Industrywide Issues

  • | | |

    Nova Scotia Goldboro LNG Buys Driller, Getting Gas from Canada

    For years we’ve had a Canadian LNG export project on our radar, bringing you news about the project, hoping that prodigious amounts of Marcellus/Utica gas would be used at the plant. The project is called the Goldboro LNG project, planned by Pieridae Energy for the coast of Nova Scotia. Two weeks ago we told you that $3 billion of German money will be used to propel the $10 billion project to begin (see With $3B from Germany, Canadian Goldboro LNG Looks Like Done Deal). While it looks like the project will happen, alas, it will happen without liquefying Marcellus/Utica molecules. Last Friday Pieridae announced it is purchasing Canadian driller Ikkuma Resources Corp. Ikkuma has major acreage and producing wells (both conventional and shale) in Western Canada, mostly Alberta. With TransCanada Pipeline’s new lowball shipping charges (see TransCanada Pipe Begins Lowball Shipping to Compete with Marc/Utica), Pieridae will be able to ship its own gas to Nova Scotia, liquefy it, and sell it. We’re disappointed, but we certainly understand. You can’t build a multi-billion dollar LNG plant on the *hope* that US politicians in New York and New England will suddenly get their heads right and allow pipelines to flow cheap Marcellus gas north into Nova Scotia. We get it. It’s just a shame–because our gas is more than thousand miles closer to the Goldboro plant, cheaper to ship–IF the pipelines were in place to do so. Because of anti-fossil fuel freaks in New England, that’s not the case. Pieridae wants to get going and can’t wait forever. They’ve purchased their own reliable supplies, and with TransCanada’s low-ball shipping from west-to-east, Pieridae is pulling the trigger. The FID will happen soon, and Pieridae will be totally self-sufficient. Good for them. Bad for us…
    Read More “Nova Scotia Goldboro LNG Buys Driller, Getting Gas from Canada”

  • | | | |

    Rex Energy Sells Itself to PennEnergy Resources for $600M

    Rex Energy, one of our favorite small drillers, has finally found a buyer for its Marcellus/Utica assets. And it’s a good home. After scheduling and rescheduling a bankruptcy auction four times in a single week, Rex canceled the auction and said it has cut a deal with PennEnergy Resources to buy the company–for $600.5 million. You may recall that Rex, heading into bankruptcy in May, owed nearly $1 billion to several creditors (see Rex Energy Owes Nearly $1B – Who They Owe & How Much). If the deal is for $600.5 million, somebody’s not going to get paid everything they’re owed. But then, that’s the nature of bankruptcy court–to decide who gets what and how much. The deal Rex/PennEnergy is subject to approval by the bankruptcy court, but we expect it will get approved. Part of the deal calls for PennEnergy to pay $1 million to Rex landowners who had sued the company claiming Rex didn’t pay them royalties. We think PennEnergy will be a good home for the Rex assets. PennEnergy launched in 2011, founded by two former Atlas Energy executives–Rich Weber and Greg Muse. The company is backed by EnCap Investments and now has 70 employees. No word on how many of Rex’s employees will come along with the deal. Rex’s acreage sits close to PennEnergy’s, hence the interest. Below the details as we have them, including Rex’s SEC filing outlining the deal…
    Read More “Rex Energy Sells Itself to PennEnergy Resources for $600M”

  • | | |

    Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18

    Somebody must have lit a fire under the Ohio Dept. of Natural Resources (ODNR). The ODNR issued first quarter 2018 production numbers for shale oil and gas production a little over a month ago, in July (see Top 25 Producing Gas & Oil Wells in Ohio Utica for 1Q18). Which does seem a bit late. Yesterday ODNR made up for it by issuing production numbers for 2Q18. Natural gas production was up an astounding 42% over the same period last year (after being up 43% in 1Q18). Utica natgas production broke record, hitting a new all-time high of 554.3 billion cubic feet (Bcf) in 2Q18. Unlike 1Q18 when Utica oil production was down 3.6%, in 2Q18 Utica oil production was up, a big 11%! Ohio’s oil production has seesawed up and down over the past few years. Once again Ascent Resources, founded by the late Aubrey McClendon, dominated the top 25 highest-producing gas wells, with 18 of the top 25. Eclipse Resources grabbed a majority of the top 25 most-producing oil wells, with 12 of 25 wells on the list. The top 6 oil wells were all Eclipse wells, all located in Guernsey County. Below we have the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference. We show you which wells are not just producing the most quantity overall, but which wells are producing at the fastest (most productive) rates–even if those wells haven’t yet been online a full three months. We also include a link to the complete list (Google spreadsheet) of 2,035 wells included in the 2Q18 ODNR report, in a more useful format than that provided by ODNR…
    Read More “Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18”

  • | | | | | |

    Local Leaders Get Ready for Belmont County, OH Cracker Plant

    It sure feels like PTT Global Chemical, the Thailand-based petrochemical giant that says it wants to build an ethane cracker in Belmont County, OH, is getting close to making a positive final investment decision (FID). On Monday we told you that an Ohio State Representative, Andy Thompson, said such a decision will be forthcoming in “a month or so” (see PTT Decision on Ohio Cracker Announced in Next “Month or So”). We have more evidence of an impending decision. Recently two dozen local county officials, from both sides of the Ohio River, went on a field trip to Beaver County where Shell is building their $6 billion ethane cracker. The officials wanted to see, first-hand, how the project is impacting the local area. They got eyes- and earsful. They came back jazzed. Here’s our point: A horde of local officials doesn’t traipse around the countryside wasting time unless they are convinced the project is going to happen. From the language this group of officials is using, and their overall demeanor, we’d say the PTT Belmont cracker is a happening project…
    Read More “Local Leaders Get Ready for Belmont County, OH Cracker Plant”

  • | | | | | | |

    FERC Approves Mountaineer XPress Pipe Rate Increase

    We spotted a story that contains information we don’t fully understand. Columbia Gas Transmission is currently building the Mountaineer XPress Pipeline, a $2 billion, 170-mile pipeline that will flow 2.7 billion cubic feet (Bcf) per day of natural gas from existing and future points of receipt along or near the Columbia pipeline system–most of it located in West Virginia (see Details on Columbia Pipeline Mountaineer XPress Pipeline Project). At 2.7 Bcf/d, Mountaineer XPress is the second largest (by volume) new pipeline project for the Marcellus/Utica region–second only to Rover’s 3.25 Bcf/d pipeline. It is a big and important project. When Columbia (aka TransCanada) filed the original application, approved by the Federal Energy Regulatory Commission, they sought permission to charge $9.827 per dekatherm (one dekatherm is equivalent to one thousand cubic feet, or 1 Mcf) to flow gas along the pipeline. Put another way, shippers without a contract who want to ship along the pipeline will pay $9.83/Mcf to ship gas. Since gas typically fetches less than $3/Mcf, how can you make any money? That’s what we can’t figure out. Perhaps one of our sharp MDN readers can enlighten us? MDN Note: We have THE BEST readers! Dmitry Brown, a Senior Analyst with UGI Energy Services, wrote to clear up our confusion. The prices are per month, not per day. Shippers on MXP were expecting to pay $9.827/Mcf/month, or $ 0.32/Mcf/day. Columbia recently filed a request with FERC to increase the charge from $9.83/Mcf to a whopping $14.66/Mcf! The reason, according to Columbia, is that project costs have ballooned from $2 billion to $3 billion, “related to contractor labor costs, inspection costs, and outside services costs that substantially exceeded the contingency established for such charges.” Last Friday FERC approved the 49% increase. Now shippers will have to pay $14.663/Mcf/month, or $0.48/Mcf/day. Quite an increase…
    Read More “FERC Approves Mountaineer XPress Pipe Rate Increase”

  • | | | |

    Eclipse’s Top Brass Not Sticking Around After Blue Ridge Merger

    MDN brought you the big news yesterday that Eclipse Resources is merging with Blue Ridge Mountain Resources (see Eclipse Resources Merging with Former Magnum Hunter). We noted that nowhere in the announcement and paperwork we read that Eclipse co-founder and CEO Ben Hulburt would be staying with the newly merged company. We now have confirmation that Hulburt is leaving when the deal closes. We also have confirmation that pretty much all of Eclipse’s top brass is leaving–except for Oleg Tolmachev, who will become the senior vice president and COO of the newly merged company. In addition to Hulburt’s departure, Eclipse executive VP/general counsel Christopher Hulburt is leaving, and executive VP/CFO Matthew DeNezza will also exit stage right. All three are being paid more than $1 million (Ben Hulburt more than $3 million) to leave…
    Read More “Eclipse’s Top Brass Not Sticking Around After Blue Ridge Merger”

  • | | | |

    Eclipse Resources Merging with Former Magnum Hunter

    Blue Ridge/Eclipse combined acreage location – click for larger version

    Some big news breaking from yesterday: After months of teasing by Eclipse Resources that it’s working on selling itself–it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres–focused 100% on the Marcellus/Utica. Eclipse is renown for having drilled the world’s longest onshore lateral wells. Why do we say Blue Ridge is buying Eclipse when the announcement talks about a merger and on paper Blue Ridge will become a subsidiary of Eclipse? Because Eclipse is doing a 15 to 1 reverse stock split (combining shares to boost the per share value) and Eclipse CEO Ben Hulburt is nowhere to be found in the management structure of the newly combined company. Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev–the guy who figures out how to drill those super-long laterals–will become Executive Vice President and COO of the combined company. No word yet on which name (or new name) they will use for the newly merged company…
    Read More “Eclipse Resources Merging with Former Magnum Hunter”

  • | | | | | |

    Atlantic Sunrise Pipeline Slightly Delayed, Ready by Sept 10

    In July MDN told you that Williams said their $3 billion Atlantic Sunrise Pipeline that runs through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County will go online in August (see Williams: Atlantic Sunrise Pipeline Going Online in August). At the time, we said this: “We have no reason to doubt Williams. After all, if they make an announcement like that and then don’t live up to it, there will be PR hell to pay.” Oops. Looks like it’s time for Williams to pay PR hell. Last Friday Williams filed an official request with the Federal Energy Regulatory Commission (FERC) to begin flowing gas along the rest of Atlantic Sunrise beginning Sept. 10. Yeah, it’s only 10 days late, and perhaps close enough that we can forgive them. It is exciting! We’ve waited years to announce the beginning of Atlantic Sunrise flows–amidst protests from nuns, kooks and quacks. Most of the time we think of Atlantic Sunrise as the new greenfield pipeline that cuts through 10 northeastern PA counties, traveling from Susquehanna County to Lancaster County. But that part of the project, called the  Central Penn Line, is only part of the project. Other parts of the larger Atlantic Sunrise project were actually up and running a year ago around this time (see Williams Atlantic Sunrise Project to Begin Partial Service on Sept 1). What will happen Sept. 10 is the completion of those parts of the project not yet online, including the Central Penn Line…
    Read More “Atlantic Sunrise Pipeline Slightly Delayed, Ready by Sept 10”

  • | | | | | | | |

    Sen. Pat Toomey Claims Trump Tariffs Will Delay Shell Cracker

    US Sen. Pat Toomey

    Pennsylvania’s U.S. Senator Pat Toomey is a DC swamp dweller–let’s just be honest about it. He’s a Republican, largely in name only. He’s better than a Democrat–but not by much. Toomey is claiming that President Trump’s attempt to stop the flow of foreign steel dumping in our markets by using tariffs (dumping which hurts our own steel industry and isn’t anywhere close to being fair or free trade), will delay incoming material for the Shell ethane cracker plant in Beaver County and result in the layoff of “hundreds” of workers. A Shell spokesman neither confirms nor denies Toomey’s claims but uses doublespeak to sidestep the issue–meaning Shell likely asked Toomey to be the front guy in shaming the Trump Administration into granting waivers so they can get their cheap, imported steel. Toomey has been an early and repeat critic of Trump. Toomey opposed Trump’s tariffs from the beginning and is currently trying to get a new law passed stripping the President of his constitutional power to impose tariffs…
    Read More “Sen. Pat Toomey Claims Trump Tariffs Will Delay Shell Cracker”

  • | |

    Marcellus Gas Heads to Florida Electric Power Plants

    Sabal Trail Pipeline route – click for larger version

    Do you know which of our 50 states (57 states if you’re Obama) generates the most electricity? It’s Texas! How about the state that generates the second highest amount of electricity? That would be Florida. California, our most populous state (maybe not anymore now that it’s run by lib Dems) is not in the top 2 for electric generation. Over the past few years, Florida has been dumping coal generating plants and instead building new natural gas-fired electric generating plants. Traditionally Florida has sourced its natgas from the Gulf Coast, but increasingly they now get their natural gas from–yep–the Marcellus/Utica. Say what? That’s right! How does our gas get all the way to Florida? Pipelines, of course. Specifically, Williams flows our gas south along the mighty Transco Pipeline. Marcellus gas volumes along the Transco are about to increase dramatically as the Atlantic Sunrise project comes online (see today’s story about the rest of Atlantic Sunrise going online Sept. 10). Our gas flows south on Transco to a point in Alabama where Transco connects with the Sabal Trail Pipeline–and Sabal Trail goes all the way to the Orlando area. RBN Energy does a deep dive into how our gas gets to Florida in a 2-part series. Below is part one…
    Read More “Marcellus Gas Heads to Florida Electric Power Plants”

  • | | |

    China Official Says $83.7B Deal with WV Still On, Some Progress

    Some encouraging words, but also some outright lies, coming from Ling Wen, president of China Energy Investment about China’s planned investment in West Virginia. Wen addressed reporters yesterday in Hong Kong, and some of the conversation turned to China Energy Investment’s 20-year deal to invest $83.7 billion in WV’s shale and petrochemical industries (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). Months ago we speculated that the impending trade war with China might put that investment on hold, a fear that was confirmed in June. Chinese officials were supposed to attend the Northeast U.S. Petrochemical Construction Conference in Pittsburgh to announce the first round of investments in WV. However, Brian Anderson, director of the West Virginia University Energy Institute, said given the trade war with China, the officials elected to stay home instead. Anderson said at that time, “The pending trade war has put this project in jeopardy” (see Trade War Puts $83.7 Billion Chinese Investment in WV on Hold). But a few weeks later Anderson changed his tune. He told a reporter, “In terms of the development process, we continue to move forward…We’re even working on the next potential visits by officials and team members, so it’s not just the high-level executives, but development teams” (see $83.7B Chinese Investment in WV Shale & Petchem Still Alive?). Yesterday Ling Wen said even though there is an ongoing trade war between China and the U.S., the WV deal is still on. That’s good news. Wen also said that media reports that China cancelled trips “was not true.” That’s an outright lie. They did cancel trips in June…
    Read More “China Official Says $83.7B Deal with WV Still On, Some Progress”

  • | | | |

    Fake Study Recommends Quarter-Mile Setbacks for PA Shale Drilling

    More fake “research” on drilling, courtesy the anti-drilling Southwest Pennsylvania Environmental Health Project (EHP). This is the same group of antis who brought us the so-called list of the harmed (in 2013) and last year launched a faux health registry that attempts to link everything from the sniffles to “performance issues” to nearby fracking (see Fake Science: SWPA Enviro Health Registry for Those Near Fracking). Here’s the latest laughable “research” published (yes published) in a pay-for-play journal: Setback distances for unconventional oil and gas development: Delphi study results. The so-called researchers from EHP asked 18 of their anti-drilling friends, who are supposedly experts, for an opinion on how far away a building should be located from a shale well. The current standard in PA is 500 feet. That is, a well being drilled must be at least 500 feet away from an “occupied building.” EHP’s anti-drilling friends (16 of the 18) said that number should be 1,320 feet–a quarter mile. EHP wrote it all up, presenting it as fact, and got it published in the very low-standard PLOS One journal–a journal where you pay them and they’ll publish anything. Totally made-up research. PLOS One is “peer reviewed” so voila, there’s now a “peer reviewed study” that says setbacks in PA should be at least a quarter of a mile away when it comes to shale drilling. Which would eliminate about 90% of all shale drilling in the state (which is the purpose of this “study”). We really don’t know how those from EHP can show their faces in public, pedaling this kind of junk science. More to the point, how can any honest, self-respecting organization spend good money to fund EHP?…
    Read More “Fake Study Recommends Quarter-Mile Setbacks for PA Shale Drilling”

  • | | | | | | | | | | | | |

    FERC Finally Approves 2 Key Rover Pipeline Laterals, Sept 1 Start

    The Federal Energy Regulatory Commission (FERC) game of hardball with Energy Transfer over the Rover Pipeline has finally paid off. For months FERC has refused to allow four Rover laterals–feeder pipelines to shuttle gas from where it’s produced into the main Rover pipeline–to start up (see FERC Plays Hardball with Rover – Refuses to Certify 4 Laterals). The reason? ET has not, according to FERC, lived up to its word on restoration work. Things like smoothing over the dirt and replanting grass and other vegetation over top of the buried pipeline. Earlier this month ET assured FERC it would have the majority of restoration work done on two key laterals–the Burgettstown Lateral in southwestern PA, and the Majorsville Lateral in the northern panhandle of WV–by the end of this month (see FERC Continues to Block Rover Laterals Until Restoration Work Done). With recent evidence that ET is indeed living up to its word, last Thursday FERC gave ET permission to start up both the Burgettstown and Majorsville Laterals on Sept. 1. The majority of the restoration work will be done by this Friday, Aug. 31. However, there will still be some odds and ends after that (addressing “ground movement areas) that will go on through December. That leaves two final laterals–the CGT (Columbia Gas Transmission) and Sherwood Laterals, still not online. This is a prime example of FERC playing hardball, contrary to the “rubber stamp” antis claim FERC is for pipeline companies…
    Read More “FERC Finally Approves 2 Key Rover Pipeline Laterals, Sept 1 Start”

  • | | | |

    Partial Victory for PA Drillers re DEP Chapter 78a Drilling Regs

    The Pennsylvania Commonwealth Court has handed PA drillers a partial victory in their quest to block onerous new drilling regulations, part of something called Chapter 78a. In October 2016, after five years in the making, PA adopted new shale drilling regulations (see PA’s New Chapter 78a Drilling Regs Go into Effect Oct 8). Although the regs were ready at the end of the Gov. Tom Corbett Administration, Corbett fumbled the ball and the regs didn’t get adopted, which left them vulnerable to the incoming left-leaning Tom Wolf Administration. Wolf’s people mangled the regulations under the Dept. of Environmental Protection (DEP) Dictator/Secretary John Quigley, who got fired over unethical collusion with Big Green groups. Some of the good stuff remained, but onerous new elements were introduced. The Marcellus Shale Coalition (MSC), which represents PA’s biggest shale drillers, filed an appeal in Commonwealth Court to block the most onerous aspects of the new regulations (see Marc. Shale Coalition Files Lawsuit to Block PA Chapter 78a Regs). In December 2016, the DEP escalated the case by asking the PA Supreme Court to undo the block on those regulations imposed by the lower Commonwealth Court. Last October the Supremes heard oral arguments in the case, and in June of this year the Supremes ruled to not undo the block on DEP’s onerous regs–but instead bumped the case back down to Commonwealth Court to let the matter play out there (see PA Supreme Court Upholds Block on DEP Chapter 78a Drilling Regs). Last week Commonwealth Court struck down provisions in Chapter 78a (f) and (g) defining “common areas of a school’s property and playgrounds,” and “species of special concern” as public resources under Act 13. While we didn’t get 100% of what we wanted, we got maybe 95%–at least for the two provisions in sections (f) and (g). Other parts of the lawsuit are still under consideration by Commonwealth Court. Here’s the deets on this important victory for Marcellus drillers…
    Read More “Partial Victory for PA Drillers re DEP Chapter 78a Drilling Regs”

  • | | | | | |

    PTT Decision on Ohio Cracker Announced in Next “Month or So”

    Sometimes you spot an innocent, off-the-cuff remark that’s not really part of the intended story–but has huge meaning. Such was the case when we spotted a story quoting Ohio House of Representatives member Andy Thompson (Republican, 95th District covering Carroll, Harrison and Noble counties, and portions of Washington and Belmont counties). Thompson, who (to his credit) is not running for reelection after four terms [NOTE: a sharp MDN reader emailed to say Mr. Thompson was term-limited out and could not run again], gave a speech at the Ohio Mid-Eastern Governments Association last week in St. Clairsville. In his remarks, Thompson talked about the work of Shale Crescent USA, an economic development organization formed a few years ago to encourage business growth in the Ohio Valley based on low natural gas prices that allow manufacturers to operate more efficiently–with easy access to half the population of the United States and Canada. Although Thompson’s focus was not on the PTT Global Chemical ethane cracker project potentially planned for Belmont County, he had some VERY interesting remarks about that project and others like it…
    Read More “PTT Decision on Ohio Cracker Announced in Next “Month or So””

  • | | | |

    Dominion Buying a Piece of Competitive Mountain Valley Pipeline

    Here’s some dots that we’ve not seen anyone else connect. There are two competing pipeline projects that generally run along the same route to shuttle Marcellus/Utica gas to the southeastern U.S. One project is EQT Midstream’s Mountain Valley Pipeline (MVP), which runs 303 miles from West Virginia into southern Virginia. MVP is facing a court case that’s idled three-fourths of the project, leading to a layoff of “thousands” of workers (see FERC Lets MVP Restart Work on 25% of Pipe; MVP Lays off ‘Thousands’). The other project is Dominion Energy’s Atlantic Coast Pipeline (ACP), a 600+ mile pipeline from West Virginia through Virginia and into North Carolina, almost to the border with South Carolina. ACP is currently idled because of a similar court case (see FERC Shuts Down ALL Work on Atlantic Coast Pipeline). Both EQT and Dominion believe the court order and FERC’s directive is only a temporary setback. Both believe their projects will be completed sometime next year. Here’s where it gets interesting. Although MVP has not officially filed with FERC (yet), they do plan to expand from the current termination point in Pittsylvania County, VA another 70 miles into North Carolina (see Mountain Valley Pipeline Launches Plan to Expand 70 Miles into NC). That new portion of MVP is called the Southgate project. Last week PSNC Energy, based in North Carolina, purchased a 30% share in the MVP Southgate project. PSNC is a subsidiary of South Carolina-based SCANA Corp. Sound familiar? Dominion Energy is right now in the process of closing a deal to buy/merge in SCANA Corp. (see FERC Approves Dominion Energy/SCANA Merger – Deal Still Alive). Ergo, Dominion is buying a 30% stake in its primary competitor to flow Marcellus/Utica gas south…
    Read More “Dominion Buying a Piece of Competitive Mountain Valley Pipeline”