EMG Stabs McClendon in the Back re Chesapeake Data Lawsuit
This is a strange and complicated tale that boils down to this: Aubrey McClendon has a singular talent for finding and taking money from people who later turn around and stick a knife in his back. You may remember in February the story we brought you that Chesapeake Energy had sued its former co-founder, Aubrey McClendon, claiming he stole data on his way out the door (see Chesapeake Energy Sues McClendon for Taking His Rolodex with Him). McClendon responded that he contractually had every right to take the data he took with him (see McClendon Hires Top PR Firm to Respond to “Stolen Data” Charge). This is where it gets complicated. Aubrey has spun off several companies from his new company American Energy Partners (AEP). For example, one of the companies (named in the Chesapeake lawsuit) is American Energy-Utica, LLC, (AEU), operating in Ohio’s Utica Shale region. A major funding partner for AEU is Energy & Minerals Group (EMG). EMG is, essentially, in charge of AEU. EMG has just cut a deal with Chesapeake, behind Aubrey’s back, to give Chesapeake 6,000 acres of leases in northern Harrison County along with $25 million in extortion, er ah hush money, er ah “damages” thereby removing EMG/AEU from the Chesapeake lawsuit. The lawsuit against Aubrey and mother company AEP will continue–but the child company/EMG investors won’t be part of it. Aubrey is hopping mad because EMG didn’t tell him nor seek his blessing on their deal with Chesapeake…
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We’re passing along a bit of gossip–we call it gossip because we haven’t (yet) been able to verify it, but we believe it to be true. A long-time MDN reader wrote to tell us that he services most of the rigs operating in the Appalachian basin (Marcellus/Utica), and that Southwestern either has or is about to idle two rigs owned and operated by Precision Drilling in northeast PA: Rigs #538 and #539 in Bradford and Susquehanna counties. According to our source, the Bradford County rig was idled last week and the Susquehanna County rig will be idled this week. We don’t know if Southwestern has any remaining active rigs in northeastern PA owned by other companies.
This is truly brazen. We’ve previously written about callous drillers like Hess who drilled next door to a cemetery (see 
It’s an LNG love story. Yesterday Shell announced they are buying BG Group, the former British Gas, for $69.7 billion dollars. To put it in perspective, in 1998 Exxon bought Mobil for $80 billion, forming what is now ExxonMobil. So this is that kind of scale–really really huge. The oil and gas industry is buzzing about the deal. Is this the first of many such consolidations, given the low price of oil? Will the Shell/BG deal impact shale drilling? What does it ultimately mean? We’ll leave it to others to discuss the broader implications. What we always wonder is, how will this affect the Marcellus/Utica? We have a few thoughts. Both Shell and BG have acreage in the Marcellus/Utica. But before we get to that, the first thing to understand about the Shell/BG deal is that it’s about LNG. This merger will make Shell the largest player in the global LNG market–easily twice the size of the nearest competitor…
In early February, MDN told you that EV Energy Partners, a company with a huge amount of leased acreage in the Ohio Utica Shale region, was looking to sell its 21% interest in Utica East Ohio (UEO)–a midstream/pipeline company operating in Ohio (see 
Who were the top 5 natural gas producers in Pennsylvania for all of 2014? The names of the companies won’t surprise you if you’ve read MDN for any length of time. But the order of the list may surprise you, and the number of active wells for some of them likely will surprise you…