Energy Services

Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Golden Parachutes Pop Open for MarkWest Top Management/Board
December 7, 2015December 7, 2015

Last week MarkWest Energy Partners ceased to exist as an independent company (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). MarkWest “units” (equivalent to shares of stock) stopped trading on the New York Stock Exchange on Friday. The company became part of Marathon Petroleum. And when it did, high level executives at MarkWest, at least some of them, got new positions with Marathon. That is, according to the prediction of former MarkWest CEO and co-founder John Fox, MarkWest’s upper management and board members got golden parachutes (i.e. they personally benefited) from the sale of MarkWest. Here’s how they did…
Read More “Golden Parachutes Pop Open for MarkWest Top Management/Board”
Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy/Marathon Petroleum Exchanging Notes
December 7, 2015December 7, 2015

Remember exchanging notes in grade school? “Do you like me? [ ] Yes [ ] No” Exchanging notes in the corporate world is a little more complex than that–but it seems to us like it’s not far removed from exchanging notes in grade school. In the case of high finance and the MarkWest Energy/Marathon Petroleum merger deal, the notes getting exchanged have (big) financial value and implications. MarkWest/Marathon are exchanging old MarkWest IOUs (notes) for new Marathon notes. If it doesn’t get delayed, the exchange will happen on Dec. 18–just in time for Christmas. Will it be a Merry Christmas for existing MarkWest note holders? If you can figure it out, please let us know…
Read More “MarkWest Energy/Marathon Petroleum Exchanging Notes”
Energy Services | Marathon Petroleum | MarkWest Energy

Marathon/MarkWest Investor Day: 9 New Opportunities in Midstream
December 4, 2015December 4, 2015

Yesterday Marathon Petroleum, new owner of MarkWest Energy Partners, held an analyst and investor day at their Findlay, Ohio headquarters. During the meeting Marathon unveiled a $4.2 billion capital investment plan for 2016. Of that $4.2B, $1.2B will go to infrastructure projects for MarkWest, almost entirely in the Marcellus/Utica region. As part of the presentation Marathon/MarkWest detailed a list of nine potential investment opportunities that is pursued will cost between $6-$9 billion. Among those opportunities: building out pipeline infrastructure in the Rogersville Shale, and investing in “ethane cracker infrastructure.” Below is the press release issued by Marathon along with a copy of the investor presentation they used at the meeting (unfortunately we don’t yet have a transcript of the official presentation). We’ve indicated our favorite slides from the (extensive and long) presentation, slides we think you’ll find interesting too…
Read More “Marathon/MarkWest Investor Day: 9 New Opportunities in Midstream”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pipelines | Regulation

PennEast: The Long, Careful, Deliberate Road to Pipeline Approval
December 4, 2015December 4, 2015

The latest theme/meme being pedaled by groups like THE Delaware Riverkeeper (Maya van Rossum) and other anti-fossil fuel groups is that the Federal Energy Regulatory Commission (FERC) is just a big ole rubber stamp for Big Oil and Big Gas. FERC, they say, never met a pipeline project they didn’t approve. FERC is in the back pocket of the fossil fuel industry. Yada yada yada. Some of the crazier of the crazies took to attending open FERC meetings in Washington, DC and disrupting those meetings (see FERC Clears the Room at DC HQ After Riff Raff Start Mouthing Off). Once they were banned from attending, they began to illegally block entrance to the building (see 24 Anti-Drilling Protesters Arrested by Homeland Security in DC). FERC has been made a kindergartenish bogyman by those who oppose pipelines. To counter some of the nonsense pedaled by these groups (and their willing accomplices in the media), PennEast Pipeline recently published an article to set the record straight. FERC doesn’t simply rubber stamp a pipeline application like PennEast’s–a pipeline proposed to run from Wilkes-Barre, PA to Trenton, NJ. PennEast faces a “gauntlet of approvals”–including 11 federal, state and local agencies that must approve thousands of pages of plans, much of it stringent safety requirements. Approving a pipeline is an intense, detailed, and LONG process in which no stone is left unturned. There is no rubber stamp except in the childish minds of irrational anti-fossil fuelers…
Read More “PennEast: The Long, Careful, Deliberate Road to Pipeline Approval”
Energy Services | Patterson-UTI

Patterson-UTI Rig Count Hits New Low in November
December 4, 2015December 4, 2015

As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). The company has just issued their report for November, and once again the rig count went down. However, the company reports idling only one more rig in November over October–operating 91 rigs in November vs 92 in October. Is the slide in rig counts finally ending? About to turn around?…
Read More “Patterson-UTI Rig Count Hits New Low in November”
Electrical Generation | Energy Services | Industrywide Issues | Luzerne County | Pennsylvania | UGI Energy Services

NEPA Electric Plant Converted from Coal to NatGas a Huge Success
December 3, 2015December 3, 2015

As MDN has previously chronicled, Chicago-based Invenergy hopes to build what will be the largest (to date) electric generating plant in the state of Pennsylvania powered by natural gas. Invenergy hopes to build the 1300-megawatt plant in the borough of Jessup (Lackawanna County), near Scranton. But there’s been quite a bit of opposition, most of it from anti-fossil fuelers (see our Jessup power plant stories here). The folks in Jessup might want to cast their eyes on another project not far away, in Luzerne County, where a former coal-fired power plant was recently converted to burn natural gas. That plant, owned and operated by UGI, reduced sulfur dioxide emissions by 99%, and reduced nitrogen oxide emissions by 95%. That is, natgas-fired electric plants are one of the lowest polluting ways to generate electricity–and far more reliable than alternatives like solar and wind…
Read More “NEPA Electric Plant Converted from Coal to NatGas a Huge Success”
Columbia Pipeline Group | Energy Services

Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M
December 3, 2015December 3, 2015

Yesterday MDN told you that Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, announced a stock offering of 51 million shares (see Columbia Pipeline Group Floats 51M Shares of New Stock). We speculated if they got the then-current price of $19.03 per share, they’d haul in close to $1 billion in new revenue. Of course stock offerings like this almost never receive the existing/going price. We also said if they got $15 a share, that would net them $756 million. We now know, a day later, what they’re aiming for: $17.50 per share, which will bring in $892.5 million…
Read More “Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M”
Energy Services | GE Oil & Gas | Industrywide Issues | Orion Drilling | Supply Chain

GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs
December 3, 2015December 3, 2015

You may not think that computer software would have much to do with drilling holes in the ground and extracting natural gas and oil. But you would be wrong. If you ever visit a drilling rig and are fortunate enough to make a visit to “the dog house,” which is the equivalent of a jetliner cockpit where the rig is controlled by high-powered computers (and software), you’ll quickly understand how high-tech drilling has become. But it’s not just controlling a rig where computers are used in the oil and gas business–they’re used throughout the business. In fact there is software that, well, monitors other software. GE (nee General Electric) has a software offering that monitors drilling rigs and other equipment at drill sites. At least that’s how we understand it. GE issued a press release yesterday to tout the fact that GDS (Global Drilling Support) International is using GE’s “Equipment Insight” solution at rigs in both the Marcellus and Utica Shale in a six-month pilot program to squeeze ever more efficiency from the drilling process…
Read More “GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs”
Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy Investors/Unitholders Approve Merger with Marathon
December 2, 2015December 2, 2015

At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
Read More “MarkWest Energy Investors/Unitholders Approve Merger with Marathon”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines

Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout
December 2, 2015December 2, 2015

On Monday the largest pipeline company in the United States, Kinder Morgan, and their partner Brookfield Infrastructure Partners, announced a deal to buy out a third partner in the Natural Gas Pipeline Company of America (NGPL). When the deal is done, both Kinder Morgan and Brookfield will each own 50% of NGPL, although Kinder is the pipeline operator. NGPL, in case you haven’t heard of it, is a huge interstate pipeline system located in the Midwest and southwest. (See a copy of Kinder Morgan’s pipeline systems map below. The dark green lines represent NGPL.) So why is the NGPL buyout in the Midwest/southwest a Marcellus/Utica story? Because NGPL is currently building an expansion in the Chicago area, appropriately called the Chicago Market Expansion Project. That expansion will carry gas coming into the NGPL pipeline where it intersects with the Rockies Express (REX) pipeline in in Moultrie County, Illinois northward into the Chicago area. REX recently reversed its flow and now carries Marcellus/Utica gas to Moultrie—meaning more Marcellus/Utica gas will be flowing to the Chicago area starting in 2016 when the Expansion Project is put into service (see 1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1). A little over two months ago Kinder Morgan announced they would reverse the flow for part of NGPL and begin sending northeast gas south, to the Gulf Coast (see Marcellus/Utica Gas Heading to TX LNG Export Plant…in 2018), meaning gas arriving at Moultrie will not only go north, it eventually will go south too. So the NGPL purchase is very much about the Marcellus/Utica…
Read More “Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout”
Columbia Pipeline Group | Energy Services

Columbia Pipeline Group Floats 51M Shares of New Stock
December 2, 2015December 2, 2015

Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, was spun out into its own company in July from parent NiSource (see NiSource/Columbia Pipeline Divorce is Final). The new company has made a number of investments in major projects, including $1.2 billion worth of investments in pipelines for the northeast in 2015 (see Columbia Pipeline 2Q15: Investing $1.2B in NE Projects This Year). With prices plummeting and investments increasing, how does a company like Columbia get more money to keep operating and expanding? One way is to sell debt (bonds and IOUs). Another way, the preferred way in our book, is to sell equity, or stocks. Right on cue Columbia announced yesterday they are floating 51 million shares of new stock in an effort raise money. The company doesn’t say how much they want to raise, but if you do some simple math and multiply this morning’s share price of $19.03 by 51 million you get a whopping $970.5 million–nearly $1 billion! They likely won’t get a full $19.03 per share, but hey, if even if they only get $15 per share that’s still $765M big ones. Here’s the announcement offering new stock in Columbia Pipeline…
Read More “Columbia Pipeline Group Floats 51M Shares of New Stock”
Energy Services | Industrywide Issues | NEXUS Pipeline | Ohio | Pipelines | Spectra Energy | Statewide OH

Jimmy Stewart Makes the Case for NEXUS Gas Pipeline in Ohio
December 1, 2015December 1, 2015

Jimmy Stewart, president OGA

Jimmy Stewart (no, not that one, another one!) is the former Majority Leader of the Ohio Senate. After his days in the Senate, Stewart joined the Ohio Gas Association as its President. Perhaps feeling the need to push back against the steady drumbeat of negativity coming from anti-frackers who also oppose pipelines in the Buckeye State, Stewart wrote a powerful guest column for the Cleveland Plain Dealer to make the case for major new natural gas pipelines in general, and to make the case for Spectra Energy’s NEXUS Gas Transmission pipeline in particular. Here is that powerful column…
Read More “Jimmy Stewart Makes the Case for NEXUS Gas Pipeline in Ohio”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Susan Sarandon Supports Anti-Pipeline Movement in Massachusetts
November 25, 2015November 25, 2015

What do Hollywood celebrities do to boost a sagging career? Celebrities who were once “A” list but have sunk to “B” and “C” list status? Celebrities like Mark Ruffalo and Susan Sarandon found notoriety in supporting the anti-fracking movement. But the problem with “success” when it comes to anti-fracking (a la New York’s ban), is that once you’ve won, what do you do then? You see, antis like Ruffalo and Sarandon always need another bogyman–another “cause” to inject (a) notoriety, and (b) meaning into their otherwise meaningless lives. Like a junkie who needs another fix, these people need to be in the news, their face and name plastered everywhere, or they don’t think anyone “loves” them anymore. It’s a shame what depths they sink to, really. At least Sarandon has talent–Ruffalo has no talent. Sarandon (or more properly, her agent) has (surprise!) found a new cause to promote–time to prop up that sagging career. Sarandon has thrown in her lot with the crazies opposing the Kinder Morgan’s Northeast Energy Direct (NED) pipeline project–the massive $5 billion expansion of the Tennessee Gas Pipeline system from Pennsylvania into New York, Massachusetts, New Hampshire and back into Massachusetts where it will end near Boston. Sarandon recently issued a statement through the Mount Grace Land Conservation Trust, whose director, Leigh Youngblood, has been at the forefront of opposing any new pipelines in the Bay State…
Read More “Susan Sarandon Supports Anti-Pipeline Movement in Massachusetts”
CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Litigation | Maryland | Processing Plants | Statewide MD

Antis Try Last Desperate Ploy to Stop Cove Point LNG in Court
November 25, 2015November 25, 2015

Dominion is working fast and furiously on constructing the Cove Point LNG export facility in Maryland. In fact, it’s now half done (see Dominion 3Q15: Progress on Atlantic Coast Pipeline, Cove Point LNG). Even though the Federal Energy Regulatory Commission (FERC) gave its blessing on the project, and even though Dominion suffered through something like 70+ federal, state and local permits to begin building, irrational anti-fossil fuel haters are still opposing the project. We told you how some of the most extreme among them endangered fans at an NFL game recently (see Cove Point Protesters Disrupt Monday Night Football Game on TV). Now comes word that several groups of nutters, including Waterkeepers Chesapeake, Potomac Riverkeeper, Lower Susquehanna Riverkeeper and others have filed a “friend of the court” brief in a lawsuit that is trying to get the project stopped cold in its tracks…
Read More “Antis Try Last Desperate Ploy to Stop Cove Point LNG in Court”
Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

PTT Taps Swiss Company INEOS for OH Cracker Plant Technology
November 24, 2015November 24, 2015

Yet another piece of the Belmont County, OH ethane cracker falls into place–further indicating the project is likely to get built. It was only April of this year that MDN brought you the announcement that partners PTT Global Chemical (based in Thailand) and Marubeni Corporation (financial company based in Japan) were teaming up to potentially build a new $5.7 billion ethane cracker/petrochemical complex in Belmont County (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since that time, PTT hasn’t let any grass grow under its feet. Already PTT (and Marubeni) are spending $100 million with Bechtel Enterprises and Fluor Corporation to design the plant (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). PTT has also signed an option to buy the property where they plan to build the plant (see 300 Acres Next to FirstEnergy Site Part of Belmont Cracker Plan). All very good signs that this is indeed a serious project moving forward. And now, another piece of the puzzle falls into place. INEOS Technologies, a Swiss-based petrochemical technology company, announced they have been selected to provide a key piece of the technology for the new Belmont cracker plant…
Read More “PTT Taps Swiss Company INEOS for OH Cracker Plant Technology”
Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Both MarkWest Co-Founders Strongly Against Sale to Marathon
November 24, 2015November 24, 2015

There is a fevered battle going on to prevent Marathon Petroleum from consummating a deal to buy MarkWest Energy. Yesterday we told you that MarkWest was touting two more proxy advisory firms, in addition to a previously named advisory firm, have endorsed the deal (see War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale). We also told you that one of MarkWest’s two co-founders and a former CEO of the company, John Fox, is dead set against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). The other MarkWest co-founder, Brian O’Neill, has now come out against the sale as well…
Read More “Both MarkWest Co-Founders Strongly Against Sale to Marathon”