Energy Companies

Energy Companies | Vantage Energy

Vantage Energy Postpones IPO Citing Unfavorable Market Conditions
September 26, 2014September 26, 2014

Have shale-related initial public offerings (IPOs) lost some of their luster? Early this year Rice Energy, focused on the Marcellus and Utica Shale region, launched an IPO that brought in $924 million (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Eclipse Resources, another driller focused on the northeast, launched an IPO in June and raised $818 million (see the Bloomberg story Eclipse Resources Falls in Debut After IPO Priced at Low End). In July Vantage Energy, a Colorado company with major operations in the Marcellus, announced they would launch an IPO seeking $400. Then in September the number was revised up–the company felt like $601 million would be the goal of their IPO (see Vantage Energy IPO Target Goes from $400M to $601M). On Wednesday, Vantage announced they’re postponing the IPO, citing “unfavorable equity market conditions”…
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Cardinal Gas Services | Energy Companies | Energy Services | EV Energy Partners | Industrywide Issues | M&A | Ohio | Pipelines | Statewide OH | Total | Utica Shale

Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M
September 24, 2014September 24, 2014

In August MDN told you that a pair of Korean companies were sniffing around Cardinal Midstream Services–looking to buy up to a 34% stake in the company (see Cardinal Gas Courts S Koreans to Invest in Utica JV). Cardinal is a midstream operator (pipelines and processing plants) in the Utica Shale. The Koreans are sniffing no more. Yesterday, one of the investor/owners of Cardinal, French oil giant Total, announced they’re selling their 25% stake in the company to two Korean companies…
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Chesapeake Energy | Columbiana County | Energy Companies | Ohio | Utica Shale

Some of Best Producing Utica Wells are in…the North?!!
September 23, 2014September 23, 2014

According to reports coming from Columbiana County where 24 wells have been drilled and are now connected via pipeline, the Columbiana wells are some of the best producing methane Utica wells in the entire shale play–and that includes the new “it” spot in the southern portion of the play…
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American Energy Partners | EMG | Energy Companies | Energy Services | Industrywide Issues | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Processing Plants | Statewide OH | Summit Midstream

MarkWest Signs Up McClendon’s New Company as Utica Customer
September 23, 2014September 23, 2014

Yesterday MarkWest Energy and their partners The Energy & Minerals Group and Ohio Gathering Company announced they’ve signed up Aubrey McClendon’s new company American Energy Partners (AEP) as a major new customer in the Utica Shale. Ohio Gathering will hook up their pipelines to AEP’s drilled Utica wells and pump natural gas and liquids, and MarkWest will process it all. The natural gas part will be processed in MarkWest’s Cadiz complex in Harrison County, OH and its Seneca complex in Noble County, OH. AEP’s NGLs will be fractionated (separated) at MarkWest’s Hopedale complex…
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Energy Companies | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Range’s Unique Approach to Signing Small Landowners in WPA
September 23, 2014September 23, 2014

Typically villages and cities have not seen Marcellus or Utica Shale drilling under them because of the numbers. To negotiate leases with hundreds or even thousands of landowners over a relatively small area makes no sense when you have to pay landmen and have all of those leases individually vetted by a lawyer. Signing bonuses are piddly and royalty checks aren’t much either. So most drillers have passed by the small villages and towns that sit next to land they otherwise have leased. However, Range has hit on a unique approach. Range has enlisted the help of the Claysville Borough (Washington County, PA) fire department to approach and get residents in the borough to sign a single, standardized group lease–think landowner coalition lease…
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Chesapeake Energy | East Resources | Energy Companies | Industrywide Issues | Public Opinion | Range Resources Corp

What Nightmares Keep Drillers Up at Night? Hint: Not Fines
September 22, 2014September 22, 2014

What are the nightmares that keep drillers up at night? Is it the prospect of having to pay big fines, like the biggest fine paid to date in Pennsylvania, announced just last week (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). While we’re sure that fine stung, the money paid was more like a bee sting. According to the drillers themselves and their comments, the thing that keeps them up at night is negative publicity. Bad public relations (PR). It’s not the fine itself but public perception about being fined or being in violation. Some of the problem is caused by an unrealistically high standard of zero mistakes and zero screw-ups imposed by those who oppose shale drilling…
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Energy Companies | Industrywide Issues | Litigation | PDC Energy

PDC Energy Settles Lawsuit with Previous Investors for $35M
September 22, 2014September 22, 2014

There’s a fair amount of high finance when it comes to how drilling companies are structured on paper. There are, in some cases, corporations, partnerships, and then there’s the Master Limited Partnership (MLP), a special form of company allowed under United States law to encourage the mineral and extractive industries. At the end of the day, they’re businesses, no matter that form of legal structure they take. However, the legal structure of partnerships is used to encourage investors to invest large sums of money. And when those partnerships are bought out, the investors want their due proceeds. Sometimes there’s a dispute, as happened to PDC Energy (formerly known as Petroleum Development Corporation). PDC had several layers of partnerships that they rolled up into one company back in 2010/2011. The partners in the sub-units purchased felt that they didn’t get their fair share, so they sued. On Friday PDC announced they had settled and over the next 13 years they’ll pay out money to the tune of $35 million…
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Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Washington County

PA DEP Fines Range Resources $4.15M for Wastewater Impoundments
September 19, 2014September 19, 2014

Range Resources has just had their knuckles rapped, hard, by the Pennsylvania Dept. of Environmental Protection (DEP) with respect to wastewater/recycled water impoundments (i.e. ponds) they operate in Washington County, PA. Range has been fined the most any company has been fined by the DEP in the modern shale era–$4.15 million. They will also be required to close five of the seven impoundments they’ve operated in the county (Range was closing them anyway), and make major upgrades to the two remaining impoundments. There’s no way to sugarcoat this–Range was taken to the proverbial woodshed by the DEP and got a lot more than a switch to the rear-end…
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Energy Companies | Gastar Exploration

MDN’s Prediction of Gastar Stock Offering Scary Accurate
September 19, 2014September 19, 2014

We don’t toot our own horn too often (at least, we hope not), but we want to point out how MDN keeps readers on the cutting edge. Yesterday we brought you the news that Gastar Exploration is a) shifting their drilling focus to a play outside the Marcellus/Utica in 2015, and b) is issuing more common stock, hoping to raise more money for drilling (see Gastar 2015 Budget: Scaling Back Marcellus/Utica Drilling). We said, based on our back-of-the-envelope calculations, we expect Gastar will raise around $100 million from issuing the new stock. After we published yesterday, Gastar released an update on their stock offering to say they expect to raise…
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Chevron | Energy Companies | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

CSSD Bestows First Certification for Sustainable Drilling: Chevron
September 18, 2014September 18, 2014

In March 2013, the Center for Sustainable Shale Development (CSSD) burst onto the scene. It had been a closely guarded secret, the creation of a few hand-picked people from both industry and the environmental movement working together to see if there is any common ground on which both sides can agree that shale development would be safe, sustainable AND affordable. They worked hard for over a year and finally hammered out a set of 15 standards that if a driller (or midstream company or contractor) would meet, it would get a stamp of approval from both the industry and environmental groups as being a good goobie–a safe driller. We were somewhat skeptical from the start (see Important: Drillers & Enviros Form New Group, Launch Cert Program). However, the time for skepticism may be over. Today the CSSD announced they have certified their very first driller–one of their founding members–Chevron…
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Energy Companies | Gastar Exploration

Gastar 2015 Budget: Scaling Back Marcellus/Utica Drilling
September 18, 2014September 18, 2014

A pair of announcements issued by Marcellus/Utica driller Gastar Exploration on Monday. One of the announcements is that the company is floating another 17 million shares of stock to help raise more operating capital. The second (we would argue related) announcement is a brief update on Gastar’s 2015 capital budget. The company will spend $257.3 million in 2015, comprised of $222.7 million for drilling, completion and infrastructure costs; $28 million for land and seismic expenditures; and “other” costs of $6.6 million. The interesting tidbit in Gastar’s 2015 budget announcement is how much they spend to drill a well in various plays, including the Marcellus and the Utica, and that in 2015 they won’t drill very much in the northeast…
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CONE Midstream | CONSOL Energy | Energy Companies | Energy Services | Industrywide Issues | Noble Energy | Pipelines

CONSOL/Noble IPO for CONE Midstream Hopes to Raise $423M
September 18, 2014September 18, 2014

Three weeks ago MDN brought you the news that CONSOL Energy together with Noble Energy (two drillers who joint venture together on some Marcellus drilling) have joined forces to form a midstream (pipeline) company called CONE Midstream to hook up pipelines to their Marcellus wells (see CONSOL & Noble Energy Form New Marcellus Midstream Company). The new pipeline company will take the corporate form of a master limited partnership, or MLP. Yesterday Noble announced an initial public offering (IPO) for “units” in the new company (think shares of stock). The companies hope to sell 20.1 million units and raise $422.6 million for the fledgling midstream company…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | M&A

Morgan Stanley Buys Partnership in Eureka Hunter for $65M
September 17, 2014September 17, 2014

Yesterday Magnum Hunter, a Marcellus/Utica driller with a number of subsidiaries, including midstream company Eureka Hunter, announced that Morgan Stanley is becoming a partner in Eureka Hunter. Price tag for becoming a partner? $65 million. According to Magnum Hunter and Morgan Stanley, Eureka Hunter is now worth $1 billion. The deal itself is complicated and includes multiple subsidiaries and names you’ve likely never heard of (like Ridgeline Midstream and ArcLight Capital Partners). We just told you the news in a nutshell. Below is the press release from Magnum Hunter announcing that news–a press release obviously written by lawyers, rendering it virtually unreadable for the rest of us…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation

Mich. AG Continues to Target Chesapeake, Racketeering Charge
September 17, 2014September 17, 2014

In June 2012 Reuters tried to stir up trouble against Chesapeake Energy by broadcasting “leaked” (Watergate anyone?) emails that somehow magically appeared on the Reuters doorstep that supposedly show Chesapeake trying to collude with Encana Energy to keep the price of Michigan state land oil and gas leases artificially low (see Did Reuters Break the Law with Latest Chesapeake Story?). Eventually the Michigan Attorney General’s office filed charges against Chesapeake, even though the federal government had investigated and didn’t find anything worth pursuing (see Feds Clear Chesapeake & Encana in Collusion Case, Michigan Next?). Michigan is still hell-bent on shaking down Chesapeake (see Michigan AG (Unbelievably) Files More Charges Against Chesapeake). The same Michigan Attorney General, Bill Schuette, has also filed charges against Chesapeake’s leasing arrangements with private landowners. On Monday, a Michigan court said Chessy must face a trial on one charge of racketeering (a felony) and 20 counts of using false pretenses to allegedly defraud private landowners in the state…
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Chesapeake Energy | Energy Companies

Chesapeake Hires New Mouthpiece
September 17, 2014September 17, 2014

Chesapeake Energy has a new mouthpiece: Brad Sylvester. The company announced (a few weeks ago) that Sylvester is joining Chesapeake as its new Vice President of Investor Relations and Communications. He has his job cut out for him. The company is being sued and hauled into court in multiple states over leasing practices. Michigan, as we highlight in another MDN story today, continues to press the attack on Chesapeake–this time with a racketeering charge in federal court (a felony). Sylvester was most recently employed by Southwestern Energy. He’ll report to Chesapeake’s Chief Financial Officer, Nick Dell’Osso. Nick, you may recall, is one of Aubrey McClendon’s fair weather friends (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). Here’s the Chessy announcement that Sylvester is stepping into the lion’s den:
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Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Norse Energy | Regulation | Statewide NY | Tompkins County

Norse Energy Appeals Town Ban Case Back to NY High Court
September 16, 2014September 16, 2014

In April MDN reported on the rumors that Norse Energy, the ill-fated company that bet big on New York State with 180,000 acres of leased land in NY, had been sold at bankruptcy court (see Highest Bid for Norse Energy $2.65M – Was it Sold & Who Bid?). As we pointed out in the story, we don’t know if the company was actually sold, and if it was, who the actual buyer was. We still don’t know. What we do know is that the only thing left to sell were Norse’s leases, since they had already sold off all of the hard assets (see Lights Turned Off, Door Closed – Good Night, Norse Energy). However, the Norse trustee retained at least some of the leases assets so the company could continue their lawsuit against New York for bankrupting them. Try to get back at least some of that money. Then the double-whammy: The New York Court of Appeals (our highest court) ruled against Norse and said local towns can ban fracking (see Shale Drilling in NY is Over – High Court Upholds Town Bans). The new news, just coming to light for us, is that Norse appealed that decision back to the Court of Appeals for a second time, based on a recent decision in a Colorado court…
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