shares of Rex Stock
May 18, 2015May 18, 2015

Rex Energy is a small but determined driller headquartered in State College, PA totally focused on the Marcellus and Utica Shale. We like to call Rex “the little energy company that can and does” when it comes to profitably tapping northeast shale. As we told you a few weeks ago, Rex is, like all drillers, facing some stiff challenges right now (see Rex Energy 1Q15: Production Up 61%, Revenue Down 33%, Gulf Coast Deal). Even though revenues are down for the company, Rex’s CFO Thomas Rajan still believes in the company. He just bought another 10,000 shares of stock himself for $5.45 per share ($54,500.00). That puts Rajan’s personal holdings of Rex stock at 190,000 shares, worth over $1 million. It’s good to see Rex’s upper management eating their own dog food…
Read More “Rex Energy CFO Buys Another 10K Shares of Rex Stock”
Chesapeake Energy | Columbiana County | Energy Companies | Industrywide Issues | Ohio | Roads

Chesapeake Refuses to Fix OH Road, Town Terminates RUMA
May 18, 2015May 18, 2015

Chesapeake Energy has told Franklin Township (Columbiana County), OH to stuff their RUMA where the sun doesn’t shine, in so many words. A RUMA is a Road Use Maintenance Agreement under which a driller agrees to maintain certain roadways in a town or county that they’re using to access drill pads. When you run heavy trucks over roads constantly, it damages the roads. Chessy had such an agreement with Franklin Township and since they aren’t drilling right now (any more?) in the town, they refused to fix a road Franklin thought they should fix. So Franklin has terminated the RUMA. Next step–lower the weight limit for trucks on the roads and bar Chesapeake trucks from using them. We wonder if Chessy has ever heard the phrase “cutting off your nose to spite your face”…
Read More “Chesapeake Refuses to Fix OH Road, Town Terminates RUMA”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

More Signs Shell is Close to Decision on PA Ethane Cracker Plant
May 15, 2015May 15, 2015

More signs that Shell is much closer to a decision on whether or not it will build an ethane cracker plant in Monaca (Beaver County), PA. An executive vice president with Shell Chemicals, speaking off-script at an event in Germany, said the company expects to make a decision “soon.” After that an official Shell spokesman, speaking on-script, came along to clean up the EVP’s poopy mess and said there is no timeline on a decision. Another positive sign, according to the EVP, is that the front-end engineering and design study on the project has been completed. But according to the spokesman, even though the study is done, there are “still hurdles” before making such a large investment decision. So it’s a tit for tat, back and forth. Our take: even though we’re suffering from cracker fatigue, we continue to be hopeful that Shell will be the first of those to announce a possible cracker to actually pull the trigger and build it…
Read More “More Signs Shell is Close to Decision on PA Ethane Cracker Plant”
Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania | Regulation

Conflict of Interest Prevents Hilcorp Wellpad Approval, What Now?
May 14, 2015May 14, 2015

A strange ending occurred at the Pulaski Township (Lawrence County), PA Board of Supervisors meeting Monday night. The marathon four hour hearing saw Pulaski’s three Supervisors (actually, two of the three) approve one of two conditional use permits to allow Hilcorp to construct a wellpad on the property of Victor A. Litwinovich on Topper Hill Road–much to the consternation of anti-fossil fuel ninnies who were present. But when it came to approving a second Hilcorp wellpad–on the property of Sam Varano and his wife, Beverly, on Evergreen Road–the board couldn’t get a single motion among the three Supervisors to approve it. Why? Because one of the Supervisors is Sam Varano himself–a clear conflict of interest. A second Supervisor is Greg Carna, who owns land adjacent to Varano that is leased to Hilcorp and, presumably, would be included in the Varano well drilling unit–also a conflict of interest. That left the third Supervisor, Lori Sniezek, who won’t vote any Hilcorp matters because she is employed full-time by Hilcorp. Ethics rules barred any of the three from making a motion to approve the wellpad. Without a motion, Varano gavelled the marathon session to a close. What will happen next?…
Read More “Conflict of Interest Prevents Hilcorp Wellpad Approval, What Now?”