Chesapeake Agrees to $30M Royalty Settlement for PA Landowners
Chesapeake Energy is holding out an olive branch to Pennsylvania landowners–the offer of settling a years-old class action lawsuit for $30 million–as reparations for shafting PA landowners out of royalties. But–and it’s a big but–Chesapeake is also snatching the olive branch away unless/until the PA Attorney General’s office resolves its separate lawsuit against Chesapeake for the same thing. No deal with the AG? No final settlement. Chesapeake’s lawyer calls it “global peace”–which we find amusing. The lawyer said “we need global peace,” meaning both lawsuits must be settled. His comment reminds us of the recent song blaring on the radio over the holidays called, “My Grown-Up Christmas List.” Yeah, don’t we all want “global peace.” Chesapeake’s proffered deal will give the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. Frankly, it’s chump change. The big concession by Chesapeake in the proposed deal is that it gives landowners the right to clarify the terms of their leases: “Every Chesapeake lessor will get to pick how their royalties are paid going forward.” Landowners can choose to continue letting Chesapeake market the gas outside of the region (theoretically for a higher price) but requiring the landowner to share in post-production expenses with Chessy as has been the case, OR landowners can rework the lease so there are no post-production expenses deducted. In the second case royalties will be based on the local price of gas in that landowner’s area (typically in the basement). It’s a tough decision. So, landowners got shafted in the past, but the past is the past. Going forward, let’s not get shafted any more. That’s what this proposed deal seems to boil down to. Oh, and throw in a few grand as the cherry on top. The billion dollar question is whether or not the AG’s office will go for it. The AG’s office is signaling it may settle, IF Chesapeake picks a number higher than $30 million as a settlement number…
Read More “Chesapeake Agrees to $30M Royalty Settlement for PA Landowners”
The Pennsylvania Dept. of Environmental Protection (DEP) has fined CNX Resources (formerly CONSOL Energy/CNX Gas) $433,500 for violations at four shale well sites in Greene County, PA. The violations, which happened in 2015/2016, include failure to control and dispose of wastewater properly and failure to prevent erosion. Some of the flowback/wastewater ended up in a small stream called Jacobs Run. We always find the language of these announcements by the DEP somewhat strange: “CNX Gas Company, LLC (CNX) has agreed to two civil penalties totaling $433,500 for violations at well sites in Greene County.” Really? The company getting fined has to “agree” to accept the fine? Apparently we don’t fully understand how regulatory agencies work in PA. What if CNX didn’t agree to the fine? Would the DEP come back with a lower amount, “Will you accept this fine instead?” But we digress. CNX themselves noticed the problems and self-reported the violations. After doing so, they fired two of the service companies they were using. The unnamed service companies were obviously guilty of cutting corners that resulted in improper disposal of wastewater. Interesting factoid: Half of all the wells CNX has drilled in PA are located in Greene County…
It’s been a long road, but we’re finally close to startup for the first phase of what will be Pennsylvania’s largest gas-fired electric generating plant near Scranton, PA. The Invenergy plant, dubbed the Lackawanna Energy Center (located in the community of Jessup), will produce 1,480 megawatts of electricity when it’s fully built and running. Construction crews are hard at work in frigid temperatures, working to complete the first of three combined-cycle generator units. The work is 80% done on the first unit and on track to be completed by February. The plant is certainly having an impact on locals–both good and bad. On the bad side, we previously reported that antis in the Jessup community exacted their revenge on local political leaders for approving the plant by removing them from office (see 
Baby it’s cold outside! This was predictable (and indeed, MDN did predict it). With the arrival of an extended cold period, because of a lack of natural gas pipeline capacity in New England, recent spot prices for natgas near Boston have spiked to more than $35 per thousand cubic feet (Mcf). It gives New England the dubious distinction of paying the highest average price for natural gas in the entire WORLD. The price for the same gas about 250 miles away in the Marcellus? Between $1-$2/Mcf. And yet the dunderheads in New England, like U.S. Sen. Elizabeth “Pocahontas” Warren, continue to block new pipelines in the region. “Stupid is as stupid does,” as Forrest Gump said. We hope our friends in New England enjoy paying through the nose and every other orifice they possess over the next few weeks, until the arctic blast subsides…
PTT Global Chemical, based in Thailand, continues to delay a final investment decision (FID) regarding their much-ballyhooed ethane cracker project in Belmont County, OH. In April 2015, PTT announced they are interested in building a ~$5 billion ethane cracker plant complex in Belmont County, OH (see 
Yesterday a Pennsylvania federal judge denied a group of 600+ Marcellus Shale landowners’ request to form a class action in arbitrating a royalty case against Chesapeake Energy. Although the judge’s decision is a disappointment for landowners, his decision should come as a surprise. In April, the same judge, U.S. District Judge Matthew Brann for the Middle District of PA, telegraphed that the landowners, under the law (and under the leases they signed) did not have a right to form a class action (see 
Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project recently asked the Federal Energy Regulatory Commission (FERC) for permission to begin clearing trees along the path of the pipeline in all three states where the pipeline will run: West Virginia, Virginia, and North Carolina. FERC approved the project in October (see 
In July, West Goshen Township, in the Philadelphia suburb of Chester County, won a temporary victory in their efforts to stop Sunoco Logistics’ Mariner East 2 (ME2) NGL pipeline in their community (see 
In 2015 MDN told you about an Allegany County, NY attorney who had filed a lawsuit against the New York Dept. of Environmental Conservation (DEC) over their infamous frack ban. It was the first such lawsuit to be filed against the DEC since the frack ban was officially declared (see 
A group of six radical Democrats who oppose the Mariner East 2 pipeline through southeast Pennsylvania met yesterday with Democrat Gov. Tom Wolf to gripe and moan–and to ask Wolf to illegally shut down construction of the pipeline (a pipeline which is now 91% done). Wolf politely listened–and then did nothing. Which is good. The radicals hold out hope that Wolf will change his mind and use his executive authority under Title 35 (dealing with health and safety) as an excuse to shut down all ME2 construction. Good luck with that. A statement issued later in the day by a Wolf spokesman seems to indicate the governor is punting any decisions about shutting down construction over to the Public Utility Commission. Yesterday the PUC vote to allow already-shut-down ME2 construction in one SE PA town to resume (see today’s story, PA PUC Votes to Let ME2 Pipeline Restart Construction in West Goshen). All of which says to us that Wolf won’t do a thing to stop completion of ME2, which angers the radicals all the more…
Yesterday the Federal Energy Regulatory Commission (FERC) held its first public meeting with Kevin McIntyre as its new chairman. Delivering on a promise McIntyre made during his Senate confirmation hearing, the new chairman announced that FERC will conduct a top-to-bottom review of its 1999 policy statement that governs how the commission conducts reviews of pipeline projects. The news lit up the swamp (inside the Beltway of Washington, D.C.), with Big Green groups becoming positively giddy at the thought that FERC may “get serious” about considering the hoax of man-made global warming in its decisions on whether or not to authorize new pipelines. At this point, the review and what it may result in, is all speculation. The statement released by FERC following yesterday’s meeting (see it below) says, in essence, “stay tuned” and offers no details about this top-to-bottom review. The greenies are speculating, so why can’t we? We speculate that following this review, FERC will figure out a way to cut down on the frivolous lawsuits filed by Big Green groups that delay pipeline projects for years. And we speculate that FERC will figure out how to handle rogue states, like New York, who refuse to obey federal law. What if that’s the end result of this review? Don’t forget, four of the five members sitting on the Commission are Trump appointees–and three of those four are Republicans. You really think this commission is going to introduce man-made global warming flummery as part of the criteria they use in evaluating a new pipeline project? If you think that, we want some of what you’re smoking…
The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the third quarter of 2017. The good news is that production is up for both natural gas AND oil. Utica natgas production saw a huge percentage increase–up 27.51% over the same period last year. 2Q17 Utica natgas production increased 16% over the previous year, and 1Q17 production increased 13% over the previous year. Although the trend has been up this year, 3Q17’s jump is really big (nearly double) compared to previous quarters. The even better news is that until 3Q17, Ohio oil production was trending down quarter after quarter–but in 3Q17 the trend reversed. Utica oil production was up slightly, close to 3%, over the same period last year. The ODNR report lists 1,796 horizontal wells, of which 1,760 reported production of some amount. The average natgas well produced 261,681 million cubic feet (Mcf) during 3Q17, and the average oil well produced 2,367 barrels of oil. But as we all know, each well is unique. Below we give you an MDN exclusive, showing the top 25 natgas wells and top 25 oil wells. In 3Q17, the top 3 natgas wells were drilled and operated by Ascent Resources. Rounding out the top 5 were two wells drilled by Rice Energy (now owned by EQT). All top 5 producing natgas wells in 3Q17 are located in Belmont County. What about oil wells? The top 2 producing oil wells were drilled by Ascent Resources. Coming in at #3 was a well drilled by Eclipse Resources, followed by #4 drilled by Chesapeake Energy. Rounding out the top 5 producing oil wells was a well drilled by Ascent Resources. Four of the five top producing oil wells are located in Guernsey County, with one in Harrison County. You might say, with some justification, that Ascent Resources (formerly called American Energy Partners, Aubrey McClendon’s startup following Chesapeake Energy), dominated the top producing wells for 3Q17, for both natgas and oil…
The Trump Dept. of Energy is hopping on the natural gas liquids storage bandwagon. Yesterday the DOE published a 45-page report called, “Natural Gas Liquids Primer: With a Focus on the Appalachian Region” (full copy below). The DOE uses its own data along with data from the U.S. Energy Information Administration (our favorite government agency) to create an up-to-date picture of Appalachian NGL supply, demand, and infrastructure. What does that picture show? It shows we are in desperate need of our own regional NGL storage facilities. No doubt one of the reasons for the report is to goose China into investing in a proposed $10 billion NGL storage plan being pushed by many (see 
Randolph County, WV is about to see some big changes in the coming months. Why? In “early spring” somewhere around 400-1,200 workers will descend on Randolph as work begins to build the mighty $5 billion Atlantic Coast Pipeline (ACP) being built by Dominion Energy. Members of the Rotary Club of Elkins heard a presentation earlier this week about what to expect when the pipeliners come a callin’. Some of those impacts include: higher traffic levels, more business for restaurants and convenience stores, an uptick in business at local laundromats, and higher occupancy for hotels and apartment buildings. According to Denise Campbell, community liaison for the ACP, “There’s a lot of opportunity.” Here’s a recap of Campbell’s comments to the Rotarians…
An obscure committee of individuals will begin to wield big power over Pennsylvania’s natural gas (and oil) gathering pipelines beginning next year. In just about every state in the country, before you start digging a hole in the ground for some reason (water well, septic system, laying an underground electric line, etc.)–the first thing you do is call 811 or some similar phone number. The “one call” or “first call” reaches a state-authorized (not necessarily state-run) office where they have, on file, maps detailing any kind of underground cables, pipelines and other infrastructure. If such underground structures exist, a representative of the owner for the underground line will, if necessary, stop by and mark the areas so when you do begin digging, you don’t hit it. Makes sense. A bill introduced last year (in 2016) in the Pennsylvania legislature “enhances” the existing 811 law in PA. One of the “enhancements” is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system, mainly lines run to low-producing conventional gas wells. The bill was opposed by the Pennsylvania Independent Oil & Gas Association (see