Energy Services

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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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

How Much is Magnum Hunter & Eureka Hunter Worth Today?
December 15, 2015December 15, 2015

Valuing an oil and gas or midstream/pipeline company is probably as much art as it is science. In any real estate or land or business valuation, in fact in any kind of transaction where something is bought and sold, something is worth as much as someone is willing to pay for it. But we all need guidelines…rules of thumb…markers that help us determine how much value something has. The “thing” under consideration in this post is the value of both driller Magnum Hunter Resources, and its midstream subsidiary Eureka Hunter. A stock analyst writing on the Seeking Alpha website tackled that question and came up with some interesting numbers…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Looks Like a March 2016 Wedding for ETE & Williams
December 15, 2015December 15, 2015

In September Williams finally relented and accepted a buyout/merger offer from Energy Transfer Equity (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Deals like this one, with ETE paying $37.7 billion for Williams, take time to complete. There are lots of regulatory hoops to jump through. The two companies said in their original announcement they expect the deal will be done in “the first half of 2016.” Smart move on their part to not commit to a specific date too early. From an announcement issued yesterday, we now have a much better idea of the timing. The announcement says the two companies are complying with certain regulatory requests and that they won’t get hitched before March 18, 2016. Which means if all goes well in regulatory hell between now and then, we’ll have a March wedding…
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Duke Energy | Energy Services | Industrywide Issues | M&A

Piedmont Natural Gas CEO’s Pure Gold Parachute – $14.4M
December 15, 2015December 15, 2015

In October Duke Energy, the largest electric power holding company in the United States and a utility with 7.3 million customers in the southeast and Midwest, announced they had cut a deal to buy Piedmont Natural Gas for $4.9 billion in cash and the assumption of $1.8 billion in existing debt–for a total deal price of $6.7 billion (see Duke Energy Buys Piedmont NatGas for $6.7B, Marcellus Connection). Piedmont is a midstream and natgas LDC, or local distribution company/utility, with operations primarily in North Carolina, South Carolina and Tennessee. At least one person is going to make a boatload of money from the deal. Piedmont’s CEO Tom Skains will get a $14.4 million severance check when the deal goes through. Looks like the color of Skains’ parachute is pure gold…
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Energy Services | Industrywide Issues | Lebanon County | Pennsylvania | Pipelines | Williams

Township in Lebanon County, PA Welcomes Atlantic Sunrise Pipeline
December 14, 2015December 14, 2015

One township in Lebanon County, PA hasn’t caved to the very loud (and very small in number) anti-pipeline ninny nannies–and that has them spinning and sputtering. South Annville Township supervisors decided last Wednesday night that they would NOT pass a resolution expressing opposition to Williams’ Atlantic Sunrise pipeline. Why not? Because (a) its a meaningless gesture–FERC won’t consider it in their decision-making, and (b) there are a lot of people in the town who WANT the pipeline. So kudos to the supervisors of South Annville Twp for doing the right thing…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Anti-Pipeline Loons March on Concord Today – Play the Bagpipes!
December 11, 2015December 10, 2015

Break out the bagpipes! It’s time to get blasted and stumble down the streets of Concord, New Hampshire to show your love of Mother Earth and that you object to that evil, vile Northeast Energy Direct (NED) pipeline that will bring carbon-reducing, clean-burning, fracked natural gas to the Granite State. Protesters will assemble at the corner of Storrs and Theatre Street in Concord at 10:00 am this morning, and then stumble along for a half-mile while (no lie) bagpipers and drummers play. The goal–if they make it that far–is the State House where a bunch of “dignitaries” will deliver hate speeches against natural gas and pipelines and Big Oil and Gas and Satan and Donald Trump and whatever else they feel like railing against. Should be a real fun time…
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Energy Services | Industrywide Issues | Kinder Morgan | New York | Pipelines | Regulation | Schoharie County | Tennessee Gas Pipeline

TGP Gets FERC Pushback on Need for 2 NED Compressor Stations in NY
December 11, 2015December 10, 2015

Kinder Morgan and their Tennessee Gas Pipeline (TGP) subsidiary have gotten some pushback from the Federal Energy Regulatory Commission (FERC) over their planned Northeast Energy Direct pipeline plans in Schoharie County, NY. Kinder’s plans call for two different portions of the NED project–the Supply Path portion that comes from the gas fields of northeastern Pennsylvania to Schoharie County, and the Market Path portion that goes from Schoharie County into Massachusetts, New Hampshire, and back into Mass. near Boston. The two different pipelines in Schoharie will use two different compressor stations under Kinder’s existing plan. FERC wants to know why they cant’ be combined into a single compressor station to reduce footprint. FERC is giving Kinder 20 days to respond…
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Energy Companies | Energy Services | Repsol | Williams

Marcellus Companies Among Winners at Platts Global Energy Awards
December 11, 2015December 10, 2015

Publishing company Platts held their annual Global Energy Outlook Forum yesterday on Wednesday in New York City. MDN editor Jim Willis has gone for the past couple of years–but this year Platts uninvited media, including MDN, to attend. So unfortunately we have no news for you from the Forum. However, Platts holds an evening award ceremony each year, following the Forum. It’s called the Platts Global Energy Awards and Wednesday was the 17th running of the awards. Energy companies from seven countries won 18 awards. One company, a company with a growing presence in the Marcellus/Utica, stole the show by winning three awards. That company was Repsol, the Spanish oil giant with a love affair with American shale. Here’s a recap of the event, and the list of winners…
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Bradford County | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA | Williams

PA Atty General Sues Chesapeake Energy, Williams for Royalty Fraud
December 10, 2015December 10, 2015

Pennsylvania Attorney General Kathleen Kane, who has been indicted on numerous felony charges and likely to be forced from office any day now, filed a lawsuit yesterday against Chesapeake Energy in Bradford County Court over the issue of shorting landowners out of royalties. What every story we’ve seen (thus far) misses is this: The lawsuit also names Williams as participating in the scheme to defraud landowners out of royalty payments. So this is not just a Chesapeake story, it’s a Williams story too. Landowner groups are “hailing” the decision, jumping up and down with glee. Let us throw a little cold water on your face. Note to landowners and the groups that represent them: When you (metaphorically) crawl into bed with Kathleen Kane, you’re crawling into bed with a rattlesnake. Sooner or later she’s going to turn on you too. Mark it down. It’s in her nature. With that disclaimer in place, we’ll break down the news for you, and show you a copy of the lawsuit Kane’s office filed yesterday…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Is the Halliburton Buyout of Baker Hughes in Trouble?
December 9, 2015December 9, 2015

Is the Halliburton/Baker Hughes wedding in trouble? Last time we checked in (in September) both companies were holding garage sales to dump business units to comply with regulators’ concerns over anti-competitiveness (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). Halliburton is attempting to buy Baker Hughes in a deal worth $34.6 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). The shotgun wedding was supposed to happen by the end of this year, then got pushed into early next year. Halliburton has experienced a series of “headaches” with their proposed buyout of Baker Hughes. Now the headaches are, according to one source, turning into a migraine. Yesterday the country of Brazil lodged complaints and concerns over the proposed merger. Brazil’s opposition alone would not be enough to sink the deal–but Brazil’s opposition combined with opposition coming from other sources just may be enough…
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Dominion Energy | Electrical Generation | Energy Services | Industrywide Issues | Statewide VA | Virginia

Dominion’s Northern VA NatGas Electric Plant an Award Winner
December 9, 2015December 9, 2015

A natural gas-powered electric generating plant in northern Virginia that MDN told you about more than four years ago is now an award winner. In September 2011 MDN told you that Dominion would build a huge new electric plant, powered by Marcellus Shale gas (see Marcellus is “Game Changer” for New Electric Power Plants). The 1,329-megawatt Warren County Power Station entered into commercial operation on December 10th, 2014. The natural gas-fired power station, located just north of Front Royal, VA, can produce enough electricity to power about 325,000 homes at peak demand. The plant is among the cleanest fossil-fuel fired facilities in the nation, using three combustion turbines and a steam turbine. This clean-burning, environmentally-friendly FOSSIL FUEL PLANT was named Gas-Fired Project of the Year for 2015 by the editors at Power Engineering and Renewable Energy World magazines…
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Baker Hughes | Energy Services | Industrywide Issues | Research

Baker Hughes Nov. Rig Count Decline Slows; Marc/Utica Lose Just 2
December 8, 2015December 8, 2015

The number of active drilling rigs worldwide was down by just 2 rigs according to the November Baker Hughes rig count report. But active rigs in the U.S. fell by 31 month over month in the U.S. There were 791 active drilling rigs operating in the U.S. in October, and 760 rigs operating during the month of November. Ouch. What about active rigs in the Marcellus/Utica? Once again MDN brings you the exclusive chart for Marcellus/Utica rig counts over the past 12 months. This month’s chart is heartening. Although the count declined by another 2 rigs from October, the it appears like we may be hitting bottom with respect to the number of active rigs. Both rigs lost in November were from one state. Which one?…
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Belmont County | Energy Services | Ethane | FirstEnergy | Industrywide Issues | Ohio | Processing Plants | PTT Global

FirstEnergy Working Like Crazy to Clean Up Future OH Cracker Site
December 8, 2015December 8, 2015

In June FirstEnergy Corp. kind-of, sort-of confirmed that their now-closed R.E. Burger power plant site in Belmont County, OH would be the location for the future PTT Global Chemical ethane cracker plant (see FirstEnergy Confirms Their Site is Future Home of OH Cracker). FirstEnergy has gone from being cagey and reticent to admit theirs is the site that will be used, to frenetic activity/can’t get it cleaned up fast enough. They are hauling out old coal power plant equipment and working to turn the brownfield site into a greenfield site within a year–to have it ready to sell to PTT sometime in 2016. Here’s what they’re currently doing at the site to get it ready…
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Columbia Pipeline Group | Energy Services

Columbia Pipeline Sells 20M Shares More Than Forecast, Nets $1.4B
December 8, 2015December 8, 2015

Whoa, we didn’t see this one coming! It seems there’s a big appetite on the part of investors for midstream (i.e. pipeline) companies. MDN told you just last week that Columbia Pipeline Group was floating 51 million shares of new stock, with an option to add another 10 million shares–at a price of $17.50 per share (see Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M). We estimated if they sold the 51 million shares they were aiming to sell, they’d bring in $892.5 million. But what’s this? Columbia reports they actually sold 71.5 million shares, and after expenses, they brought in $1.4 billion!! What it means is that Columbia won’t have to borrow any money until 2017 at the earliest…
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