Industrywide Issues

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    MarkWest Energy/Marathon Petroleum Exchanging Notes

    do you like me noteRemember exchanging notes in grade school? “Do you like me? [ ] Yes [ ] No” Exchanging notes in the corporate world is a little more complex than that–but it seems to us like it’s not far removed from exchanging notes in grade school. In the case of high finance and the MarkWest Energy/Marathon Petroleum merger deal, the notes getting exchanged have (big) financial value and implications. MarkWest/Marathon are exchanging old MarkWest IOUs (notes) for new Marathon notes. If it doesn’t get delayed, the exchange will happen on Dec. 18–just in time for Christmas. Will it be a Merry Christmas for existing MarkWest note holders? If you can figure it out, please let us know…
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    Binghamton Newspaper Extreme Anti-Drilling Bias on Display

    This is what passes for “journalism” at the Binghamton Press & Sun-Bulletin (P&SB), MDN’s hometown newspaper. Once upon a time the P&SB had a lefty reporter working for them, Tom Wilber. We’ve highlighted Tom’s anti-fracking articles in the past. Tom is a good writer, and fancied himself an Author, so he left the P&SB to write a book on fracking, “Under the Surface: Fracking, Fortunes, and the Fate of the Marcellus Shale.” Perhaps Tom thought he could retire in style after attacking shale energy. The book bombed. Tom had to get a day job again and ended up working for the P&SB (surprise!). He recently penned a rehashed diatribe against shale drilling in a series on shale energy appearing in the pages of the P&SB. We found it, quite frankly, boring. If we’re bored, you will be too–which is why we didn’t bother to comment on the series. Fortunately, MDN friends Tom Shepstone and others “took one for the team” and analyzed Tom’s latest anti-drilling diatribe (see NGN: Is That All There Is, Tom Wilber?). Tom (Shepstone) deserves hazard pay for reading it all. Our point: Tom Wilber is what the P&SB considers to be a fair, impartial journalist. Well, no they don’t, not really. They know he’s as biased and unfair as the editors at the P&SB, which is why they run his articles. They present his work as impartial journalism. To further highlight just how unfair and biased the P&SB is, we spotted two opinion pieces in the Sunday edition (yesterday). You know how newspapers run side-by-side “for and against” op-ed pieces? This time it was “against and against”–both op-eds were against fracking and shale energy. That’s what passes for “fair” in the P&SB…
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    North America’s Largest Private CNG Facility Opens in Detroit

    TruStar Energy, one of the biggest Compressed Natural Gas (CNG) fueling station operators, over the weekend announced it has completed construction of the largest private CNG fueling station in North America. The facility was built in Detroit for FCA US and will fuel 179 FCA tractor trucks that haul parts and materials to plants located in Michigan, Ohio and Ontario, Canada. The press release does not say where the natural gas comes from that gets compressed and used, but we have to believe at least some of that gas is coming from the Utica/Marcellus, which makes this a story of interest for MDN…
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    Wyoming Senator Exposes Obama Paris Climate Tax Plan

    U.S. Senator John Barrasso (Republican from Wyoming) is the chairman of the Senate Foreign Relations Subcommittee on Multilateral International Development, Multilateral Institutions, and International Economic, Energy, and Environmental Policy. Sen. Barrasso has done the country a huge favor by writing and releasing a new report titled: “Senate Outlook on United States International Strategy on Climate Change in Paris 2015” (full copy below). If we can sum up the report, it perfectly details how President Obama is attempting to hoodwink U.S. taxpayers into transferring their hard-earned money to foreign countries under the guise of global warming flummery. That is, according to Sen. Barrasso, President Obama intends to force American taxpayers to pay for past economic success through his contributions to the Green Climate Fund. It is an outrage and must opposed at every turn…
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    Former XTO Marcellus Landman Gets 5+ Years in Prison for Fraud

    prisonIn a somewhat complicated scam, a former landman for XTO Energy, Steven E. Fisackerly (33 years old) defrauded XTO out of more than $1 million with fake lease deals in the West Virginia Marcellus Shale region. He cooked up bogus documents and passed them off as real, pocketing commissions. He even worked with a supposed/fake mineral rights owner to pocket kickbacks from lease payments sent to the fake rights owner. It was elaborate and convoluted–and ultimately stupid. Fisackerly plead guilty in May and will enter prison on January 4. His sentence? Pay back more than $1 million he defrauded from XTO, and serve 63 months (over 5 years) in federal prison…
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    OH Shale Wells Already Smash 2014 Record, 3Q15 Results (Exclusive)

    Ohio’s oil and natural gas horizontal well (i.e. Utica) production for 2015 has, has of the third quarter, already surpassed production for all of 2014 according to the Ohio Dept. of Natural Resources (ODNR). The ODNR issued their latest quarterly production update, for 3Q15, yesterday. During 3Q15 Ohio’s horizontal shale wells produced 5.7 million barrels of oil and 245 billion cubic feet of natural gas. Below we have the ODNR’s high level overview of the numbers, along with our own 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! The longer an oil or gas well is online, the less it produces. Newer wells produce more. So 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 they haven’t yet been online a full three months (92 days). We also include a link to the complete list of 1,134 wells that had at least some Utica oil or gas production in 3Q15 in a more usable format than that provided by the ODNR…
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    Magnum Hunter Investor: We’ll Sue to Stop Bankruptcy Filing

    Dallas Salazar
    Dallas Salazar

    A developing situation with Magnum Hunter Resources (MHR). As you know, analysts we’ve read believe MHR is about to file for bankruptcy. In fact, MHR itself indicates bankruptcy is a very real (likely?) option, judging from comments they make in a recent filing they made with the SEC (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). However, one of MHR’s largest stockholders, Dallas Salazar, CEO of Austin, TX-­based Atlas Consulting, is telling MHR to hold on (see Activist Investor Threatens Magnum Hunter with Takeover Unless…). Salazar and a growing list of supporters will fight an MHR bankruptcy tooth and nail. Salazar has assembled a team of investors who will sue MHR should the company file for bankruptcy. Salazar’s legal team is the same team that previously (and successfully) sued Washington Mutual on behalf of shareholders. Salazar, in very frank language, has sent a letter to MHR management to let them know bankruptcy is not an option (see the letter below)…
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    Cinci Law Firm Opens New Office/Energy Practice in Pittsburgh

    292586LOGOJust last week we told you it’s getting so bad out there because of the low price of oil and gas, that even some law firms are closing down. We told you that Burleson LLP, headquartered in Houston but with a sizable office they opened in Pittsburgh six years ago, is shutting down all of their offices, including Pittsburgh (see Prominent Energy Law Firm Closing Down – Lack of Business). That puts 31 Burleson employees (including 26 lawyers) in the unemployment line. But just like that, another law firm, this one from Cincinnati, has just announced they are OPENING a new office in Pittsburgh. And guess what? They’ve hired 10 of those Burleson lawyers for their new Pittsburgh office…
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    PennEast: The Long, Careful, Deliberate Road to Pipeline Approval

    The latest theme/meme being pedaled by groups like THE Delaware Riverkeeper (Maya van Rossum) and other anti-fossil fuel groups is that the Federal Energy Regulatory Commission (FERC) is just a big ole rubber stamp for Big Oil and Big Gas. FERC, they say, never met a pipeline project they didn’t approve. FERC is in the back pocket of the fossil fuel industry. Yada yada yada. Some of the crazier of the crazies took to attending open FERC meetings in Washington, DC and disrupting those meetings (see FERC Clears the Room at DC HQ After Riff Raff Start Mouthing Off). Once they were banned from attending, they began to illegally block entrance to the building (see 24 Anti-Drilling Protesters Arrested by Homeland Security in DC). FERC has been made a kindergartenish bogyman by those who oppose pipelines. To counter some of the nonsense pedaled by these groups (and their willing accomplices in the media), PennEast Pipeline recently published an article to set the record straight. FERC doesn’t simply rubber stamp a pipeline application like PennEast’s–a pipeline proposed to run from Wilkes-Barre, PA to Trenton, NJ. PennEast faces a “gauntlet of approvals”–including 11 federal, state and local agencies that must approve thousands of pages of plans, much of it stringent safety requirements. Approving a pipeline is an intense, detailed, and LONG process in which no stone is left unturned. There is no rubber stamp except in the childish minds of irrational anti-fossil fuelers…
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    Water Well Testing Near OH Injection Wells Comes Back Negative

    Athens County, OH is infested with liberal Democrats who irrationally hate fossil fuels. Let’s just get the facts out there on the table, shall we? The ninny nannies in Athens finally (after years of agitation) browbeat their neighbors into voting for a frack ban last year (see 3 of 4 Frack Ban Ballot Measures in Ohio Fail – Athens Exception). Whatever. Athens County hosts eight wastewater injection wells and that drives the crazies every crazier. They’re doing their damnedest to get all eight shut down, and to deny a permit for a ninth well (see Athens County Asks Gov Kasich & ODNR to Stop New Injection Wells). One of their strategies is to prove that the existing wastewater injection wells are causing pollution of nearby water wells and groundwater supplies. So a study was done, testing nine different water wells for the presence of volatile organic compounds–a signal that wastewater is leaking into the wells. Guess what they found? Nothing. Nada. Zip. Zero. The injection wells are not contaminating groundwater and water well sources. What do the crazies want? More testing! More more more more more. They want to test until they find something–or rig the tests so something gets found…
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    Top 20 NatGas Pipelines in 2015 – Ranked by Traded Volume

    The amazing thing about this wonderful industry we’re in–the fossil fuel energy industry–is that you learn something new every day. Like there’s a service called the Capacity Center (CapacityCenter.com) that tracks flows of physical natural gas in every interstate pipeline in the U.S. Each year (for the eighth year running) the Capacity Center issues a report detailing the Top 20 Traders (buyers and sellers) of natural gas along those pipelines, and the Top 20 Pipelines by volume of natural gas flowing through the pipeline. We’re intrigued–particularly by the Top 20 pipelines, because a number of them operate in the Marcellus/Utica region. Below is the full Capacity Center Top 20 Capacity Traders & Top 20 Pipelines Report for 2015. If you’re like us, you’ll dig it too…
    Read More “Top 20 NatGas Pipelines in 2015 – Ranked by Traded Volume”

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    NEPA Electric Plant Converted from Coal to NatGas a Huge Success

    As MDN has previously chronicled, Chicago-based Invenergy hopes to build what will be the largest (to date) electric generating plant in the state of Pennsylvania powered by natural gas. Invenergy hopes to build the 1300-megawatt plant in the borough of Jessup (Lackawanna County), near Scranton. But there’s been quite a bit of opposition, most of it from anti-fossil fuelers (see our Jessup power plant stories here). The folks in Jessup might want to cast their eyes on another project not far away, in Luzerne County, where a former coal-fired power plant was recently converted to burn natural gas. That plant, owned and operated by UGI, reduced sulfur dioxide emissions by 99%, and reduced nitrogen oxide emissions by 95%. That is, natgas-fired electric plants are one of the lowest polluting ways to generate electricity–and far more reliable than alternatives like solar and wind…
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    GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs

    You may not think that computer software would have much to do with drilling holes in the ground and extracting natural gas and oil. But you would be wrong. If you ever visit a drilling rig and are fortunate enough to make a visit to “the dog house,” which is the equivalent of a jetliner cockpit where the rig is controlled by high-powered computers (and software), you’ll quickly understand how high-tech drilling has become. But it’s not just controlling a rig where computers are used in the oil and gas business–they’re used throughout the business. In fact there is software that, well, monitors other software. GE (nee General Electric) has a software offering that monitors drilling rigs and other equipment at drill sites. At least that’s how we understand it. GE issued a press release yesterday to tout the fact that GDS (Global Drilling Support) International is using GE’s “Equipment Insight” solution at rigs in both the Marcellus and Utica Shale in a six-month pilot program to squeeze ever more efficiency from the drilling process…
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    MarkWest Energy Investors/Unitholders Approve Merger with Marathon

    At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
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    Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX

    Shell is closing its Pittsburgh-area office and moving “most of” the 180 workers who worked there to its U.S. HQ in Houston, Texas–so says a Shell spokesperson. A few workers may remain and redeploy to various field offices that Shell intends to keep open–including a field office in Tioga County, PA where they have an active drilling program. Shell drilled just eight wells in PA this year, compared to 17 last year and 31 the year before that. Notice a pattern? Perhaps most importantly Shell stresses the office closure has nothing to do with the work on a proposed ethane cracker plant in Beaver County…
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    Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban

    An interesting update on what is now ancient history in New York State with regard to Andrew Cuomo and his ban on fracking. According to secretly recorded wiretaps of conversations of the son of former NY Senate Majority Leader Dean Skelos, a Cuomo official made the rounds to several prominent Senate Republicans to ask if there would be any “blowback” when (not if) Cuomo lifted a ban on fracking. If true, the revelation is a bombshell–that Cuomo had intended to lift the moratorium but changed his mind at the last minute. The problem with the recorded conversations is that Skelos’ son Adam, in talking with three different lobbyists, attributes the conversation to different Cuomo Administration sources. That is, he changes his story, making his story less credible. Both father Dean and son Adam Skelos are on trial in Manhattan for corruption. Dean tried to help his son get work with sweetheart deals–something that happens every day in New York with both Republicans and Democrats. We’re not excusing corruption–just pointing out the context and circumstances…
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