Energy Services | Industrywide Issues | M&A | MarkWest Energy | Ohio | Pipelines | Statewide OH | Summit Midstream
Summit Midstream Sells Utica Pipeline Assets to MPLX for $625M
Summit Midstream Partners, LP, which owns midstream (pipeline) assets in a number of major plays across the country, including the Marcellus/Utica, announced on Friday the sale of the company’s Ohio Utica assets, including its Summit Midstream Utica, LLC subsidiary, which includes its approximately 36% interest in Ohio Gathering Company, approximately 38% interest in Ohio Condensate Company, and other wholly-owned Utica assets. The sale was made to a subsidiary of MPLX LP (i.e., MarkWest Energy) for $625 million in cash. Summit will no longer own Utica assets in Ohio, but the company WILL retain (for now) its Marcellus assets in West Virginia.
Read More “Summit Midstream Sells Utica Pipeline Assets to MPLX for $625M”
Diversified Energy (formerly Diversified Gas & Oil), with major assets in the Marcellus/Utica region (and other regions, too), owns approximately 8 million acres of leases with 67,000 (mostly) conventional oil and gas wells. The company’s business model is to buy lower-producing wells on the cheap and find ways to make them more productive. Last week, Diversified issued its fourth quarter and full-year 2023 update. Part of the update included an announcement that Diversified is acquiring financial partner Oaktree Capital Management’s interests in the companies’ JV assets in western Oklahoma, East Texas, and northwest Louisiana for a net purchase price of $386 million.
Over the past year or so, there has been merger mania in the upstream (drilling) sector. And it continues even now. According to major midstream (pipeline) companies speaking at last week’s CERAWeek event in Houston, TX, pipeline companies are next in line for merger mania. However, combinations in the midstream space will not follow the same path upstream has followed. There’s a big difference.
Is hydrogen energy a solution in search of a problem? That’s the question that keeps running through our heads. In a free market, customers buy products from companies that manufacture them. If a company is producing a product for which there is no demand, that company doesn’t stay in business long. According to a journalist at last week’s CERAWeek energy event in Houston, TX, one of the “hot topics” at the event was “hydrogen’s demand dilemma” — as in, the customers don’t exist to buy it.
Now we’re teaching our kids how to become eco-terrorists? In Ohio?? It seems the answer to that is YES. Ohio State University (OSU) has a geography class that teaches “the political economy of climate change and the political philosophy of climate justice.” One of the books to be used in the course is: “How to Blow Up a Pipeline.” Ring any bells? There was a movie released with the same title last year (see 
Last week, the Baker Hughes rig count dropped five rigs after adding seven the week before. The count went from 629 active rigs two weeks down to 624 last week. The national count is officially rangebound. Since last October, the national count has gone as low as 616 and as high as 629. And that’s it. No higher and no lower. The Marcellus/Utica cumulatively lost one rig (in Pennsylvania) last week and now runs 42 rigs. The number of gas rigs cumulatively across the country fell to its lowest number since January 2022.
The Pennsylvania Dept. of Environmental Protection (DEP) sent a letter to the Shell ethane cracker plant on Feb. 22 essentially saying, “You’re time is up.” The cracker plant facility has 120 days from Feb. 22 (until Jun. 21) to file for a federal Title V Operating Permit for air emissions. If the facility doesn’t at least file for the permit, it’s lights out until it does.
The New York State Energy Research and Development Authority (NYSERDA) is shopping for a public relations firm that can help the agency convince gullible New Yorkers that they’re better off paying more money for unreliable renewable energy than they are in using fossil fuels like natural gas. NYSERDA is offering $500,000 for a one-year contract to help the agency tout its wide-ranging push to phase out gas cars in favor of electric vehicles, dump gas-heated homes in favor of electric heat, and eliminate fossil-fuel power generation in favor of solar and wind. While they’re at it, maybe they can sell you a bridge in Brooklyn, too.
The problem-plagued Freeport LNG export plant continues to be mostly offline following an episode of cold temps in January. It seems like this facility has been out of commission more than it’s been in commission since it went online in 2019. A few days ago, Freeport announced that two of the three trains at its facility would remain out of service for testing and repairs through May. The plant has not operated at full capacity since late January following a deep freeze in Texas that caused problems in Train 3.
Finally, a little legal action to push back against Joe Biden’s “pause” on approving new LNG export applications. In January, Joementia announced he would “pause” any approvals for new LNG export plants (currently 17 requests in the pipeline) for at least one year while his people fart around pretending to figure out how to measure global warming as a new consideration for whether or not to approve projects (see 
Earlier this month, MDN told you that President Joementia Biden has nominated three new candidates to become Federal Energy Regulatory Commission (FERC) commissioners (see 
It’s full speed ahead for the radical anti-Marcellus Democrats in the Pennsylvania State Legislature. Last week, PA Gov. Josh Shapiro traveled to Scranton, PA, to do a dog-and-pony show announcing his personalized version of the Regional Greenhouse Gas Initiative (RGGI) carbon tax that would apply only to PA (see 
Honestly, we can’t heap enough praise on the excellent work done by Pennsylvania shale drillers. It is unreasonable to expect there will be absolutely zero problems when engaging in something as complex as drilling a mile straight down and then one to four miles horizontally underground. Nothing in life is error-free. NOTHING. There’s always a problem. There’s always a slight error somewhere. Yet in PA drilling, only 54 shale wells out of 14,412 drilled since 2004 have resulted in the shale well “communicating with” (interfering with or leaking methane to) nearby water wells, conventional wells, abandoned wells, or other shale wells. That’s 0.0037 of the time, or 3.7 wells for every 1,000 drilled. Converting that number to a percentage, it’s 0.37% (about one-third of a single percentage point). Rounding further, it’s 0% of the time.
Where do business dreams go to die? New York State, of course. Yesterday, the New York State Senate passed a bill to ban the use of carbon dioxide (CO2) in any process to extract natural gas or oil in the so-called Empire State. The NY Assembly (our state’s lower chamber) voted to approve the same bill a week ago (see 
Water use restrictions have finally been lifted at the Beaver Run Reservoir in Westmoreland County, PA (near Pittsburgh). The Municipal Authority of Westmoreland County (MAWC), which manages Beaver Run Reservoir, has issued a contract to CNX Resources allowing the company to buy up to 51 million gallons of water to use in fracking at nearby gas wells. CNX will pay $12,855 for every 1.5 million gallons of water it buys. If the company ends up buying the full 51 million gallons, it will pay the MAWC $437,000.