Energy Companies

  • | | | |

    EnLink’s 2014 Crystal Ball: $525M Revenue, $430M Capex

    Stockholders will soon vote on the previously announced merger between midstream company Crosstex Energy and driller Devon Energy (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds). There’s no reason to think the merger will not proceed smoothly. Both companies have operations in the Marcellus and Utica Shale region. The name of the new Devon subsidiary will be EnLink Midstream. As we previously mentioned, Barry Davis, CEO of Crosstex will become (or remain) CEO of EnLink. For us this is a feel-good merger–no one loses their job and Davis, by all accounts, is a really nice guy to work for (see A Peek Behind the Curtain of Crosstex/Devon Midstream Marriage).

    Yesterday Crosstex issued their “best guess” as to what revenues and expenses will be for the company for 2014–something financial types call “guidance.” Here is Crosstex/EnLink’s best stab at peering into the crystal ball for 2014…
    Read More “EnLink’s 2014 Crystal Ball: $525M Revenue, $430M Capex”

  • | | | | | | | | | | |

    PA Gas Production #s Released: Top 10 Wells, Top 5 Counties & More!

    Top 10Pennsylvania released their second half 2013 production numbers yesterday and man oh man is it another sizzling hot report. Another 700 horizontal (mostly Marcellus) shale wells were brought online in the second half of 2013 in PA which brings the number of horizontal wells with reported production to 5,074. And, in what we believe is a first, Susquehanna County has displaced Bradford County as having the most production during a 6-month reporting period.

    Not surprisingly Cabot Oil & Gas and their prolific wells in Susquehanna County top the list as most productive. Get this, when you look at average daily production by wells, Cabot has the top 13 most productive wells in the state for 2H13–all top 13 spots. When you expand it out, they have 17 of the top 20 spots, and 34 of the top 50 spots. Truly astonishing.

    Below we have a few lists for you: Top 10 All Time Producing Wells in PA, Top 10 Wells by Production per Day, and the amount of gas produced by the top 5 counties in PA…
    Read More “PA Gas Production #s Released: Top 10 Wells, Top 5 Counties & More!”

  • | |

    The Big Picture: Why Some Drillers Avoid Natgas Drilling, for Now

    Last week MDN brought you the news that WPX Energy will not be drilling any new Marcellus wells in 2014–and likely beyond (see WPX Gives MDN an Update on Their 2014 Marcellus Plans). WPX is focusing their attention on oil and wet gas shale plays. They’re not the only ones.

    A Reuters story running in the Canadian National Post highlights comments by ConocoPhillips, a huge oil and gas driller, saying the company is staying away from natural gas for the time being (at least the next few years) because of the low price environment. According to Conoco’s CFO Jeff Sheets, they want to see the Henry Hub price for natgas at $5 per MMBtu for at least two years before they’ll even consider returning to natgas drilling…
    Read More “The Big Picture: Why Some Drillers Avoid Natgas Drilling, for Now”

  • | | | | | | | |

    Do PA Drillers have Law on Their Side in Royalty Debate?

    A sharp MDN reader, John S., emailed MDN to remind us of how PA landowners ended up in the quagmire they are now in with regard to royalties with drillers (like Chesapeake) deducting post-production expenses from what they pay to landowners. We had forgotten about the Kilmer v ElexCo Land Services case from March 2010 in which the PA Supreme Court ruled that drillers could indeed deduct certain post-production expenses without violating the law that says landowners must be paid a 12.5% minimum royalty (see Breaking News: PA Supreme Court Rules Against Landowner Seeking to Invalidate Lease).

    PA Gov. Tom Corbett wrote a letter to Doug “the ax” Lawler at Chesapeake telling him the company’s royalty calculations were unfair at best, and perhaps illegal. Doug just has to point to the 2010 PA Supreme Court case. Here’s more information about the 2010 case and what the decision means, and doesn’t mean:
    Read More “Do PA Drillers have Law on Their Side in Royalty Debate?”

  • | | | |

    EQT 2013 Year in Review: Proved Reserves Up 38% from 2012

    EQT became the latest driller to announce huge volumes of proved reserves in the Marcellus and northeast shale plays–8.3 trillion cubic feet equivalent, to be exact. That’s up 2.3 Tcfe (or 38%) from just a year ago. Total proved, probable and possible (3P) reserves by end of 2013 stood at 36.4 Tcfe, an increase of 10.5 Tcfe, or 40%, over the 2012. They also doubled net income during 4Q13 over 4Q12. Clearly this is a company on the grow–particularly in the Marcellus.

    Here’s a look back at EQT’s stellar 2013, by the numbers…
    Read More “EQT 2013 Year in Review: Proved Reserves Up 38% from 2012”

  • |

    Marcellus Gas Production for Norwegian Statoil Now 660 Mmcf/d

    A semi-retired engineer who dabbles with investing wrote an interesting article appearing yesterday on the Seeking Alpha investor’s website about Statoil, a Norwegian multinational oil and gas company. One of the “short-term catalysts” mentioned in the article is Statoil’s investment and activity in the Marcellus and Utica Shale. We found his quick-take (and charts) on Statoil’s northeast activity an interesting and useful update on what the company is doing here in our neck of the woods. The Marcellus/Utica is growing in size and importance for Statoil.

    Here’s a quick update on Statoil’s activity in the northeast:
    Read More “Marcellus Gas Production for Norwegian Statoil Now 660 Mmcf/d”

  • | |

    MDN Quoted in Bloomberg News Article on Dan Rice & Rice Energy

    You may think by reading MDN for any length of time that it’s primary writer, Jim Willis, is a bit of a braggart–a show-off–given that he writes exactly what he thinks, even when he knows it may not be popular or what a majority of others think. He doesn’t do it purposely to be controversial, and Lord knows he doesn’t seek the limelight or attention. Jim simply wants to get the truth out about shale drilling in the northeast and combat the untruth he perceives is rampant on the vital issue of Marcellus and Utica drilling. He likes to think of himself as a humble guy (don’t laugh!). So he feels a bit uncomfortable bringing you this news, but figures if he doesn’t share it, no one else will.

    Last Monday, Feb. 10, Jim was called by Bloomberg News reporter Brendan Coffey to ask about MDN’s articles and knowledge on Rice Energy and Dan Rice III. Jim happily accommodated Mr. Coffey and chatted with him for about 20 minutes. Mr. Coffey mentioned that he may quote MDN in the article. Whereupon Jim pretty much forgot about it. But then last Thursday, Feb. 13, Coffey’s article turned up on the Bloomberg wire and low and behold, MDN (and Jim) were mentioned pretty high up in the article. Here is that article:
    Read More “MDN Quoted in Bloomberg News Article on Dan Rice & Rice Energy”

  • | | | | | |

    Bradford PA Landowner Rally over Chesapeake Royalty Shenanigans

    fox in henhouseLandowners in Bradford County, PA feel like they’re getting screwed by Chesapeake Energy on royalty payments, a complaint they’ve been making for some time now (see Bradford County, PA Landowners Sue Chesapeake over Royalties). PA state law guarantees a minimum 12.5% royalty to landowners, but because Chesapeake keeps deducting post-production expenses (like pipeline costs, processing costs, perhaps marketing costs), landowners end up getting squat–in some cases a 1.5% royalty. The landowners have some righteous anger over the issue. More than 100 landowners and officials gathered at the Bradford County Courthouse in Towanda on Friday in a rally to raise awareness of the issue and to support passage of PA House Bill 1648, which would protect landowners from large deductions from their royalty checks for post-production costs.

    We applaud these landowners and their elected representatives for seeking justice in this situation. The problem is, they’ve invited a fox into the hen house to help them out. State Senator Gene Yaw, whose district includes Bradford County, along with PA Gov. Tom Corbett, has asked PA’s anti-drilling Attorney General, Kathleen Kane, to investigate Chesapeake and this matter of landowners getting shorted on royalty payments. She’s only too glad to “help out.” Normally that would be a good thing, except Kane is just as likely to turn around and bite the people she’s supposed to be helping. She hasn’t met a driller yet she wouldn’t rather see behind bars (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO). If it were up to Kathleen Kane, there would be no Marcellus drilling at all and consequently no royalties for landowners to argue about. We think it’s an ill-advised move to involve Kane, but that’s just our humble opinion…
    Read More “Bradford PA Landowner Rally over Chesapeake Royalty Shenanigans”

  • | | | | |

    Chevron Well Fire Update: Fire Spreads to 2nd Well, Both Fires Out

    MDN previously told you about an explosion and well fire at a Chevron drilling site in Greene County, PA last Tuesday (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). We then brought you Chevron’s series of updates on progress (or lack thereof) in extinguishing the fire and locating a missing worker (see Update: Chevron Well Fire in Greene County Still Burning). On Saturday, a second well at the pad caught fire and started to burn–something Chevron feared may happen. However, as of 3 pm on Saturday, both well fires were out, although Chevron isn’t quite sure why (theory: lack of gas to fuel them). The very careful work of removing a badly burned crane now begins so Chevron can start “well intervention work.”

    There is still, so far, no sign of the missing worker, who is presumed dead. Chevron has issued a steady flow of updates on their website. Below are the most recent three updates issued (since the first four we brought you), which gives a timeline for what’s happened at the site since the explosion…
    Read More “Chevron Well Fire Update: Fire Spreads to 2nd Well, Both Fires Out”

  • | | | | |

    Chevron Well Fire Victim – Native of Warren County, PA

    Although we’ve not heard the missing worker at the site of a Chevron well fire in Greene County, PA has been located, we do now know who it is that is missing. His name is Ian McKee and he’s a native of Warren County, PA. Ian works for Cameron International, the sub-contractor working on completing and hooking up the shale well to a gathering pipeline.

    A prayer vigil was held for Ian last Thursday night…
    Read More “Chevron Well Fire Victim – Native of Warren County, PA”

  • | | | |

    Magnum Hunter’s Prolific (& Dry) Utica Well in Monroe County, OH

    Last week Magnum Hunter released an announcement (below) about their first Utica Shale well, drilled in Monroe County, OH. The company reports it’s an almost totally “dry” shale well–producing 97% methane (almost no natural gas liquids). But oh baby, is it ever productive! MH’s Stalder #3UH, which sits on a well pad that may at some point support up to an eye-popping 18 wells, had an initial production (IP) of 32 million cubic feet of natural gas per day (Mmcf/d). That’s not the highest rate we’ve seen (that honor still goes to Antero Resources’ Yontz well in Belmont County). However, 32 Mmcf/d puts the Stalder #3UH well in an elite group of the top 2-3 best-producing wells in the Ohio Utica–so a big congratulations to Magnum Hunter!

    Here’s last week’s announcement from MH:
    Read More “Magnum Hunter’s Prolific (& Dry) Utica Well in Monroe County, OH”

  • | | | | | | | |

    CONSOL to Begin Ethane Shipments Next Year–to Europe?!

    CONSOL Energy is a big, important driller in the Marcellus and Utica Shale. Most of their operations are in “wet gas” areas–those locations that produce a lot of natural gas liquids (NGLs), like ethane, along with “dry gas” or methane. Although CONSOL has a lot of acreage in southwestern PA and in WV and eastern OH, the ethane they produce will not be going to a proposed new ethane cracker plant being built by Odebrecht in Parkersburg, WV. Instead, CONSOL is going to send their ethane by pipeline to an export facility in Philadelphia, and from there, on to Europe for processing and use in European petrochemical factories.

    Why in the world ship ethane all the way to Europe for processing instead of selling it in your own back yard? Timing. CONSOL doesn’t want to wait the 4-5 years for an ethane cracker to be built (if it’s built at all). They’ve adopted a “bird in hand” strategy. They’d rather start shipping it next year, when Sunoco Logstics’ Mariner East pipeline is up and running, rather than wait. And so CONSOL, according to their announcement below, has locked in a deal with Ineos Europe AG. But don’t despair, CONSOL also previously signed an agreement with Shell to provide its cracker plant in Beaver County, PA with ethane–when and if that plant gets built…
    Read More “CONSOL to Begin Ethane Shipments Next Year–to Europe?!”

  • | | |

    WPX Gives MDN an Update on Their 2014 Marcellus Plans

    Yesterday MDN brought you the news that WPX Energy seemed to be waving good-bye to the Marcellus, based on our observation that they will not do any new drilling in the Marcellus in 2014 (see WPX Energy Abandoning the Marcellus? Sure Looks That Way). Upon posting that story, WPX official Susan Oliver contacted MDN to provide some perspective and background. MDN concludes that we had most of our analysis right, but we may have left the wrong impression by using the word “Abandoning” in our headline. We want to clear this up right here and now, at the beginning of this update: WPX Energy is not leaving the Marcellus. That is, the 100 or so wells they’ve already drilled here in the Marcellus will continue to be WPX wells. We thank the company for making that clarification and apologize to landowners if we gave you a bit of shock.

    However, WPX is, as we noted yesterday, not doing any new drilling in the Marcellus–at least in 2014 and likely beyond. That part of yesterday’s story was correct. As Susan told us, the change we see reflected in their 2014 budget and drilling plan is that the company is shifting from drilling to production in the Marcellus. As for their new drilling program in 2014, they owe it to their stockholders to drill new wells in more oily shale plays–places where they will make more money, quite frankly. And you can’t fault them for that…
    Read More “WPX Gives MDN an Update on Their 2014 Marcellus Plans”

  • | | | | | |

    FERC: Constitution Pipeline Should Make Changes to Lessen Impacts

    From the beginning when it was first proposed, MDN has chronicled the journey of the proposed 125-mile Constitution Pipeline, a natural gas pipeline that will stretch from the gas fields of Susquehanna County, PA to central New York where it will connect with two major interstate transmission Pipelines–the Tennessee Gas Pipeline and the Iroquois Gas Transmission pipeline. We have an important milestone to report on the Constitution. Wednesday, the Federal Energy Regulatory Commission (FERC), the federal agency in charge of approving these kinds of pipeline projects, issued a Draft Environmental Impact Statement (EIS) for the project (the Executive Summary is embedded below).

    In brief, the draft EIS, which is now open for public comment until April, says that the project as proposed does pose some threats to the environment, but that those threats can be reduced to “less than significant levels” if Williams, the builder of the pipeline, makes certain changes and takes certain precautions. FERC also said there’s no better alternative to meeting the energy needs for hundreds of thousands of people–that the Constitution is the best option out there for delivering more natural gas to the northeast in a timely manner. To do nothing is not an option, according to FERC, and there are no other pipelines that can do what the Constitution will do. This EIS was FERC essentially blessing this project–with certain conditions attached…
    Read More “FERC: Constitution Pipeline Should Make Changes to Lessen Impacts”

  • | | | |

    Benesch Shale Report: Chesapeake Sale Rumors Swirling

    The Ohio law firm of Benesch, Friedlander, Coplan & Aronoff are one of the northeast’s top energy law firms. Each quarter they publish a Shale Industry Report, largely focused on what’s been happening in the Ohio Utica Shale (most recent report covering fourth quarter 2013 is embedded below). It’s a great update–one that we like to read and enjoy being able to bring it to you. The top issue listed in the opening of the report is the rumor that, unsurprisingly, corporate raider Carl Icahn (Chesapeake Energy’s second largest shareholder) is shopping Chesapeake for sale to other companies. We’ve warned you about this from the beginning, when Icahn first started flexing his raider muscles and bullying the company into submission.

    Everyone yells at MDN, “Chesapeake needed fiscal discipline…Aubrey McClendon was reckless and almost bankrupted the company…a strict hand was needed at the helm and Icahn came along at the right time…etc.” We say bunk. This has always been about adding more zeros to Icahn’s bank account–from firing more than 1,200 people to selling off assets right and left in the equivalent of fire sales. There’s nothing disciplined or wholesome or good about it. It’s about fat cats getting fatter (i.e. richer). Yes it’s a free country (maybe, we need to check how many more illegal executive orders have been issued in the past 24 hours by Obama)–and in a free country this kind of thing can happen. But we don’t need to like it, and we sure as heck don’t. Icahn and his toady Doug Lawler need to go. End rant. So who’s rumored to be interested in buying Chessy?…
    Read More “Benesch Shale Report: Chesapeake Sale Rumors Swirling”

  • | | |

    WPX Energy Abandoning the Marcellus? Sure Looks That Way

    bye byeWPX Energy, the drilling division of Williams that was spun off into its own company just two years ago, continues to “bump along the bottom” according to an unflattering article on The Motley Fool investor’s website (see WPX Energy Still Lacks Growth, Leading to Low Valuation). MDN told you about the shakeup in WPX’s leadership in December (see CEO Shake-up Explained: Taconic Capital Jerking WPX’s Chain). New CEO Jim Bender released WPX’s 2014 plan of action and capital spending budget on Monday. Although the company had 33 unique drill permit locations for the last four months of 2013 in PA according to the recently published Marcellus and Utica Shale Databook, it appears to us that for 2014 WPX plans to drill precisely zero new Marcellus wells, which of course is a disappointment–especially for landowners signed with WPX who haven’t yet seen drilling on their land.

    Looking at WPX’s 2014 budget (see below), there is a paltry $20-$30 million budgeted for the Marcellus (i.e. “Appalachia”), likely being used to finish wells started at the end of 2013. There’s a big fat goose egg for the number of rigs they plan to operate in the Marcellus this year. Our conclusion: WPX is saying bye-bye to the Marcellus. Is this yet more chain-jerking by Taconic and corporate raiders? Is it really the wisest course for WPX to abandon the northeast? Below is their announcement about 2014 plans, and the forecast of where they will spend $1.47 billion this year…
    Read More “WPX Energy Abandoning the Marcellus? Sure Looks That Way”