Energy Companies

Energy Companies | Olympus/Huntley & Huntley | Pennsylvania | Range Resources Corp | Westmoreland County

Murrysville Park Lease to be Discussed at Meeting
January 16, 2014January 16, 2014

Last June MDN told you that Huntley & Huntley, a small conventional gas driller, had leased land surrounding the Murrysville Community Park in Westmoreland County, PA. At that time Huntley made overtures to Murrysville officials about leasing the land under the park for drilling from neighboring properties they already have under lease (see Conventional Driller Eyes Marcellus Under Murrysville, PA Park). Since that time MDN has learned that Huntley often works with and for Range Resources. Although it’s not clear if Range is the client in this case, we suspect that is the case.

Next Wednesday, Murrysville Council will take up a proposal from Huntley & Huntley (Range?) at their regularly scheduled public meeting. Both council members and Huntley want the public to attend and hear more about Huntley’s (Range’s?) plan, “in the interests of good communication.” Should be interesting…
Read More “Murrysville Park Lease to be Discussed at Meeting”
Alternative Energy | BP | Crude Oil | Economic Impact | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Research

BP’s Annual Energy Outlook Through 2035 – Fool’s Errand?
January 16, 2014January 16, 2014

Yesterday BP, a huge driller with a sizable acreage position in the Utica Shale (84,000 leased acres), issued its annual BP Energy Outlook 2035 (full copy embedded below). The 96-page report sets out BP’s view of the most likely developments in global energy markets to 2035, based on up-to-date analyses. BP experts expect global energy demand to rise 41% from now until 2035 with 95% of that growth coming from “emerging economies.” According to BP, gas as a source of energy is growing fastest among the fossil fuels and by 2035 gas is expected to be at parity with coal–each providing about 27% of power needs in 2035. BP says shale gas will make up 68% of U.S. gas production by 2035.

Of course, all of this speculation is fun to read, but frankly is just so much folly. MDN editor Jim Willis heard Charif Souki, CEO of Cheniere Energy address the predictions game at the Platts Global Energy Forum in New York City last December (see Energy Industry Leaders Gather at Platts Forum in NYC). At that forum, Souki said any kind of prediction beyond 2-3 years in the rapidly changing energy industry is meaningless. He said if you go back 20 years and look at those predictions about today, none of them predicted shale and how the industry would change so dramatically. We concur with Souki–making these kinds of predictions is a fool’s errand. Still, it’s fun to read and muse about what might be…
Read More “BP’s Annual Energy Outlook Through 2035 – Fool’s Errand?”
Accidents | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Jay-Bee Oil & Gas | Tyler County | West Virginia

Frack Tank Explosion in Tyler County Shuts Down Jay-Bee Pad
January 15, 2014January 15, 2014

Try as we might, sometimes an important news story slips by our otherwise keen eye on the Marcellus and Utica. Case in point: On Jan. 2 there was a rare accident at a shale drilling site in Tyler County, WV, a drill site operated by WV-based Jay-Bee Oil & Gas. A flow-back tank on the drill pad exploded, injuring a worker at the site and causing the spill of a “black sludge” onto a neighboring field. The West Virginia Dept. of Environmental Protection (DEP) shut down the Lisby drill pad operation, which is located along Big Run Road, roughly 6 miles southeast of Middlebourne, WV, and issued Jay-Bee a citation over the incident.

Jay-Bee was supposed to have provided a report to the DEP by yesterday outlining what happened and why. The DEP is also requiring Jay-Bee to provide a best management practices plan for flow-back tank systems at all of its operations in WV. In other words, Jay-Bee is now on the hot seat and needs to prove to the DEP that they can operate safely. Here’s what we can so far find about the accident, including the WVDEP’s statement about it…
Read More “Frack Tank Explosion in Tyler County Shuts Down Jay-Bee Pad”
Crosstex Energy | Devon Energy | Energy Companies | Energy Services | EnLink Midstream | Industrywide Issues | Pipelines | Processing Plants

Crosstex Energy Gets a Name Change, Merger with Devon Proceeds
January 15, 2014January 15, 2014

In October, Devon Energy (a major shale driller in several plays with midstream assets) and Crosstex Energy (a sizable midstream company) announced they will merge their midstream operations into a new company (see Devon Energy & Crosstex Energy Form New Midstream Company in JV). Both companies have major operations in the Marcellus/Utica. At the time of the announcement the new company was unnamed. No longer. Yesterday Devon and Crosstex announced that Crosstex would change its name to the name of the newly combined venture (which is majority owned by Devon). The new name is EnLink Midstream. Barry Davis, CEO of Crosstex will become (or remain) CEO of EnLink.

May we net-net this? Essentially Devon has purchased Crosstex and turned it into a semi-autonomous subsidiary, keeping the Crosstex management team in place. Here’s the statement issued yesterday with details of the legal structure for the new company, which on paper will be two companies for investment purposes–an LLC and an LP (master limited partnership)…
Read More “Crosstex Energy Gets a Name Change, Merger with Devon Proceeds”
Energy Companies | Industrywide Issues | Pennsylvania | Range Resources Corp | Regulation | Washington County

Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation
January 15, 2014January 15, 2014

Starting last August, Range Resources has been in a battle with the board of supervisors for Mt. Pleasant Township in Washington County, PA. The issue, the bone of contention, has been four water impoundments–three of which are for fresh water, essentially ponds (see Range Resources Argues with Mt Pleasant over Water Impoundment). The impoundments were originally used to drill nearby Marcellus Shale wells, several years ago. Since then, Range has continued using them, but now uses them to drill wells that are not nearby, in Mt. Pleasant Township. And the supervisors object.

In December it appeared there was a sliver of good news when the township said Range could proceed with converting one of the impoundments to an above ground enclosed tank impoundment for recycled waste water, subject to certain terms and conditions (see Range Strikes Deal with Mt Pleasant for 1 of 4 Water Impoundments). It now seems that was a bit too optimistic. On Monday the Mt. Pleasant Zoning Hearing Board (different group of people from the board of supervisors) voted unanimously to uphold notices of violation issued by the township’s zoning officer against the four Range impoundments, so here we go again…
Read More “Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation”
Energy Companies | Rice Energy

Rice Energy Launches IPO, Hopes to Raise $840M
January 14, 2014January 14, 2014

MDN told you last month that Marcellus and Utica Shale driller Rice Energy would soon launch an initial public offering (IPO) and start to trade publicly listed stocks (see Impending Rice Energy IPO Creating a Buzz). Rice Energy launched their IPO yesterday. Previous chatter was that the company would receive a valuation of $2.5 billion. That’s not how much the stock offering would generate–but the overall value the market would give to the company (market capitalization, or “market cap”).

Rice, in a statement issued yesterday (see below), announced they have now floated 40 million shares of common stock and hope to get $19-$21 per share (30 million of that for the company, 10 million for an unnamed “selling stockholder”). If that happens, the company and the selling stockholder together will receive $840 million. For comparison, a larger Marcellus/Utica driller, Antero Resources, went public last October and sold over 35 million shares with their IPO and raked in $1.57 billion ($44 per share)! The Antero IPO valued the company at $11 billion. Antero’s IPO did much better than they hoped. Will Rice’s?…
Read More “Rice Energy Launches IPO, Hopes to Raise $840M”
Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Norse Energy | Otsego County | Regulation | Statewide NY | Tompkins County

NY Pro-Drillers File Final Briefs in Dryden/Middlefield Cases
January 10, 2014January 10, 2014

According to Tom West, lead attorney in the New York “Dryden” court case that seeks to overturn bad lower court decisions that allow towns to completely ban fracking, the “last word” has been now been filed by landowners and (in the case of West’s client), drillers like Norse Energy. West, via his blog site, announced two days ago that the final briefs with counter-arguments have been filed for both the Dryden and Middlefield cases (copies of both final briefs are embedded below). According to West, additional friend-of-the-court briefs (called amicus briefs) will still be filed, but until oral arguments are heard in a few months, this is the final word from our side of the isle. Interestingly, when you read through the two briefs, they each make slightly different arguments–perhaps increasing the odds that something will resonate with the justices.

Here’s what West says via his blog site about the filings:
Read More “NY Pro-Drillers File Final Briefs in Dryden/Middlefield Cases”
Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Deal Done to Lease Washington County, PA Airport for Drilling
January 10, 2014January 10, 2014

MDN told you yesterday about an impending vote by Washington County, PA commissioners to lease portions of the county airport for drilling under (but not on) airport property (see Washington County, PA Airport Considers Offer to Lease). The vote was taken, and the deal was approved. In the end, it looks as though the county, which does not own the mineral rights for all 400 acres of airport property, does own the rights to at least 135 acres, which they leased for a signing bonus of $6,400 per acre and 18.25% royalties on any gas produced.

The taxpayers of Washington County should be happy that a check for $864,000 of “newfound money” is heading their way…
Read More “Deal Done to Lease Washington County, PA Airport for Drilling”
Energy Companies | WPX Energy

Shotgun Wedding: New Board Member Forced on WPX Energy
January 9, 2014January 9, 2014

Yesterday WPX Energy, the spin-off drilling company from midstream giant Williams Partners, announced the appointment of Karl Kurz to the board of directors. MDN previously told you that WPX is being jerked around by its second largest stockholder, Taconic Capital Advisors, which led to the firing of the WPX’s CEO (see CEO Shake-up Explained: Taconic Capital Jerking WPX’s Chain). It appears that Kurz, previously COO for Anadarko Petroleum, is Taconic’s toady on the board–there to do his masters’ bidding.

Here’s the interesting thing to MDN: Williams, WPX’s one-time parent that still has a major stake in WPX, was attacked by a Carl Ichan disciple at the same time WPX was attacked by Taconic–no coincidence if you ask us (see Bad News: Corporate Raiders Take Aim at Williams). Carl Icahn’s toady at Chesapeake Energy is it’s new CEO Doug Lawler–a one time executive at Anadarko (see The Great Chesapeake Massacre: Lawler Fires 800 People in One Day). Now we get a former Anadarko person on the board at WPX. See a trend here?…
Read More “Shotgun Wedding: New Board Member Forced on WPX Energy”
Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

Washington County, PA Airport Considers Offer to Lease
January 9, 2014January 9, 2014

Washington County, PA commissioners will vote today on a proposed lease of the county’s airport property–to allow shale drilling under (but not on top of) the property. According to the deal offered, the county would receive $6,400 per acre as a signing bonus and 18.25% royalties on any gas produced. It’s unclear how much of the 360 airport-owned acres will generate revenue for the county because when the county purchased the property some landowners retained mineral rights. However, the deal, if signed, is sure to generate a boatload (or planeload) of money for Washington County.

Here’s more details about the proposed offer, and which drillers (plural) are cooperating to do the drilling…
Read More “Washington County, PA Airport Considers Offer to Lease”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream | Industrywide Issues | Ohio | Pipelines | Statewide OH | Statewide WV | West Virginia

Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow
January 8, 2014January 8, 2014

Eureka Hunter, the wholly-owned midstream (pipeline) subsidiary of driller Magnum Hunter, published their month by month flow numbers yesterday for how much gas they pumped through their pipelines in West Virginia and Ohio during 2013. It was an impressive year for Eureka Hunter. The average daily flow or “throughput” in 2012 was 23,291 million Btus (or MMBtus), which equates to 23.3 million cubic feet per day (or MMcf/d). If the “average” well is producing, say, 3 MMcf/d, that’s the equivalent of having 8 wells connected to the pipeline. The average daily flow in 2013 was 83,828 MMBtus, or 83.4 MMcf/d, or 28 wells hooked up and flowing. That’s a 360% year over year increase–nearly quadruple the volume!

What the average doesn’t tell you, however, is that by the end of the year, Eureka Hunter’s pipeline flowed nearly 160,000 MMBtus, or 160 MMcf/d, which is production from an average 53 wells. They predict in 2014 the daily flow rate will hit 206,500 MMBtus. Somewhere between 40-50% of the gas they flow is from Triad Hunter, another Magnum Hunter subsidiary (sister company to Eureka Hunter). Below is the press release with Eureka Hunter’s monthly flow numbers. With our explanation above, you now know how to view it!…
Read More “Eureka Hunter Boasts 360% Yearly Increase in Marcellus/Utica Flow”
Antero Resources | Energy Companies | Industrywide Issues | Research

Drill Capital Launches Drill Research; Nifty Antero/Utica Report
January 8, 2014January 8, 2014

MDN does not usually run self-serving press releases that are the sum total of “look at us.” But sometimes we do–when the release piques our interest. Such a release was issued yesterday by investment firm Drill Capital–a firm focused on investing in the North American energy sector. According to yesterday’s press release, Drill Capital has formed a separate, dedicated research arm called Drill Research that will evaluate energy sector investment opportunities. Of course this is a marketing technique to attract customers (i.e. investors) to join Drill Capital. Certainly nothing wrong with that! What piqued our interest is their publication of a sample model portfolio highlighting Drill Research’s top pick. Which is? One of the top drillers in the Marcellus and Utica Shale: Antero Resources.

By visiting the Drill Research webpage highlighted in the release, you can read their research and view the model portfolio. If you do, you’ll find interesting details about Antero, the Utica Shale, the Marcellus Shale and several other major U.S. shale plays. It’s definitely worthwhile info, which is why we share it with you…
Read More “Drill Capital Launches Drill Research; Nifty Antero/Utica Report”
Energy Companies | Energy Corporation of America | Greene County (PA) | Pennsylvania

China Comes to the Marcellus – to Learn and to Profit
January 8, 2014January 8, 2014

In the dead of the holiday season, on Friday, Dec. 27, Energy Corporation of America (ECA) issued a press release that largely went unnoticed. In the release, ECA announced it has formed a 50/50 joint venture partnership with the world’s second largest (and China’s largest) coal company, China Shenhua Energy Company (100% Chinese government owned), to drill 25 Marcellus wells in Greene County, PA. Shenhua will invest $90 million in the venture and in the process learn how drill in shale–knowledge currently lacking in China. It’s not much of a stretch to predict this is not the final involvement of Chinese money that will flow to the Marcellus and Utica Shale.

Here is the brief statement issued by ECA, followed by a story about the jv from China Daily:
Read More “China Comes to the Marcellus – to Learn and to Profit”
Energy Companies | Lease & Royalty Payments | Ohio | Protege Energy | Utica Shale | Washington County (OH)

Marietta, OH Offered $4,750/Acre + 17.5% Royalties for 35 Acres
January 7, 2014January 7, 2014

An offer–or more accurately a pre-offer–was made at the Marietta (OH) City Council meeting yesterday that would put an initial $166,250 in the city’s coffers from leasing 35 city-owned acres along the edge of the city for shale drilling. A driller is tentatively offering $4,750 per acre as a signing bonus, plus 17.5% royalties, for land in the area. Some city council members (Democrats) expressed concerns about the potential offer, and several residents from anti-drilling groups in attendance also added their ~~drivel~~ 2 cents.

Here’s more of the details about the offer–the driller who’s making it, when the drilling would begin, and what was ultimately decided as the next step at yesterday’s meeting…
Read More “Marietta, OH Offered $4,750/Acre + 17.5% Royalties for 35 Acres”
Energy Companies | Energy Services | Hilcorp Energy | Industrywide Issues | Mahoning County | NiSource | Ohio | Pennant Midstream | Processing Plants | Utica Shale

Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready
January 7, 2014January 7, 2014

Good news! Pennant Midstream announced yesterday that its Hickory Bend cryogenic processing plant in Mahoning County, OH is now live and online and ready to receive “wet gas” from the Utica Shale. You may recall Gov. John “foreigner hunter” Kasich dedicated the plant back in October (see OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found). However, the $375 million plant was not quite ready at that point. It is now, and the gas will start flowing soon.

The even better news is that Pennant, a joint venture between Hilcorp Energy and NiSource, is preparing to build two more plants at the same location. Each plant can handle 200 million cubic feet of raw gas per day, separating it into methane and natural gas liquids (NGLs). The NGLs are then pipelined elsewhere for further processing. Here’s yesterday’s announcement:
Read More “Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready”
Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport Energy Issues Utica Production Guidance for 2013, 1Q14
January 7, 2014January 7, 2014

Gulfport Energy, one of the most important (and increasingly prolific) drillers in the Utica Shale released a short update yesterday to crow about their production numbers for 2013, set production expectations for the first quarter of 2014, and to remind investors to invest early and invest often.

Here’s yesterday’s Gulfport update…
Read More “Gulfport Energy Issues Utica Production Guidance for 2013, 1Q14”