Marathon/MarkWest Tells Activist Investor Co. Will Not Split

As MDN reported two weeks ago, so-called “activist investors” Elliott Management and D.E. Shaw want Marathon Petroleum (parent of MPLX, otherwise known as MarkWest Energy) to split itself into three separate companies, and a couple of other large shareholders are calling for Marathon CEO Gary Heminger to be fired (see Major Investors Pressure Marathon Petroleum to Split into 3 Cos.). Heminger and board member Greg Goff have just politely, but firmly, told Elliott, Shaw, et al to “buzz off” (our words). Heminger is going to fight the effort to split the company and dump him.
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Major Investors Pressure Marathon Petroleum to Split into 3 Cos.

Here we go again. “Activist investor” Elliott Management is pressuring Marathon Petroleum to split itself up into three companies–retail (Speedway convenience store chain), refining, and midstream (or MarkWest Energy). Recall that Marathon bought out and merged in MarkWest just a few years ago, in December 2015 (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). Now Elliott wants the company carved up to “unlock value.” Two other large shareholders either want the company split up and/or Marathon CEO Gary Heminger gone–now.
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MarkWest Continues to Expand NGL Infrastructure in the Wet M-U

Our friends at RBN Energy recently launched a new mini-series of blog posts delving into Marcellus/Utica gas processing and fractionation in the wet gas region–meaning southwest PA, eastern OH, and the northern panhandle of WV. We previously brought you part 1 of that series (see Overview of Gas Processing & Fractionation in M-U Wet Gas Region). Today we have part 2, which takes a close look at MPLX (i.e. MarkWest Energy) and the key role their processing plants play in allowing NGL production in the M-U to continue growing.
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MPLX M-U Processing, Fractionation Plants Coming Online Soon

MPLX, formerly known as MarkWest Energy, recently released their second quarter 2019 update. There seems to be a new emphasis for MPLX on the Texas Permian play, which is detectable in the update. However, much of the company’s revenue continues to come from our region. A slide embedded deep in the Appendix of the latest slide deck tells an interesting story for us: Of the ten processing and fractionation plants MPLX is currently building or planning to build, six of them are in the Marcellus/Utica region. We have the list below.
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MPLX VP Says We Need NGL Storage, and We Need it NOW

Some interesting comments by Jim Crews, vice president of northeast business development for MPLX (formerly known as MarkWest Energy), during a presentation he gave at the Independent Oil and Gas Association of West Virginia’s (IOGAWV) Summer Meeting last week. Crews said lack of natural gas liquids storage is a crisis (our words, reflecting his sentiment). And we need storage not only here in the Marcellus/Utica region–but across the country. “We’re out of storage,” he said, and “Cargoes are just being given away.”
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Range Resources 2Q – Production Up 10% Despite MarkWest Outage

Production for Range Resources was up a healthy 10% year over year in second quarter 2019, according to Range’s 2Q19 update issued late last week. Range produced 2.3 billion cubic feet equivalent per day (Bcfe/d) in 2Q. For the first half of the year Range brought online 39 Marcellus/Utica wells and plans to bring online another 49 wells in the second half of 2019. The company is on track to spend roughly $750 million on drilling in 2019.
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MarkWest, Contractor Fined $98K for SWPA Gas Plant Explosion

In mid-December there was an explosion at a MarkWest Energy natural gas processing plant in Chartiers (Washington County), PA, injuring four people (see MarkWest Plant Explosion in Washington Co. Injures 4; 1 Critical). Unfortunately one the workers later died (see Sad Postscript: Man Dies of Injuries from MarkWest SWPA Explosion). The Occupational Safety and Health Administration (OSHA) investigated the incident and has just fined MarkWest and a contractor (that employed the workers) a cumulative $98,508.
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MarkWest Hopedale Plant Problem Knocks 2 Bcf/d Offline in OH, WV

A pipeline feeding the MarkWest Hopedale Fractionation Facility in Jewett, Ohio was knocked offline last Sunday, and that outage caused a cascading effect throughout the region that forced three gas processing plants in West Virginia to temporarily scale back (or stop) operations, which further caused a ~2.1 billion cubic feet per day (Bcf/d) decrease in gas flows on two interstate gas transmission pipelines. The good news is that the problem is now resolved.
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MarkWest Gathered & Processed Volumes Thru the Roof in 1Q19

MarkWest Energy, now part of MPLX (Marathon Petroleum) operates the nation’s largest cryogenic gas processing plant operation in the country, the Sherwood Complex, in West Virginia (see Nation’s Biggest NatGas Processing Plant (in WV) Getting Bigger). MarkWest/MPLX released its quarterly update yesterday. The company has grown, a lot, with operations in multiple regions of the country. Our interest is, of course, the Marcellus/Utica. Gathered volumes in the M-U averaged 3.4 billion cubic feet per day (Bcf/d) in 1Q19, up a huge 26% versus 1Q18. Processed volumes averaged 6.0 Bcf/d, an 18% increase over 1Q18 thanks to expanded volumes from the Sherwood (in Doddridge County, WV) and Harmon Creek (in Washington County, PA) processing plants.
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Nation’s Biggest NatGas Processing Plant (in WV) Getting Bigger

MarkWest Sherwood Complex

MarkWest Energy, now part of MPLX (Marathon Petroleum) operates the nation’s largest cryogenic gas processing plant operation in the country–in West Virginia. The Sherwood Complex in Doddridge County, WV has the capacity to process up to 2.2 billion cubic feet per day (Bcf/d) of natgas, along with fractionation (separating out ethane) of up to 60,000 barrels per day (bpd). This year the facility will expand.
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MarkWest Energy’s “Extraordinary Results” in 2018

The company we call MarkWest Energy is technically MPLX, renamed after MarkWest was bought out and merged into Marathon Petroleum in December 2015 (see Golden Parachutes Pop Open for MarkWest Top Management/Board). We still call it MarkWest because most people we know still call it that. It’s been over a month since MPLX/MarkWest issued its 2018 update, but we’d still like to analyze it. The company had a breakout year, earning more in 2018 than at any time in the company’s history.
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Smith Twp Residents Say They Have Enough Processing Plants

A single township in Washington County, PA, Smith Township, is home to two “sprawling” shale gas complexes that process and separate Marcellus/Utica gas extracted in southwestern Pennsylvania. One is MarkWest Energy’s Harmon Creek complex, and the other Energy Transfer’s Revolution complex. Area residents think they have quite enough infrastructure and are asking town officials to throttle back new development.
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Range SWPA Production Takes Hit After MarkWest Plant Explosion

Range Resources issued an updated 2018 (not 2019) capital spending and operational update yesterday to say (a) they spent about $20 million less last year than originally forecast and (b) the company took a hit on production because of an outage at the MarkWest Houston/Harmon Creek processing facilities.
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Sad Postscript: Man Dies of Injuries from MarkWest SWPA Explosion

As we previously reported, an explosion and fire last week at the MarkWest Energy natural gas processing plant in Chartiers (Washington County), PA sent four people to the hospital–carried there by helicopter (see MarkWest Plant Explosion in Washington Co. Injures 4; 1 Critical). We are profoundly sad to report that the man who was in critical condition has died. The Allegheny County Medical Examiner’s office reported that Jeffery Fisher, 61, of Salem, WV died at 3:38 p.m. Tuesday at UPMC Mercy hospital. Below is an update on the situation, with additional new details.
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MarkWest Plant Explosion in Washington Co. Injures 4; 1 Critical

An explosion and fire last night around 6 pm at the MarkWest Energy natural gas processing plant in Chartiers (Washington County), PA sent four people to the hospital–carried there by helicopter. All of them remain hospitalized, and one of them is, sadly, in critical condition. The explosion happened near “two temporary tanks that were onsite for routine maintenance,” according to a MarkWest statement. The tanks hold, “liquid ethylene glycol plus hydrocarbons”–used to clean incoming raw natural gas. The PA Dept. of Environmental Protection is on location today to determine what happened and why–and to ensure there have been no negative impacts to the environment.
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