Analyzing Gulfport’s Decision to Diversify Away from the Utica
Last week MDN told you about Gulfport Energy’s deal to buy 85,000 acres of leases with 48 horizontal wells in Oklahoma’s SCOOP shale play in a $1.85 billion deal (see Gulfport Energy Expands into SCOOP, New Stock & IOUs to Pay $1.85B). At the time we said, “we jealously wish they were investing that money here [in the Utica] and not there.” Looks like we’re not the only ones questioning Gulfport’s strategy of “diversifying away from the Utica.” None other than energy analyst Richard Zeits, our favorite Seeking Alpha author, did a deep dive into the deal. He found that Gulfport paid $27,000 per acre and although they paid for it with a fair amount of equity, they also increased their debt load “significantly.” Zeits said, “The move into a new core area raises questions with regard to the company’s macro outlook for the Utica/Marcellus region.” Hmmm. Here’s what else the oracle of energy had to say about Gulfport’s SCOOP deal…
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In November 2015, MDN told you about Pilgrim Pipeline Holdings, developing an East Coast pipeline to carry refined petroleum products such as gasoline, diesel, heating oil, and jet and aviation fuel northbound from Linden, New Jersey to Albany, New York (178 miles). In addition, a second Pilgrim pipeline will carry crude oil from Albany south to NJ and other locations. Two pipelines, side by side, liquids flowing through them in different directions (see 
A bunch of wacko New England liberals get together at a local high school to bad mouth the proposed Spectra Energy Access Northeast Pipeline project. That describes just about any town or hamlet in Massachusetts just about any night of the week. These New England libs, who are intolerant of the very fossil fuels that allow them to exist, are actually kind of funny (and sad) when you listen to them. We read yet another such story, about a group of antis in Grafton, MA, and thought you might enjoy our reading our appended comments to the story. Hey, you’ve got to have fun with this stuff–or you’d just get depressed at how obtuse some people can be…
We’ve written plenty about President Obama’s so-called Clean Power Plan (CPP), introduced last summer, a plan to force electric generators to convert to using more “renewable” sources of energy–and less fossil fuels (see 
The London School of Economics recently released a research study that prominently features the Marcellus/Utica. In “On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution” (full copy below), the authors find America’s shale revolution is revitalizing American manufacturing. If we could vastly simplify the research in just a few words, it is this: While we have enough shale gas to export plenty of it, exporting it is not as economic as exporting oil due to the elaborate processes to liquefy and regassify natural gas–therefore a lot of the gas stays right here at home, making the U.S. one of (if not the) cheapest places on the planet to establish manufacturing plants, especially for manufacturers that use natural gas and NGLs (natural gas liquids). Therefore, manufacturing, especially in the petrochemical sector, is ramping back up in the U.S. The authors cite a study that says for every two jobs created by the fracking industry, another one job is created in the manufacturing sector. The paper also concludes that the shale revolution saved Obama’s bacon by creating hundreds of thousands of jobs. Without shale drilling we would not have recovered as quickly as we did from the economic near-collapse of 2007/2008. Here’s a summary of the research, followed by a full copy of the published paper…
Two weeks ago MDN editor Jim Willis attended the “Platts Global Energy Outlook Forum 2016” held in New York City (see 
Last week MDN editor Jim Willis attended the “Platts Global Energy Outlook Forum 2016,” held at the beautiful Cipriani, located across the street from the iconic bull that sits on Wall Street. As in previous years, this year’s event featured a number of big names in the oil and gas industry. Most notable was the opening keynote address and Q&A with Harold Hamm, CEO of oil driller Continental Resources (and an adviser to Donald Trump). The luncheon featured the former Secretary General of OPEC. As you can surmise, this year’s event, unlike previous years, was mostly about oil. The recent OPEC agreement to cut production among member states by 1.2 million barrels per day, and a follow-on agreement by non-OPEC members (like Russia) to cut another 600,000 barrels per day, was the topic du jour for speakers and audience members alike. Below are MDN’s notes from Harold Hamm’s address and Q&A session…
We’ve seen signs of increased drilling in the Marcellus/Utica. Just look at the Baker Hughes rig counts month by month. Ever so gradually, the number of rigs operating in our region is creeping back up. The smart analysts at 
Natural gas and wind are the lowest-cost technology options for new electricity generation across much of the U.S. when cost, public health impacts and environmental effects are considered. So says a new research paper released by The University of Texas at Austin. Researchers assessed multiple generation technologies including coal, natural gas, solar, wind and nuclear. Their findings, as depicted in a series of maps illustrating the cost of each generation technology on a county-by-county basis throughout the U.S., are featured in a new white paper titled “New U.S. Power Costs: by County, with Environmental Externalities” (full copy below). What’s interesting to us is who helped fund the research. Two organizations helping pay the bill were the Cynthia and George Mitchell Foundation and the Environmental Defense Fund. That is, those with a bias against fossil fuels. We wonder if they’ll ask for their grant money back? Here’s a summary of the research, followed by the full report…
You hear a lot about wind these days, not so much about solar, as an alternative to nasty fossil fuels like natural gas. But is wind really “all that?” We spotted an Associated Press story bragging about “the nation’s first offshore wind farm” opening off the coast of Rhode Island. Deepwater Wind built five turbines producing 30 megawatts of electricity (enough electricity to power 17,000 homes) 3 miles off Block Island–at a cost of $300 million. That’s about $10 million per megawatt to construct the facility. Let’s compare that to building a natural gas-fired electric plant. Natgas plants cost about $1 million per megawatt (10x less). This past year the very first built-from-scratch natgas plant built to use Marcellus Shale gas, called Panda Liberty, went live (see 
The Potter Township Board of Supervisors convened a public hearing on Tuesday afternoon at 3 pm that ended up going until 1 am Wednesday. The intent was to approve Shell’s request for permits to begin construction on the multi-billion dollar ethane cracker plant. That didn’t happen. Instead, the supervisors decided to hold another hearing Wednesday night. They did, and that hearing went for over an hour, in closed-door session. At the conclusion, the supervisors made a couple of requests from Shell, which Shell agreed to. However, the supervisors are still not ready to approve the permits and instead asked for more paperwork to be filed–by both Shell and the radical, anti-fossil fuel Big Green group Clean Air Council (from Philadelphia). It seems the antis are attempting to stop this project cold–which should have the good citizens of Beaver County (indeed the entire northeast) outraged. At any rate, we’re sure the permits will be forthcoming–but now it won’t happen until sometime in January…
Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has (or rather had) a presence in the Marcellus/Utica Shale with 90,000 acres of leases. In October Stone announced (a) it is selling its Marcellus/Utica assets to Tug Hill for $350 million, and (b) the company is preparing to file for bankruptcy (see 
Keane Group is a Texas-based oilfield services company that provides fracking, wireline and top-hole air drilling services to oil and gas companies in the Marcellus/Utica as well as several other major basins. In January, Keane announced they were buying out Canadian-based Trican Well Service for $247 million (see