Enervest Pushes for Co-Tenancy in West Virginia
In August MDN told you the West Virginia Oil & Natural Gas Association (WVONGA) plans to push, once again, for what MDN calls forced pooling lite in the next session of the legislature scheduled for early 2018 (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018). Forced pooling legislation in West Virginia has been put forward five times in the past seven years–and each time it has failed to win enough votes in the WV legislature. This year, WVONGA changed tactics and renamed forced pooling as co-tenancy and joint development (see WV Won’t Push Forced Pooling, Will Push Joint Dev. & Co-Tenancy). The West Virginia Surface Owners Rights Organization refers to co-tenancy as “majority rules” and joint development as “invisible ink” (see Another Look at WV’s Co-tenancy & Joint Development Proposals). EnerVest, a shale (and conventional) driller with considerable acreage in West Virginia recently contributed a editorial to the Charleston Gazette-Mail which unsurprisingly supports WVONGA’s push–at least for co-tenancy. The article doesn’t mention joint development, but since the two are tied together in a single bill, we assume they also want to see joint development. Below is (once again) a brief explanation of the two concepts, along with EnerVest’s editorial/reasons for why the Mountain State needs them…
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Last week midstream powerhouse Williams issued their third quarter 2017 update. CEO Alan Armstrong said this about the Transco Pipeline–a key pipeline in the Marcellus/Utica region: “So far in 2017, we’ve placed four of our ‘Big 5’ Transco expansion projects into service including Gulf Trace, Hillabee Phase 1, Dalton Expansion and New York Bay Expansion with the fifth of the ‘Big 5’ expansions – the Virginia Southside II project – expected to be placed in service during fourth-quarter 2017. The incremental capacity from the fully-contracted Transco expansion projects going in service so far this year reflects a 25 percent increase in Transco’s design capacity.” All five of those projects to one degree or another flow Marcellus/Utica Shale gas. Williams is in a multi-year program to reverse the flow of the Transco. Traditionally it has flowed gas from the Gulf to the northeast. The pipeline is in the process of getting turned around, to flow our gas southward, some of it all the way to the Gulf Coast. With respect to the Atlantic Sunrise project–a part of the Transco system–Armstrong reminded listeners on the analyst phone call that some of that project is already up and running: “And on Atlantic Sunrise, we started construction and have already placed a portion of Atlantic Sunrise into early service on September 1 of this year, providing about 400,000 dekatherms a day of firm transportation service on Transco’s existing mainline facilities, and of course that serve delivery points as far south as Choctaw County, Alabama. So we’re really excited to be starting to see the Transco system turn around and be able to deliver volumes to the south. And I can tell you, that’s very much needed as we’re seeing a lot of demand growth occur in the southeast on our system.” As for the stalled Constitution Pipeline in New York State, Armstrong said to “stay tuned” and that there is “plenty of fight left in this dog.” Armstrong sounded encouraged about the prospects of the Constitution. Below is the full 3Q17 update complete with financials, excerpts from the analyst phone call of interest for MDN readers, and the newest slide deck…
MDN is pleased to bring you another guest post from our very good friend Chris Acker. Chris is MDN editor Jim Willis’ right arm when it comes to scanning for stories, something Jim is profoundly grateful for. Chris is a geological engineer with an MBA. He grew up in the oil fields of Venezuela where his father, a petroleum engineer, was a drilling contractor for all the major players, onshore and off. Chris’ interest in energy economics and policy found him working for Exxon, Petroleum Industry Research Associates and Petroleos de Venezuela. He bought a parcel of land in the PA countryside twenty-five years ago and later semi-retired to work on antique pianos (see 
The director of the Ohio Environmental Protection Agency (EPA), Craig Butler, continues to go off the rails with a major grudge against Rover Pipeline (see 
We find this story amusing. A group of left-leaning Catholic nuns in Lancaster County, PA, whipped up by radical environmentalists with ties to Big Green organizations, got it into their heads to try and block a very-safe natural gas pipeline from crossing their property–the Atlantic Sunrise Pipeline being built by Williams. The Sisters call themselves Adorers of the Blood of Christ. We call them Sisters of the Corn, because they put a couple of wooden park benches in a cornfield on their property (leased to a local farmer), christening it a “chapel” and claiming because the pipeline would run through the middle of their so-called chapel, building a pipeline is a violation of freedom of religion. In September a federal judge tossed the lawsuit (see 
An off-hand comment by a Pennsylvania Gov. Wolf staffer has landowners in northeast PA hopping mad–and with good reason. Speaking on the topic of PA landowners getting screwed out of royalty payments by drillers deducting inflated post-production costs (sometimes sending royalty statements where landowners OWE the drillers money!), Wolf deputy policy director Sam Robinson said this: “I think there was a crescendo of that kind of claim in 2015 to 2016…There’s been real movement in a positive direction on that issue.” Really? Not according to Bradford County Commissioner Doug McLinko and National Association of Royalty Owners (NARO) PA president Jackie Root. Not only is the issue not resolved, but the industry, under the prompting of EQT, snuck through an “environmental rider” in the recently passed-and-signed-into-law Fiscal Code bill (called Section 1610) that gives drillers a back door to reactivate old, non-producing wells after they have not been producing (and the lease considered terminated) under certain conditions (see 
The guy who runs the investment firm Jana Partners, Barry Rosenstein, is a corporate raider. He invests millions in a company he’s targeted in order to get one or two people elected to the board of directors. Those people then agitate and force the company to lay off hundreds or thousands of employees, and sell off assets, in a bid to make the stock price jump. When the price does jump, corporate raiders like Rosenstein then sell their shares, making a profit on the new/higher price (buy low sell high). It may be legal, but we consider it immoral. In June, EQT, one of the biggest drillers in the Marcellus/Utica, announced a deal to buyout and merge in Rice Energy, another sizable M-U driller (see 
Last week National Fuel Gas Company, headquartered in Western New York State with drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its fourth quarter (everyone else’s third quarter) 2017 update. In the accompanying analyst phone call, CEO Ronald Tanski blamed the delay of the Northern Access Pipeline project (delayed by the NY Dept. of Environmental Conservation) for lower earnings than the company would have otherwise realized. Thanks, business UNfriendly NY! You may recall in July NFG filed a lawsuit against the DEC for arbitrarily rejecting the project (see 
Although there is still quite a bit less drilling than there was in 2014-2015, for a number of reasons, there are plenty of jobs to be had in the Marcellus/Utica Shale–especially in southwest PA. Companies that do work in the industry held a job fair last Thursday night at the Deer Lakes High School, looking for truck drivers, roustabouts and construction workers. Seems like a week doesn’t go by now that we don’t read about a job fair somewhere in the Pittsburgh region. Yes, there may be less drilling, but there’s still plenty of jobs to be filled, especially with Shell’s cracker plant construction ramping up. Below is news about last week’s job fair–who was looking, and what they’re willing to pay…
Recently the profoundly biased mouthpiece for Big Green groups, PBS StateImpact Pennsylvania, ran an article about the political fallout around the construction of what will be Pennsylvania’s largest natural gas-fired electric generating plant, located near Scranton. Invenergy is currently building the Lackawanna Energy Center, a 1,480 megawatt plant in Jessup, PA that will cost “well over $1 billion” according to an exclusive MDN source working on the project. The PA Dept. of Environmental Protection (DEP) approved the plant in December 2015 (see 
In September 2016, Chesapeake Energy filed disclosure forms with the Securities and Exchange Commission which says the U.S. Dept. of Justice (DOJ), a number of states, and even the U.S. Postal Service have served the company with subpoenas for information (see 
In January of this year, the Federal Energy Regulatory Commission (FERC) voted to approve and issue a certificate to Columbia Pipeine’s Leach XPress and Rayne XPress pipeline projects (see 
Exciting! We have a brand new pipeline project to tell you about–located in the Greater Philadelphia area. Although the project is new, the pipeline is old–already in the ground. Talen Energy, birthed in June 2015 from a combination between PPL Energy Supply and certain assets of Riverstone Holdings, is one of the largest competitive energy and power generation companies in North America. Talen’s core business is building and operating electric generating power plants. One of the assets Talen inherited in the merger is an 84-mile pipeline called the Interstate Energy Company which runs from Northampton County, PA through Bucks, Montgomery, and Chester counties, terminating in Delaware County at Marcus Hook. Talen announced yesterday they’ve sold the Interstate Energy Company (the pipeline) to Adelphia Gateway, a subsidiary of New Jersey Resources, for $189 million. The northern 34 miles of the pipeline was converted to flow natural gas back in 1996. The southern 50 miles currently flows oil, but Adelphia (NJ Resources) announced yesterday they will convert the oil portion of the pipeline to instead flow natural gas. The bottom line is that a wide swath of Greater Philly is about to get a new source of clean-burning, abundant fracked PA natural gas…
The odious Sierra Club is at it again. Using what appears to be endless supplies of money from people like the Rockefellers, the Sierra Club, along with a mishmash of other radical environmental groups, filed an emergency motion in federal court on Monday, asking the court to stop any further work on the Atlantic Sunrise Pipeline. Atlantic Sunrise is a $3 billion, 198-mile natural gas pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. Williams, the company building/owning the project, broke ground in September (see 
The Pennsylvania Dept. of Environmental Protection (DEP) continues its quest to put Mariner East 2 (ME2) Pipeline construction under a microscope. Two days ago MDN told you that the DEP had issued a Notice of Violation (NOV) for ME2 work in Lebanon County, PA, for spilling LESS THAN 1 gallon of non-toxic drilling mud (see