Energy Companies

Energy Companies | Southwestern Energy

Feed the Beast: Southwestern Seeks $2.34B from New Stock Offering
January 20, 2015January 20, 2015

As MDN previously pointed out, Southwestern Energy has racked up a lot of expenses lately. They picked up 413,000 acres and 1,500 wells from Chesapeake Energy, and another 46,700 acres and 63 Marcellus wells from WPX in 2014 (see Southwestern Energy on a Tear – Doubles Marcellus Budget for 2015). Southwestern has to pay for that rapid expansion somehow. Early last week they announced they would float 20 million new shares of stock (see Southwestern Energy Floats 20M New Shares of Stock). Later last week the number of shares was increased and we found out how much money they hope to raise: $2.34 billion. What will they do with the money?…
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Energy Companies | Gulfport Energy | Marshall County | Ohio County | Utica Shale | West Virginia

Gulfport Energy Enters WV Utica, Leases in Ohio/Marshall Counties
January 19, 2015January 19, 2015

Looks like Gulfport Energy, with 184,000 acres of leases and an active driller in eastern Ohio’s Utica Shale, is making moves into the West Virginia Utica Shale. We spotted an article that says Gulfport has purchased an 87.5% stake in “hundreds of lease agreements” in Ohio and Marshall counties in WV. We don’t know how many acres are involved (yet). But we do know who they’ve purchased the leases from…
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Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Statewide PA | Washington County

Strange: DEP Fines Range Resouces $1.75M for Water Withdrawals
January 19, 2015January 19, 2015

A strange announcement from the Pennsylvania Dept. of Environmental Protection (DEP) on Friday says that Range Resources has agreed to pay $1.75 million to the state for failure to keep track of water withdrawals made by the company (takes a lot of water to frack, much of which comes from creeks and rivers), and for exceeding the amount of water withdrawn according to the plan they have on file with the DEP. What’s strange about the announcement is that a) you can’t find it on the DEP website itself, b) Range was making withdrawals and not recording/tracking the withdrawals from 2009 to 2014–five years–but apparently the DEP didn’t notice or didn’t care, and c) $950,000 of the $1.75 million “fine” (more than half) will go to fix up and operate the Hamilton Abandoned Mine Treatment System in Findlay Township, Allegheny County…
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Energy Companies | Energy Services | Industrywide Issues | NGLs | Pipelines | Range Resources Corp | Sunoco Logistics

Range Cuts 2015 Drilling Budget 33%; Mariner East Up & Running!
January 16, 2015January 16, 2015

In addition to release good news yesterday about record high proved reserves (see today’s companion story), Range Resources issued a second press release yesterday to say they’re scaling back the drilling budget (capital expenditures, or capex) for 2015. Originally they set out to spend $1.3 billion on drilling projects in 2015. They’ve just trimmed it back by 33% to $870 million. They’re scaling back because of the low commodity price of natural gas, plain and simple. That’s the bad news. The good news is that 95% of that money will be spent in the Marcellus Shale. The further good news (why the deuce do we always have to hear these things from Range instead of Sunoco Logistics?!) is that the Mariner East pipeline is now up and running, flowing propane from western PA to storage caverns currently–not all the way to Philadelphia just yet…
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Antero Resources | Energy Companies | Lease & Royalty Payments | Monroe County | Ohio | Utica Shale

Antero Resources 4Q14: Just Paid $20K/Acre for More Utica Leases
January 16, 2015January 16, 2015

Antero Resources, one of the biggest Marcellus/Utica Shale drillers, issued their fourth quarter operations and hedging report on Wednesday. The report includes a lot of 2014 summary information. It’s an important update with a lot of juicy information contained in it. Perhaps the juiciest is buried near the end: Antero closed on a deal to pick up another 12,000 Utica acres, most of it located in Monroe County, OH, from an undisclosed third party. Antero paid an eye-popping $240 million–or $20,000 per acre! The land does have five producing shale wells and an 8-mile pipeline. Figure the wells are worth $8M each (the cost to drill them) and the pipeline is worth $1M per mile, another $8M (this is very rough, back of the envelope stuff). Deducting that from the price you still get $16,000 per acre for the undeveloped land. Yikes. Here’s the other things that caught our eye about the update…
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Energy Companies | Industrywide Issues | Range Resources Corp | Reserves (Proved and Unproved)

Range Hits Record High 10.3 Tcfe Proved Reserves in 2014
January 16, 2015January 16, 2015

A high level report wrapping up stellar results for 2014 was issued by Range Resources yesterday. Among the things Range is justifiably crowing about: Their proved reserves have increased by 26% to 10.3 trillion cubic feet equivalent (Tcfe). In 2014, it cost Range an average of $0.64 per million cubic feet (Mcf) to find and develop their Marcellus Shale acreage–get it ready to drill. And in 2014, it cost them an average $0.55/Mcf to drill and develop their acreage. That’s a combined $1.19 per Mcf cost to Range to find, drill and product, so you can see they’re still making money on dry gas that sells for less than $3/Mcf (plus they’ve hedged, meaning they get even more for their gas than the going spot price). There’s plenty of other goodies in yesterday’s announcement…
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American Energy Partners | Energy Companies

Trusted McClendon Lt. Takes Reigns as CEO of Northeast Drilling
January 14, 2015January 14, 2015

Aubrey McClendon has just entrusted the main part of his fledgling new company, American Energy Partners LP (AELP), to a trusted lieutenant. MDN told you last week that AEP was combining their Utica and Marcellus shale operations–on paper separate entities–into one larger subsidiary of AEP called American Energy Appalachia Holdings, or AEA as they now call it (see McClendon Utica/Marcellus Subsidiaries Combine & Form New Company). The man who was/is running AEA is Jeffrey A. Fisher. Until now, Fisher was Chief Operating Officer of the American Energy Partners mothership AELP. Now he’s the CEO of AEA. That is, he’s the CEO over roughly 90% of Aubrey’s newly amassed empire…
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Allegheny County | Energy Companies | Laurel Mountain Energy | Pennsylvania | Statewide PA

“New” Pittsburgh Company Forms to Target Marcellus/Utica in W PA
January 12, 2015January 12, 2015

A brand new baby is born! Or is it? Using money from private equity firm TPH Partners, the father-son team of Clark and David Nicklas have just given birth to a new “upstream” (exploration and production) company called Laurel Mountain Energy which will be headquartered in Pittsburgh and target the Marcellus, Upper Devonian and Utica layers in western PA. Dad Clark founded Vista Resources in 1987 and since that time the company has drilled over 1,000 wells in the northeast. This is Houston, TX-based TPH’s first investment in the Marcellus, and they couldn’t be happier…
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Energy Companies | Halcon Resources | Ohio | Statewide OH | Utica Shale

Halcon Resources: Slashes Drilling Budget 50%, No Utica for 2015
January 12, 2015January 12, 2015

As MDN chronicled in March 2014, Halcon Resources, with some 140,000 net acres in the Ohio Utica Shale, quit drilling in the Utica, at least for the balance of 2014 (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale). That now holds true for 2015 as well. In a statement about their drilling program released late last week, Halcon indicated they have revised their drilling budget down by nearly 50%–from the previous $750-$800 million to $375-$425 million. They’re also reducing the number of drilling rigs from 11 rigs to 3–and none of them will be operating in the Utica Shale…
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Energy Companies | Southwestern Energy

Southwestern Energy Floats 20M New Shares of Stock
January 12, 2015January 12, 2015

As we’ve previously noted, Southwestern Energy has been on a tear, snapping up Marcellus and Utica Shale acreage (see Southwestern Energy on a Tear – Doubles Marcellus Budget for 2015). All of that new acreage and plans to drill means the company needs more money. Today, Southwestern announced they will float an additional 20 million shares of stock in an effort to raise more cashola to drill baby drill…
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Accidents | Energy Companies | Industrywide Issues | Pennsylvania | Warren Resources | Wyoming County (PA)

Small Explosion/Fire at P&G Well Pad in NEPA, No Injuries/Damage
January 8, 2015January 8, 2015

Not much to report on this, thankfully. MDN has told you in the past one of the most under-appreciated stories we know of is that the only Proctor & Gamble manufacturing plant out of their 150 plants worldwide that is 100% energy self-sufficient is a plant in Wyoming County, PA–near Wilkes-Barre in northeast Pennsylvania (see P&G’s Only Energy Self-Sufficient Plant is Powered by Marcellus). The plant uses Marcellus Shale gas from wells drilled on plant property to power an electric generator that supplies all of the electricity the plant needs–with some left over to sell to the local utility grid. How cool is that? The company, using Warren Resources, continues to drill more wells on the property. One of those operations, as it was nearing completion, accidentally vented a small amount of natural gas that ignited and caused a small explosion yesterday…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia

Eureka Hunter Nears 1/2 Billion Cubic Feet per Day in WV/OH
January 8, 2015January 8, 2015

Magnum Hunter announced yesterday that its pipeline/midstream subsidiary Eureka Hunter has set a new record. Eureka pumped more than 400,000 million Btus per day (MMBtu/d) in West Virginia and Ohio by the end of December, and they expect to be pumping more than 500K MMBtus by the end of this month. A half million MMBtus works out to be roughly half a billion cubic feet of natural gas per day…
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Antero Resources | Energy Companies | Industrywide Issues | Jobs | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Antero Resources Lays Off 250 Landmen, Blames Low Oil Prices
January 7, 2015January 7, 2015

Antero Resources said on Monday it will lay off more than 250 contract land brokers operating in West Virginia, Ohio and Pennsylvania. The layoffs will not affect any Antero employees–only contract workers (landmen and others) who work to get leases signed, sealed and delivered for future drilling. Antero blames the low price of oil, which causes the price they get for their Marcellus/Utica natural gas liquids to be low, which means they’ll stick to drilling on the half million plus acres they already have under lease…
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Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport Production Soars in 2014, 6 Active Rigs in OH Utica
January 7, 2015January 7, 2015

On Monday Gulfport Energy, a major driller in the Utica Shale, released a high-level operational update. Gulfport CEO Michael G. Moore said the company produced more oil and gas in the fourth quarter of 2014 than they did in all of 2013. And the Gulfport production engine continues to chug away in the Ohio Utica Shale. Gulfport brought 22 new Utica wells online in 4Q14 and has six rigs currently drilling in the Utica. Gulfport is also wisely “hedged”–meaning they’re getting about $1 per Mcf more for their gas (they currently get $4.12/Mcf) than the current spot rate of ~$3.00/Mcf. Smart…
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American Energy Partners | Energy Companies

McClendon Utica/Marcellus Subsidiaries Combine & Form New Company
January 6, 2015January 6, 2015

After getting the unceremonious boot out the door from Chesapeake Energy in early 2013, the company he co-founded 24 years earlier, it only took a few months for Aubrey McClendon to form a new company and raise billions of dollars of new capital investment (see He’s Baaaack! Aubrey McClendon is Back in OH Shale Country). The new company is called American Energy Partners (AEP). Since AEP’s founding, McClendon has done what he always does–create a plethora of subsidiary companies on paper for tax purposes, or to (temporarily) hide his ownership interest. McClendon has put the pedal down and has aggressively formed companies and attracted, at last count, nearly $9 billion (see Aubrey McClendon Raises Huge $8.7B for Shale Drilling…So Far). Part of McClendon’s strategy has been to spin off his new empire into “pure play” subsidiaries (see Another Brilliant McClendon Move: ‘Pure Play’ Public Companies). Yesterday, AEP announced that two of Aubrey’s biggest pure play subsidiaries, American Energy – Utica and American Energy – Marcellus, will combine to form a new pure play company called American Energy Appalachia Holdings…
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Earthquakes | Energy Companies | Hilcorp Energy | Industrywide Issues | Mahoning County | Ohio | Research

OH Researchers Confirm Hilcorp Fracking Caused Low-Level Quakes
January 6, 2015January 6, 2015

According to one graduate student and two professors at Miami University of Ohio, the fracking done by Hilcorp in the Youngstown area DID cause some low-level earthquakes (see ODNR Says Youngstown Earthquakes “Probably” Caused by Fracking). The three researchers are set to publish an article titled “Earthquakes Induced by Hydraulic fracturing in Poland Township, Ohio” in the February/March issue of the peer-reviewed Bulletin of the Seismological Society of America. Using a technique called “template matching” the researchers say they could identify 77 earthquakes, all except one that could not even be felt at the surface (and the one was barely felt) and matched those quakes to fracking activities by Hilcorp. The researchers stressed that the only reason the quakes happened was because Hilcorp was fracking directly over top of a previously unknown underground fault. They also said it was a very small portion of the frack operations that led to the quakes…
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