Energy Companies

Energy Companies | Industrywide Issues | Range Resources Corp | Reserves (Proved and Unproved)

Range Resources New High for Proved/Unproved Marcellus Reserves
February 6, 2014February 6, 2014

Yesterday MDN reported that Antero Resources was reporting a new high for the company–they have 7.6 trillion cubic feet equivalent (Tcfe) of proven natural gas reserves under the acreage they lease (see Antero 2013: 124 Marcellus/Utica Wells Drilled, Reserves Skyrocket). Not to be outdone, Range Resources has published their own chest-thumping announcements that they (Range) had 8.2 Tcfe at the end of 2013. In addition, Range is reporting their unproved resource potential zooms up to 42 – 55 Tcf of natural gas and 3.7 – 4.9 billion barrels of NGLs and crude oil.

Here’s a pair of announcements from Range with more details on their excellent position in the Marcellus at the end of 2013…
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Energy Companies | Industrywide Issues | Reserves (Proved and Unproved) | Rex Energy

Rex 2013: Proved Reserves up 37%, Avg Drilling Costs Up Too
February 6, 2014February 6, 2014

We like to refer to Rex Energy, the State College-based Marcellus/Utica driller as the little energy company that could. Rex is quite a bit smaller than some of the big boys, with just 77,000 leased acres in the Marcellus and 20,000 acres in the Utica. But they appear to be a healthy company–and they stay focused on their core mission of drilling in the northeast. We’ve recently mentioned “proved reserves” for some of the big boys in the Marcellus and Utica–reserves in the trillions of cubic feet. Rex’s proved reserves are in the billions of cubic feet.

Below is a Rex announcement from a few days ago outlining their proven reserves. It’s a good update because it also outlines their average costs to drill, and the locations where they drill…
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Chevron | Energy Companies | Hydraulic Fracturing | Industrywide Issues

Chevron’s Head of Unconventional Resources Discusses Marcellus
February 6, 2014February 6, 2014

Chevron is the third largest acreage holder in the Utica Shale with 600,000 leased acres and fourth largest in the Marcellus with 714,000 acres. So when Chevron’s manager of unconventional resources for global drilling and completions, Michael Power, sits down for a Q&A to discuss “what’s next”–new methods and technologies the company will be using–that’s of high interest for MDN readers.

An interview of Power with Drilling Contractor magazine reveals Chevron’s strategy in the Marcellus–fewer pads with more wells and longer laterals. They’re also recycling wastewater on site for reuse in drilling and fracking. Power discusses Chevron’s under-construction Decision Support Center in Pittsburgh, government regulation, community relations and more in this enlightening interview…
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Chesapeake Energy | Cuyahoga County | Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Can a Single Canceled Airline Route Affect Utica Shale Development?
February 6, 2014February 6, 2014

Could a single canceled airline route have an impact on the development of one of the hottest shale plays in the U.S. (the Utica)? Maybe, is the surprising answer. United Airlines has announced they will discontinue their non-stop daily flights to and from Cleveland and Oklahoma City. OKC is the headquarters for Chesapeake Energy, and Chessy is the #1 driller (for now) in the Utica Shale. It’s also HQ for Gulfport Energy, one of the most prominent and prolific drillers in the Utica next to Chesapeake. By cutting out that direct route it will mean much longer flights with layovers “at best” according to the Oklahoma Independent Petroleum Association. They leave us to think about the “at worst” possibilities.

“No problem!” you say. Pittsburgh is probably closer to the oil and gas fields of eastern Ohio than Cleveland anyway. Or Columbus. Ahhh, but there’s the rub. Neither of those airports go direct to OKC either. Cleveland was the only one in the entire region to do so. And so this spring when United cuts the direct routes, it will mean a major disruption for the flow of “foreigners” (as Gov. John Kasich refers to them) coming into Ohio to work in Ohio’s oil and gas fields…
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Antero Resources | Energy Companies

Antero 2013: 124 Marcellus/Utica Wells Drilled, Reserves Skyrocket
February 5, 2014February 5, 2014

Antero Resources continues to impress. The company is focused on drilling in the Marcellus and Utica Shale region–and it’s one of the biggest drillers with the most land under lease (450,000 acres between the two plays). No wonder the company’s IPO last October was such a hit (see Antero’s IPO Fetches $1.57B, Company Valued at $11B!). Yesterday Antero issued an update on their Marcellus/Utica drilling program. It will come as no surprise (but is impressive all the same) that Antero reports their proved reserves–the amount of gas they know is down there and recoverable–was 7.6 trillion cubic feet (Tcfe). That’s an astonishing 78% increase over 2012. If you open it up to the looser 3P standard (proved, provable and possible), the number zooms to 35 Tcfe. Wow! That’s a lotta gas. 😉

Antero reports they added 113 new Marcellus wells in 2013, and 11 new Utica wells. One of those wells took top honors as the most productive well in the Utica (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d). Below is yesterday’s Antero update with lots of good info about 2013…
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Chesapeake Energy | Energy Companies

Big News! Chesapeakes Hires One New Employee – a Lawyer
February 5, 2014February 5, 2014

Stop Press! This is really big news… After laying off some 1,200 people last year (see The Great Chesapeake Massacre: Lawler Fires 800 People in One Day), Chesapeake Energy’s CEO Doug Lawler has hired one new employee–a lawyer. And not just any lawyer, but the former Secretary of the Environment for the state of Oklahoma. In unrelated news, the handful of people who still work at Chesapeake have once again voted their company onto the Fortune 100 Best Companies to Work For list–for a seventh straight year. Right. We wonder whose hands were greased for that one? Anyone notice big full page ads for Chessy now appearing in Fortune?

Below are a pair of recent press releases from Chesapeake, announcing the appointment of Miles Tolbert to lead the environmental health and safety group at Chessy’s HQ in Oklahoma City (rumor is he has an entire empty floor of offices to himself), and the announcement about the faux Fortune 100 list…
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Atlas Energy | Chevron | Energy Companies | Pennsylvania | Statewide PA

The Unconventional Rise & Sale of Atlas Energy
February 5, 2014February 5, 2014

Atlas Energy, aka Atlas Resource Partners and Atlas Pipeline Partners, is a Pittsburgh-based exploration and production (E&P) and midstream company with active drilling operations not only in the Marcellus/Utica region but another four resource plays as well. The company has an unconventional history, to say the least. The entrepreneurial Cohen family from Philadelphia bought a major stake in the company in the late 1990s and installed son Jonathan in Pittsburgh to help run it. The Cohens had no special knowledge or foresight but seemed to be in the right place at the right time (the Marcellus Shale), because in 2010 the Cohens sold Atlas Energy to Chevron for a pile of cash (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward).

An interesting story about the entrepreneurial Cohen family, the businesses they’ve founded or grown, and the rise of Atlas Energy as a major driller in the Marcellus…
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American Energy Partners | Energy Companies | Hess | Ohio | Statewide OH | Utica Shale | XTO

McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma
February 4, 2014February 4, 2014

Aubrey McClendon’s American Energy continues its rapid expansion. Aubrey is raising money like crazy–and spending it like crazy too. Last week Aubrey landed another half billion dollars to spend in the Utica (see McClendon’s New Company Gets Another Half Billion $ for Utica). Then he spent it! The rumor was the mystery buyer of Hess’ 74,000 Utica Shale acres they sold for $924 million last week was McClendon (see Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer). It’s no longer a mystery–American Energy verified it is the buyer of the Hess acreage.

But hey, that was last week. It’s a new week, so it’s time for a new deal for Aubrey and American Energy. And right on cue, we have one: XTO Energy has announced they’ve done a deal whereby American Energy will fund 100 percent of XTO’s near-term drilling costs in a “core area” of 55,000 Utica Shale acres. In return, American Energy will get ownership of 30,000 net acres of XTO’s holdings in three Ohio counties. Yesterday Aubrey said he’s cut three deals recently–Hess, XTO and Paloma Partners. Between the three deals, Aubrey says he’s picked up another 130,000 acres in the Utica in the past week. The man is on a tear…
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CNX Resources | CONSOL Energy | Energy Companies

CONSOL Reports Record Gas Production in 4Q13, Bumps Up Guidance
February 4, 2014February 4, 2014

On Friday CONSOL Energy (and its CNX Gas division) issued an update on activity for the fourth quarter of 2013. The company reported net income of $738 million, but the majority of that ($591 million) came from “discontinued operations”–which means from the five WV coal mines they recently sold (see CONSOL Sells More Coal Mines, Investing $24B(!) in Shale Drilling). The gas division had a record 4Q13, producing 48.5 billion cubic feet of natural gas equivalent (Bcfe). Although it’s a 4Q13 update, CONSOL also hauls out the crystal ball and says that for 2014 the company estimates it will produce 215 – 235 Bcfe of natural gas. In addition, they’ve stuck their necks way out and say that for 2015 and 2016 those numbers will go up an average 30% each year.

And so, like a broken record, we once again repeat that CONSOL continues its transformation from coal energy producer to natural gas energy producer. Here’s the update from Friday:
Read More “CONSOL Reports Record Gas Production in 4Q13, Bumps Up Guidance”
Crosstex Energy | Devon Energy | Energy Companies | Energy Services | EnLink Midstream | Industrywide Issues | M&A | Pipelines | Processing Plants

A Peek Behind the Curtain of Crosstex/Devon Midstream Marriage
February 4, 2014February 4, 2014

For a number of months, MDN has told you the story/news of the merger between Crosstex Energy (a Dallas, TX company) and Devon Energy (Oklahoma City, OK company). It’s an important story because both have a major presence in the Marcellus/Utica region. Essentially Devon Energy, a driller with a major midstream division, bought out Crosstex, a midstream company, and merged the two operations leaving Crosstex in command of the newly created midstream entity. The newly formed subsidiary company was recently named EnLink Midstream (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds).

An article in the Dallas Morning News about the merger caught our eye because it profiles the people involved and how the merger happened. We’re not sure that the story reveals any new, salient news about the deal–but it does reveal the depth of experience and character of the people involved. And it inspires confidence that this particular merger, a merger in which no one lost their job, portends very good things for the northeast where EnLink will continue to grow and expand. We’d call it a “here’s why you should feel good about this merger and doing business with these guys” kind of story…
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Elk County | Energy Companies | Industrywide Issues | Pennsylvania | Seneca Resources | Wastewater

New Frack Wastewater Injection Well Coming to Elk County, PA
February 3, 2014February 3, 2014

Looks like more injection wells are on the way in Pennsylvania. Injection wells are used to pump leftover frack fluid (and brine, naturally occurring salt water that comes of the hole longer after fracking is done) deep underground for safe disposal. There are a lot of injection wells in Ohio, and PA drillers who don’t recycle or find another way of disposing of wastewater typically ship it to OH. (Vol. 3 of the Marcellus and Utica Shale Databook, out in a week, contains what we believe the most comprehensive list of frack wastewater and landfills in existence. Pre-order a copy now!)

Seneca Resources has just received federal approval to convert an old vertical natural gas well in Elk County, PA into an injection disposal well. The Elk injection well will pump up to 60,000 gallons per day of wastewater and brine into the Elk 3 sandstone formation. However, before they begin operations at the Elk injection well, Seneca still needs an approval from the state Dept. of Environmental Protection…
Read More “New Frack Wastewater Injection Well Coming to Elk County, PA”
Energy Companies | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Soil | Statewide PA

Range Floats Plan to Use Drill Cuttings to Build Roads
February 3, 2014February 3, 2014

This one is sure to set the anti-frackers into a tailspin. Range Resources has applied to the PA State Dept. of Environmental Protection (DEP) to begin using drill cuttings (leftover rock and dirt that comes out of the ground) as an “aggregate” or material to build roads to drilling sites. There’s nothing wrong with drill cuttings, but sometimes there are low levels of radioactivity found in them–far below any kind of health threat. But we can see the headlines now: Radioactive Roads! Run for the Hills! Drillers Want to Poison Mother Earth! That’s how the shrill anti-fossil fuel lobby will try and spin this.

We’re sure Range knows they’ve opened a can of worms with this one. Let’s see how it all plays out in the coming 60 days, the time period authorized by the DEP to receive public comments on the proposed plan…
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Devon Energy | Energy Companies

Utica Driller Devon Energy Picks Up 2 New Board Members
January 31, 2014January 31, 2014

Devon Energy announced earlier this week that they’ve added a pair of drilling industry veterans to their board of directors. The additions are “immediate” and include Barbara M. Baumann, 58, a former BP Amoco executive who currently serves as president and owner of Cross Creek Energy Corporation, and John E. Bethancourt, 62, a retired Chevron executive. Devon is a major acreage holder in the Utica Shale with 157,000 acres under lease.

Does this sudden, with no warning, addition signal problems or issues? We don’t think so, but we don’t know. We haven’t come across any scuttlebutt about Devon–they seem to be doing well, focusing largely on oily shale plays, including the Utica. A couple of years ago the company picked up $2.2 billion from Chinese oil major Sinopec International Petroleum Exploration Production Corp. in a joint venture deal (see China Makes $2.2B Investment in U.S. Shale, Including Utica). Last October Devon more or less bought out Crosstex Energy (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds). Seems like everything is going well, full speed ahead with no corporate raiders lurking in the background. Whew. Here’s the board announcement from earlier this week:
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Coterra Energy (Cabot O&G) | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Susquehanna County

Vol 2 Photojournal for Cabot Well in Susquehanna County, PA
January 31, 2014January 31, 2014

A quick note to let you know that tomorrow (Saturday, Feb. 1) you can once again download Photojournal of a Pennsylvania Natural Gas Well: Book 1: Ground Preparation. It’s a really cool book of photos (and captions) taken by a non-professional photographer, Susquehanna County resident Janice Gavern. MDN recently reported on Janice’s project to document a Cabot Oil & Gas shale well being drilled just outside of Montrose, PA, close to (yes) Dimock (see PA Resident Snaps 8,000 Pictures of Cabot Well Construction).

Jancie has been a busy beaver. She’s now posted her second volume in this multi-volume series: Photojournal of a Pennsylvania Natural Gas Well: Book 2 Site Set-up. You can grab a copy of this volume for free on Sunday, Feb. 2. Be sure to grab them while they’re free! It will save you $9.99 (or if you like, download it and pay the $9.99 to give Jan a little bit of money for her efforts).

What if you don’t own a Kindle reader? No problem. You can download and install a Kindle reader application on your computer, smartphone–just about any device you have that connects to the internet. So don’t lack of a Kindle stop you from grabbing a copy of Jan’s books.
American Energy Partners | American Energy Utica | Energy Companies | Hess | Ohio | Statewide OH | Utica Shale

Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer
January 30, 2014February 4, 2014

Looks like the end of 2014 came in January of 2014 for Hess. On Oct 30, 2013 Hess’ Executive VP and President of Worldwide Exploration & Production, Greg Hill, said that Hess was working on figuring out their Utica Shale acreage and where the wet gas area is located so they could make decisions about where they will and won’t drill. Hill said they would make their final decision “at the end of 2014 once we finish delineation” (see Hess Officials Talk About the Utica on 3Q13 Earnings Call). Yesterday Hess announced they have struck a deal to sell to sell 74,000 Utica Shale dry gas acres to an unnamed buyer for $924 million. End of 2014 (and Christmas) came early for Hess. Why sell now? And, who was the buyer? MDN thinks we know (we speculate below).

Hess owns a 100% interest in 95,000 Utica Shale acres, and a 50% interest (in a joint venture deal with CONSOL Energy) for another 65,000 Utica acres. In consulting the Hess map of their Utica acreage below (from a November 2013 investor presentation), you can get a pretty good idea of where the acreage they’ve sold is probably located. Much of Hess’ 100%-owned acreage is in the “dry gas” area on the map–our money is that most of that acreage is what got sold. No doubt landowners will soon receive notifications if they are among those being traded to another drilling team. Below is the Hess announcement (which is brief), the map we located which helps shed light on the brief announcement, and our speculation on why they sold now, and who purchased…
Read More “Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer”
American Energy Partners | American Energy Utica | Energy Companies | Ohio | Statewide OH | Utica Shale

McClendon’s New Company Gets Another Half Billion $ for Utica
January 30, 2014January 30, 2014

Former Chesapeake Energy CEO Aubrey McClendon’s new company, American Energy Partners, keeps the money rollin’ in. Last fall AEP lined up a big pile of cash to be used to purchase leases in the Utica Shale (see McClendon Gets a Little Help ($1.7B) from His Friends in OH Utica). In December, Aubrey floated 100 million “units” (i.e. stock) in an effort to raise up to $2 billion more (see McClendon Plan to Raise Additional $2B in “Unit” Offering). No word on how that effort is going.

In the meantime, time’s a wastin’, so Aubrey has raised another $500 million in private equity to help fund Utica Shale ventures (see the story below). MDN wonders, is it just coincidence that AEP’s brief announcement was issued yesterday, on the same day that Hess announced their sale of 74,000 Utica Shale acres to a mystery buyer? Interesting, no?…
Read More “McClendon’s New Company Gets Another Half Billion $ for Utica”