Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”
It’s a sad day for Halliburton and Baker Hughes. The two companies intended to get married, with Halliburton buying out BH and merging it in a deal worth $35 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). That was in November 2014. Since then, the two companies have jumped through every hoop demanded of them, including shedding assets (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). By the end of last year, rumors were circulating that the deal is in trouble (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Then European regulators began throwing cold water on the deal (see Europe Puts Halliburton/BH Merger Under a Microscope). No problem–HalliHughes thought they could still pull it off. But then the bullies of the Obama Justice Department got involved and sued to block the deal (see Obama DOJ Sues to Block Halliburton/Baker Hughes Merger). We can’t remember a time when the DOJ opposed a big deal it ended up happening. And so it is with this one. The bullies have won. In a rare Sunday press release, Baker Hughes says the deal is now off–and Halliburton owes Baker Hughes $3.5 billion in a breakup fee–due by this Wednesday. Happy May Day, Halli!…
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Each month MDN tracks the number of active rigs deployed by oilfield services drilling company Patterson-UTI Energy (see our 
In addition to watching companies that operate drilling rigs, like Patterson-UTI Energy (see today’s companion story) for indications of how well (or not) the drilling industry is doing, another type of company to watch is a proppant company–the companies that supply sand and ceramic beads used in fracking. CARBO Ceramics is one of the premier such companies. Yesterday CARBO issued their first quarter 2016 update. Like Patterson, the news wasn’t so good. CARBO lost $25 million in 1Q16. In some cases E&Ps (exploration and production companies, or “drillers” here on MDN) are electing to complete previously drilled wells–and that’s good for CARBO. But in many cases drillers are electing to leave already-drilled wells uncompleted, i.e. not fracked, and that’s bad for CARBO. Here’s more of the good, the bad and ugly for CARBO Ceramics in 1Q16…
Yesterday Baker Hughes released its first quarter 2016 update. According to BH CEO Martin Craighead, “the industry faced another precipitous decline in activity” in 1Q16, which means it wasn’t good for BH. The company reported that revenues were down 42% year over year during the first quarter. Ouch. The company list $981 million for the quarter, nearly $1 billion! Double ouch. The company, which maintains THE rig count everyone watches, said rig counts will stabilize in the second half of the year, but the company expects 2Q16 rig count numbers to slide another 30%, to all-time historic lows. Triple ouch. What about the Halliburton buyout of BH? The deal expires in two days on April 30. BH says beyond that date the merger agreement does not automatically terminate–they may decide to continue riding the merger horse. Time will tell. Here’s the BH update from yesterday…
A Washington County, OH man is not happy with Blue Racer Midstream’s construction work on a new pipeline in the area. Heavy rain washed out gravel used as fill for the project. The man was on his way home (rural area) and ran into a ditch because, he says, the work was not done well and is “destroying” area roadways. Here’s the story of a man, a car, a ditch and a rainy night…
Just a few years ago Halliburton, the second largest oilfield services company in the world, employed 600 people in its operation center located in Lycoming County, PA. Today? There are 40 working there. Some 200 of Halliburton’s Lycoming employees were laid off last Friday. Lycoming County is relatively rural with the city of Williamsport as its county seat. Losing 560 jobs, 200 of them in one go, is a huge blow to the area. We grieve with those who have lost their jobs–and with their families who depended on those jobs…
We knew that corporate raider Carl Icahn’s protege, Keith “Mini-Me” Meister, had been meddling in Williams since 2013 (see 
The partners in the Constitution Pipeline, including Williams and Cabot Oil & Gas, have come roaring back against Gov. Cuomo and his pusillanimous Dept. of Environmental Conservation (DEC) after the DEC lied last Friday in announcing they would not grant stream crossing permits for the pipeline project. Yesterday Cabot, along with Williams, issued a STRONGLY worded rebuttal that says, in part that the DEC’s “stated rationale for the denial includes flagrant misstatements and inaccurate allegations, and appears to be driven more by New York State politics than by environmental science.” Flagrant misstatements is another way of saying the DEC lied, which is exactly what we said yesterday (see 
The Delaware River Basin Commission (DRBC), charged with overseeing potential impacts on the Delaware River and the various tributaries that feed it, has once again stepped outside of its legal bounds. The PennEast Pipeline is a $1 billion, 118-mile pipeline from Luzerne County, PA to Mercer County, NJ–part of it through the Delaware River Basin area. In 2014 the DRBC tried to tell PennEast and its sponsors that the pipeline will need their approval before it can be built (see 
Last week midstream giant Kinder Morgan announced they didn’t have enough demand lined up for their proposed $3.3 billion Northeast Energy Direct (NED) pipeline and so they will suspend any more work on the project (see 
Last week Seventy Seven Energy (SSE)–the old Chesapeake Oilfield Operating unit that was spun into its own company a few years ago–announced it would soon declare bankruptcy (see 
Radical environmentalists from groups like the Sierra Club, Chesapeake Climate Action Network and Earthjustice continue a full court press to try and stop Dominion’s Cove Point LNG (liquefied natural gas) export facility, currently under construction (more than a quarter done) along the coast of Maryland. These groups coordinate and collude to try and deny a single, legitimate business–Dominion–the right to conduct business. Sounds like something out of Stalin’s Russia or Hitler’s Germany–but no. It’s right here in the US of A. Here’s the radical’s strategy in a nutshell–throw as much feces against the wall as you can, and hope that some of it sticks. One pile of feces they’ve thrown is to file multiple lawsuits, in various courts (see