Energy Companies

Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Trimming $15B in Spending Next 3 Years – PA Cracker?
January 30, 2015January 30, 2015

Shell released their fourth quarter 2014 results yesterday, along with comments on what’s ahead for 2015. Full year profits for Shell were up in 2014–to $19 billion (a mind-blowing number). However, the company plans to trim $15 billion worth of spending in over the next three years. Ouch. MDN wondered if the Shell ethane cracker plant planned for Monaca, PA is on the list to trim…
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Carrizo Oil & Gas | Energy Companies | Guernsey County | Ohio | Statewide OH | Utica Shale

Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015
January 29, 2015January 29, 2015

Carrizo Oil & Gas is the latest Marcellus/Utica driller to cut their 2015 capital expenditures (capex) budget–by 35% over 2014. According to the Carrizo announcement below, they plan to spend $450-$470 million on drilling, most of it in the Eagle Ford (Texas) where they’re running three drilling rigs. They will spend only has much as they have to on “lease maintenance” in the Utica Shale–which we take to mean they’ll only do what they must to show they still intend to drill on leases that may soon expire. In the update below we get some numbers for Carrizo’s second Utica Shale well, in Guernsey County, OH. The update also indicates Carrizo continues to throttle back production in the Marcellus. It says nothing about new drilling in the Marcellus, so we presume there isn’t any planned for 2015…
Read More “Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015”
Chesapeake Energy | Energy Companies | Industrywide Issues | Regulation | Southwestern Energy | Statewide WV | West Virginia

WV Legislature Passes Bill to Help Southwestern Keep Drilling
January 29, 2015January 29, 2015

Currently in West Virginia, if an E&P company, say Chesapeake Energy, has applied for and received permits to drill dozens or hundreds of wells which are currently in various states of being drilled, and then decides to sell those leases and drilling operations to someone else, like Southwestern Energy, the drilling law passed a few years ago says the new company buying those leases and drilling operations must re-apply for all of those permits to continue drilling. That’s a big problem. Southwestern, you may recall, has just paid Chessy $5.375 BILLION for leases, wells and drilling operations–most of it in WV. Can you imagine what will happen? Rigs idled…people laid off…chaos and confusion. It’s an economic disaster. So you can understand why the WV legislature has dispensed with the rules and passed a bill in record time that fixes the problem, allowing Southwestern (or anyone else) to assume permits on leased property that changes hands…
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Antero Resources | Energy Companies | Industrywide Issues | Reserves (Proved and Unproved)

Antero Proved Reserves Rocket Up 66%; Dev Costs Just $0.61/Mcf
January 29, 2015January 29, 2015

Antero Resources, one of the largest drillers in the Marcellus and Utica Shale region, issued a press release yesterday to crow about some important numbers. The first important number is 66%–as in Antero’s “proved reserves” of natural gas (and liquids and oil) jumped 66% in 2014–to a mind-blowing total of 12.7 trillion cubic feet equivalent (Tcfe). Proved reserves means using existing technology and under these economic conditions, Antero can reasonably, with very high confidence, extract at least 12.7 Tcfe. Astonishing. Another number to crow about: $0.61, as in it costs the company only 61 cents per thousand cubic feet (Mcf) to find and develop/extract that gas. Of course what’s missing in that number is the midstream component–processing and pipelining it to market. But still, it shows that these large companies can still make money even in a low cost environment, which is reassuring…
Read More “Antero Proved Reserves Rocket Up 66%; Dev Costs Just $0.61/Mcf”
Energy Companies | Hess | Ohio | Statewide OH | Utica Shale

Hess Cuts Utica Drilling Budget 42% for 2015
January 27, 2015January 27, 2015

Hess Corporation, with some 90,000 leased acres in the Ohio Utica Shale, announced yesterday they are whacking their Utica budget, reducing it by 42% for 2015. Last year Hess spent $500 million in the Utica. This year they plan to spend $290 million and drill 20-25 wells (around $11-$12 million per well). Hess will continue their joint venture with CONSOL Energy in the Ohio Utica. Here’s the announcement from yesterday:
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Energy Companies | Equinor/Statoil | Gastar Exploration | Jay-Bee Oil & Gas | Lease & Royalty Payments | Marshall County | Noble Energy | Statewide WV | Triad Hunter | Tyler County | West Virginia | Wetzel County

More Bids to Drill Under WV State-Owned Land, Incl Ohio River
January 27, 2015January 27, 2015

West Virginia keeps up its aggressive push to lease and allow drilling under state-owned land–both under the Ohio River and under other tracts of state-owned land in prime Marcellus/Utica country. Last Friday the state Dept. of Commerce, responsible for overseeing the leasing program, opened its latest round of bids. Some of them are truly eye-popping. You may recall Antero Resources has paid $12,000 per acre (with 20% royalties) to drill under 518 acres of the Conaway Run Wildlife Management Area (see Record High Bid to Drill Under Bambi’s Home in Tyler County, WV). In the bids opened Friday, Jay Bee bid an even higher price to drill under the Jug Wildlife Management Area, also in Tyler County…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Guest Post: Bradford Co Landowner Asks Gov. Wolf to Support HB 1684
January 27, 2015January 27, 2015

MDN has written plenty about Pennsylvania’s HB 1684–the Guaranteed Minimum Royalty Act (see these MDN articles). In essence, some companies (cough *Chesapeake Energy* cough) have gotten creative with deducting post-production costs from royalty checks. According to the PA Guaranteed Minimum Royalty Act of 1979, royalty owners (landowners) must receive no less than 1/8, or 12.5%, by law. But when Chessy and others start deducting this and that, never spelled out in the original lease agreement, landowners are getting the shaft–way lower than 12.5%. In some cases they get royalty checks for a few dollars! Bradford County landowner John Williams is concerned, both about HB 1684 and newly elected Gov. Tom Wolf’s stand on that bill, and about Wolf’s proposed 5% severance tax. Will the severance tax be the next deduction gas companies take, further reducing royalty checks? Is the severance tax Tom Wolf proposes a tax that will be paid, in essence, by landowners? We thank John for his guest post…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter CEO: No New Marcellus/Utica Drilling in 2015
January 26, 2015January 26, 2015

Magnum Hunter Resources (MHR), a small but growing driller in the Marcellus/Utica, gave one day’s notice and then convened a phone call with investors last Friday to declare they’re not spending a dime on new drilling in 2015–until the prices charged by oilfield services companies (the companies that do the drilling and fracking) come down–a lot. MHR CEO Gary Evans said he’s looking for a 40% discount compared to what the company paid in 2014 for the same services–and until they get it, the drill rigs for MHR will be idled. But have no fear, production for the company (meaning revenue) will continue to grow each quarter in 2015 because of wells already drilled and shut-in, waiting to be connected to pipelines…
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Energy Companies | Rice Energy

Latest Rice Energy Investor Presentation Reveals New Info
January 26, 2015January 26, 2015

Last week Rice Energy posted a new PowerPoint investor presentation on their website. We like to share these concise “get to the point” presentations with the MDN audience because they’re full of maps and information that landowners, energy companies and supply chain companies find useful. This latest from Rice is no exception. Early on we learn a neat fact (slide #3): Rice Energy hit Marcellus Shale production levels of 200, 300, 400 and 500 million cubic feet per day with fewer wells than any other operator in the Marcellus. Cool. Here’s what else we notice in the latest Rice presentation…
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Allegheny County | Chevron | Energy Companies | Industrywide Issues | Jobs | Pennsylvania

Chevron Laying Off 23% of their Marcellus Workforce in Pittsburgh
January 23, 2015January 23, 2015

Well, don’t say we didn’t warn you. In November MDN brought you the news that Chevron announced the are “restructuring” their northeast business until to “become more efficient” and for “long-term growth.” We pointed out at the time that kind of language doesn’t inspire confidence (see Chevron Scaling Back in the Marcellus/Utica? Maybe). We also said it was a good sign that no WARN Act notices of impending large layoffs had been issued. Oops. That’s now changed. In an emailed statement yesterday, Chevron said it plans to lay off 162 Pennsylvania workers as part of their “restructuring”–nearly a quarter of their Marcellus workforce. Ouch. It wasn’t so long ago Chevron was planning to build a massive, new 350,000 square foot regional headquarters near Pittsburgh (see Chevron Puts Moon Twp, PA Office Building Project on Hold). It seems that project is now dead–no signs of life. Here’s the disappointing info on Chevron’s coming round of layoffs…
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Antero Resources | Energy Companies | Industrywide Issues | Pipelines

Antero Resources Slashes 2015 CapEx Budget 41%, Reduces Rig Count
January 22, 2015January 22, 2015

Earlier this month, Antero Resources, one of the largest leaseholders and drillers in the Marcellus/Utica, announced they are laying off 250 landmen in WV, OH and PA because of low oil and gas prices (see Antero Resources Lays Off 250 Landmen, Blames Low Oil Prices). Seems it was an omen. On Tuesday, the company released details of their 2015 capital budget–and it’s not pretty. Antero is slashing their capital expenditure budget in the Marcellus/Utica by 41% over what they spent in 2014–$1.8 billion in 2015 compared to $3.05 billion in 2014. Ouch. They’ll operate an average of 14 drilling rigs in 2015 compared to the average of 21 they were operating by the end of last year. Ouch. They predict they will complete 130 Marcellus & Utica wells this year, down from 179 completed last year. Ouch. About the only bright spot is that production is predicted to increase, from an average of 1 billion cubic feet per day (Bcf/d) in 2014 to 1.4 Bcf/d in 2015. Why the big cuts? Yes because of the low commodity price for natural gas, but when you dig, you find the price for natgas in the northeast is lower than other areas of the country because of the lack of pipelines…
Read More “Antero Resources Slashes 2015 CapEx Budget 41%, Reduces Rig Count”
Energy Companies | Stone Energy

Stone Energy Will Suspend Marcellus/Utica Drilling after 1Q15
January 22, 2015January 22, 2015

Similar to the recent announcement by Antero Resources, Stone Energy has announced a big scale back in the Marcellus/Utica for 2015. However, whereas Antero is one of the biggest drillers in the northeast, Stone is one of the smallest drillers in the Marcellus/Utica. In 2014 Stone drilled 38 wells in the Marcellus, and a single Utica test well. The company plans to spend $450 million for drilling in 2015, down from $875 million spent in 2014–roughly half of what they spent last year. But the majority of that $450 million (75%) will go to drilling in the Gulf of Mexico and deep water. Only 8% of the budget, or $36 million, will go to the Marcellus/Utica region. Stone says after they complete a few wells in the first quarter of this year, they’re suspending all Marcellus drilling for the rest of this year–releasing the single rig that’s been operating in the Marcellus. Landowners signed with Stone–if Stone hasn’t already begun your well, you can forget about it for at least for the rest of this year…
Read More “Stone Energy Will Suspend Marcellus/Utica Drilling after 1Q15”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Lease & Royalty Payments | Ohio | Triad Hunter | Utica Shale | Washington County (OH)

OH Village Gets $307K Signing Bonus, 18.25% Royaly to Lease 72 Acres
January 22, 2015January 22, 2015

Last night, the village of New Matamoras, in Washington County, OH, was handed a check for $307,687.25. The general fund budget for all of 2014 was $121,368! The check came from MNW Energy, which is acting as the land broker for Triad Hunter (a division of Magnum Hunter Resources). The money is the up-front lease signing bonus for 72 acres of village owned-land that Triad plans to drill under. The payment amounts to a signing bonus of $4,275 per acre. When and if Triad drills, the village will get an 18.25% royalty on all gas/liquids produced. The biggest “problem” Matamoras had was how to cash the check! The next “problem” they have is how they’ll spend it. Here’s the low-down…
Read More “OH Village Gets $307K Signing Bonus, 18.25% Royaly to Lease 72 Acres”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Industrywide Issues | Reserves (Proved and Unproved)

Magnum Hunter Drilled 24 NE Wells in 2014, Proved Reserves Up 25%
January 22, 2015January 22, 2015

Yesterday Magnum Hunter Resources, a growing driller in the Marcellus/Utica region, announced their “proved” reserves have jumped a healthy 25% by the end December 2014 over a year earlier. Proved reserves are defined as the estimated quantities of oil and gas which geological and engineering data demonstrate with reasonable certainty (90% or more certainty) to be recoverable in future years from known reservoirs under current economic and operating conditions. Magnum Hunter’s estimated total proved reserves increased in 2014 to 83.8 million barrels of equivalent (or MMboe), compared to 67.3 MMboe at the end of 2013. They reckon it breaks down as 70% natural gas and the rest natural gas liquids, condensate and oil. Magnum Hunter’s acreage in the Marcellus and Utica is impressive: they now own 80,000 net acres in the Marcellus and 125,000 net acres in the Utica. Last year they drilled 24 wells in the Marcellus/Utica. They have their eye on a potential future 1,000 more drilling locations in WV and OH…
Read More “Magnum Hunter Drilled 24 NE Wells in 2014, Proved Reserves Up 25%”
Antero Resources | Energy Companies | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Kinder Morgan NE Projects Update – Filing with FERC for Broad Run
January 22, 2015January 22, 2015

Kinder Morgan, the largest midstream company in the U.S., issued a press release yesterday nominally to say they’ve raised the quarterly dividend by 10% or $0.45 per share because they had a great year last year, despite the low price of oil and the gyrations in the market. But as part of that update, if you put on your hip boots on and wade through all of the tiny print, you find some interesting nuggets and updates. For example, we get an important update on their Northeast Energy Direct project–an extension of the Tennessee Gas Pipeline through Massachusetts and New Hampshire. We also learn that Kinder is ready to file with FERC–this month–to move forward with the Broad Run Flexibility and Broad Run Expansion projects that will flow Marcellus and Utica Shale gas from West Virginia to delivery points in Mississippi and Louisiana. All (100%) of the capacity for the the Broad Run pipelines is already spoken for, by Antero Resources…
Read More “Kinder Morgan NE Projects Update – Filing with FERC for Broad Run”
Energy Companies | Southwestern Energy

The Beast Grows Hungrier: Southwestern Ups # Shares of New Stock
January 22, 2015January 22, 2015

We’re not sure what to make of this as we’re not high finance people. But we find it intriguing all the same. MDN reported 10 days ago that Southwestern Energy would float 20 million shares of new common stock and 26 million “depositary” shares of stock in an effort to raise a boatload of new cash (see Southwestern Energy Floats 20M New Shares of Stock). A few days later, they upped it to 26 million shares of common stock and 30 million shares of depositary stock (see Feed the Beast: Southwestern Seeks $2.34B from New Stock Offering). It seems the beast grows even hungrier. Yesterday they upped it again–this time to 30 million shares of common stock and 34.5 million shares of depositary stock. Hmmm, what does it all mean?…
Read More “The Beast Grows Hungrier: Southwestern Ups # Shares of New Stock”