Energy Companies

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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:
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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…
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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”

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    Range Resources New High for Proved/Unproved Marcellus Reserves

    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…
    Read More “Range Resources New High for Proved/Unproved Marcellus Reserves”

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

    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…
    Read More “Rex 2013: Proved Reserves up 37%, Avg Drilling Costs Up Too”

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    Chevron’s Head of Unconventional Resources Discusses Marcellus

    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…
    Read More “Chevron’s Head of Unconventional Resources Discusses Marcellus”

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    Can a Single Canceled Airline Route Affect Utica Shale Development?

    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…
    Read More “Can a Single Canceled Airline Route Affect Utica Shale Development?”

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

    rocket to the moonAntero 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…
    Read More “Antero 2013: 124 Marcellus/Utica Wells Drilled, Reserves Skyrocket”

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    Big News! Chesapeakes Hires One New Employee – a Lawyer

    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…
    Read More “Big News! Chesapeakes Hires One New Employee – a Lawyer”

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    The Unconventional Rise & Sale of Atlas Energy

    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…
    Read More “The Unconventional Rise & Sale of Atlas Energy”

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

    Aubrey McClendonAubrey 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…
    Read More “McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma”

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

    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”

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    A Peek Behind the Curtain of Crosstex/Devon Midstream Marriage

    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…
    Read More “A Peek Behind the Curtain of Crosstex/Devon Midstream Marriage”