Energy Services

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    Washington Gas $126M Deal to Bring Marcellus Gas to DC Suburbs

    Washington Gas, a natural gas utility serving customers in Washington, DC, Maryland and Virginia, announced a deal last week to purchase Marcellus Shale natural gas directly from 22 producing wells in Pennsylvania to be used to sell to Washington Gas’ customers in Virginia. Yes, some of that cheap, abundant and wholesomely fracked Marcellus Shale gas will be going to the Washington, DC suburbs. The deal is with Energy Corporation of America (ECA) for $126 million and runs for 20 years. It is the first such deal under a new 2014 Virginia law that allows such investments. Here’s the details…
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    The Fight to Build the PennEast Pipeline: Arguments For & Against

    About a month ago MDN editor Jim Willis granted an interview with Kevin Mooney, on assignment writing for The Daily Signal, a publication of arguably the top conservative think tank in the country–the Heritage Foundation. Kevin wanted to talk about the PennEast Pipeline and the controversy surrounding what should be a straightforward and non-controversial project. These days anything to do with fossil fuels is being opposed by the likes of the Sierra Club and (in the case of the PennEast), regional anti-drilling groups like THE Delaware Riverkeeper–a group now being investigated by pro-drillers for possible violations of ethics laws in their dealings with the Delaware River Basin Commission. Kevin not only talked with MDN, he also spoke to Tom Shepstone of the always excellent Natural Gas Now, and Nicole Jacobs from the excellent Energy in Depth–both good friends of MDN’s Jim Willis. Kevin got the other side of the story too–from none other than Maya van Rossum, who is THE Delaware Riverkeeper herself (see Delaware Riverkeeper Gets a French Kiss from Phila. Inquirer). Kevin turns in a well-balanced and useful overview of the fight to build the PennEast. What are the arguments for it, and against it? We bring you Kevin’s article here…
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    Ohio Univ to Get New Natgas Pipeline from Columbia Gas This Year

    Here’s a fact: So-called “sustainable” forms of energy like solar, wind and geothermal cannot, by themselves, provide all of the electric needs for a huge university like Ohio University, situated on an 1,850 acre campus in Athens, OH. Right now OU uses coal to meet its electric generating needs. They want to replace it with natural gas. But get this, ninny nanny “environmentalists” don’t like that idea. They’d rather have OU continue to burn dirty coal rather than build a pipeline to the campus and have the campus change over to natural gas. Which perfectly illustrates another fact: “environmentalist” opposition to natural gas springs from a twisted ideology and irrational hatred of fossil fuels, rather than concern for the environment or concern for the air people breathe…
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    DOE Grants Cove Point LNG Final Approval, Earthjustice Sues

    Big-news.jpgWe have two big pieces of news to share with you today about the Cove Point, Maryland LNG export facility being built by Dominion. The first is that yesterday, after a years-long process, the Obama Dept. of Energy finally gave Dominion their final stamp of approval to build the facility. Last month we pointed out this last piece of the puzzle still had not fallen into place (see Cove Point LNG Plant STILL Waiting for Final DOE Approval?!). It now has. There is nothing else in the way to stop the project. Except, possibly, a lawsuit–which is the second big piece of news. On Wednesday we told you that the Federal Energy Regulatory Commission had finally, this week, responded to a request for a re-hearing on the facility demanded by anti-drilling groups. FERC declined (see FERC Says “No” to Anti’s Request for Cove Point LNG Re-hearing). As we explained on Wednesday, the groups needed an official response from FERC on a re-hearing before they could launch yet another frivolous lawsuit. As we predicted on Wednesday, they’ve now filed a frivolous lawsuit in another last-gasp attempt to stop the Cove Point export facility from becoming reality…
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    NY DEC Signals Support for Seneca Lake Propane Storage Project

    A little good news coming from New York State for a change. The state’s Dept. of Environmental Conservation (DEC) has “quietly” given its support to the Crestwood Midstream plan to use a depleted salt cavern along the shores of Seneca Lake to be used as a propane storage facility. We’ve written about this before–about the very safe plan to use it in this manner, and about protesters like Sandra Steingraber who seem to enjoy trips to the county jail for blocking the facility, repeatedly (see Steingraber, 2 Others Sent to Jail for Refusing to Pay Fine). In February an “issues conference” was held before an administrative law judge where testimony was given by both sides–Crestwood Midstream and anti-drillers. The anti-drilling side is being funded by the odious Earthjustice and National Resources Defense Council (NRDC). The DEC has sent a brief (full copy below) saying, in essence, (a) those against the project haven’t proven this facility would bring about environmental Armageddon, as they say it would, (b) some of the loonies opposing it don’t even have standing to oppose it, and (c) no more hearings are required. The only continuing reservation we have, and the reason we’re not celebrating just yet, is that the person who will make the ultimate decision is the head of the DEC, the anti-drilling Joe Martens, a man deeply in the pocket of Big Green…
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    Rice Energy Doubles Production 1Q15; Utica Flows; Ekes Out a Profit

    Rice Energy, a driller focused on the Marcellus and Utica Shale region, released their first quarter 2015 update yesterday. Counter to most others, Rice was actually able to eke out a gain of $152,000 for 1Q15 (most others, in fact we think all others, experienced a loss in 1Q15). Of course that’s down radically from 1Q14 when the company made $129.5 million! But still, they ended up on the positive side of the balance sheet. The big news was that Rice more than doubled their production in 1Q15 from a year ago–to an average 440 million cubic feet equivalent per day (Mmcfe/d). Unlike last year, this year 15% of Rice’s production came from the Utica Shale (last year it was 0%). Rice’s midstream division continues to experience strong growth as well–by volumes shipped and by revenue. Below we have Rice’s update yesterday, links to several stories analyzing Rice’s results, and a copy of the newest PowerPoint slide deck, used by Rice management on their earnings call with analysts…
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    DRBC Makes a Play to Slow/Block the Penn East Pipeline

    The Delaware River Basin Commission (DRBC), currently under investigation by pro-drilling groups for its collusion (possibly illegal) with groups like THE Delaware Riverkeeper, appears to be making a play to block the Penn East Pipeline. The Penn East Pipeline will be 114 miles of 36-inch diameter natural gas pipeline that will run from Luzerne County, PA to Mercer County, NJ–running through the DRBC’s “territory.” The DRBC has contacted the Federal Energy Regulatory Commission (FERC)–the only agency empowered to approve or not approve the project–declaring DRBC’s interest in being part of the process to approve it. How convenient that the DRBC is in bed with the virulent anti-drilling Delaware Riverkeeper–and the main focus of Riverkeeper right now is to stop the Penn East…
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    MarkWest 1Q15: Life is Good in the Marcellus/Utica Midstream

    MarkWest Energy is perhaps the biggest midstream player in the Marcellus/Utica region. Of course they have operations in other parts of the country too–but the northeast remains their primary focus. MarkWest issued their first quarter 2015 update yesterday. Below we’ve selected out a brief portion focusing on the northeast. Life is generally pretty good in the midstream, as evidenced by the new processing plants MarkWest has recently brought online in the northeast. However, if you look at MarkWest’s financials, you’ll notice that revenue for 1Q15 was down a bit from the same period in 2014 ($467 million in 1Q15 vs $512 million in 1Q14). That can almost certainly be chalked up to driller curtailing some of their production, waiting for prices to go higher once again. Below we have excerpts of the update, a portion of the analyst phone call with lots of talk about the Marcellus and Utica, and a copy of MarkWest’s latest PowerPoint presentation…
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    Summit Midstream – Update on Mountaineer, Floats Another 6.5M Units

    A couple of pieces of news today about Summit Midstream. Compared to midstream giants like MarkWest Energy, Williams and Access Midstream (now part of Williams, formerly Chesapeake Midstream), Summit has a pretty modest presence in the northeast. Their Mountaineer Midstream gathering system is 49 miles long, operating in Doddridge and Harrison counties in WV (see the map below). Last December Summit announced they’ve been hired by XTO Energy to build a new 115-mile pipeline gathering system in the Utica Shale in Belmont and Monroe counties in OH (see XTO Gets Serious in OH Utica, Hires Summit for Gathering System). The news today? Summit issued their first quarter 2015 update which includes a brief update on the Mountaineer Midstream system. They’ve also just floated another 6.5 million “units” (think shares of stock) looking to raise more cash–perhaps to help build the XTO project?…
    Read More “Summit Midstream – Update on Mountaineer, Floats Another 6.5M Units”

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    Crestwood Midstream – NGL Volumes Up Thanks to Marcellus/Utica

    Crestwood Midstream is a pipeline company with operations in several shale plays, including the Marcellus and Utica. They are, like Summit Midstream, another smaller but meaningful player in the northeast. Crestwood has 65 miles of natural gas gathering pipelines in Harrison and Doddridge counties in WV–along with eight compressor stations (see the map below). Another major initiative by the company is to convert a depleted salt cavern along the shore of Seneca Lake in New York into an underground storage facility for liquefied propane (see Crestwood Execs on Radio to Promote Propane Storage @ Seneca Lake). Like fracking in New York, so far that facility has been blocked by the efforts of anti-drillers (really fossil fuel haters). The state Dept. of Environmental Conservation recently held a hearing about the facility–but from what we can tell, the process to issue a permit remains stalled. At any rate, Crestwood issued their first quarter update yesterday and they report, among other good news, that natural gas liquids (NGL) volumes are higher in 1Q15 vs a year ago mainly due to an increase of NGLs flowing in the Marcellus/Utica…
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    Seventy Seven Energy 1Q15: Red Ink Continues to Flow Heavy

    red inkSeventy Seven Energy, 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). Yesterday the company released their first quarter 2015 results and said, in essence, “We told you it would be a bloodbath this year, and it is.” The red ink is flowing like the Mississippi at Seventy Seven. Revenues are down a slight 6% in 1Q15 from 1Q14, but down a larger 13% from 4Q14 (just last quarter). Looking at revenue and expenses, in 1Q14 Seventy Seven had a net loss of $18.6 million. In 1Q15 the net loss doubled to $37.6 million. Ouch. They plan to use a $100 million accordion line of credit to keep going. Was there any good news?…
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    FERC Says “No” to Anti’s Request for Cove Point LNG Re-hearing

    In December MDN told you about the latest strategy from the anti-fossil fuel nutters at Allegheny Defense Project and Wild Virginia–an attempt to get another hearing on Dominion’s Cove Point LNG export facility (see Anti Groups Ask FERC to Stop Construction on Cove Point LNG Plant). Before the two can file yet another frivolous lawsuit with the aim of tying up progress on the plant in legal knots, they must first apply for a “rehearing.” They did so and requested the Federal Energy Regulatory Commission (FERC) have Dominion stop work on the plant in the meantime. FERC said “no” to stopping construction, and “we’ll get back to you in our own good time” on the rehearing. Five plus months later (yesterday) FERC responded, and as we predicted, they handed Allegheny Defense Project and Wild Virginia a big, fat “no” to the rehearing request. You can bet the frivolous lawsuit will get filed within the next few days…
    Read More “FERC Says “No” to Anti’s Request for Cove Point LNG Re-hearing”

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    Patterson-UTI Active Rig Count Drops Again in April

    Patterson-UTI operates (leases out) drilling rigs for shale and conventional drilling. They are one of the biggest rig firms in the Marcellus/Utica. In March Patterson reported they had an average of 142 drilling rigs operating in the United States and four rigs in Canada. Patterson just released the April numbers and the bleeding continues. In April, Patterson had an average of 131 rigs operating in the U.S. and just two in Canada. Although it’s true that drillers are today more efficient than they were just a year or two ago, this continuing dramatic drop in rig counts has everyone wondering, “When will we hit the bottom?”…
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    Time for Pro-Drillers to Take Action on the Penn East Pipeline

    A shout-out to everyone in Pennsylvania and New Jersey who wants to pay less for natural gas and electricity. Nefarious groups like THE Delaware Riverkeeper, Sierra Clubbers and others have turned the volume button all the way up on their opposition to the Penn East Pipeline–a 114-mile, 36-inch diameter natural gas pipeline that will run from Luzerne County, PA to Mercer County, NJ. There is no coherent or logical reason to oppose this pipeline, but reason and logic aren’t the stock in trade for anti-fossil fuelers. They just hate all fossil fuels and will lie about projects like the Penn East in an attempt to support their twisted philosophy of ridding the world of fossil fuels (don’t get us started!). At any rate, it’s time for those of us who support clean burning Marcellus Shale gas to step up to the plate and do two simple things: (1) send a comment to FERC supporting the pipeline, (2) send a comment to your elected officials supporting it. We have details below for how you can do it…
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    EQT Floats IPO to Sell Off Some Ownership of Midstream Division

    Looks like the mad dash to raise cash has not yet ended. Major Marcellus driller and midstream company EQT announced yesterday they are, using a subsidiary company (EQT GP Holdings) floating an initial public offering of 20 million units (roughly equivalent to shares of stock). The new company, EQT GP, is a holding company that will invest the money it raises into EQT’s midstream operations. On paper EQT’s midstream operations are run by a different entity with the stock ticker symbol of EQM (EQT Midstream). It’s all under one roof, but split on paper for tax and high finance purposes. If you net it all out, it appears to us (warning: we are neophytes with this high finance stuff) that EQT is selling off some of the ownership of EQT Midstream without exactly saying so. How much does EQT hope to raise? They don’t say in the announcement (below). But EQM’s current stock price is running at $86.45 per share as of close of business yesterday. Let’s say EQT gets, oh, $70 per unit for this new IPO. That would be a huge $1.4 billion. What if they get just $50 per unit? That would be an even $1 billion. However you slice it, EQT is looking to raise some major cash by selling off ownership of EQM…
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    Williams Says Some Marcellus Drillers Shutting in Production

    Last week top management from midstream heavyweight Williams participated in an analyst call to discuss first quarter 2015 results and to talk about what to expect going forward in 2015. The one that that stands out about the call is that Williams is facing lower volumes of gas flowing through their pipelines in some areas of the Marcellus Shale because drillers are “curtailing” or shutting-in some of their wells to wait for natgas prices to go up. Sometimes drillers do that. They have a lot of expenses sunk into a well. If they believe the price will rise in the near or medium term, they sometimes throttle back and wait. How much are drillers shutting in? Williams figures it will be between 300-500 million cubic feet per day (Mmcf/d) of production…
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