Energy Companies

Energy Companies | Noble Energy

Noble Energy 2014 in Review, Spending $900M on Marcellus in 2015
February 20, 2015February 20, 2015

Noble Energy issued a pair of announcements yesterday. One was their their fourth quarter 2014 and full year 2014 results, the other was “guidance” or projections for what they plan to do in 2015. Noble is a big company with drilling both onshore and offshore. Of interest to us is their Marcellus program. In 2014, Noble drilled 24 Marcellus wells and they drilled their very first Utica well (in WV). According to Noble’s guidance, they plan to spend roughly $900 million on new Marcellus drilling in 2015…
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Access Midstream Partners | Bradford County | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Williams

PA Landowners File RICO Royalty Lawsuit Against Chesapeake/Williams
February 19, 2015February 19, 2015

Along with acquiring Access Midstream (formerly Chesapeake Midstream), Williams has just acquired a brand new lawsuit. Two Bradford County, PA law firms along with a New Jersey law firm on Tuesday filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit on behalf of 90 landowners in Bradford County against Chesapeake Energy and Williams Partners (because Williams is now the owner of what was Access Midstream) claiming Chessy and Williams/Access conspired to defraud landowners of royalty money by deducting post-production expenses they had no right to deduct…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Susquehanna County

Cabot O&G Loses PA Supreme Court Case to Extend Lease
February 19, 2015February 19, 2015

In October MDN told you about an important lawsuit that went to the Pennsylvania Supreme Court, a case called Harrison v Cabot Oil & Gas (see Important Landowner/Driller Case Heads to PA Supreme Court). In brief, Susquehanna County, PA landowners Wayne and Mary Harrison signed a lease with Cabot Oil & Gas for $100 per acre and 12.5% royalties. Learning that others in the area got better deals and feeling they were not only hoodwinked but pressured into signing, they sued Cabot halfway through the lease to dissolve it. Ultimately that lawsuit was decided in favor of Cabot. But by the time the lawsuit was done and dusted, the original 5-year term had expired without Cabot drilling. The Harrisons claimed since Cabot hadn’t drilled, the lease is now over with. Cabot said the lease went on “pause” when the Harrison’s sued–you can’t very well drill with an active lawsuit. This “lease on pause” case was appealed all the way to the Supreme Court in PA, and on Tuesday they rendered their decision…
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American Energy Partners | Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation

Chesapeake Energy Sues McClendon for Taking His Rolodex with Him
February 19, 2015February 19, 2015

This is rich. Yesterday Chesapeake Energy sued its former co-founder, Aubrey McClendon, claiming he took his rolodex (“contacts list” for our younger readers) with him when he left the building. Chesapeake said the data McClendon took with him had “trade secrets” in it. McClendon, in responding to the frivolous lawsuit, said that the data he took was part of his contractual agreement with Chesapeake. McClendon was and remains Chessy’s biggest partner, with a working interest in almost all of the wells they’ve drilled. Apparently his ongoing relationship with the company he co-founded bothers the Powers That Be (corporate raiders Carl Icahn and Mason Hawkins)…
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Energy Companies | Rex Energy

Rex Energy 2014: Revenues Up 39%, Production Up 66%, 50 New Wells
February 19, 2015February 19, 2015

Rex Energy, our “little energy company that could, and does” in the Marcellus and Utica Shale turned in its 2014 financial and operational update yesterday. Rex had a good year in 2014, despite prices for natural gas heading lower. They hit a new high for production–averaging 154.4 million cubic feet equivalent per day (MMcfe/d)–that’s 66% more than the 2013 average. Total proved reserves jumped up 57% to 1.3 trillion cubic feet. Rex drilled 50 new wells across their acreage in the Marcellus and Utica Shale, and they brought 46 wells online during the year. They earned $298 million in revenue in 2014 (up 39% over 2013) and they have $420 million of liquidity–money available to use for more drilling…
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Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH | Summit County

OH Supreme Court Strikes Down Home Rule in Gas Drilling Case
February 18, 2015February 18, 2015

Cases before the high courts of both New York and Pennsylvania in the past year have ruled that local municipalities can control oil and gas drilling within their borders–so-called “home rule” statutes. In the case of NY the high court went berserk and said towns can actually ban such drilling, which of course strips away private property rights guaranteed under the U.S. Constitution. In PA it was a little better, but not much. PA’s high court gutted provisions in the state’s Act 13 law making for a crazy-quilt patchwork of local zoning regulations that PA’s drillers must now navigate through. One state’s high court, however, has gotten it right. Yesterday the Ohio Supreme Court issued its long awaited ruling in the Munroe Falls v Beck Energy case (for background, see Beck Energy & Munroe Falls Go to Court – Again). In a 4-3 ruling, the OH Supremes said the City of Munroe Falls cannot stop Beck Energy from drilling a well that was properly permitted by the Ohio Dept. of Natural Resources (ODNR)…
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Energy Companies | Rice Energy

Rice Energy Trims 2015 Budget 19%, Production Soars 61% in 4Q14
February 18, 2015February 18, 2015

Yesterday Rice Energy, a small but rapidly growing driller in the Marcellus and Utica Shale, issued a recap of 2014 along with “guidance” (or projections) for what they plan to do in 2015. The disappointing but understandable news is that Rice plans to spend less money drilling in 2015 than they did in 2014–$890 million for 2015 compared with $1.1 billion in 2014–a 19% reduction. That’s not nearly as deep a cut as many Marcellus/Utica drillers. For 2015, Rice plans to drill 61 new wells using that $890 million, and bring 36 new wells online. Production for Rice soared in 4Q14–up 61% from the previous quarter! Below are a pair of announcements from yesterday with loads of details…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Slashes Drilling Budget by 75% for 2015
February 18, 2015February 18, 2015

In 2014 Magnum Hunter’s capital budget for drilling (most of it in the Marcellus and Utica) was $400 million (see Magnum Hunter 2014 CapEx: Utica/Marcellus). We recently warned you that MH was planning to quit drilling in 2015, at least until they get a 40% discount from oilfield services companies (see Magnum Hunter CEO: No New Marcellus/Utica Drilling in 2015). Indeed that seems to be the case. Yesterday MH released their 2015 budget. It contains $100 million (down 75% from 2014), which is mostly tidying up wells already under way and drilling perhaps one or two new wells, along with some change for more acreage acquisitions…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Susquehanna County

Cabot O&G Clipped $50K by SRBC for Lack of Water Permit
February 16, 2015February 16, 2015

Timing is everything. If you start drilling a hole too early, it will cost you. In this case, $50,000. That’s the amount Cabot Oil & Gas has offered to pay the Susquehanna River Basin Commission (SRBC) for their eager-beaver error in drilling a hole on a new well pad in Susquehanna County, PA before they had the necessary approval from the SRBC. No, the SRBC doesn’t suddenly issue permits to drill–that’s the job of the DEP (Dept. of Environmental Protection). However, the SRBC does issue permits for the water that’s needed to drill, and it was that permit Cabot didn’t have in hand when they started to drill late last year. The SRBC says it’s not a big deal and that Cabot is normally “very compliant.” That is, it was a mistake and not intentional. There was no environmental harm as a result. However, for Cabot, it was a costly mistake…
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Energy Companies | JKLM Energy | Lease & Royalty Payments | Pennsylvania | Potter County | Utica Shale

Potter County, PA Hospital Leases Land to JKLM for Utica Drilling
February 13, 2015September 28, 2015

UPDATE: A sharp MDN reader tipped us with more of the details on this deal. The Cole property is 742.9 acres (located in the Townships of Eulalia and Sweden, and in the Borough of Coudersport); the lease signing bonus payment is reportedly $2,200 per acre, which makes the up-front payment to Cole Memorial a whopping $1,634,380; and the royalty is rumored to be 15%. Thanks to our great reader!

Cole Memorial Hospital in Coudersport (Potter County), PA has reportedly signed a lease with JKLM Energy to allow shale drilling on a “substantial amount” of hospital-owned property. What we don’t know about the deal is more than we do know. We don’t know how many acres. We don’t know how much the signing bonus was for. And we don’t know what royalty was agreed to. How’s that for good reporting? What we do know is that they signed a lease, JKLM has “ties” to Buffalo “Marcellus” Bills owner Terry Pegula. JKLM is potentially interested in the Utica layer and they will only be allowed to drill on non-hospital campus property…
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Energy Companies | WPX Energy

WPX CEO Riffs on Company Strategy Change from Gas to Oil Drilling
February 13, 2015February 13, 2015

Some people, and some companies, just have plain old bad luck and rotten timing. Like WPX Energy. WPX didn’t like the business it was in–drilling for natural gas in Pennsylvania, so they’ve sold off 46,700 acres and 63 operational wells in northeastern PA to Southwestern Energy for $300 million (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). They still have some acreage in southwest PA they’re trying to dump. What has WPX’s attention these days? What’s the all-fire hurry to get out of the northeast? They’re trying to convert the company from gas to oil drilling–just in time for oil prices to go as low as they’ve been in a generation. Talk about bad timing!…
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Energy Companies | EV Energy Partners

EV Energy Partners CEO Resigning, VP/CFO Promoted
February 13, 2015February 13, 2015

Changes are coming at the top of EV Energy Partners (EVEP). Mark Houser, current president and CEO, will resign at the end of February. Houser will remain on the board. In his place, EVEP is promoting Michael Mercer, senior VP and CFO, to the top post of president/CEO. EVEP says the move was planned. EVEP, you may recall, has been trying to unload a hoard of Utica Shale acreage (more than a half million acres) for the past three years–largely unsuccessfully (see EVEP’s Mark Houser Says More Utica Acreage Sales Ahead in 2014). They recently sold their interest in Cardinal Midstream to a pair of South Korean companies (see Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M). Perhaps Mercer will have more luck shopping their considerable inventory of Utica acreage?…
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CONSOL Energy | Energy Companies

Corporate Raider Mason Hawkins Holds 14% of CONSOL Energy Stock
February 12, 2015February 12, 2015

We consider this bad news for CONSOL Energy: Corporate raider (mainstream media calls it “activist investor”) Mason Hawkins, founder, chairman and CEO of Southeastern Asset Management, has just purchased another boatload of stock in CONSOL Energy. Hawkins, you may recall, is part of the dynamic duo, along with corporate raider Carl Ichan, who pressured Aubrey McClendon to leave Chesapeake Energy in 2013 (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). Hawkins and Ichan then hired Doug Lawler as their proxy who came in and fired over 1,200 people at Chesapeake–an action intended to line the pockets of Hawkins and Ichan. Southeastern was/is the #1 stockholder in Chesapeake with 13.4% of Chessy’s stock. Southeastern is now, we believe, the #1 stockholder in CONSOL. After Hawkins’ latest spending spree, Southeastern now owns (according to our calculations) 14% of CONSOL’s stock…
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Energy Companies | Southwestern Energy | Statewide WV | West Virginia

Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus
February 12, 2015February 12, 2015

Southwestern Energy is one of the few exploration and production (E&P) companies that is bucking the trend. Most E&Ps are slashing their 2015 drilling budgets by a third or more. Not Southwestern. They recently closed on the purchase of a massive 413,000 Marcellus Shale acres, mostly in West Virginia, from Chesapeake Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). Southwestern paid $5.375 billion. Rather than pull back on spending, in December the company announced it would double its investment in drilling for the northeast (see Southwestern Energy on a Tear – Doubles Marcellus Budget for 2015). We picked up a few more details on Southwestern’s plans for 2015, which include drilling 70 wells in northern WV…
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Columbiana County | Energy Companies | Hilcorp Energy | Lawrence County | Mahoning County | Mercer County | Ohio | Pennsylvania | Trumbull County | Utica Shale

Full Speed Ahead for Hilcorp in the Northern Utica in 2015
February 10, 2015February 10, 2015

In 2014 Hilcorp spent some $400 million on drilling in the *northern* Utica Shale play–an area that virtually everyone else has abandoned for the more alluring wet gas to be found in the southeaster portion of the play. According to Hilcorp, they are enjoying success in the northern Utica and that’s where they will continue to focus their efforts…
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Devon Energy | Energy Companies | Guernsey County | Ohio | Utica Shale | Wayne County (OH)

Devon Puts 2 Utica Wells Up for Sale, Not Happy with OH Utica
February 10, 2015February 10, 2015

Devon Energy has put Wayne County, OH’s lone Utica shale well up for sale, along with another Utica well they own in Guernsey County. To which we say we were surprised. We had forgotten Devon had drilled (or owned) any Utica wells in the first place. Perhaps the reason they’re dumping the Wayne County well, which the say has “future utility,” is because it hasn’t produced a thing–oil or natural gas. The well in Guernsey also appears to be a bust. Here’s the brief blurb we caught on Devon exiting the Utica…
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