Energy Companies

American Energy Partners | Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation

McClendon Hires Top PR Firm to Respond to “Stolen Data” Charge
February 24, 2015February 24, 2015

Last week we told you about the silly lawsuit filed by Chesapeake Energy against its former co-founder and CEO Aubrey McClendon (see Chesapeake Energy Sues McClendon for Taking His Rolodex with Him). Chesapeake says McClendon took a bunch of data with him when he left and (gasp) used it to aggressively lease property in the Ohio Utica Shale. That is, they’re ticked that Aubrey continues to outclass them in every conceivable way. Did they think he’d just shrivel up and die after they tossed him out the door? Get real! Aubrey isn’t taking it lying down. This is a public relations battle as much as a court battle and in addition to having ace attorneys, Aubrey has hired one of the top PR firms in the country–Edleman–to respond to the Chesapeake lawsuit…
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Antero Resources | Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | EV Energy Partners | EXCO Resources | Halcon Resources | Industrywide Issues | Research | Rex Energy | Warren Resources

19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica
February 23, 2015June 23, 2015

David Fessler is energy and infrastructure strategist (i.e. stock analyst/researcher) with The Oxford Club–a publisher based in Baltimore, Maryland that publishes the Oxford Resource Explorer, among other financial publications. Fessler spends his days immersed in the energy industry and in the stocks of companies in that industry. Fessler and The Oxford Club have produced a special report called “The Oil Company Death List” which is a list of 19 publicly-traded oil and gas companies that, according to a formula worked out by Fessler, will “die soon.” That is, they’ll go bankrupt if they don’t sell themselves or otherwise sell off major assets. Why? They’re “swimming in debt” and way over leveraged with “ugly balance sheets.” Fessler’s simple formula is all about a company’s debt ratio. When a company’s debts reach 4 times or higher its earnings (EBITDA), that’s a huge red flag. Below we have the list of 19 on the “death list” along with a copy of Fessler’s full report (describing his methodology). The interesting/troubling aspect is that 8 of the 19 are Marcellus/Utica operators–one of which is #1 for highest debt-to-earnings ratios. Some companies in the list surprised us–others did not. Is your favorite Marcellus/Utica driller in the list?…
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Anti-Drilling/Fossil Fuel | Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Ohio County | Regulation | Wastewater | West Virginia

GreenHunter Keeps Pressure on USCG to Barge Brine on Ohio River
February 23, 2015February 23, 2015

GreenHunter Resources is keeping up the pressure on the U.S. Coast Guard (USCG)–essentially daring them to stop GreenHunter from proceeding with barging brine–or produced water–from shale wells down the Ohio River (see GreenHunter to Coast Guard, We’re Barging While You Fiddle Around). In new comments last week, GreenHunter’s Chief Operating Officer Kirk Trosclair reaffirmed his company is proceeding with its plan to begin barging from a facility in Wheeling, WV. Meanwhile, so-called “environmental” groups are organizing and joining forces with the Wheeling Water Warriors (Warriors, Warriors, Warriors…that’s an echo you hear for our superheros) to oppose GreenHunter from barging a substance that isn’t anywhere near as toxic as the chemicals that currently float down the river on barges every single day. Here’s what Trosclair said last week…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | West Virginia | Wetzel County

Magnum Hunter 7-Well Pad in WV Online, Yields 80/20 Gas/Liquids
February 23, 2015February 23, 2015

Last week Magnum Hunter Resources announced their recently completed Marcellus Shale well pad in Wetzel County, WV went online to production–all 7 wells on the pad. Combined, the 7 wells are producing an average 35 million cubic feet per day equivalent (MMcfe/d) of natural gas. Actually it works out to be around 17% natural gas liquids, 3% condensate and 80% natural gas/methane flowing from the wells. Here’s the details from MH…
Read More “Magnum Hunter 7-Well Pad in WV Online, Yields 80/20 Gas/Liquids”
Carrizo Oil & Gas | Columbia County | Encana Energy | Energy Companies | EXCO Resources | Lackawanna County | Luzerne County | Pennsylvania | Southwestern Energy | WPX Energy

Lights Out for Marcellus Drilling in Lackawanna/Luzerne Counties
February 23, 2015February 23, 2015

It’s lights out for Marcellus drilling in both Lackawanna and Luzerne counties in northeastern Pennsylvania. Lackawanna and Luzerne are otherwise known and Scranton and Wilkes-Barre, respectively. But it’s not because of the two large cities located in those counties that Marcellus drilling will not be done (there are plenty of rural locations in each). It’s because there’s no gas in the shale layer to be had in those counties–at least not in quantities that are commercially profitable. Over the past five years seven different wells have been drilled in both counties (or very close by in neighboring Columbia County). The seventh and final well, drilled by WPX Energy, has just been plugged and abandoned…
Read More “Lights Out for Marcellus Drilling in Lackawanna/Luzerne Counties”
Energy Companies | Industrywide Issues | M&A | Talisman Energy

Talisman Energy Sale to Repsol Takes 2 Giant Steps Closer
February 23, 2015February 23, 2015

Not that there was really any doubt, but last week the deal for Spanish oil giant Repsol to buy out Canadian shale driller Talisman Energy took a couple of big leaps forward (see Spanish Respol Buys Marcellus E&P Talisman Energy for $8/Share). Talisman has major drilling operations in the Pennsylvania Marcellus Shale. The company was having problems for some time and that invited the vultures, er, corporate raiders to show up (see Carl Icahn’s Claws Go Deeper into Talisman – 2 New Board Members). No doubt under pressure by Ichan’s lieutenants, Talisman had to either sell off key assets, or sell the whole company. They opted to do the later last December. Last week both the shareholders and the Canadian government gave it’s blessing to the sale. Now all that’s left is for the proverbial fat lady to sing…
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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…
Read More “Rex Energy 2014: Revenues Up 39%, Production Up 66%, 50 New Wells”
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…
Read More “Rice Energy Trims 2015 Budget 19%, Production Soars 61% in 4Q14”
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…
Read More “Magnum Hunter Slashes Drilling Budget by 75% for 2015”
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…
Read More “Cabot O&G Clipped $50K by SRBC for Lack of Water Permit”
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…
Read More “Potter County, PA Hospital Leases Land to JKLM for Utica Drilling”