Energy Services

Blue Racer Midstream | Energy Services

Blue Racer Midstream CEO Says Utica Shale Better than Marcellus
July 31, 2015July 31, 2015

In April 2015, Stephen Arata, then Chief Financial Officer for Blue Racer Midstream, became the CEO of Blue Racer (see Blue Racer Midstream CFO Promoted over President to Become CEO). While Blue Racer operates in both the Utica and Marcellus Shale plays, it is the Utica that’s turned Mr. Arata’s head and is the focus of Blue Racer’s operations. In an article published in the July issue of The American Oil & Gas Reporter titled “Midstream Adjusts For Emerging Utica,” Mr. Arata makes this prediction about the Utica: “Arata predicts development of the Utica is about to take off. ‘The rock in the Utica is great,’ he enthuses. ‘The core of the rich part of the Utica is better than anything in the southwestern Pennsylvania Marcellus. People will be surprised how fast the Utica develops.'” Arata makes a number of boasts about Blue Racer, including the claim they are the only midstream company that can get “rich gas” out of Washington County, PA. Give this excellent article (with a number of Arata brags) a read…
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Carbon County | Electrical Generation | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Regulation

PennEast Changes Route Where it Crosses Appalachian Trail
July 31, 2015July 31, 2015

This story is cool on many levels. Score another PR victory, and another clever re-route, for the PennEast Pipeline. PennEast, you may recall, is a $1 billion, 110-mile, 36-inch diameter natural gas pipeline that will run from Luzerne County, PA to Mercer County, NJ. It is vigorously opposed by Big Green groups like the nutty Sierra Clubbers and THE Delaware Riverkeeper. Some who oppose it have threatened violence (see today’s companion story). Why? Because the PennEast will flow that evil, nasty fossil fuel called natural gas. Can’t have that, you know. PennEast has made a course correction that is sure to cut down on the time it requires to get approved. The course correction is where the PennEast will cross the Appalachian Trail in Carbon County, PA. The course correction also lets the PennEast deliver cheap Marcellus Shale gas to a new electric generating plant being built by the Blue Mountain Ski Resort…
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Alternative Energy | Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

New England’s Obdurate (and Foolish) Opposition to Pipelines
July 31, 2015July 31, 2015

Yet another example (not that you need it) that most folks who oppose pipelines, and shale drilling, and anything to do with shale energy–do so because they irrationally hate fossil fuels. This latest example comes from the land of liberal lunacy–Massachusetts. Leigh Youngblood, director of the Mount Grace Land Conservation Trust, community organized a protest rally preceding a Federal Energy Regulatory Commission (FERC) scoping session on Wednesday in Greenfield, MA. The FERC scoping session was to hear about potential environmental impacts from the proposed Tennessee Gas Pipeline interstate project known as Northeast Energy Direct, or NED. Youngblood, true to lib Dem form, believes that Massachusetts should dump dirty fossil fuels and instead concentrate their “superior” intellects on using so-called alternative energy sources. Renewable energy is the future, dontchya know…
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Energy Services | Industrywide Issues | Marathon Petroleum | NGLs

How Shale Gas May Change the Gasoline You Buy at the Pump
July 31, 2015July 31, 2015

Shale drilling may play an important role in the gasoline you purchase at the pump. No, not because compressed natural gas (CNG) will replace gasoline–that frankly isn’t happening any time soon. Other hydrocarbons come out of the ground along with methane–or what we call natural gas. Those other hydrocarbons are oil and NGLs–natural gas liquids. NGLs can be further separated into their component parts–ethane, pentane, propane and butane. It is butane that may play a role in the gasoline you buy at the pump. It all has to do with “alkylation.” Let us explain…
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Energy Services | Industrywide Issues | Pipelines | Tallgrass Energy

1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1
July 30, 2015July 30, 2015

Something really big is about to happen in the Marcellus/Utica region. Starting August 1, the Rockies Express Pipeline (REX), originally built from Colorado and Wyoming to Monroe County, OH to bring natural gas from west to east, will reverse the flow for a large and important section of the pipeline. On August 1, the section of REX from Monroe County, OH to Mexico, MO will reverse the flow and carry 1.8 billion cubic feet per day (Bcf/d) of Utica and Marcellus Shale gas to the Midwest, including to the greater Chicago area. This flow reversal has the power to a) increase prices northeast drillers receive for their natural gas, and b) lower the cost of natural gas for consumers (and industrial companies, and electric generating plants, etc.) in places like Chicago. It is a win/win scenario. It is so important, and will have such a profound affect on natgas prices in the Midwest, that our friends at NGI’s Daily Gas Price Index have created a “REX Tracker”–a free daily chart updating the price of natural gas along the REX’s Zone 3 section…
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Energy Services | Williams

Williams 2Q15: Revenues Up Thx to the Marcellus/Utica
July 30, 2015July 30, 2015

Yesterday both Williams Partners and parent company Williams released their second quarter 2015 financial and operational updates. For our purposes of focusing on the northeast, Williams Partners is the company to focus on. Overall Williams Partners’ EBITDA (earnings before interest, taxes, depreciation and amortization) was up a healthy 41%, from $717 million in 2Q14 to $1.0 billion in 2Q15. When you peal back the onion, you find that Williams’ northeast operations are largely the reason for the increase. The 2Q15 numbers include revenue from Williams’ purchase of Access Midstream and largely explain the bump up in revenue, although both the Atlantic-Gulf pipeline division and the Northeast Gathering & Processing divisions also saw big increases year over year. So the financial picture for Williams is rosy largely because of the Marcellus/Utica. The quarterly update does mention the “indecent proposal” by Energy Transfer Equity (but not by name) and says Williams continues to evaluate all options (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). Below is the Williams Partners 2Q15 update, along with a copy of the Williams quarterly “data book” with slides breaking down the particulars for each division…
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Energy Services | Seventy Seven Energy

Seventy Seven Energy 2Q15: Red Ink Continues to Flow Heavy
July 30, 2015July 30, 2015

Seventy 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 second quarter 2015 results. The red ink continues to flow like the Mississippi at Seventy Seven. While revenues were down 6% from 1Q14 to 1Q15, revenues tanked in the second quarter, down 46%. Looking at revenue and expenses, Seventy Seven’s net income (actually net loss) doubled from 1Q14 to 1Q15 (net loss of $37.6 million). In the second quarter, it got worse. They had a net loss from 2Q14 to 2Q15 of 444%, losing $74.7 million in 2Q15. Ouch. The company used a $100 million “accordion loan” to keep operating. Here’s the red news…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Wastewater

GreenHunter Brings 2 New Injection Wells Online in Meigs County, OH
July 28, 2015July 28, 2015

Big news for GreenHunter Resources: They finally have two more wastewater injection wells up and running at their Mills Hunter facility in Meigs County, OH. In May we reported that GreenHunter was hoping to have four new injection wells operating at the Mills Hunter facility by the end of June, for a total of six operating wells (see GreenHunter Resources 1Q15: Bets the Ranch on OH Injection Wells). However, Mills Hunter has just two new wells now operating, for a total of four, and it’s nearly August. GreenHunter’s COO Kirk Trosclair continues to express his frustration at delays from the Ohio Dept. of Natural Resources (ODNR), saying instead of taking 30-45 days for approvals (which is what it used to take), it’s now taking ODNR more than 90 days to issue approvals. GreenHunter has two more wells at the Mills Hunter facility working their way through the approval process now. But let’s not dwell on the negatives…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lancaster County | Pennsylvania | Pipelines | Williams

Antis Plan to Protest Pipeline Talk Tonight in Lancaster County
July 28, 2015July 28, 2015

A small group of anti-fossil fuel protesters plans to disrupt an information meeting being hosted by the Chamber of Commerce in Lancaster County tonight. The event will feature representatives from Williams discussing and sharing information about their planned $3 billion Atlantic Coast Pipeline project–a project largely embraced by the public but opposed by a few small pockets of dedicated protesters, one such group being Lancaster Against Pipelines. The Atlantic Coast project will flow Marcellus Shale gas to Mid-Atlantic and southern states. Most of the protesters are too cheap to buy a $25 ticket to the event, so they’ll stand outside and make fools of themselves by chanting and hollering at those who enter the meeting. We encourage a contingent of pro-drillers to show up and stand outside to show support for the project. It’s time to show everyone that supporters far outnumber detractors…
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Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics | Washington County

Mariner East Pipeline Uses Eminent Domain Against SWPA Landowners
July 28, 2015July 28, 2015

Confession: We have a tough time with eminent domain cases filed by pipeline companies. We believe property rights are sacrosanct–you don’t tell me what I can and can’t do with my property, and I don’t tell you what you can and can’t do with your property. But then zoning laws enter the picture. And statewide bans on fracking. Etc. What happens if all but a handful of landowners sign up to allow a pipeline? Should an entire project that when built results in a greater “good” for society get nixed because of half a dozen of holdout landowners? Tough tough issues. The latest skirmish comes from Washington County, PA where Sunoco Logistics has filed eminent domain cases against a handful of landowners who won’t allow new construction through their property for the Mariner East Pipeline project. Sunoco has taken them to court and seeks leases on a total of 11 acres…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline | UIL Holdings

UIL Invests $80M in Kinder Morgan’s Northeast Energy Direct Pipeline
July 28, 2015July 28, 2015

UIL Holdings, a Connecticut-based utility with 725,000 electric and natural gas customers in two states, is investing $80 million in Kinder Morgan’s Northeast Energy Direct (NED) natural gas pipeline project that will stretch from NY to near Boston, MA to bring cheap, abundant and clean-burning natural gas to New England. One of UIL’s subsidiary companies is Berkshire Gas Company, one of NED’s anchor shippers. Berkshire, you may recall, is at capacity now with respect to natural gas supplies they receive from Kinder’s Tennessee Gas Pipeline. Berkshire has put a moratorium on accepting any new hookups for natural gas in Franklin County, MA (see Guts: No New Pipeline in MA? Then No New Natgas for Utility Customers). You may also recall that UIL is the company that offered the City of Philadelphia the best deal it will ever get to sell the city-owned Philadelphia Gas Works utility, a deal ultimately scuttled by the Democrat-controlled–and profoundly corrupt–Philadelphia City Council (see Philly City Council Kills the Phila. Gas Works $1.86B Deal). UIL will get a 2.5% ownership stake in NED in return for it’s $80M investment…
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Coterra Energy (Cabot O&G) | Energy Companies | Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

Cabot Says Constitution Pipeline Construction to Begin this Fall
July 27, 2015July 27, 2015

Last Friday during the Cabot Oil & Gas quarterly earnings call update with analysts, Cabot’s CEO Dan Dinges provided an important update on the Constitution Pipeline, a 125-mile pipeline that will stretch from the gas fields of Susquehanna County, PA into New York, to Schoharie County. It is a critically needed pipeline to get Cabot’s natural gas in Susquehanna County to markets throughout the northeast and New England. Although Williams is the lead company building the pipeline, Cabot is the other primary partner in the project. Currently the Constitution is 100% FERC authorized and they have 100% of the rights of way leases signed for the project. The only hold-up is the New York State Dept. of Environmental Conservation in granting 401 Water Quality Certificates that allows the Constitution to lay pipe through and under swamps, creeks and other bodies of water. According to Dinges, they expect NY to issue those permits any day now…
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Energy Services | Industrywide Issues | Litigation | NEXUS Pipeline | Ohio | Pipelines | Statewide OH

Pipeline Case: OH Judge Finds Public Right to Free Flow of Energy
July 27, 2015July 27, 2015

There are a number of pipeline battles currently going on. While residents in New England tend to be more unreasonable than most when it comes to pipelines, landowners in other regions also oppose new pipeline construction. Some of their opposition stems from nutty opposition to fossil fuels. But some opposition is legitimate–concerns over where the pipeline will go through a property. Or concerns about lease terms/compensation. One thing that doesn’t hurt anyone is to allow a survey of a property. We would encourage landowners to begin their dialog about a potential pipeline with the surveyors–to make companies aware of your concerns about the routing of a pipeline across your land. But some holdout landowners unreasonably resist even a survey–and they’re consistently losing in Ohio courts. Specifically we’re talking about the NEXUS Gas Transmission pipeline–a $1.5-$2.0 billion natural gas pipeline that will carry Utica and Marcellus Shale gas spanning 11 counties in Ohio, 3 counties in Michigan, and eventually connect to the Dawn Energy Hub in Canada. We recently told you that in most cases when landowners refuse access to surveyors, they lose (see NEXUS Pipeline Sues for Survey Access, Wins Most of the Time). Below we have news of a court decision from Fulton County, OH in which the judge outlines his reasons for ruling in favor of NEXUS to allow surveys to commence on properties for 15 hold-out landowners. The judge’s ruling is instructive. In it, the judge says the general public has a “right” to expect a “free flow” of energy products…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream

EQT Midstream 2Q15: Lots of Pipeline Projects Still Coming
July 24, 2015July 24, 2015

While EQT Midstream numbers were included in today’s MDN story about EQT’s second quarter financial and operating results, the company also issued a second, separate update for EQT Midstream. We include a portion of that update below because it outlines the many pipeline projects the company is actively pursuing with their investment dollars. Those projects include building the new Allegheny Valley Connector; expanding existing gathering systems, including the Jupiter and Northern WV Marcellus Gathering systems; investment in the Ohio Valley Connector; investment in the Antero Resources east side expansion project; building the Mountain Valley Pipeline; and a new project announced yesterday–a new natural gas header pipeline for Range Resources (see today’s story on the Range announcement)…
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Energy Companies | Energy Services | EQT Corp | Equitrans/EQT Midstream | Industrywide Issues | Pennsylvania | Pipelines | Range Resources Corp | Statewide PA | Washington County

EQT Midstream Building $250 Million Pipeline – for Range Resources!
July 24, 2015July 24, 2015

In a show of “coopetition” or cooperative competition, EQT Midstream, a division of major Marcellus/Utica driller EQT Corporation, is going to build a $250 million, 32-mile “header pipeline” for arch-rival Range Resources in southwestern Pennsylvania to “support Range’s dry Marcellus and Utica development.” The new pipeline, which will be built in two phases in 2016 and 2017, will provide Range with more than half a billion cubic feet of natural capacity per day…
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Energy Services | Patterson-UTI

Tough Times: Patterson-UTI’s Net Income Drops 135% in 1 Year
July 24, 2015July 24, 2015

Not that we need it, but we have evidence of more tough times in the oilfield services business. We previously reported on tough times for Halliburton (see Tough Times: Halliburton’s Net Income Drops 93% in 1 Year) and Baker Hughes (see Tough Times: Baker Hughes Net Income Drops 153% in 1 Year). They are some of the largest oilfield services companies in the world–both operating in the Marcellus/Utica region. Patterson-UTI Energy is another Marcellus/Utica oilfield services firm, although much smaller than Halliburton and BH. Sometimes being smaller means being more maneuverable–fleet of foot–able to adapt quicker. Being smaller has not, however, shielded Patterson from the current downturn. Patterson reports revenue for 2Q14 (a year ago) was $757.3 million. Revenue for 2Q15 was $472.8 million–a drop of 38% year over year. When you add in expenses of all types, the picture is dismal: In 2Q14 Patterson’s net income was $54.3 million. In 2Q15 it was minus $19.0 million, or $19M in the hole–which is a 135% drop year over year. Patterson’s ratios similar to both Halliburton and BH…
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