Energy Services

Access Midstream Partners | Energy Services | Industrywide Issues | M&A | MarkWest Energy | Williams

Former Access Midstream CEO Reappears – on MarkWest Board of Dir
May 19, 2015May 19, 2015

Last June, Williams announced the biggest midstream news of the year–a deal to buy Access Midstream (the old Chesapeake Midstream) and fold it into their own operation (see Big News: Williams Partners Buying Access Midstream for $6B). After clearing all of the regulatory and financial due diligence hurdles, the two companies officially merged on February 2nd (see It’s Official: Williams and Access Midstream Tie the Knot). But before they did, Mike Stice, the CEO of Access and the President and COO of Chesapeake Midstream before it was Access, left Access as of January 1st of this year (see Access Midstream CEO Replaced by COO Under Williams Ownership). We don’t know if Stice’s departure was amicable or not. Stice’s #2 man, Chief Operating Officer Robert Purgason, took over as the head of Williams’ new Access division. Mike Stice has turned up again–this time on the board of directors for Williams’ arch competitor MarkWest Energy…
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Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Regulation | Ritchie County | Wastewater | West Virginia

GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells
May 18, 2015May 18, 2015

A lot of news to report about GreenHunter Resources, the fresh water and wastewater subsidiary of Magnum Hunter Resources, focused totally on the Marcellus and Utica Shale region. On Friday GreenHunter released their first quarter 2015 update and held an earnings call with analysts. If we could sum it up in our own layman’s terms–we’d say GreenHunter is currently treading water (pun intended) as they wait to turn around their lack of revenue by bringing online a series of wastewater injection wells in both Ohio and West Virginia. Although GreenHunter’s COO Kirk Trosclair rightly pointed out the company has gotten much more efficient–driving down costs–there’s no papering over the fact that GreenHunter’s revenues for 1Q15 were down 39% from the same quarter in 2014 ($5.1 million in 1Q15 vs. $8.5 million in 1Q14). Which seems odd as GreenHunter’s CEO, Gary Evans, said that the company currently turns down 20 to 25,000 barrels a day of water that they can’t handle because they are currently “full.” GreenHunter currently has two operating injection wells at their Mills Hunter facility, located in Meigs County, OH and one injection well operating in Ritchie County, WV. By the end of June they plan to have six wells operating at the Mills facility and a second well at the Ritchie location…
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Energy Services | Industrywide Issues | New York | Pipelines | Statewide NY | Transco | Williams

With Williams Pipeline Completed, Fracked Shale Gas Flows to NYC
May 18, 2015May 18, 2015

More Marcellus Shale gas is now flowing to 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island thanks to the completion of the Williams Rockaway Delivery Lateral and Northeast Connector projects. The Rockaway project added 3.2 miles of new Transco pipeline off- and on-shore (and related facilities) in New York (see Williams Files with FERC for New Access Point to NYC from Transco Pipeline). The Northeast Connector project added new compressionion equipment at three existing Transco facilities in New Jersey and Pennsylvania (see Williams Happy with FERC Progress on NE Pipeline Expansions). The two projects fit hand-in-glove. The Northeast Connector now delivers 100,000 dekatherms (or 100 million cubic feet, Mmcf) per day to the Rockaway Delivery Lateral. The Rockaway Lateral is delivering 647,000 dekatherms (or 647 Mmcf) per day to NYC residents of abundant, cheap, clean-burning FRACKED (mostly) Marcellus Shale gas…
Read More “With Williams Pipeline Completed, Fracked Shale Gas Flows to NYC”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lebanon County | Pennsylvania | Pipelines | Regulation | Sunoco Logistics

Antis’ Zoning Appeal re Mariner East Pump Stn in Lebanon “Moot”
May 18, 2015May 18, 2015

Back in November MDN told you about anti-drillers in Lebanon County, PA who had succumbed to shiny object syndrome and transferred their irrational hatred of fossil fuels from the Williams Atlantic Sunrise pipeline project to the already-in-the-ground but getting repurposed Sunoco Logistics Mariner East pipeline (see New Target for Lebanon, PA Antis: Mariner East Pipeline). As part of converting Mariner East from an oil pipeline to flow natural gas liquids, including propane and ethane, from western PA to the Philadelphia area, some 31 pump and valve stations need to be constructed–one of them in West Cornwall in Lebanon County. Three local residents and an anti-drilling group called Concerned Citizens of Lebanon County filed an appeal with the zoning board to force the town to rescind permits they granted to allow the pump station (see Sunoco Presents on Mariner East Pump Station in Lebanon, PA). Last Thursday the West Cornwall Township Zoning Hearing Board declared “moot” that appeal. The anti-drillers are hopping mad…
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Commodity Price | Economic Impact | Energy Services | Industrywide Issues | Pennsylvania | Statewide PA | UGI Energy Services

SE PA Natgas Customers See Rates Drop 13.5% Thx to Marcellus
May 18, 2015May 18, 2015

Last winter in the northeast saw record-setting cold temperatures in many locations–particularly in Pennsylvania–and near-record demand for natural gas. That would normally mean the price of natural gas used to heat homes and power businesses would rise–significantly. Instead, if you’re among the 178,000 customers who live or work in one of 15 southeastern PA counties served by UGI Penn Natural Gas, your rates are about to go down–again. How much? By an average of 10.3% as of June 1st and another 3.2% on December 1st (total of 13.5% in 6 months). Why? Because UGI now sources ~90% of its natural gas from the cheap, abundant, clean-burning, homegrown, FRACKED Marcellus Shale. Even with record low temps and record high demand, your price just keeps dropping. UGI customers in other PA regions (northeast and central PA) are also seeing rates drop…
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Commodity Price | Energy Services | Industrywide Issues | Pennsylvania | Supply Chain | UGI Energy Services | Union County

Marcellus Shale Gas Road Show Visits Union County, PA
May 18, 2015May 18, 2015

Last Friday approximately 100 business leaders gathered in Lewisburg (Union County), PA for the “Think About Energy” briefing hosted by America’s Natural Gas Alliance (ANGA), UGI Utilities, Inc., UGI Energy Services and the Greater Susquehanna Valley Chamber of Commerce. The energy briefing is the seventh such briefing in a series being held throughout PA over the past year. The briefings focus on the supply outlook for natural gas and natural gas liquids, as well provide information on production, consumption trends, utilization opportunities and infrastructure developments. That is–the briefings help those who own or run businesses use and profit from the availability of cheap, abundant Marcellus Shale gas and figure out how to plug into the supply chain. Such sessions are not uncommon. What is uncommon about this session is it’s location–Union County–which is south of Lycoming County and east of Centre County. Union has not (yet) seen a single Marcellus Shale well drilled…
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Anti-Drilling/Fossil Fuel | Crestwood Midstream | Energy Services | Industrywide Issues | New York | Schuyler County

Josh Fox Among 21 Arrested at Crestwood Facility in Upstate NY
May 15, 2015May 15, 2015

Thank God we get some comic relief every now and again by the bizarre antics of anti-drillers. Covering the miracle of wholesome, safe and good hydraulic fracturing and the many benefits to society of natural gas is rewarding, but what makes it fun is to point out the hypocrisy and stupid behavior of those who oppose it. On Wednesday a group of mostly old upstate NY hippies staged yet another protest and illegally blocked the entrance of the future underground propane storage facility near Watkins Glen, NY owned and operated by Crestwood Midstream. Getting arrested in front of the Seneca Lake facility to gain media attention is a regular occurrence (see 10 Antis Arrested for Blocking Crestwood Facility at Seneca Lake and NY Protesters Arrested for Blocking NatGas Storage Facility). On Wednesday, the largest number of protesters illegally blocking the facility–a veritable mob–was arrested. There were 21 arrests in all. Among them was Gasland mockumentary maker and minor celebrity Josh Fox…
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Energy Services | Seventy Seven Energy

Seventy Seven Energy Secures $100M Loan to Keep on Drillin’
May 15, 2015May 15, 2015

As we told you last week, Seventy Seven Energy–an oilfield services company with major operations in the northeast, the old Chesapeake Oilfield Operating division of Chesapeake–spun off into its own company on July 1, 2014–continues to operate in the red (see Seventy Seven Energy 1Q15: Red Ink Continues to Flow Heavy). The company has just secured a $100 million loan which, according to CEO Jerry Winchester, “strengthens our liquidity” and “provides us a greater ability to take advantage of opportunities that may arise to enhance shareholder value.” In other words, it allows them to keep the doors open…
Read More “Seventy Seven Energy Secures $100M Loan to Keep on Drillin’”
CNG/LNG | Energy Services | Industrywide Issues | Pennsylvania | UGI Energy Services | Wyoming County (PA)

UGI Building LNG Plant in NEPA, Local Marcellus Gas to Feed It
May 15, 2015May 15, 2015

We think this is very cool, and forward looking. UGI Energy Services, a subsidiary of northeast PA utility giant UGI Corporation, announced yesterday they will spend $60 million to build a new LNG production plant in Wyoming County, PA (northeast part of the state). The facility will liquefy locally produced Marcellus Shale gas–with a capacity of up to 120,000 gallons of LNG per day. There will also be a storage facility on site. UGI says the market for LNG is rapidly growing. Not only do trucking fleets, like UPS, use it, but drillers use it to power rigs and industrial plants use it in locations where there are no natural gas pipelines. UGI sees a rosy future for LNG in northeast PA…
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Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | Statewide PA | Sunoco Logistics

West Goshen, PA Reversal: Votes to Approve Mariner East Pipeline
May 14, 2015May 14, 2015

One by one the remaining communities that were fighting Sunoco Logistics and the company’s plans to re-purpose the Mariner East pipeline to flow natural gas liquids is disappearing. Sunoco is working with communities individually to address their concerns and resolve the issue to the point that the company must be near to completing the Mariner East project. As evidence, it was only last fall that West Goshen Township (near Philadelphia) took Sunoco Logistics to court in an attempt to stop them (see West Goshen’s Legal Shenanigans Try to Block Mariner East Pipeline). Yesterday West Goshen officials voted to accept a settlement agreement with Sunoco Logistics. West Goshen didn’t get everything they wanted and Sunoco didn’t either. But the agreement is done and the pipeline, which is already in the ground in West Goshen, will receive some safety enhancements and become operational…
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Energy Services | Williams

Williams is Buying Out Williams Partners Subsidiary for $13.8B
May 14, 2015May 14, 2015

In the oil and gas industry, in both the upstream (drillers) and midstream (pipelines) sectors, companies often split themselves into several different companies on paper. It all has to do with taxes and getting as much money as possible to investors. High finance stuff. The trend lately, however, seems to be going in the reverse direction. Instead of creating subsidiaries on paper, midstream companies are recombining into one larger whole. It happened last November when the stockholders (or unit holders) for four Kinder Morgan companies voted to combine into one mothership company (see Shareholders Approve Kinder Morgan Plan to Merge 4 into 1). A couple of things were notable about that recombination: One thing is that Kinder Morgan is the largest midstream company in the U.S. The second thing is that its founder, Richard Kinder, is the man who pioneered the use of MLPs or Master Limited Partnerships as a way of bumping up profits for shareholders. He reversed himself and knit it all back together, on paper. What is perhaps the country’s second largest midstream company, Williams, is now doing the same thing. Yesterday Williams announced that it is buying out its subsidiary Williams Partners LP in a stock deal valued at $13.8 billion. That is, Williams is buying itself–or rather a piece of itself–and streamlining the corporate structure of the company…
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Energy Services | Industrywide Issues | Medina County | NEXUS Pipeline | Ohio | Pipelines

Medina, OH Landowner Says He’ll Meet NEXUS Surveyors Packing Heat
May 13, 2015May 13, 2015

Landowners in Medina County, OH received a letter from the NEXUS Pipeline a few weeks ago telling them that surveyors have the right to enter their property and conduct surveying–whether the landowner has granted permission or not. The letter said that landowners had until May 1 to sign a permission letter, and after that date surveyors would show up. A word of caution for NEXUS surveyors: York Township resident Walter Giebeler says he has a big gun collection with some nasty looking firearms and if surveyors show up on his property, the 80 year-old Giebeler is going to pay them a visit carrying several firearms as a means of threatening them…
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Blue Racer Midstream | Dominion Energy | Energy Services | Industrywide Issues | Ohio | Pipelines | Statewide OH

Dominion Says Their Pipelines Gather 80% of All Ohio Natural Gas
May 13, 2015May 13, 2015

The Guernsey County Energy Coalition heard from utility and midstream giant Dominion last week at their regular meeting in Cambridge, OH. Mack Smith Jr., Dominion’s manager of commercial gas services, had some fascinating things to say. One of them was this: “Dominion gathers about 80 percent of all Ohio gas and interconnects with seven major pipelines to distribute gas to markets, and to sell storage services to marketers and end users.” Did you know that Dominion gathers 80% of all Ohio natural gas? We sure didn’t! Here’s some more pickings from what Smith said last Thursday…
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CONE Midstream | CONSOL Energy | Energy Companies | Energy Services | Noble Energy

CONE Midstream Looking to Add Customers Beyond CONSOL & Noble
May 13, 2015May 13, 2015

In August 2014, CONSOL Energy and Noble Energy formed a midstream joint venture called CONE Midstream to connect their Marcellus and Utica wells (see CONSOL & Noble Energy Form New Marcellus Midstream Company). By February of this year, CONE had already flown by the 500 million cubic feet per day of of throughput (see CONE Midstream’s Strong Beginning, Hits 500 Mmcf/d 6 Mos Early). CONE issued their first quarter 2015 update on Monday. Management also held an earnings call and on that call upper management stated they are now looking to open up their pipelines to flow gas for other companies. CONE CEO John Lewis said so far CONE has two customers: CONSOL Energy and Noble Energy. Lewis said they’re looking at taking on new customers as well as looking at possibly buying other pipelines already in place to add to their network…
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Air Quality | Energy Companies | Energy Services | Industrywide Issues | Litigation | Lycoming County | National Fuel | Pennsylvania | Regulation | Seneca Resources

PA DEP Loses its ‘Common Sense’ in Seneca Air Pollution Ruling
May 13, 2015May 13, 2015

Every now and again the legal definition of “adjacent” and “contiguous” pops up in lawsuits in Pennsylvania related to natural gas drilling. Two years ago we highlighted the issue (see Should PA Compressor Plants Miles Away be Considered “Adjacent”?). The argument revolves around lumping together several potential air pollution sources, like compressor plants and even well pads and pipelines–into one, common, larger source of air pollution for the purposes of regulation. Smaller sources are regulated by the PA Dept. of Environmental Protection (DEP) and larger sources, over a certain threshold, by the federal Environmental Protection Agency (EPA), with much stricter and more expensive standards. The PA DEP, for whatever reason, has gone after Seneca Resources and its parent company National Fuel Gas Co. for their operations in Lycoming County, PA. Even though Seneca’s well pads, pipelines and compressor stations are miles apart, because they are all owned by one corporate entity, the DEP wants them all lumped together into one source for pollution regulation. Although the combined single source would not trigger EPA regulation, Seneca/National Fuel Gas is suing the DEP to push back, on principle. The case will get a hearing in court this week…
Read More “PA DEP Loses its ‘Common Sense’ in Seneca Air Pollution Ruling”
Energy Companies | Energy Services | EV Energy Partners | GASFRAC | Hydraulic Fracturing | Industrywide Issues | Ohio | Tuscarawas County

EVEP Reports Waterless Fracked OH Well is a Bust
May 12, 2015May 12, 2015

Reading through earnings calls transcripts (hey, somebody has to do it), we discovered what we believe no one else has (yet) discovered or reported. On an earnings call yesterday, top management from EV Energy Partners, one of the largest acreage holders in the Utica Shale, shared interesting initial results from the test Utica well they drilled in Tuscarawas County, OH–a well drilled using waterless fracking technology from GASFRAC (see Details on GASFRAC’s Waterless Frack Test in OH Utica). The theory being tested by EVEP is that using water during fracking of a well targeted for oil recovery somehow damages the chances of oil recovery. GASFRAC used a mix of 75% butane and 25% mineral oil to frack EVEP’s “Nettles” well. The results? On yesterday’s earnings call EVEP Chairman John Walker revealed that after 90 days in production, the Nettles well is producing about half the production of a similar nearby well fracked using water. That is–the waterless frack job was a big disappointment…
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