Energy Companies

Blue Ridge Mtn Res/Magnum Hunter | Economic Impact | Energy Companies | Industrywide Issues | Ohio | Triad Hunter | Washington County (OH)

Magnum Hunter Spends $1M on Office in OH, Here for “Long-Term”
February 12, 2013February 12, 2013

Magnum Hunter Chairman and CEO Gary Evans was on hand Monday in Marietta, Ohio for the grand opening of the new regional office building for Magnum’s Marcellus and Utica Shale subsidiary Triad Hunter. Triad has (so far) leased 85,500 acres in the Marcellus Shale and 81,800 acres in the Utica Shale. The new office is located centrally to both the Marcellus and Utica plays—together referred to as Appalachia.

Triad spent $1 million to remodel a downtown Marietta building that will be their Marcellus/Utica regional headquarters. So far over 40 Triad employees have moved in. Magnum Hunter, through subsidiaries including Triad Hunter, Alpha Hunter, Eureka Hunter, Green Hunter Water and Viking International Resources has its fingers in a lot of different pieces of the drilling pie. According to Gary Evans, their commitment to Appalachia is long-term…

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Carroll County | Chesapeake Energy | Energy Companies | Ohio

Man Who Fell Through Ice Saved by 3 Chesapeake Energy Workers
February 11, 2013February 11, 2013

Three Chesapeake Energy shale drilling workers and a local businessman put their own lives in jeopardy to save a man who had fallen through the ice in Atwood Lake in Carroll County, OH last week. We sometimes hear about an infrequent case of a drilling worker who engages in a criminal activity like dumping wastewater or getting into a fight at a local bar—it’s front page news. But when was the last time you heard about a drilling worker who saved someone’s life? Good news stories from the gas field do happen—you just never hear about them.

A huge congratulations to Chesapeake Energy workers Jason Rickman, Tyler Trammel and Jim Ray, and to Zielger Tire employee John Streb. They’re all heroes. Here’s their story:

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Allegheny County | CONSOL Energy | Energy Companies | EQT Corp | Lease & Royalty Payments | Pennsylvania

CONSOL Increases Bonus Offer to Pgh Airport by 2.4 Times to $50M
February 11, 2013February 11, 2013

MDN has been following the deal to lease 9,263 acres of Pittsburgh International Airport land for shale gas drilling. As you may recall, there were two bids submitted in December, one by CONSOL with an 18% royalty and signing bonus of $20.8 million, and one from EQT, also with an 18% royalty but a hefty $44 million signing bonus—more than twice that of CONSOL. Logic would dictate that EQT’s bid would be accepted. But it wasn’t. The Airport Authority chose to accept CONSOL’s bid, leading us to theorize that the “fix” was in (see Inside Job? Pittsburgh Airport Leases Land to CONSOL).

A few weeks later word came out that the Airport Authority was negotiating with CONSOL to get them to raise their signing bonus, which seemed strange to us. We’ve never heard of a government agency accepting a bid and then turning around and renegotiating it (see Pittsburgh Airport Wants More $ from CONSOL…After Accepting Bid). It appears that “further negotiation” was successful. The Airport Authority now reports they’ve approved a renegotiated deal with CONSOL with a $50 million signing bonus—nearly 2 1/2 times the original amount offered when the sealed bids were opened in December. Anyone else smell rotten fish?

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Brooke County | Chesapeake Energy | Energy Companies | Lease & Royalty Payments | West Virginia

WV Park’s Marcellus Signing Bonus the Highest We’ve Seen
February 8, 2013February 8, 2013

In a story about a natural gas pipeline that will be run under a county-owned trail in Brooke County, WV, MDN spotted a brief mention about the signing bonus and royalty rate received by Brooke Hills Park in 2011 for drilling on 100 acres of park land. It is perhaps the highest per acre signing bonus we’ve seen for land in the Marcellus:

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Energy Companies | Energy Corporation of America | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Federal Judge Upholds Split Decision in PA Royalty Case
February 8, 2013February 8, 2013

A group of landowners who signed leases in western Pennsylvania with Energy Corporation of America (ECA) filed a lawsuit in June 2012 (Pollock, et al v Energy Corporation of America) alleging ECA improperly deducted certain expenses, and didn’t include certain revenues, when calculating and paying royalties. At the time, ECA counter-sued asking for summary judgment that the way they calculate royalties and revenues is OK according to accepted practice and previous court rulings.

Last fall Magistrate Judge Robert Mitchell “partially granted and partially denied” the summary judgment request from ECA. It was mostly a victory for ECA because it dismissed all but one of the charges by the landowners. The case was appealed by both sides to federal court and on Jan. 24, Judge Joy Flowers Conti of the Western District of Pennsylvania said Judge Mitchell’s interpretation of the case is correct. She upheld his decision. This is an instructive case for both landowners and drillers, and a caution to be sure the lease you sign spells out in minute detail how royalties will be calculated…

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Energy Companies | Seneca Resources

Seneca 1Q13: Marcellus Production Up, Marcellus Profits Down
February 8, 2013February 8, 2013

National Fuel Gas Company released their earnings and operations update yesterday for what is their first quarter fiscal year 2013 (but would be fourth quarter 2012 for everyone else)—covering October through December 2012. National Fuel Gas’ exploration and production division is known as Seneca Resources—a major driller in the Marcellus Shale. NFG aka Seneca reports that production in the Marcellus region increased 48% over the same period a year earlier. Seneca continues to operate three drilling rigs in the Marcellus. Even though the company turned in a profit overall, Marcellus earnings were down $1.2 million for the quarter because of the low commodity price of natural gas.

Here’s the update form NFG/Seneca:

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CONSOL Energy | Energy Companies

CONSOL 2012 Wrap-Up: Added Nearly 1 Tcf of New Reserves
February 8, 2013February 8, 2013

CONSOL Energy delivered an update on 2012 Marcellus Shale drilling activity yesterday—an update full of useful and interesting factoids. Among them: Due to extensions and discoveries, CONSOL added nearly 1 trillion cubic feet of natural gas to its proven reserves in 2012; they spent $440.7 million on drilling and completion in 2012; and their “drill bit finding and development cost” is 46 cents per thousand cubic feet (Mcf) of gas—among the lowest in the industry.

CONSOL continues to transition from being one of the country’s largest coal producers to one of the country’s major shale energy producers. Just a few weeks ago CONSOL announced their plans for 2013 (see CONSOL Energy’s 2013 Plan: Spend Lots on Marcellus & Utica Shale). Below is the 2012 shale drilling wrap-up CONSOL issued yesterday, which includes numbers for the average daily output from their wells in 2012, and the average cost to drill a well:

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Energy Companies | Noble Energy

Noble Energy 2012 Wrap-Up: Marcellus Production, Profits Go Up
February 8, 2013February 8, 2013

Houston-based Noble Energy, one of the big drillers in the Marcellus Shale, turned a tidy profit of $1 billion in 2012 according to their year-end financial report issued yesterday. That’s double what they earned in 2011 ($453 million). They also report Marcellus Shale production was up 19% in the 4Q12 from 3Q12—to a new high of 121 million cubic feet per day (MMcfe/d). Noble has a joint venture with CONSOL Energy in the Marcellus and the JV produced 280 MMcfe/d in 2012 (see Who’s a Member of the Marcellus “1 Bcf/d” Club?).

Noble operated three drilling rigs in the Marcellus during 2012. Here’s the year-in-review update issued yesterday:

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Beck Energy | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Ohio | Regulation | Summit County

OH Appeals Court Strikes Down Home Rule for Drilling
February 7, 2013February 7, 2013

In 2012, Beck Energy Corp. got a permit from the OH Dept. of Natural Resources (ODNR) to drill on property located in the City of Munroe Falls (Summit County), OH. Beck started drilling and the city slapped a Stop Work Order on them and took them to court, saying Beck was not in compliance with a number of local ordinances and necessary permits. The local trial court supported Munroe Falls’ position and ruled in their favor.

Beck appealed the trial court decision to the Ohio Court of Appeals (Ninth District) and in a decision handed down yesterday, the appellate court sided with Beck and against so-called “home rule” when it comes to oil and gas drilling. The Ninth District instructed the lower court to reverse its opinion. This decision (full copy embedded below) has major consequences for both Utica Shale drillers and municipalities throughout the state…

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Antero Resources | Belmont County | Energy Companies | Lease & Royalty Payments | Ohio

Antero Offers Barnesville, OH Residents $5,700/Acre 20% Royalties
February 7, 2013February 7, 2013

Normally drillers eschew drilling under cities or villages as a practical matter. Where do you put a drilling rig? What about traffic clogging up local streets? What if you can’t get everyone (or almost everyone) to sign? And why work to sign several hundred leases for a one square mile drilling unit with all of the deed research, negotiations, etc. that come with it, when you can sign leases with three or four people (farmers with lots of acreage) in a single unit?

The prospect of dealing with hundreds of landowners is not stopping Antero Resources (see Antero Resources Goes “All In” on Marcellus/Utica) from offering the residents of Barnesville (Belmont County), OH the same deal they struck last year to lease village-owned land: $5,700 per acre as a signing bonus, and 20% royalties on production.

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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy Dumps Piceance to Concentrate on Ohio Utica
February 7, 2013February 7, 2013

PDC Energy, formerly known as Petroleum Development Corp., announced Tuesday they are selling off “non-core” assets in the Piceance Basin (northwestern Colorado) and assets they own in northeastern Colorado for $200 million so they can invest the money in wet gas drilling in the Ohio Utica and Niobrara Shale plays.

PDC’s announcement from Tuesday:

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Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | New York | Regulation | Statewide NY

NY Comptroller Bullies Cabot O&G over Frack Fluid Disclosure
February 6, 2013February 6, 2013

Being the sole person in charge of a pot of investments worth $150 billion is an awesome responsibility—and invests that person with an enormous amount of power. Power which can (and is) abused. New York State Comptroller Thomas P. DiNapoli is the sole person in charge of the New York State Common Retirement Fund and he regularly throws his weight around with the companies the fund invests in to strong-arm them into doing things they typically don’t want to do. Call it bullying (because that’s what it is).

The latest example: DiNapoli, himself an anti-driller, is crowing that he forced Cabot Oil & Gas, one of the companies the Fund invests in ($35.8 million), to “publicly disclose its policy and procedures for eliminating or minimizing the use of toxic substances in its hydraulic fracturing fluids.” Never mind that Cabot already lists the components of its fracking fluids in the FracFocus.org Chemical Disclosure Registry. Let’s not let facts get in the way of a good PR campaign.

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Chesapeake Energy | Energy Companies

Chesapeake Pays $15.4M to Prevent Exodus of Top Talent
February 5, 2013February 5, 2013

Last week MDN told you the news that Chesapeake Energy founder and CEO Aubrey McClendon was given the pink slip by the Chesapeake board of directors (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). At the time we theorized that Chesapeake may rue the day they let him go—we fully expect to see McClendon turn up again, running a new company to compete with Chesapeake. He’s young (53 years old), he’s charismatic, and he’s full of energy and determination.

Although it was pure speculation at the time, perhaps we weren’t so far off the mark. Chesapeake has awarded big (big) stock option “retention” bonuses worth $15.4 million to three members of McClendon’s leadership team to keep them right where they are—at Chesapeake:

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Antero Resources | Energy Companies

Antero Resources Goes “All In” on Marcellus/Utica
February 4, 2013February 7, 2013

Last week MDN told you we noticed references that Denver-based Antero Resources’ plans for the Marcellus Shale in 2013 would be “aggressive” (see Antero Says 2013 Plans for WV Drilling are “Aggressive”). We now know just how aggressive.

Antero’s capital budget for 2013 is $1.65 billion. They plan to spend all of it drilling in the Marcellus and Utica Shale. We’d call that “all in” on the Marcellus/Utica…

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Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Regulation | Washington County

Robinson Twp, PA Drags Feet on Approving New Permits to Drill
February 4, 2013February 4, 2013

Why are drilling permits from Range Resources not being approved in Robinson Township (Washington County), PA? You may recall that Robinson is one of seven towns in PA that sued the State of Pennsylvania over Act 13, a new shale drilling law passed in February 2012. Robinson and the other towns object to a provision in Act 13 that replaces the right of local towns to enact zoning restrictions on oil and gas drilling and instead replace local rules with a uniform set of zoning rules from the state (see Lawsuit Filed: PA Towns Sue State over Marcellus Act 13 Law).

Robinson and the other towns went to court over the provision and won their case in the lower courts. The decision was appealed by the state all the way to the PA Supreme Court where a everyone eagerly awaits a decision (see PA Supreme Court Hears Testimony on Act 13 Zoning).

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Energy Companies | Range Resources Corp

Range Revises Unproved Resource Potential Up
February 4, 2013February 4, 2013

Range Resources has revised its unproved resource potential—how much recoverable gas they believe they have in the ground for their leased acreage—by a little bit. At the end of 2011, Range estimated their reserves at 47-66 trillion cubic feet. At the end of 2012, they’ve revised it up to 48-68 Tcf. Not a huge jump, but hey, 1 trillion cubic feet of natural gas will heat 1 million homes for 15 years, just to give you some perspective.

Here’s the announcement from Range:

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