Energy Companies

Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | New York | Statewide NY

Victory for NY Landowners in Chesapeake Force Majeure Case
June 15, 2012June 15, 2012

In a major victory for New York landowners, Attorney General Eric Schniederman’s office reached a settlement with Chesapeake Energy to allow 4,400+ landowners with a collective 264,000 acres to renegotiate old gas drilling leases that Chesapeake was attempting to extend using the “force majeure” clause. MDN has followed this story for more than a year (see this MDN story from May 2011 for history and background).

As a brief background, a number of New York landowners—many of them in the Southern Tier area of New York—signed gas drilling leases in 2000 with small drilling companies. The leases had a 10-year term. Most of the landowners got $3 per acre as a signing bonus. Those leases, along with leases signed prior to 2000, were bought by Chesapeake in the mid-2000s. In 2009, Chesapeake sent letters to New York landowners invoking the force majeure clause, which is legalese for “we’re extending the contract term due to extenuating circumstances, which we believe is our right to do.” The extenuating circumstance? The moratorium on high volume hydraulic fracturing that was implemented by then-Gov. David Paterson in 2008.

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Economic Impact | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break
June 15, 2012June 15, 2012

Pennsylvania Gov. Tom Corbett officially launched his public relations effort yesterday to get the PA legislature to pass a package of tax credits for Shell to build an ethane cracker plant in the state. The package of tax credits will amount to $1.7 billion over a 25-year period (up to $66 million per year) and will not begin until 2017 at the earliest.

Three of Corbett’s cabinet secretaries held a forum at the Beaver County community college yesterday, near the location of the proposed plant (in Beaver County), to push for the tax credits. When the new plant is built, it will result in 20,000 new jobs throughout the region.

Corbett is making a push to get the legislature to adopt the package by the end of June, before legislators adjourn for summer recess. But many legislators complain they don’t know enough about the plan (yet) to cast a vote either way. This effort by Corbett and his administration is an attempt to bridge that gap.

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Energy Companies | Industrywide Issues | Litigation | New York | Norse Energy | Statewide NY

Norse Says NY Force Majeure Settlement Doesn’t Apply to Them
June 15, 2012June 15, 2012

MDN reported today that New York Attorney General Eric Schneiderman’s office struck a deal with Chesapeake Energy over the issue of extending landowner leases in New York using the “force majeure” clause in the contract (see this MDN story). Norse Energy issued a press release saying essentially that the deal does not apply to them, and their force majeure claims are still in place until overturned by a court.

Here’s the Norse press release:

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Energy Companies | Energy Services | Industrywide Issues | Lycoming County | National Fuel | Pennsylvania | Pipelines | Seneca Resources

Trout Run Pipeline Goes Operational, Seneca Wells Connect
June 15, 2012June 15, 2012

National Fuel Gas Midstream’s new Trout Run Gathering System (Lycoming County, PA) came online May 30 and is now delivering natural gas to the Transcontinental Gas Pipe Line (Transco). Because the new pipeline is now operational, Seneca Resources has brought online four new wells. As of a few days ago, the wells were producing a combined 45 million cubic feet of gas per day.

National Fuel Gas’ press release:

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Energy Companies | New York | Norse Energy | Statewide NY

Norse Energy: The Little Driller that Could
June 14, 2012June 14, 2012

You have to admire Norse Energy Corp. (subsidiary of the larger Norwegian company of the same name). They rolled the dice by leasing most of their acreage for shale gas drilling in New York State, thinking there was no way it would take this long (now four years) for New York to begin high volume hydraulic fracturing. But it has taken this long, and Norse has tried to stay alive by selling off various assets, reducing staff, restructuring debt and in general doing whatever it takes to “hang in there.”

Just a few weeks ago Norse announced they were shuttering their Buffalo office and heading back to Houston (see this MDN story).

But the plucky Norse, not ready to throw in the towel quite yet, found encouragement in yesterday’s leaked trial balloon announcement that Gov. Andrew Cuomo may begin to allow very limited fracking soon (see this MDN story).

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Chesapeake Energy | Energy Companies

Chesapeake CEO Losing Chairman Title, But Keeping Powers
June 14, 2012June 14, 2012

Although Chesapeake Energy CEO Aubrey McClendon is about to lose his title as Chairman of the Board, it seems that’s about the only thing he’s losing—the title. The power of the position—the ability to call board meetings and the power to call special shareholder meetings—he’s going to keep. The existing board of directors made a change to its bylaws last Friday to grant McClendon the right to call meetings.

Those critical of Chesapeake’s management take it to mean that nothing is really changing with respect to board oversight of McClendon.

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Brooke County | Chesapeake Energy | Energy Companies | Equinor/Statoil | Industrywide Issues | Lease & Royalty Payments | Litigation | Range Resources Corp | West Virginia

WV Couple Challenges Chesapeake Lease Renewal
June 13, 2012June 13, 2012

A husband and wife in Brooke County, West Virginia are suing to have their 5 year-old lease, which is now expired and up for renewal, nullified so Chesapeake (now the owner of the lease) cannot automatically renew it as they are attempting to do.

Increasingly landowners who signed leases that are now expiring after a customary 5 year period face the same issue—and drillers are trying to lock them in under the terms of lease for a new period of time.

Here’s the story of Ramon and Lois Bowen:

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Chesapeake Energy | Energy Companies

The Day Chesapeake CEO McClendon Would Rather Forget
June 11, 2012June 11, 2012

Aubrey McClendon, CEO of Chesapeake Energy, had a tough day last Friday at the annual shareholder’s meeting at Chesapeake’s headquarters in Oklahoma City . Shareholders passed a number of votes against the sitting board and against McClendon. McClendon had previously announced that Chesapeake’s two largest shareholders, Southeastern Asset Management and Carl Ichan will be allowed to nominate four new board members and a new chairperson, replacing more than half of the board. The new members are slated to begin later this month. Still, shareholders withheld approval of two sitting board members up for re-election. They both promptly offered their resignations.

A number of large shareholders addressed McClendon and the current board. Some were rather blunt about McClendon’s doubtful future with the company he founded in 1989:

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Economic Impact | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA | Taxation

More Details about Proposed Ethane Cracker Tax Break
June 11, 2012June 11, 2012

Some more details about how the tax break would work that Pennsylvania Gov. Tom Corbett is planning to offer Shell to build it’s ethane cracker plant in PA:

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

EPA Investigating Range Drill Site in Western PA
June 11, 2012June 11, 2012

The federal Environmental Protection Agency (EPA) is investigating whether or not drilling activity by Range Resources at their Yeager Marcellus Shale site in Washington County, PA is causing air pollution and groundwater contamination. Range operates a wastewater pond and a drill cuttings pit at the site.

Several families living close to the site filed a personal injury lawsuit last month against Range.

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Chesapeake Energy | Energy Companies

Fire Sale Begins: Chesapeake Sells Midstream Assets for $4B
June 8, 2012June 8, 2012

Chesapeake Energy announced today that they have sold their midstream assets, including their Chesapeake Midstream subsidiary, to Global Infrastructure Partners for a total deal worth $4 billion. Chesapeake’s midstream assets include pipelines and processing plants. The announcement comes just prior to their annual meeting being held today in Oklahoma City and no doubt is an effort by Aubrey McClendon to tamp down criticism of the mountain of debt the company has piled up under his watch.

The company has also put other assets, including 337,000 acres of Utica Shale acreage, on the auction block in a bid to reduce the debt load.

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Beaver County | Economic Impact | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell: Final Decision on Cracker Plant Still 18-24 Mo. Away
June 8, 2012June 8, 2012

MDN previously warned that the final decision of where Shell will build an ethane cracker plant is not a done deal. It certainly is looking good—they selected a site in Beaver County, northwest of Pittsburgh—and they are deep into planning for that site. But Shell CEO Peter Voser was quoted as saying it would be “several years” before a go/no decision on whether to build it would be made (see this MDN story).

That timeline of several years was reaffirmed by a Shell representative yesterday in comments to the Pittsburgh Business Times:

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Accidents | Antero Resources | Energy Companies | Harrison County | Industrywide Issues | West Virginia

Antero Hits Aquifer in WV, Creates Backyard Geysers
June 8, 2012June 8, 2012

Antero Resources was drilling a natural gas well in the Sardis, WV area (near Clarksburg) when they hit a water aquifer in the area. It resulted in several abandoned nearby water wells to start gushing water, some of it blowing 10 feet or more into the air. But there were no chemicals being used during drilling, it was the initial stages and only water and air were used, and the air is what caused the problem.

Here’s what happened:

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Chesapeake Energy | Energy Companies | Energy Services | Global Infrastructure Partners

Chesapeake in Advanced Talks to Sell Midstream Unit for $4B
June 7, 2012June 7, 2012

Bloomberg news service reported yesterday that Chesapeake Energy is in advanced talks to sell its midstream subsidiary, Chesapeake Midstream, to Global Infrastructure Partners for $4 billion. Chesapeake Midstream operates not only in Texas and Louisiana, but also in the Pennsylvania Marcellus Shale.

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Economic Impact | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Gov, Lt Gov Speak Out on Shell Cracker Plant Tax Break
June 6, 2012June 6, 2012

In brief public comments yesterday, both Pennsylvania Gov. Tom Corbett and Lt. Gov. Jim Cawley supported and defended a plan to grant Shell a 25-year, $1.7 billion tax forgiveness plan if they will build and operate an ethane cracker plant in the state. For those new to the issue, ethane is one of the chemicals that comes out of the ground from natural gas drilling. Ethane can be “cracked” or converted in ethylene, a raw material used to make plastics.

The plant that Shell proposes to build will generate some 20,000 jobs and create an economic impact of $17-$20 billion. Investing $1.7 billion to get $17-$20 billion is a no-brainer.

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

Chesapeake Selling 337K Utica Shale Acres, Counties IDed
June 5, 2012June 5, 2012

MDN started seeing references yesterday to a story that Chesapeake Energy has put some of its Ohio Utica Shale acreage on the auction block. First came stories that Chesapeake says the value of each acre it controls in the Utica Shale is worth between $13,000 and $17,000:

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