Energy Companies

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    Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M

    Rice Energy, one of our favorite newer drilling companies, announced yesterday they’ve put some of that IPO money to good use (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Rice has purchased a 28-mile pipeline gathering system already up and running in Washington County, PA from M3 Midstream for $110 million cash on the barrel head. The deal also includes rights of way to build more gathering pipelines in both Washington and Greene counties. Rice Energy owns leases and is conducting active drilling in both counties.

    The Marcellus and Utica Shale Databook, Vol. 3 (just out) shows Rice with 28 unique well location permits in Washington County, PA for the last four months of 2013, and 9 unique well location permits in Greene County (via Alpha Shale Resources, which Rice recently picked up in a deal with Alpha Natural Resources). Makes perfect sense Rice would want to buy the pipelines that connect to their wells and get a piece of the midstream action in the white hot Marcellus region of SWPA. Here’s yesterday’s announcement:
    Read More “Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M”

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    Update: Chevron Well Fire in Greene County Still Burning

    Yesterday MDN told you of the explosion and well fire at Chevron’s Lanco 7H well pad, in a remote area of Greene County, PA, northwest of Bobtown. The explosion/fire began around 6:45 am Tuesday (see Explosion & Fire at Chevron Well in SWPA – 1 Person Missing). The update is that the fire still burns–out of control–although it hasn’t spread to several other wells on the same well pad, yet. The specialists brought in to put the fire out, a company called Wild Well Control, are evaluating and planning and apparently getting ready to go into action. The one missing contract worker, which we have learned is from Cameron International, a Fortune 500 company that specializes in completing wells (flow control), is still missing.

    Below are a few more select bits of information along with the four updates provided thus far from Chevron itself about the accident:
    Read More “Update: Chevron Well Fire in Greene County Still Burning”

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    Marcellus Gas to the Rescue: WNY Customers Avoid Step Price Jump

    National Fuel Gas Company is a large, integrated energy company with its HQ in Buffalo, NY. They have operations spanning from upstream (Seneca Resources, a major Marcellus Shale driller) to midstream pipelines to a downstream utility company serving customers in western New York State and northwestern Pennsylvania. A story from the NFG utility company caught our eye today. NFG is putting the word out to its hundreds of thousands of customers that they might want to consider hopping on the budget plan–to spread out their winter heating bill payments. Why are NFG’s customers paying a lot more this winter to heat with natural gas? Simply because this is one of the longest and coldest winters we’ve had in decades.

    The interesting part of the NFG “you ought to get on the budget plan” story is that, according to the company, it could have been a lot worse than it is. The price of NFG’s natural gas is steady and has not gone up. What’s helping to save western NY (and NWPA) gas customers from huge price spikes being experienced elsewhere? PA Marcellus Shale gas…
    Read More “Marcellus Gas to the Rescue: WNY Customers Avoid Step Price Jump”

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    Explosion & Fire at Chevron Well in SWPA – 1 Person Missing

    Chevron Well FireThere was an explosion and fire at a Chevron Marcellus shale well in Greene County, PA early yesterday morning. The explosion happened about 6:45 am at Chevron’s Lanco 7H well pad, in a remote area northwest of Bobtown. One person was treated for “minor injuries” and released. However, the sad news is another person is missing. Since the fire is still burning and hot, no one can get close enough to search for the missing worker, so we sadly assume the worst. Our prayers and thoughts go to the families involved.

    Chevron has flown in a disaster team from Wild Well Control (Houston, TX) to get the fire extinguished, but it will take at least “several days” before the fire is out. Below we have the information we’re able to find concerning the explosion and fire–why it happened–along with some perspective on the level of danger workers face working in the shale drilling industry, plus we make some connections and provide background you won’t find anywhere else but here, on MDN…
    Read More “Explosion & Fire at Chevron Well in SWPA – 1 Person Missing”

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    Marietta Residents Generally in Favor of Leasing City-Owned Land

    Seems to us, from an informal survey around town, that most residents of Marietta, OH are in favor of the city leasing 35 acres of municipal property to Protege Energy for the offered $4,750 per acre signing bonus and 17.5% royalty on any gas produced.

    A sampling of reaction “around town”…
    Read More “Marietta Residents Generally in Favor of Leasing City-Owned Land”

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    Chesapeake, Atlas Try Forced Pooling in Columbiana County, OH

    Forced pooling, or as it’s called in Ohio, “unitization”–it’s something we understand, but we don’t like it. Chesapeake Energy and Atlas Noble have filed petitions seeking forced pooling for property owned by a number of landowners in Columbiana County, OH. Some of those petitions have been approved by the Ohio Dept. of Natural Resources (ODNR). Some are still pending.

    The industry and landowners who have leased will argue it’s not fair that one or two hold-outs who won’t lease can scuttle a deal to drill and therefore should be forced to lease if they can’t come to reasonable terms. Landowners who don’t want to lease say it’s their land and drillers can figure out how to drill around them–I don’t say you can’t drill, and you don’t say I have to drill under my land. We favor the later position, to the consternation of our friends in the shale drilling industry. We say, make it worth their while–give them an offer they can’t refuse. Here’s some of the details on the forced pooling being sought by Chessy and Atlas in eastern OH:
    Read More “Chesapeake, Atlas Try Forced Pooling in Columbiana County, OH”

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    Chesapeake’s Lawler Says Utica is a “Huge Liquid Lever” for Them

    Last week Chesapeake Energy, a big driller in the Marcellus and the biggest driller in the Utica Shale, released their 2014 Outlook (see Chesapeake: My Rig’s Better than Your Rig, Cuts Capex Another 20%). They tried to spin spending 20% less on drilling as a good thing for the company–enforcing fiscal responsibility. But it means they’ll be drilling 20% less–cold, hard fact. We learned from the release of their 2014 outlook that Chesapeake will cut the number of drilling rigs in the Utica Shale from the typical 17 they operated in 2013 down to 7-9 rigs, making the Mark Twain-like claim that 7-9 of their rigs are like 20 of someone else’s rigs. Whatever.

    Chesapeake’s still new CEO Doug “the ax” Lawler was on an earnings call last week with his lieutenants (we’re sure boss man and corporate raider Carl Icahn was listening in too). Doug hasn’t met a Chessy employee he wouldn’t be willing to fire. But we digress. Woven throughout the call was references to the Marcellus and Utica and the important role they will play in the company in 2014 and beyond. Lawler’s comment on the Utica Shale is that it’s “a huge liquid lever for us.” Below is a transcript of last week’s call…
    Read More “Chesapeake’s Lawler Says Utica is a “Huge Liquid Lever” for Them”

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    Loyalsock Drilling Gets an Anti-Drilling Spin Job by PennFuture

    spinWe normally skip pronouncements from extremist anti-drilling groups like PennFuture. They, along with other PA groups like PennEnvironment, the League of [Liberal Democrat] Women Voters, Sierra Club, Shale Justice…you get the idea–hold unreasonable views on shale drilling and development. They simply want it all stopped–which ain’t gonna happen. There is no reasoning with them–no middle ground or acceptable way to drill for shale for such groups. So they become ever-more shrill in their false accusations and allegations about what may/maybe/might/could/possibly/theoretically happen if a particular area were to see shale drilling. Say, oh, like the Loyalsock State Forest in PA.

    We include a press release by PennFuture below, spinkled with lots of unspoiled this’ and pristine thats, pushing the panic button that (gasp) Anadarko Petroleum might actually be allowed to drill on land they legally hold the rights to drill on (see Manufactured Controversy over Drilling in Loyalsock State Forest). Why, that forest actually contains a “critical bird nursery”–can you imagine the malevolent intent of disturbing little birdies? What a wicked company Anadarko must be. Below is the PennFuture press release that we think has more to do with fundraising than any real or imagined harm that may come to Loyalsock. We bring it to you as an example of a masterful spin job…
    Read More “Loyalsock Drilling Gets an Anti-Drilling Spin Job by PennFuture”

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    Village in Belmont County Signs Lease with Gulfport: $7250/Acre

    Bellaire is a small village in Belmont County, OH, near the border with West Virginia. Although Bellaire is small (population 4,300), as the old saying goes, location is everything. It just so happens Bellaire sits atop wet gas Utica Shale deposits and drillers in the area want to lease. So Bellaire officials last week signed a contract with Gulfport Energy for a “piddly” 66 acres of village-owned land scattered throughout the town. Just like another deal recently signed by Gulfport with the Shadyside Local School District, Bellaire is getting $7,250 per acre signing bonus and 20% royalties (see School in Belmont County, OH Gets $7,250/Acre from Gulfport).

    The taxpayers of Bellaire will appreciate a $478,500 bonus check coming their way for the village coffers…
    Read More “Village in Belmont County Signs Lease with Gulfport: $7250/Acre”

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    Antero’s Utica Numbers Mostly Peaches & Cream, Except Condensate

    Last week MDN told you about the steep increase in proved and unproved reserves for Antero Resources–particularly in the Utica Shale (see Antero 2013: 124 Marcellus/Utica Wells Drilled, Reserves Skyrocket). While the news for Antero has been fabulous over the past year or more (including a very successful IPO last year), there is one bit of not-so-good news for the company. The eagle eye of energy analyst Richard Zeits noticed that one metric for Antero went down, not up–the EUR numbers for Utica condensate. EUR is, of course, Estimated Ultimate Recovery–the amount of gas (or in this case condensate or “natural gasoline”) that will ultimately be recovered from their wells.

    In his inimitable style, Zeits analyzes the recent announcement by Antero, providing us with a balanced perspective on this fast-growing Marcellus/Utica driller and the dip in their EUR numbers for condensate:
    Read More “Antero’s Utica Numbers Mostly Peaches & Cream, Except Condensate”

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    CSSD’s Andrew Place Talks About 3-Leg Approaches & Firehoses

    Eckert Seamans, the Pittsburgh, PA energy law firm that employs the former PA Sec. of Environmental Protection (and pot smoking proponent running for governor) John Hanger, hosted a morning breakfast meeting last Friday in Southpointe to discuss “responsible shale development.” Er, has it been *irresponsible* thus far? At any rate, three speakers were on the agenda for the breakfast conclave, one of whom was EQT’s Andrew Place–the interim and outgoing director of the Center for Sustainable Shale Development, or CSSD (see Center for Sustainable Shale Comes Roaring Back (to Life)).

    According to Place, the CSSD takes a “three-leg approach” to the shale drilling issue. And although the public has heard virtually nothing from the CSSD since it’s founding until a few weeks ago when it came roaring back, Place said it’s been a nonstop “firehose” of activity over at CSSD HQ. From the breakfast meeting (that curiously didn’t include Hanger on the speaker’s dias), here’s more on Andrew Place’s comments:
    Read More “CSSD’s Andrew Place Talks About 3-Leg Approaches & Firehoses”

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    Utica Shale Bails Monroe County out of Potential Hole

    Ormet, an aluminum plant in Hannibal (Monroe County), OH is the county’s largest employer with 700 people working at the plant. Ormet officials shut the plant down last October claiming they couldn’t get a reasonable agreement on reducing high electric rates for the plant. That’s 700 people out on the street, looking for jobs (see Ormet Workers Rally At AEP). But what’s this? Monroe County Auditor Pandora Neuhart and County Treasurer Judy Gramlich are not worried about sales tax revenues in the county taking a hit from all of those unemployed workers. Why? Because Utica Shale drilling has taken off in the county and tax revenues from drilling are starting to flow in.

    New Utica drilling revenue is not jump-up-and-down good news for the displaced Ormet workers (that situation needs urgent attention by Gov. Kasich), but the new Utica revenue is a good sign that regular county operations will not be adversely affected by the Ormet layoffs. Thank you Utica Shale! An update on Utica drilling in Monroe County, and how the now bankrupt Ormet is profiting from it (with wells on their property)…
    Read More “Utica Shale Bails Monroe County out of Potential Hole”

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    Chesapeake: My Rig’s Better than Your Rig, Cuts Capex Another 20%

    My Dog's Bigger than Your DogThe executives at Chesapeake are channeling the boastful ghost of Aubrey McClendon. Yesterday Chesapeake released its 2014 Outlook and capital program. The big news is they will spend 20% less on drilling and related activities this year. The Utica Shale remains one of the most important plays in their portfolio. Apparently in an attempt to dress up the 20% decrease in spending as a good thing, unnamed Chesapeake executives made this boast: “Chesapeake said it expects to operate seven to nine drilling rigs in its Utica shale properties this year, saying that is the equivalent of a 20-rig operation by competitors.” Which made us laugh out loud. “Hey, our 7-9 rigs are worth 20 of anybody else’s.” OK. Must be nice to have an inside track on how to repeal the laws of physics over at Chessy HQ. Maybe they should patent it! Anywho…

    Below is the Chesapeake announcement from yesterday with some fairly detailed information about where they plan to drill in 2014, and how much they think they’ll produce. Liquids (NGLs in the Utica, oil in other plays) are a big focus for Chessy this year. There’s a lot more money in liquids–and boss man Carl Icahn likes that. Below the Chesapeake announcement is a bit of analysis from the Akron Beacon Journal, from which we took the “our rigs are better than your rigs” quote…
    Read More “Chesapeake: My Rig’s Better than Your Rig, Cuts Capex Another 20%”

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    CONSOL Proved Reserves Up 44%, Marcellus the Key

    MDN has reported this week on a flurry of proved and unproved reserves announcements. Range and Antero have proved reserves in the trillions of cubic feet, Rex Energy in the billions. Yesterday CONSOL Energy weighed in (me too! me too!) with their numbers. The CONSOL announcement, however, is a bit more interesting and enlightening than some of the others. They break it down by shale play/type of play and also run some EURs–Estimated Ultimate Recovery numbers for just how much they believe they’ll end up getting from all that drilling.

    Here’s the interesting CONSOL announcement from yesterday about proved (and unproved) reserves and EURs, and the key role the Marcellus plays in the company’s future:
    Read More “CONSOL Proved Reserves Up 44%, Marcellus the Key”

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    National Fuel Spends 2/3 of Capex Budget on Drilling, Mostly Marcellus

    National Fuel Gas company is a big, diversified company. They own operations in all three segments of the oil and gas business: upstream (their subsidiary Seneca Resources is a big Marcellus driller), midstream (gathering and storage pipelines in PA), and downstream (utility company in the Buffalo, NY area). So they really “do it all.” Yesterday, in the ongoing parade of 4Q13 updates, National Fuel issued theirs–only everyone else’s 4Q is actually National Fuel Gas’ 1Q14. Regardless, it covers the last four months of 2013, no matter what you call it. And what does it show?

    It shows that National Fuel Gas via its Seneca Resources division continues to be the main focus of the company. They spent 2/3 of their capital budget on exploration and production in 2013–and the lion’s share of that in the Marcellus. Here’s the narrative part of the update issued yesterday:
    Read More “National Fuel Spends 2/3 of Capex Budget on Drilling, Mostly Marcellus”

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    Noble Energy: More Marcellus Drilling Ahead in 2014

    Noble Energy, one of the larger Marcellus Shale drillers (with 360,000 acres under lease) released their fourth quarter and full year 2013 results yesterday. The company reports producing 196 million cubic feet of gas per day on average, a 17% increase over 3Q13 and a big 61% increase over 4Q12. By December 31st they were producing 210 Mmcf/d. Noble is a big company with both on- and off-shore drilling operations around the world. The Marcellus continues to play in increasingly important role in their portfolio for 2014, as evidenced by the update and by comments made by Noble executives yesterday.

    Below are extracts from yesterday’s Noble update and the analyst conference call with company execs. We’ve selected out portions dealing with the Marcellus so you don’t have to wade through it all…
    Read More “Noble Energy: More Marcellus Drilling Ahead in 2014”