Energy Services

Baker Hughes | Energy Services | GE Oil & Gas | Industrywide Issues | M&A

Trump DOJ Blesses GE Takeover of Baker Hughes, Merging Soon
June 13, 2017June 13, 2017

During the Obama reign of terror, the world’s #2 largest oilfield services company, Halliburton, tried to buy the world’s #3 largest oilfield services company, Baker Hughes. The Obama Dept. of Justice (DOJ) killed that deal (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). It was a costly mistake for Halliburton–they had to pay Baker Hughes a $3.5 billion breakup fee. Baker Hughes was on a mission to sell itself to someone, and eventually found a new suitor last October: GE Oil & Gas (see Breaking: Who Needs Halliburton? Baker Hughes Merging with GE O&G). Since then the two have worked hard to ensure there will not be a repeat of the Halliburton disaster. Earlier this month we told you that Europe has blessed the deal (see Europe Approves GE Takeover of Baker Hughes, Co Gets a New Name). Now the Trump DOJ has blessed the deal too. GE had to agree to sell its Water & Process Technologies business (called GE Water). Small price to pay. The two maintain that the merger will take place “mid-year”. Since it’s already mid-year, we expect that translates to July or August…
Read More “Trump DOJ Blesses GE Takeover of Baker Hughes, Merging Soon”
Energy Services | Halliburton | Weatherford Intl

Halliburton Hires New CFO After Old CFO Left to Run Weatherford
June 13, 2017June 13, 2017

In March, Mark McCollum, who had been Chief Financial Officer (CFO) of Halliburton, the world’s second largest oilfield services company, left to become the CEO of Weatherford, the world’s fourth largest oilfield services company (see Halliburton CFO Leaves to Become Weatherford CEO). Not long after McCollum took the helm of Weatherford, the world’s largest oilfield services company, Schlumberger, gave Weatherford a helping hand (see Schlumberger Throws Weatherford a Lifeline, Challenges Halliburton). The chain reaction (and drama) continues to unfold. Halliburton announced yesterday they’ve lured away the CFO from smaller competitor Parker Drilling Company. And now Parker is looking for a new CFO…
Read More “Halliburton Hires New CFO After Old CFO Left to Run Weatherford”
Anadarko | Chesapeake Energy | Energy Companies | Energy Services | Equinor/Statoil | Industrywide Issues | Lease & Royalty Payments | Litigation | Mitsui | Pennsylvania | Statewide PA | Williams

NEPA Landowners Fight to Sue Chesapeake’s Partners
June 12, 2017June 12, 2017

We’re going to take a stab at this, and we are not confident we will get it 100% right. With that as a warning, we recently reported that a case brought by landowners in northeastern PA against Chesapeake Energy over unwarranted royalty deductions suffered a bit of a setback (see Chesapeake Scores Court Victory to Prevent PA Royalty Class Action). Essentially, the landowners (in this case Scout Energy) argued that since the leases signed say royalty disputes must go to arbitration, we want mass arbitration. A class action, in other words. In May, U.S. District Judge Matthew Brann of the Middle District of Pennsylvania (overseeing the case) issued an opinion that said Chesapeake is right in demanding each case get arbitrated individually–not as part of a class action. The landowners in four cases (all of which seem to be joined, or at least moving along together) filed briefs last week to make a new argument. And here’s where we are not 100% sure, but we think the argument is this: OK, we have to go to arbitration and now it has to be individually. However, there are other defendants named in the case (Anadarko, Williams, Statoil, Mitsui E&P). Since the lease language says the lease is between the landowner and the driller (i.e. Chesapeake), that means the other defendants are NOT covered by the arbitration clause and we (the landowners) can still sue them as a class action. Why? Because (allegedly) those companies colluded together with Chesapeake to “reduce, restrain or eliminate competition for gas and mineral rights, operations rights and gathering serves in multiple counties in Northern Pennsylvania.” Oy vey! It keeps getting more complicated as the days go by…
Read More “NEPA Landowners Fight to Sue Chesapeake’s Partners”
Energy Services | Industrywide Issues | Pipelines | Regulation | Spectra Energy | Williams

Sabal Trail Pipeline Begins Service Connecting M-U Gas to Florida
June 12, 2017June 12, 2017

In April MDN provided an update on the Sabal Train Transmission pipeline project (see Marcellus/Utica Gas Soon Heading to Florida Penninsula via Sabal Trail). Spectra Energy (and partners NextEra Energy and Duke Energy) are building Sabal Trail, a $3.2 billion, 515-mile interstate natural gas pipeline in Florida, Georgia and Alabama to deliver Marcellus gas to the southeast. The project has been underway for the past three+ years. Sabal Trail will connect to Williams’ Hillabee Expansion Project, which is a new pipeline spur built off the huge Transco pipeline system (see Williams Building Alabama Pipeline with Marcellus Connection). Williams is reversing a portion of the Transco to bring Marcellus gas south, much of it to feed natgas-fired electric plants. The fantastic news is that last week, the Federal Energy Regulatory Commission (FERC) authorized a partial startup of the Sabal Trail project and the Hillabee Expansion that will feed it…
Read More “Sabal Trail Pipeline Begins Service Connecting M-U Gas to Florida”
Energy Services | Industrywide Issues | Monroe County | Mountaineer NGL Storage | NGLs | Ohio

Mountaineer NGL Storage Facility in OH Not (Yet) Under Construction
June 12, 2017June 12, 2017

In May MDN conveyed the news that it appears Mountaineer NGL Storage, which wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see New Company Announces Open Season for NGL Storage in Ohio Utica), had, according to the story we read, begun construction (see Mountaineer NGL Storage Facility in OH Under Construction). Based on a new article (below), we believe that older story was in error. In October 2016, Mountaineer drilled and completed a test well in the salt formation (see Mountaineer NGL Storage Test in OH a Success, Construction in 2017). But in April of this year, Mountaineer said construction had not yet begun due to problems with red tape (see Mountaineer NGL Storage in Monroe County, OH Caught in Red Tape). A new interview with a company official who says nobody has (yet) signed on the dotted line to use the facility, and that is the holdup now…
Read More “Mountaineer NGL Storage Facility in OH Not (Yet) Under Construction”
Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA | Transco | Williams

Reminder: Public Hearings This Week for Atlantic Sunrise Pipeline
June 12, 2017June 12, 2017

Just a quick reminder that the Pennsylvania Dept. of Environmental Protection is conducting four public hearings, beginning today and running through Wednesday, for the Williams Atlantic Sunrise Pipeline project. If there is any way you can make it to one of the hearings to show your support for the project, do it! Below is the DEP announcement sharing the locations for the hearings. Today are two hearings, both from 6-9p, one in Tunkhannock and the other in Lancaster. Tomorrow the hearing is in Bloomsburg, and Wednesday in Annville. Come out to support this critical pipeline project…
Read More “Reminder: Public Hearings This Week for Atlantic Sunrise Pipeline”
Energy Services | Industrywide Issues | Kinder Morgan | NGLs | Ohio | Pipelines | Statewide OH

UTOPIA NGL Pipeline Under Construction, Should be Online Jan 2018
June 9, 2017June 9, 2017

In January 2016, Kinder Morgan (KM) committed to building the UTOPIA (Utica To Ontario Pipeline Access) pipeline, a 12-inch ethane pipeline that will run ~240 miles across the state of Ohio where it will connect with another pipeline and (eventually) flow ethane all the way to a cracker plant in Canada (see Kinder Morgan Ready to Move Forward with UTOPIA East Pipeline). However, all was not utopia in UTOPIA–some Ohio landowners got a bumble bee in their bonnet and refused to deal, so KM took them to court (see UTOPIA Pipeline Sues Holdout OH Landowners Using Eminent Domain and UTOPIA Pipeline Still Battling OH Landowners with Eminent Domain). UTOPIA hit a brick wall in Wood County when a judge blocked the use of eminent domain in that county, saying the project does not benefit the public good (see Wood County OH Judge Blocks Eminent Domain for UTOPIA Pipeline). No worries. UTOPIA signed lease agreements with more reasonable landowners and altered the route to avoid the ones who don’t want it (UTOPIA East Pipe Re-Routes Around OH Antis, Drops Eminent Domain). Hey, some people don’t want a truckload of money, who are we to argue? Here’s an update: At a recent industry conference in Ohio, Allen Fore, KM’s vice president of public affairs, said UTOPIA is currently under construction and is due to go online in January 2018…
Read More “UTOPIA NGL Pipeline Under Construction, Should be Online Jan 2018”
Energy Services | Industrywide Issues | NEXUS Pipeline | Ohio | Pipelines | Regulation | Statewide OH

NEXUS Pipe Revved Like a Race Car, Waiting for FERC Green Flag
June 9, 2017June 9, 2017

NEXUS is a $2 billion, 255-mile interstate natural gas pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. Its purpose is to move Utica and Marcellus Shale gas from an over-saturated market in the northeast to markets in the Midwest and Canada. It is a joint venture between DTE Energy and Spectra Energy. Last December, the Federal Energy Regulatory Commission issued a positive final Environmental Impact Statement for the project (see FERC Approves NEXUS Pipeline, Project on Track for 2017). The remaining obstacle for NEXUS is to obtain a certificate of public convenience and necessity from FERC, to begin construction. NEXUS had hoped to have that approval in hand on Feb. 3rd, when FERC issued a flurry of such certificates. However, NEXUS didn’t get one (see In FERC’s Game of Musical Chairs, NEXUS Pipeline Left Standing). That led some to ask, Is there still a market need for the NEXUS Pipeline project? (see Has the Clock Run Out for NEXUS Pipeline?). According to NEXUS president James Grech, you can lay those doubts and fears to rest. At the Utica Capital Midstream Seminar held earlier this week, Grech told audience members that the project is a “race car sitting there revved and all ready to go,” just waiting for a full quorum at FERC to green light (or rather wave the green flag) so they can begin construction. Grech indicates the project is ready to go, and WILL go, as soon as FERC approves it. That is, if a lawsuit by the CORNballs doesn’t derail it…
Read More “NEXUS Pipe Revved Like a Race Car, Waiting for FERC Green Flag”
Anti-Drilling/Fossil Fuel | Broome County | Energy Services | Industrywide Issues | New York | NG Advantage | Pipelines

NG Advantage Virtual Pipe “Done Deal” in Broome County, Antis Stymied
June 9, 2017July 1, 2017

MDN recently told you about a proposed “virtual pipeline” (i.e. trucking system) coming to MDN’s neighborhood. NG Advantage wants to build a new compressor station and tap into the Millennium Pipeline where it crosses the Chenango River near Port Dickinson, a suburb of Binghamton, in Broome County (see NG Advantage Virtual Pipeline May be Coming to MDN’s Backyard). NG already has three businesses lined up to buy CNG (compressed natural gas) from the project. So-called “virtual pipelines” compress natural gas and load it onto tanker trucks, and then distribute that gas to businesses that are not fortunate enough to be located near a natgas pipeline. It’s a cool concept that bypasses anti-drilling objections to pipelines. However, virtual pipelines have one negative side-effect for local residents: lots of truck traffic. Fenton’s Planning Board recently approved the project and although we thought it wasn’t quite yet a done deal, apparently it is a done deal, as a small group of antis learned earlier this week at a Town of Fenton meeting. Town of Fenton Planning Board approval is all that’s required. The Fenton Town Board has no say in the matter. It’s “a done deal” according to a town official speaking at the meeting. MDN friend Vic Furman attended the meeting and filed a report. Vic says he faced down the antis following the meeting with some hard truth: the reason they now have to live with this virtual pipeline and the traffic it will generate…is because they objected to an in-the-ground pipeline (the Constitution). Vic said they grudgingly agreed that he’s right…
Read More “NG Advantage Virtual Pipe “Done Deal” in Broome County, Antis Stymied”
Economic Impact | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Statewide PA

Homeless Shelter, Drug Program, Others Get PennEast Pipe Largesse
June 9, 2017June 9, 2017

PennEast Pipeline has just released a list of 11 non-profit organizations receiving grants of “up to” $5,000 from the pipeline company. It’s not the first time (see our PennEast grant stories here). In fact, by our count, this is the eighth round of community grants given by PennEast. So far the company has handed out more than $600,000 to local organizations, making a huge difference in the communities where the pipeline is due to run. In this latest round: a homeless shelter, an anti-drug abuse campaign, and a number of first responders (police and fire departments). Here’s a rundown on the latest batch of groups to benefit from this important pipeline project… Read More “Homeless Shelter, Drug Program, Others Get PennEast Pipe Largesse”
Baker Hughes | Energy Services

Baker Hughes May Rig Count – Steady & Holding Both US and M-U
June 8, 2017June 8, 2017

The International (non-U.S.) Baker Hughes rig count for May 2017 was 957, up 1 from the 956 counted in May 2017, and up 2 from the 955 counted in May 2016. However, the U.S. rig count for May 2017 was 893, up 40 from the 853 counted in May 2017, and up 485 from the 408 counted in May 2016. Like last month, the U.S. rig count continues to be more than double year-ago levels. Canada’s rig count continued further into the abyss in May, falling another 23 after falling 145 last month–down to 85. However, Canada’s May rig count was 43 higher than May 2016. So perhaps it’s not yet an apocalypse for our Canadian cousins. What about rig counts in the Marcellus/Utica? Although 1 net rig changed location–from WV to OH, overall the combined PA/OH/WV rig count remained the same as last month: 68 active rigs drilling…
Read More “Baker Hughes May Rig Count – Steady & Holding Both US and M-U”
Economic Impact | Energy Services | Industrywide Issues | Jobs | New York | Pennsylvania | Pipelines | Research | Statewide NY | Statewide PA | Transco | Williams

Rutgers Study Says Williams Pipeline to NYC Econ Boost of $327M
June 7, 2017June 7, 2017

Transco Northeast Supply Enhancement Project map – click for larger version

In May 2016, Williams’ Transcontinental Gas Pipe Line Company (Transco) pre-filed with the Federal Energy Regulatory Commission (FERC) for a project called the Northeast Supply Enhancement project (see Williams Pre-Files with FERC to Expand Transco Pipeline in PA, NY). The new project will increase pipeline capacity and flows heading into northeastern markets. In particular, Transco wants to provide more natural gas to utility giant National Grid beginning with the 2019-2020 heating season. National Grid operates in New York City, Rhode Island and Massachusetts. At the time of pre-filing, Williams ran an open season to lock up commitments for the Northeast Supply Enhancement project (see Williams Announces Open Season for Northeast Supply Enhancement). The open season worked. National Grid committed to all 400,000 dekatherms (400 million cubic feet per day) of extra gas the project will provide. In March 2017, Williams filed a full, official application for the project (see Williams Files with FERC to Expand Transco Pipeline to NYC, NE). No doubt anticipating stiff opposition from lunatic anti-fossil fuelers, Williams commissioned an independent, third party study of the project with Rutgers University. Yesterday the Rutgers researchers released their comprehensive study (full copy below) that finds the Transco Northeast Supply Enhancement project, which will cost $1 billion to build, will generate $327 million in additional economic activity (GDP) in Pennsylvania, New Jersey and New York. In addition, the project will directly and indirectly generate 3,186 jobs during the one-year construction period, resulting in an estimated $234 million in labor income. This is great news for PA, NJ and NY residents…
Read More “Rutgers Study Says Williams Pipeline to NYC Econ Boost of $327M”
Columbia Pipeline Group | Electrical Generation | Energy Services | Industrywide Issues | M&A | TC Energy/TransCanada

TransCanada Sells 4 Northeast Powergen Assets, 1 in Marcellus
June 7, 2017June 7, 2017

Canadian-based TransCanada, famously known for wanting to build the Keystone XL oil pipeline from Canada to the Gulf Coast, didn’t want to be left out of the most important midstream story of the century (the Marcellus/Utica), so they bought Columbia Pipeline Group–closing on the sale in July 2016 (see TransCanada and Columbia Pipeline Tie the Knot Today). The original deal cost TransCanada $10 billion (U.S. dollars), and later TransCanada bought out the remaining portion of Columbia it didn’t own for another $915 million (see TransCanada Raising Big $ to Complete Buyout of Columbia Pipeline). In order to pay for everything, both the original purchase and buying out the rest of Columbia, TransCanada announced floated $3.2 billion (Canadian) in new stock, and entered an agreement to sell off their electric power assets in New England for $3.7 billion (U.S.). On Monday, TransCanada announced the closing of the deals and the transfer of their electric power assets–3 natgas-fired plants, including one located in the Marcellus region (Lebanon, PA), and one wind farm. According to their announcement, TransCanada will hit their asking price of $3.7 billion, using the money to pay off “bridge loans” involved in financing the Columbia Pipeline deal… Read More “TransCanada Sells 4 Northeast Powergen Assets, 1 in Marcellus”
Anti-Drilling/Fossil Fuel | Duke Energy | Energy Services | Hamilton County | Industrywide Issues | Ohio | Pipelines

DOPEs Get Ready to Fight 13 Mile Pipeline Near Cincinnati
June 7, 2017June 7, 2017

As MDN previously reported, Duke Energy needs to replace an aging pipeline, built in the 1950s, near Cincinnati, OH–or some people in Cincy will have to go without natural gas (see Hearings Scheduled for Proposed Duke Pipeline in Cincinnati). Duke has proposed a 13-mile, 20-inch pipeline along two potential routes. Both routes are opposed by antis, including a group calling themselves NOPE–Neighbors Opposing Pipeline Extension. We call them DOPEs–Dummies Opposing Pipeline Extensions. Will the DOPErs volunteer to shut off the natural gas to their homes and businesses if the pipeline doesn’t get built? Not on your life! Two public hearings have now been scheduled, one for June 15 and the other July 12. Ahead of those hearings, the Ohio Power Siting Board recently released a 71-page report outlining the potential impacts of the pipeline (full copy below). In the report, staffers conclude that Duke Energy’s proposed Alternate Route represents the minimum adverse environmental impact (the best route) when compared to the Preferred Route. The staff recommend that a number of conditions become part of any certificate issued by the Board for the proposed pipeline. DOPErs are busy reading the report and gearing up to fight the pipeline at the two upcoming public hearings… Read More “DOPEs Get Ready to Fight 13 Mile Pipeline Near Cincinnati”
Energy Services | Patterson-UTI | Seventy Seven Energy

Patterson-UTI Rig Count Continues to Rocket Skyward – 159 in May
June 6, 2017June 6, 2017

As we do every month (and have for two years), MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in the Marcellus/Utica. In April the Patterson rig count rocketed to 115, up an amazing 27 rigs in a single month–the biggest jump we’ve seen (see Patterson-UTI Huge Increase in Monthly Rig Count – SSE Factored?). Why the big jump in April? We theorized that rigs from Seventy Seven Energy, which Patterson recently bought/merged with, influenced those numbers (see Patterson-UTI Energy Completes Merger with Seventy Seven Energy). Last month we reached out to Patterson and got confirmation of our theory from Mike Drickamer, Vice President, Investor Relations: “We completed the merger with Seventy Seven Energy on April 20 and so the April rig count did reflect 10 days of rigs acquired from Seventy Seven Energy.” Patterson released their May rig count number yesterday, and it zoomed to another new high–of 159 rigs. That’s up an amazing 38% in one month! It is the most rigs we’ve tracked for Patterson since we began keeping track. The reason for May’s high number is, of course, that Patterson’s numbers now reflect a full month of SSE rigs now part of the Patterson fleet… Read More “Patterson-UTI Rig Count Continues to Rocket Skyward – 159 in May”
Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Stark County | Statewide OH | Supply Chain | Trucking

Rover Pipeline Helps OH Short Line Railroad Expand
June 6, 2017June 6, 2017

For some reason we’ve always loved stories about how shale energy has revitalized the short line railroad industry. Maybe it’s from some deep-seated psychological connection of playing Monopoly as a child and loving to own the railroads on the board–including the Short Line. Who knows? We’ve just stumbled across another such shale energy story connected to a short line railroad. This one involves the mighty Rover Pipeline, now under active construction across Ohio and in Michigan. When Energy Transfer, the company building the $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline began to look at logistics and where they would store all of the pipeline and other materials needed to construction the mammoth project, they happened across a rail yard and transloading facility located in Massillon (Stark County), OH. Massillon Logistics, founded in 2004 by Steve and Dave DiPietro, had launched Republic Short Line Railroad (RSL), along with four other subsidiaries, to operate at a former steel mill site (465 acres) now called the Massillon Energy & Technology Park. RSL and the expansive park were just what Energy Transfer needed for Rover. The pipeline project has provided RSL with a boatload (or rather, rail yard) of business and money to grow… Read More “Rover Pipeline Helps OH Short Line Railroad Expand”