Shale Oil Drillers Ask OFS Providers to Slash Prices at Least 25%
If you operate a company that sells a product (particularly a commodity product) you only have two ways of making a profit: Sell the product for more money or cut expenses (or both). For oil drillers, the price of the product sold is pretty much fixed. Some drillers have “hedged” their production, pre-selling future production at a specific price. But many don’t hedge. And hedging contracts typically don’t extend beyond a year. In the case of oil, the world market sets the price, and the price this week is about half of what it was last week. That means most shale oil drillers won’t make a profit–unless they can trim costs. One of the ways drillers are attempting to cut costs is by asking the companies that do the actual drilling and perform services for them (oilfield services companies, or OFS) to cut the rate they charge.
Read More “Shale Oil Drillers Ask OFS Providers to Slash Prices at Least 25%”
Phoenix Logistics, headquartered in Milwaukee, Wisconsin, targets supply chain companies in a number of industries with warehousing, distribution, and transportation. One of the industries they target is the oil and gas sector. Phoenix has just opened a new 400,000 square foot warehousing facility in Athens (Bradford County), PA, targeting companies in the Marcellus.
Yesterday MDN brought you an article about the supply chain in Ohio–companies that sell goods and services to upstream (drilling), midstream (pipeline) and downstream (petrochemical) companies (see 
Drilling is great for local counties when it arrives. Especially for the “supply chain” in those counties–companies that sell goods and services to drilling companies. Everything from retail to convenience stores to restaurants to hotels to trucking companies and more. But what about businesses in nearby counties without any drilling activity? Is there any way they can share in the bounty too? There sure is!
Last week Shale Support, a frac sand producer and shipper headquartered in Louisiana, filed for Chapter 11 bankruptcy. The company is not able to deal with $128 million in debt it has accumulated, hence the filing. Shale Support maintains three frac sand terminal facilities in the Marcellus/Utica region.
Little by little, piece by piece, the evidence continues to mount that PTT Global Chemical and their partner Daelim Chemical will make a positive final investment decision (FID) to build a multi-billion dollar ethane cracker in Belmont County, OH. On Monday we told you the State of Ohio is investing another $30 million in the project, even though the project is not officially a done deal, yet (see 
Competitive Power Ventures (CPV) finally broke ground and began to build a new Marcellus gas-fired power plant in Cambria County, PA in October 2017 (see 
Yet another Range Resources alumnus is now working for someone else–himself. Matt Curry, a chemical engineer and Pittsburgh native who used to work for Range, along with Chris Combs, who’s worked for a number of drilling services companies in Texas, co-founded Praetorian Energy Solutions, a “pressure pumping and pumpdown services” headquartered in Canonsburg, PA. The company, launched earlier this year, is (so far) working in the Eagle Ford Shale play in Texas–because that’s where they bought their equipment. That equipment will be heading north soon to operate in the Marcellus/Utica. What is a pressure pumping/pumpdown company?
Civil & Environmental Consultants (CEC) is a large engineering firm with offices scattered across the country. We’re not sure which office is “headquarters,” but we know they have a sizable office in Pittsburgh. While CEC provides services to a number of industries, they have been a big part of the Marcellus/Utica since its birth in the 2000s. As the Farmer’s Insurance commercials say, “They know a thing or two because they’ve seen a thing or two.” Which is, of course, an understatement. They know a lot because they’ve seen (and done) a lot–when it comes to the Marcellus. Another large company, law firm Buchanan Ingersoll & Rooney (headquartered in Pittsburgh), recently interviewed CEC Founding Principal and Strategic Development Officer Greg Quatchak for their “Energy Insider” series of interviews. Quatchak talks about CEC and it’s important role (as he should), but woven into the responses to BIR’s questions we learn some important information, like this: It still takes 6-9 months on average for Pennsylvania Dept. of Environmental Protection to issue Marcellus Shale drilling permits. In Texas it takes their counterpart (the Texas Railroad Commission) about a week to issue the same type of permit. Yes, there are important differences between Texas and PA–geography, wetlands, threatened/endangered species, archaeology. And yes, the time to get a permit in PA has improved over the past year or two. But come on, 6-9 months! Here’s an interesting interview of one of the principals in an employee-owned company…
American Mud Works held a ribbon-cutting ceremony last week to officially open up a new regional headquarters in Monroe County, OH. The company specializes in mixing drilling mud–the stuff used to cool drill bits as they chew away at solid rock some 1-2 miles below the surface. They also recycle used drilling mud and wastewater/brine. The company’s main headquarters is in Texas. They’re locating a branch operation in Monroe to service the Utica and Marcellus industries in our region. In the short-term, the new office, due to be fully operational in about four weeks, will staff up by hiring 30-40 people. However, American Mud has bigger goals in view. They aim to add more service lines and expand their operations down the road. The number of employees will likely go much higher as they expand. Let’s welcome American Mud and another 40 jobs to Appalachia!…
TNT Crane & Rigging, headquartered in Houston, TX, has just purchased itself a major presence in the crane/rigging market in the Marcellus/Utica. TNT announced on Tuesday it is “merging with” (i.e. buying out and merging in) Allison Crane & Rigging, located in Williamsport, PA. When you read these kinds of announcements you’re never quite sure who is buying whom. But it became clear in this announcement. TNT, which is a “portfolio company” of (i.e. majority owned by) First Reserve, a BIG private equity investment firm, owns and operates 700 cranes in 44 different branch offices across North America. Allison operates 30 cranes. That’s how we know who bought whom. Here’s the news that TNT and Allison figure they’re better together…
One of the bits of news we love to cover is when a new business starts up for the express purpose of servicing the Marcellus/Utica industry. Having started our own company–Marcellus Drilling News–we know a little bit about the challenges one faces in launching a new business. But nothing on the scale of launching a business that ends up employing dozens, even hundreds, of people. When we see that happening, we have deep respect and admiration. In 2014, Frank Catroppa, a serial entrepreneur, rolled the dice and launched