Energy Services

Energy Services | Industrywide Issues | Sand/Proppant | Seventy Seven Energy

Seventy Seven Energy Sells Frac Sand Subsidiary, Undisclosed Sum
December 29, 2015December 29, 2015

Seventy Seven Energy (SSE), an oilfield services company with major operations in the northeast, is the old Chesapeake Oilfield Operating division of Chesapeake–spun off into its own company on July 1, 2014 (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). Each quarter we report on the performance of this public company, and each quarter it’s the same story: red ink (see our stories here). In May of 2015 Seventy Seven sold one of its assets, a trucking operation, in an effort to raise money (see Seventy Seven Energy Sells Trucking Subsidiary for Undisclosed Sum). Also in May the company secured a $100 million loan to stay afloat (see Seventy Seven Energy Secures $100M Loan to Keep on Drillin’). We’ve just learned that a few days before Christmas Seventy Seven sold off a Wisconsin frac sand operation. Like the trucking sale earlier this year, terms of the deal were not disclosed. In fact, Seventy Seven hasn’t said anything about the sale–it was the buyer, Emerge Energy Services, who issued a press release about it…
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Beaver County | Belmont County | Energy Companies | Energy Services | Ethane | Industrywide Issues | Odebrecht | Ohio | Pennsylvania | Processing Plants | PTT Global | Shell | West Virginia | Wood County

Will 2016 be the Year *Somebody* Commits to Building a Cracker?
December 28, 2015December 28, 2015

Will somebody, somewhere PLEASE build the northeast an ethane cracker plant? Pretty please? We noticed a couple of stories that indicate 2016 is THE year that at least one company will likely pull the trigger on an FID–a Final Investment Decision to build an ethane cracker. But which company is likely to do it? Shell? PTT Global? Odebrecht? Leaving Odebrecht’s Parkersburg, WV proposed cracker aside for the moment (a project where we barely detect a pulse), both the Shell plant, planned for Beaver County, PA, and the PTT Global plant, planned for Belmont County, OH, have seen impressive signs of activity in 2015. Which of those two will likely say “yes” in 2016?…
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Crude Oil | Energy Services | Enterprise Products Partners | Exporting | Industrywide Issues

Enterprise Products First to Export Crude Post-Ban – Implications
December 28, 2015December 28, 2015

The very first shipment of crude oil from America’s shores to another country since the ban on crude exports was lifted two weeks ago in perhaps the worst national budget we’ve ever had (thanks to sell-out Republicans like House Speaker Paul Ryan), will happen the first week of January. Enterprise Products Partners, owner of the ATEX (Appalachia-to-Texas Express) natural gas liquids pipeline, will load 600,000 barrels of U.S. light sweet crude oil at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel and the ship will set sail in early January. How will oil exports affect the domestic (and international) oil industry?…
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Carlyle Group | Energy Companies | Energy Services | Hilcorp Energy

Hilcorp Forms $1.24B JV with Carlyle to Shop for Shale Deals
December 23, 2015December 23, 2015

Smart. Everyone knows the best time to buy something, whether it’s stocks, real estate, fuel oil, whatever–is when the market is crashing and burning. Always buy in a “down” market and sell in an “up” market. Natural gas and oil selling at current historic lows qualifies as a down market. It’s about as down as it gets! So it figures those companies who have kept their debt levels low and managed themselves well are now in the catbird seat and can go shopping for bargain basement deals–while their competitors sit on the sidelines hoping to stay out of bankruptcy court. Marcellus/Utica driller Hilcorp is one of those well managed/smart companies. Hilcorp has just joined forces with energy investment firm Carlyle in a partnership to go shopping for deals…
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Axiall | Energy Services | Ethane | Industrywide Issues | Processing Plants

Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?
December 23, 2015December 23, 2015

Two years ago Axiall Corporation, the former Georgia Gulf/PPG, announced a plan to build a $3 billion ethane cracker/petrochemical facility in Louisiana. The facility, as we noted at the time, will almost certainly use at least some ethane coming from the Marcellus/Utica region (see Axiall Announces New Cracker Plant for LA, Fed by NE Ethane). As we know only too well, making a “final investment decision” (FID) about whether or not to spend $3 billion of a company’s money (or more correctly go into debt and spend other people’s money), and take upward of 3-4 years to build a plant, is not something you just decide to do willy-nilly. It takes a looooooooooong time to get to that point. Shell announced a cracker for Pennsylvania back in 2012 and they still haven’t made an FID. It was certainly a good sign from Axiall when they announced a partnership with Lotte Chemical for their new Louisiana cracker project (see 4th World Class Marcellus/Utica Ethane Cracker…in Louisiana??). Lightening has struck! Last Friday Axiall and Lotte announced an FID has been reached and indeed they are moving forward. Horray! Of course it would be more exciting if that plant were located in PA, WV or OH rather than Lake Charles, LA (where they have enough crackers already). But we’ll take these victories when and where we can. The expected startup date is 2019…
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Anti-Drilling/Fossil Fuel | Energy Services | Exporting | Industrywide Issues | NEXUS Pipeline | Ohio | Pipelines | Statewide OH

CORN Questions Canadian Decision to Buy American NatGas via NEXUS
December 23, 2015December 23, 2015

On Monday MDN told you that the Ontario Energy Board (OEB) has cleared the way for the Canadian portion of the NEXUS Gas Transmission pipeline by approving two 15-year contracts to use the pipeline to deliver natural gas to the Dawn Hub (see Canada Approves Marc/Utica NEXUS Pipeline to Dawn Hub in Ontario). A group of anti-fossil fuel radicals who call themselves CORN (Coalition to Reroute NEXUS) has popped up to manufacture a controversy where none exists. Apparently one or two staffers at the OEB offered a dissenting opinion (as is often the case) for why the two contracts for the NEXUS should not be granted. Somehow those internal documents were leaked to the CORNballs (our name for members of CORN) who are now attempting to claim the OEB ignored the recommendation of its own staff and approved the contracts when (according to CORN) it should not have. We wonder if the CORNballs know that an average 7 billion cubic feet of natural gas flows from Canada to the United States every day, and that an average 1.5 Bcf/d flows from the U.S. to Canada every day? Do they know that gas has been going back and forth across our border with Canada for decades? Why do they oppose this particular pathway of trade with Canada, which would strengthen ties with our friends to the north?…
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Energy Companies | Energy Services | Rice Energy | Rice Midstream

Rice Energy Sells Part Ownership in Rice Midstream for $500M
December 22, 2015December 22, 2015

Rice Energy announced yesterday they’ve pocketed a cool $500 million from an unnamed energy investment company in return for an ownership stake in their subsidiary Rice Midstream. Rice Energy (the mother ship) will use $375 million of that new cash to pay off debts, and the other $125 million will get used for drilling new Marcellus and Utica Shale wells…
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Energy Services | Industrywide Issues | Lease & Royalty Payments | NEXUS Pipeline | Ohio | Pipelines | Statewide OH

Columbus Law Firm: How to Get the Best Pipeline Easement Deal
December 22, 2015December 22, 2015

Goldman & Braunstein is a Columbus, OH law firm that’s carved a niche out of representing landowners in eminent domain disputes with pipeline companies. Earlier this year the firm asked the Federal Energy Regulatory Commission to disallow Energy Transfer Partners’ use of eminent domain in building the ET Rover pipeline (see OH Law Firm Asks FERC to Stop ET Rover Pipeline Eminent Domain). Michael Braunstein and Bill Goldman are at it again. Last week they held a meeting in Huron County, OH to advise landowners who potentially face eminent domain action by the NEXUS Gas Transmission pipeline project. They offer some good counsel. But make no mistake–they’re there to drum up business. Goldman & Braunstein do not say landowners can block the pipeline from coming through their property. What they do say is that their firm can get landowners a better deal, and ensure pipeline installation is “put in properly” by using (yep) Goldman & Braunstein. The firm believes landowners should be paid “over $100 per foot” for any deal they do with NEXUS. That’s the highest per-foot price we’ve ever heard of when it comes to pipeline easements. If they can pull that off, more power to ’em!…
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Anti-Drilling/Fossil Fuel | Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Upshur County | West Virginia

Sierra Club Pressures WV County to Oppose Atlantic Coast Pipeline
December 22, 2015December 22, 2015

The Virginia Chapter of the Big Green (and very radical) Sierra Club is pressuring county commissioners in Upshur County, WV to support their effort to block the Atlantic Coast Pipeline. Atlantic Coast is a $5 billion, 564-mile natural gas pipeline from West Virginia through Virginia and into North Carolina. Dominion is the company building it. The strategy being employed by the radicals at the Sierra Club (and at other Big Green groups that should lose their non-profit status because the engage in political activities) is to try and force the Federal Energy Regulatory Commission to combine all of the pipelines being proposed into one, massive environmental impact review–hoping that by combining separate projects together it will trigger a decision to deny all of them. The problem is by law FERC cannot combine separate projects together. Not all of those projects will get built. And they run in different geographies. FERC’s mandate, under U.S. law, is to evaluate each project individually. But silly things like obeying the law never stops Big Green groups–they just keep right on community agitating…
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Energy Services | Industrywide Issues | NEXUS Pipeline | Pipelines | Regulation | Spectra Energy

Canada Approves Marc/Utica NEXUS Pipeline to Dawn Hub in Ontario
December 21, 2015December 21, 2015

Everybody always talks about the Henry Hub, which is the natural gas delivery point where more physical natural gas is bought and sold than any other single location in North America. However, do you know what the second largest physically traded gas hub in North America is? We just learned this interesting factoid ourselves. The #2 location for trading natural gas, after the Henry Hub, is the Dawn Hub in southwestern Ontario (Canada)–not far from the border of Michigan. The Dawn Hub is in the news because of the NEXUS Gas Transmission pipeline project. Last week the Ontario Energy Board approved applications from Union Gas Limited and Enbridge Gas Distribution to move gas along the NEXUS, once its built, to the Dawn Hub. In other words, Canada has just approved the Canadian portion of the NEXUS project. We’re glad Canada isn’t holding grudges against the U.S after the Obama Administration obtusely rejected the Keystone XL pipeline project, a Canadian pipeline coming through the U.S. Here’s the good news from Spectra Energy on Canada’s approval of NEXUS…
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Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics | Washington County

Judge Rules Yes, Mariner East Pipe IS a Public Utility After All
December 21, 2015December 21, 2015

In June we told you that Sunoco Logistics Partners had sued two different families/landowners in Washington County, PA using eminent domain to complete a pipeline part of the Mariner East project (see Mariner East Invokes Eminent Domain Against 2 SWPA Landowners). As we said at the time, nobody wins when it comes to using eminent domain for pipelines. In the case of the Mariner East pipeline, the ongoing legal question/issue has been whether or not the pipeline qualifies as a public utility with the right to invoke eminent domain. Last week a Washington County judge ruled that yes, Mariner East is a public utility and that the state of Pennsylvania controls permitting for the pipeline, not the Federal Energy Regulatory Commission (FERC). The Washington County landowners who sued have lost their appeal of the eminent domain case against Sunoco, and the pipeline will now cut through their property…
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Energy Services | Industrywide Issues | Ohio | Statewide OH | Supply Chain | Wood Group

Scottish Company Buys OH Construction Co for Utica/Marcellus Work
December 21, 2015December 21, 2015

Wood Group, a $7 billion energy services company headquartered in Aberdeen, Scotland, announced this morning they are purchasing Kelchner Inc., a privately-owned construction firm. Kelchner is located in Ohio and concentrates on providing civil engineering and construction services for midstream and upstream companies in the Marcellus/Utica. Terms of the deal were not disclosed, but Kelchner generated sales of $93 million last year and Wood just got done buying a similar company along the Texas Gulf Coast by the name of Infinity Group for $150 million. So it wouldn’t surprise us if they paid a similar amount for Kelchner…
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Chenango County | Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

NY Econ Dev Grant Signals Constitution Pipeline Approval Imminent
December 17, 2015December 17, 2015

Some very good news for supporters of the long-overdue Constitution Pipeline slated to run from Susquehanna County, PA to Schoharie County, NY. So far, New York has delayed granting stream-crossing permits for the project. We’ve advocated that it’s time for Williams and the Federal Energy Regulatory Commission to take NY to court (see Time to Force NY DEC to Issue Permit for Constitution Pipeline). In fact, a Dept. of Environmental Conservation (DEC) official has said the DEC is in danger of permanently losing control over issuing such permits if they don’t approve the Constitution’s request (see DEC Official Says NY in Danger of FERC Taking Over Pipeline Permits). The good news is that NY has approved funding for a project that will build a $1.5 million, 18-mile feeder pipeline from the Constitution Pipeline to a forklift manufacturing plant in Chenango County. After banning fracking and the multi-billion dollar economic bonanza it would have brought to upstate NY, Andrew Cuomo has stolen $2 billion from taxpayers statewide to fund “economic development” via something called Upstate Revitalization Initiative grants. There are four grants of $500 million. One of those grants was just made to the Southern Tier area, where fracking would have been the strongest had it been allowed. In other words, this is a bribe being paid to upstate voters. But we digress. Tucked into the $500 million “grant” (i.e. bribe) for the Southern Tier is $1.5 million to build a feeder pipeline from the Constitution Pipeline to Raymond Corporation in Greene, NY. Why approve $1.5 million for a feeder pipeline if you’re not going to approve the Constitution Pipeline itself? You wouldn’t–ergo the Constitution is about to get approved…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

DOJ Tells Halliburton/Baker Hughes “No Deal Yet” – What’s Next?
December 17, 2015December 17, 2015

As we told you yesterday, the Halliburton buyout of Baker Hughes continues to be in trouble due to regulators (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Regulators in Australia and Brazil are balking at the deal, and there’s grumbling in the European Untion. But that’s all inconsequential compared to the main obstacle–the U.S. Dept. of Justice (DOJ). Earlier this week Halliburton/BH announced the timing agreement to reach a deal with the DOJ will expire with no deal worked out with the feds. However, they will keep working on a deal with the DOJ–they haven’t given up. What it means is that the new marriage date, which had slipped from December 1st to “early 2016,” will now be April 30, 2016–more than a year after announcing their nuptials. That is, IF they can hammer out a deal that pleases the bureaucrats at the Obama DOJ. Here’s the statement from Halliburton/BH issued earlier this week…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Whispers Turning in Chorus, Halliburton/BH Deal in Trouble
December 16, 2015December 16, 2015

Just one week ago MDN alerted you to what were (then) whispers that the Halliburton buyout of Baker Hughes not be the done deal they portrayed it as (see Is the Halliburton Buyout of Baker Hughes in Trouble?). The whispers that there’s trouble in regulatory paradise around this deal are quickly becoming a chorus. Here are a couple of more articles, from reliable and respected news services, questioning whether or not the merger will happen…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter
December 15, 2015December 15, 2015

Magnum Hunter Resources (MHR) is a company in trouble. We won’t recount all of the signs (read our MHR articles here). One of the silver bullets that was supposed to help pull MHR’s bacon out of the fire was the sale of their midstream/pipeline subsidiary Eureka Hunter. On August 14 MHR CEO Gary Evans announced there were three potential buyers for Eureka Hunter and that a deal would net the company somewhere around $600-$700 million. Evans said a deal was imminent. That deal never materialized. In November the company refinanced some of its debt to keep going and stopped holding quarterly conference calls with investors (see Magnum Hunter Refinances Again, Dodges a Bullet…Just Barely). Also in November, MHR told the Securities and Exchange Commission that the company is likely headed for bankruptcy (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). However, one of MHR’s investors has stated he’ll sue to prevent them from filing for bankruptcy (see Magnum Hunter Investor: We’ll Sue to Stop Bankruptcy Filing). Yeah, it’s complicated. So when we saw a new press release from MHR, a press release about Eureka Hunter, we perked up. What does it say?…
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