Energy Services

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    Old Hippies Turn Out at WV DEP Hearing to Oppose Mountaineer Pipe

    In April 2017, MDN brought you the news that Columbia Pipeline (now owned by TransCanada) had filed an application with the Federal Energy Regulatory Commission (FERC) to build a 3.5 mile, 8-inch pipeline that will carry natural gas from Pennsylvania to connect the Mountaineer Gas system in the Eastern Panhandle of West Virginia with the Columbia Gas Pipeline in Pennsylvania (see New 3.5 Mile Pipeline Project to Drill Under the Potomac River). That small section of pipeline is hotly opposed and part of the larger Eastern Panhandle Expansion project–a project to deliver natural gas via local distribution channels (local utility Mountaineer Gas) to a new industrial facility in Berkeley County, WV, and to provide gas to other local businesses and residents in the Tri-State area. There are three phases to the Eastern Panhandle Expansion project: Phase One runs a 22.5-mile, 10-inch-diameter steel pipeline from Morgan County to Martinsburg; Phase Two includes a loop to Charles Town; and Phase Three will build a four mile segment of pipeline into Martinsburg. The WV Dept. of Environmental Protection held a hearing on Phase One on Tuesday, at the Berkeley Springs High School. All of the people who spoke at the hearing, some 33 of the 80 people present, spoke against the project. If you look at a picture of the crowd, you’d swear you were at a ZZ Top look-alike convention. That is, a bunch of old hippies. Here’s a report on the Tuesday hearing…
    Read More “Old Hippies Turn Out at WV DEP Hearing to Oppose Mountaineer Pipe”

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    Patterson-UTI Issues Half Billion $ of New Debt to Pay Off Old Debt

    Each month MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in general and rig count health in the Marcellus/Utica in particular (see our Patterson stories here). Patterson operates many rigs in the Marcellus/Utica region, hence our interest in the company and what it does. Yesterday Patterson announced it wants to get $525 million (over half a billion dollars) for newly floated IOUs, called “notes” in the financial world. This is nothing new–for Patterson or most other publicly-traded companies in the oil and gas industry. We always marvel at how big finance works. The stated reason for floating over a half billion in new notes is…to pay off older notes. That is, they are floating new debt to pay off old debt, plus a little extra change “for general corporate purposes.” The new notes will be “guaranteed on a senior unsecured basis.” How does that work? Doesn’t “unsecured” mean “nothing backing it up”? How do you guarantee something with nothing? We’re not picking on Patterson–well, maybe just a little. We’re pointing out our own lack of understanding in how companies can continuously issue new debt for old debt. Won’t the piper need to be paid some day? Apparently today is not that day! Here’s the latest new-debt-for-old debt announcement…
    Read More “Patterson-UTI Issues Half Billion $ of New Debt to Pay Off Old Debt”

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    Nine Energy Service Launches $160M IPO

    Nine Energy Service, an oilfield services company that competes with companies like Halliburton and Baker Hughes, operates in a number of shale basins, including the Marcellus/Utica. Nine was formed in 2014 by the combination of four existing oilfield services companies–Northern States Completions, Tripoint LLC, CDK Perforating and Integrated Production Services Canada. All four were portfolio companies of SCF Partners–a private equity firm investing in the oil and gas industry. The new company was named Nine Energy Service and is headquartered in Houston, TX. Why the unusual name of “Nine”? It’s aspirational. On a scale of 1-10 with 10 being perfect, they aspire to be a 9, which is about as good as you can get. Hence the name, which is kind of cool. Nine announced yesterday it plans to go public with an initial public offering of 7 million shares. The company hopes to raise ~$160 million with the IPO…
    Read More “Nine Energy Service Launches $160M IPO”

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    Work on Mariner East 2 Continues Following “Stop Work” Order

    Last week MDN reported the news that the Pennsylvania Dept. of Environmental Protection (DEP) has suspended all construction work on the Mariner East 2 Pipeline (ME2) project until further notice (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). However, all doesn’t necessarily mean all. A Chester County, PA anti’s celebration of the stop work order came crashing down when she noticed that work was still happening in an area located near her home. How can this be?! It seems the DEP’s statement that “all construction must stop” means “all construction which the DEP permits and authorizes must stop,” which can be further defined as “anything that disturbs the ground.” If the work involves digging, shoveling, etc., it’s stopped. But there’s still plenty of work that can continue–work that is not permitted by the DEP, including welding pipes together. That’s what’s happening at the site in Chester County–and local antis desperate to stop ME2 are mad and discouraged that Sunoco Logistics Partners continues to keep at least some of their workers busy while the company works to get full construction activity restored…
    Read More “Work on Mariner East 2 Continues Following “Stop Work” Order”

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    Williams Marcellus Buildout Leads to Record Transco Pipe Volumes

    Transco Pipeline Map – click for larger version

    Williams’ Transcontinental Gas Pipe Line (Transco) is the largest natural gas pipeline (by volume pumped) in the United States. Transco and its various branches stretch from the Texas Gulf Coast all the way to New York City. As MDN previously reported, Transco completed five important expansion projects in 2017: Gulf Trace, Hillabee Phase 1, Dalton, New York Bay, and Virginia Southside II (see Transco Pipeline Update: 5th Expansion Done, More Coming 2018). Because of those expansions, Transco flowed a record-breaking, all-time high of 15.58 million dekatherms (15.58 billion cubic feet, or Bcf) of natural gas in a single day–on Jan. 5, 2018. That’s approximately 20% of all the natural gas consumed in the entire country on that day. Amazing! Two more important expansion projects that are part of the Transco system are due to complete construction and go online in 2018: Atlantic Sunrise Pipeline and Garden State Phase II. Atlantic Sunrise will feed 1.7 Bcf/day of Marcellus Shale gas from northeastern PA into the Transco system, moving it south. As an interesting aside, Cabot Oil & Gas will provide 1 Bcf/d out of the 1.7 Bcf/d on Atlantic Sunrise when it’s completed (see FERC Approves Atlantic Sunrise Pipeline! Cabot Grabs More Capacity). Here’s the Williams statement about their recent Transco record-breaking day…
    Read More “Williams Marcellus Buildout Leads to Record Transco Pipe Volumes”

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    New Study Says Mariner East 1 & 2 will Deliver $9B to PA Economy

    In February 2015, Philadelphia-based economic consulting firm Econsult Solutions released a study looking the potential economic impact of the Mariner East 1 & 2 projects, concluding the two project together would result in $4.2 billion coming to Pennsylvania (see New Study: Mariner East 1 & 2 Pipelines Mean $4.2B Windfall in PA). However, projects like Mariner East change over time. Econsult revisited and revamped their original study to reflect those changes. Know what they found? ME1 & ME2 together will result in over $9 billion of economic impact in PA! How could it be that much? Just consider, the two projects together will have created 57,000 direct, indirect and induced jobs between 2014 and 2019 (9,500 jobs annually) with earnings of $2.7 billion impacting multiple industries. And that’s just the jobs piece of the puzzle! Although total economic impact will exceed $9 billion, the pipeline will continue to generate revenue for PA state coffers for years into the future, via taxes and by feeding the petrochemical industry in the Philadelphia area. It’s not $9B total–it’s $9B initially. Sadly, the PA Dept. of Environmental Protection last week halted all work on Mariner East 2, delaying the economic benefits of the project in PA (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). Let’s hope ME2 resumes work quickly. In the meantime, we have a copy of Econsult’s new report below, along with comments by antis who ignore the hard science in front of their faces that the Mariner pipelines are a bonanza for PA…
    Read More “New Study Says Mariner East 1 & 2 will Deliver $9B to PA Economy”

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    Minuteman Seeks Justice Against Kathleen Kane & PA AG’s Office

    One of the companies in the Marcellus industry targeted for extinction by Pennsylvania’s former Attorney General, Kathleen Kane, was Minuteman Environmental Services (see PA’s Anti-Drilling AG Charges Minuteman with Enviro Crimes). Minuteman was a Pennsylvania company serving the shale industry with several different businesses. In 2014, Kane orchestrated what can only be called a terror attack on Minuteman and its owner Brian Bolus and his family (see Minuteman Enviro Says PA AG Office “Terrorized” Family Members, Filing Lawsuit). Kane’s vendetta against Minuteman was one of the most egregious examples of her abuse of power while she was AG. Kane’s attack on this small business literally drove it out of existence–they finally went bankrupt. One of the charges Kane used against the owner of the business, Brian Bolus, is that he illegally added his mom and dad to the health insurance plan for the company, even though they were not employees. Fantastically, Kane went after mom and dad, charging them with health care fraud! That charge, along with other charges, were dropped in 2016 (see Former PA AG Kathleen Kane’s Vendetta Against Marcellus Co Over). In fact, out of the original 83 charges (56 charges being felonies), 81 of the charges have been dropped. The final two charges–misdemeanors (barely above a traffic ticket in the pecking order), go to trial this month and will (hopefully) also be dropped. It has taken four, long, years for Bolus and Minuteman to be exonerated legally. During that time, Kane herself was tried and convicted for committing perjury–a felony–and removed from office (unrelated to the Marcellus industry). Kane and the AG’s office caused extreme harm to Brian Bolus and his family–reputationally, and economically. Nothing can ever make up for the years and loss of reputation and forcing a company to go bankrupt, throwing hundreds of people out of jobs. However, there is *something* can be done. Bolus has filed a lawsuit (copy below) against Kane and the AG’s office and some of the people in the AG’s office that maliciously targeted him and his company. He’s demanding a jury trial–to help right the extreme wrong that’s been done…
    Read More “Minuteman Seeks Justice Against Kathleen Kane & PA AG’s Office”

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    Dominion Buys SCANA, Mulls Atlantic Coast Pipe Expansion into SC

    Last week we noticed the large merger/acquisition by Dominion Energy in buying South Carolina-based SCANA Corporation. We didn’t think much of it at the time. SCANA is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. In other words, the local electric and gas company for much of South Carolina. Dominion is a big company with many operations–they are a pipeline company, an electric generating company, and a utility company (like SCANA). The merger makes sense–Dominion gets to grow and add more customers to its utility business. We didn’t think there was a tie-in with the Marcellus/Utica region, which is why we haven’t (until now) brought you the news about Dominion’s $7.9 billion all-stock purchase of SCANA. However, there is a big potential connection to the Marcellus/Utica. You may recall we brought you news in early December that Dominion and their partner in the Atlantic Coast Pipeline (ACP) project Duke Energy are considering expanding the original ACP to more locations in North Carolina, AND expanding the pipeline into South Carolina (see Atlantic Coast Pipeline’s Future Plans: Expand in NC & SC). Dominion is now openly saying that the SCANA purchase makes it more likely they will push to expand ACP into SC–meaning even more Marcellus/Utica gas could be flowing to Dixie…
    Read More “Dominion Buys SCANA, Mulls Atlantic Coast Pipe Expansion into SC”

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    Fracker Keane Group Doubles Line of Credit from $150M to $300M

    Frackers are in big demand. However, it takes a lot of cash to operate a fracking business. Keane Group is a Texas-based oilfield services company that provides fracking, wireline and top-hole air drilling services to oil and gas companies in the Marcellus/Utica as well as several other major basins. Keane has just doubled its line of credit and can now tap up to $300 million in cold, hard cash–if it needs it. In January 2016, Keane announced they were buying out Canadian-based Trican Well Service for $247 million (see Oilfield Serv. Co. Keane Group Buys Trican Well Service for $247M). The expansion tripled Keane’s fracking capacity and gave it access to proprietary new technology. The buyout, and Keane’s hard work, bore fruit. In December 2016, the privately-held company announced it will go public with an initial public offering (IPO) of stock, hoping to raise $287.5 million with the IPO (see Oilfield Services Co. Keane Group Floats $288M IPO). Then in May 2017, Keane announced it is expanding again, buying out fracker RockPile Energy Services for $284.5 million (see Fracker Keane Group Continues Expansion, Buys RockPile Energy). Keane continues to do well and has proven to its bankers that the company has enough assets to warrant an increase in their line of credit…
    Read More “Fracker Keane Group Doubles Line of Credit from $150M to $300M”

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    Patterson-UTI Rig Count Hits All-Time High in December, Up to 163

    As we do each month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in general and rig count health in the Marcellus/Utica in particular. Patterson operates many rigs in our region. Last April, Patterson bought out and merged in Seventy Seven Energy (SSE). The addition of SSE’s rigs served to rocket Patterson’s rig count number in April and May much higher (see Patterson-UTI Rig Count Continues to Rocket Skyward – 159 in May). With SSE fully absorbed into Patterson, the rig count number settled down. In September Patterson’s rig count slipped by 1–the first loss since June 2016. In October the count retreated another three, to 158. But the trend reversed in November when the the count jumped again–back up to 161. The numbers for December were just released and show Patterson’s monthly active rig count hit 163–which is a new, all-time high…
    Read More “Patterson-UTI Rig Count Hits All-Time High in December, Up to 163”

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    Was PA DEP Justified in Shutting Down All ME2 Pipe Construction?

    The news that the Pennsylvania Dept. of Environmental Protection (DEP) has suspended all construction work on the Mariner East 2 Pipeline project until further notice continues to reverberate (see PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). MDN has taken some heat for our implication that the main reason for the shutdown is pressure from radical Big Green groups. While we maintain our view is not incorrect, we also don’t want to leave the impression that there aren’t problems that need to be addressed with ME2 construction. There are. And the DEP is right to address them. What we DO take issue with is a complete shutdown of ALL construction. If the underground horizontal directional drilling (HDD) work is the primary issue, shut that down–but not all construction, including trench work. At any rate, we spotted a story about a landowner in Cumberland County who says his private water well was fouled when ME2 construction began–and it’s still not right. Below is his story as an example of what the DEP *should* be paying attention to…
    Read More “Was PA DEP Justified in Shutting Down All ME2 Pipe Construction?”

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    Propane Prices in the Northeast & ME2 Pipeline

    A lot of the talk and chatter this week has been about the spike in the price of natural gas (see today’s lead story, NatGas Trading in NYC Hits $175/Mcf – Highest Ever Recorded!). The other hot topic of the week is the decision by the Pennsylvania Dept. of Environmental Protection (DEP) to temporarily suspend all construction work on the Mariner East 2 (ME2) Pipeline. What antis in the Philadelphia area don’t realize is that ME2 is vital to their own region and their own pocketbooks. Yesterday we brought you one take on why Philly residents are missing the boat in opposing ME2 (see It’s Time We Stop Missing the Point About the Mariner East Pipes). In that guest post, MDN friend Garland Thompson makes the salient point that jobs and the Philly economy are tied to petrochemicals and the NGLs that will flow through the Mariner East pipelines. Today we bring you another article about why ME2 is so vital to the Philly area: the cost of propane. One of the primary NGLs that will flow through ME2 is propane, used in a variety of applications, but particularly used in places where there are not natural gas pipelines to deliver gas to homes (like the various suburbs around Philly, the ones opposing ME2). Propane prices are going up because (a) much of the propane produced by Marcellus/Utica drillers goes by railcars to Kansas, where it catches a ride on a pipeline to the Gulf Coast, and (b) the propane that does come to the Philly area also comes via rail cars, at a much higher price than if it were shipped via pipeline. Add to that other countries want our propane and are bidding the price up–and you have a prescription for spiking propane prices around Philly. The article below delves into the business of propane, explaining terms you may have heard but don’t know what they mean–like “contango” and “backwardation.” Buckle up–here’s a deep dive into the economics of propane, and why Philadelphia desperately needs the ME2 pipeline–without delay…
    Read More “Propane Prices in the Northeast & ME2 Pipeline”

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    CNX’s Pipelines to be Used for “Partners” – Not Just CNX Res.

    Yesterday we brought you the news that CONE Midstream has been renamed to CNX Midstream, and that CNX Resources is now the sole owner of the entire gathering pipeline system (see CONE Midstream Gets a New Name: CNX Midstream Partners). CONE was originally a joint venture between CONSOL Energy (the “CO” part of the name) and Noble Energy (the “NE” part of the name). CONSOL and Noble had a joint venture on hundreds of thousands of Marcellus/Utica Shale acres. Some of the wells drilled were “owned” by CONSOL, some by Noble. CONSOL and Noble decided to divide up the JV, each taking a piece, in late 2016 (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture). Then in May 2017, Noble up and sold all of their Marcellus leases and wells, to HG Energy (see Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?). Not long after, Noble announced they also want to sell their share of CONE. Long story short, CNX (formerly CONSOL) bought Noble’s CONE share, and now owns it lock, stock and barrel. Does that mean CNX will no longer flow gas from HG Energy (formerly Noble) wells served by their 100%-owned pipelines? Not on your life! CNX will continue to service HG Energy’s wells, and may even run gathering lines to other competitors’ wells (i.e. “partners”) in the areas where CNX Midstream operates. So said CNX CEO Nick DeIuliis on a conference call yesterday with analysts. DeIuliis is jazzed that his company now owns 100% of the pipeline gathering system because it will allow them to “move quickly” to seize opportunities…
    Read More “CNX’s Pipelines to be Used for “Partners” – Not Just CNX Res.”

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    PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline

    We suppose it was bound to happen sooner or later. The Pennsylvania Dept. of Environmental Protection (DEP) has caved to intense pressure from a cabal of Big Green groups and has told Sunoco Logistics Partners to suspend all work on the $2.5 billion Mariner East 2 (ME2) NGL pipline–from one side of the state to the other. Just yesterday MDN told you about the mounting pressure on the DEP to halt ME2 work, particularly work on underground horizontal directional drilling (see Big Green Says ME2 Pipe Violating Settlement; DEP Turns Up Heat). The shrill voices of Democrat Gov. Tom Wolf’s left flank were so shrill he couldn’t ignore them any longer, hence this action. The DEP in its order said construction will be halted, “until Sunoco can demonstrate that the permit conditions can and will be followed.” So there’s no particular time frame for when Sunoco can resume work–it will be up to the arbitrary gut feeling of the DEP. However, DEP does offer some criteria for when construction may be able to resume. Work can resume IF Sunoco satisfies the terms outlined in DEP’s order, including, but not limited to: (1) Address all impacts to private water wells in Silver Spring Township, Cumberland County; (2) Identify all in-progress or upcoming construction activities and detail the specific Chapter 102 and Chapter 105 permit under which the activity is authorized; (3) Submit a detailed Operations Plan outlining additional measures and controls to minimize inadvertent returns. In essence, the DEP is saying Sunoco has willfully violated the permits (and previous settlement) in constructing ME2, and they (DEP) have had enough. The DEP’s action immediately throws thousands of pipeline workers out of jobs across the state–thank you Tom Wolf and DEP. Big Green groups, including the odious Clean Air Council of Philadelphia, pounced on the DEP announcement, saying the agency should not just suspend construction, but CANCEL it. That has been their aim all along. These pressure groups want to stop the ME2 project cold. End it. Kill it. Finish it off. The DEP isn’t ready to grant that particular wish–yet. However, the suspension is certainly not good news for the project nor for thousand of families who will now have to make do with unemployment checks…
    Read More “PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline”

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    It’s Time We Stop Missing the Point About the Mariner East Pipes

    Yesterday the Pennsylvania Dept. of Environmental Protection suspended all work on the Mariner East 2 NGL Pipeline project (see today’s lead story, PA DEP Caves to Big Green Pressure, Stops All Work on ME2 Pipeline). The project has been vigorously opposed by antis in the greater Philadelphia area from the beginning. Their opposition stems from a deeper philosophical preference to end the use of fossil fuels. Last September, MDN editor Jim Willis had the pleasure of meeting and talking with Garland Thompson at the Shale Insight event in Pittsburgh. Garland, who lives in Philly, has written for the Career Communications Group of publications, including US Black Engineer & Information Technology, Hispanic Engineer & IT, and their siblings Woman of Color and Science Spectrum, for many years. He’s covered the shale revolution for those publications since 2008–before MDN began writing about it! Jim had an interesting conversation with Garland, about the need to educate folks, particularly the folks in the greater Philly area, about the benefits of pipelines. Springboarding on yesterday’s news, Garland has written a great opinion piece pointing out that opposition to the Mariner East pipelines (plural) is misguided and shortsighted. Garland builds a case for why everyone in the Philly region should want to see these important projects get built…
    Read More “It’s Time We Stop Missing the Point About the Mariner East Pipes”

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    CONE Midstream Gets a New Name: CNX Midstream Partners

    CONE Midstream is, or rather was, a pipeline joint venture between CONSOL Energy and Noble Energy (“CO” from CONSOL and “NE” from Noble Energy), formed in the summer of 2014 to service wells drilled as part of CONSOL & Noble’s drilling joint venture (see CONSOL & Noble Energy Form New Marcellus Midstream Company). Following Noble’s exit from the Marcellus last year, they began to shop their 50% share of CONE, and thought they had found a buyer in Quantum Energy Partners–for $765 million. However, as we reported in December, that deal hit a snag (see Noble’s 50% CONE Midstream Sale in Trouble – Shopping Deal to CNX). Not long after, CNX Resources (formerly CONSOL Energy) issued a press release to announce they had cut a deal to buy Noble’s 50% CONE share–for $305 million, which is 60% less than of the deal price Noble previously worked out with Quantum (see CNX to Buy Noble’s 50% Share of CONE Midstream for $305M). Two bits of news to share with you regarding the CONE deal: (1) the deal is now done, and (2) CNX Resources has renamed CONE Midstream to be CNX Midstream–which should not be a surprise since the NE part of CONE is now gone, and since the CO part changed its name. Here’s the news…
    Read More “CONE Midstream Gets a New Name: CNX Midstream Partners”