PA Supremes Order Rehearing for Rex Permits Near Martian School

The Martians and their allies have attacked once again. Run for the hills! This is a long-running story that’s just taken another (unfortunate) twist. A handful of anti-drilling parents from the Mars School District (“Martians”) in Butler County, PA, backed by money and legal help from Philadelphia Big Green groups THE Delaware Riverkeeper and the Clean Air Council, have filed frivolous lawsuit after frivolous lawsuit (see Martians Use Riverkeeper to Continue Court Battle Against Rex). The effort is aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. The actions by these radicalized parents have cost the taxpayers of Middlesex Township over $100,000 in legal fees (we hope the taxpayers enjoying paying for this folly). Eventually most of the lawsuits were won by the good guys and at least two wells got drilled. However, in 2016 the Martians appealed a town ordinance that allows the wells to be drilled about 3/4 of a mile from the school. A panel of three western PA judges in Commonwealth Court heard arguments in the case, and in June 2017 the judges ruled against Riverkeeper and the Martians (see Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling). Riverkeeper, using funding from the William Penn Foundation and Heinz Endowments (among other Big Green funders) pressed on, all the way to the PA Supreme Court. Last Friday the Supremes proved they aren’t so supreme after all. In a ruling, the Supremes told Commonwealth Court to do it over again, this time considering PA’s so-called Environmental Rights Amendment as part of their thinking. In other words, do it over, and rule another way this time–that’s what the Supremes are telling the lower court to do…
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Rex Energy Settled Butler County Water Lawsuits for $159K

Beginning in 2012, MDN reported on the story of a community in western Pennsylvania (in Butler County) whose residents said that nearby drilling by Rex Energy led to contamination of their water wells (see PA Residents Weary of Fight with Rex over Water Contamination and Rex Energy Water Contamination Case Shifts Focus to Water Pipeline). Several of the families sued Rex. The PA Dept. of Environmental Protection, after an extensive investigation, said that Rex’s drilling did not cause the situation. Apparently water quality in the area was never the greatest to begin with. Rex had built a water line in the area to supply water for fracking and had expected to turn over control/ownership of that line in 2013. That water line could be used to supply fresh water to the affected homes. The debate has been: Who will pay to hook up the homes and to maintain the pipes and infrastructure required? Since Rex, according to the DEP, is not to blame for the poor water quality in the area, the company understandably doesn’t want to pay big bucks to connect and maintain the line to residences in the area. As far as we can tell, the water line never got hooked up. However, there has been a resolution of the situation, of sorts. What had been sealed court documents (unsealed because of Rex’s bankruptcy proceedings) show that in April of this year Rex settled with the suing families, paying them between $16,250 and $27,125 each–a cumulative $159,000. Rex maintains the settlement is not an indication of guilt…
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Dela. Riverkeeper Suffers Major Defeat in Martian Well Case

Nearly a year ago MDN reported that Big Green group THE Delaware Riverkeeper (aka Maya van Rossum) and the odious Philadelphia-based Clean Air Council (CAC) had suffered a crushing legal defeat in their attempt to interfere with shale drilling on the opposite side of the state from where the Delaware River and Philly is located (see Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling). A small group of anti-drilling parents from the Mars School District (whom we affectionately call “Martians”) in Butler County, PA, backed by money and legal help from Riverkeeper and CAC, filed frivolous lawsuit after frivolous lawsuit aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. Even amid the back and forth lawsuits, at least two of the wells were permitted and drilled by Rex Energy, despite the bleatings of the Martians (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). Following last year’s final word by PA Commonwealth Court, we thought that was the end of it. However, Riverkeeper and CAC tried one last, desperate attempt–by filing an appeal with the Environmental Hearing Board. The EHB is a special court set up to hear appeals of decisions made by the Dept. of Environmental Protection (DEP). Riverkeeper and CAC argued that the DEP abrogated their responsibilities under the PA Environmental Rights Amendment (ERA) to protect PA’s environment by issuing permits for Rex’s Martian wells. Last Friday the EHB ruled that DEP was well within its rights and did not, in fact, violate the ERA by allowing the Rex wells…
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PA Class Action Royalty Lawsuit Against XTO Settles for $11M

A journey which began for Pennsylvania landowners in Butler County, PA in July 2015 is nearing an end. Two Butler County, PA landowners with a combined 245.7 acres of land leased to XTO Energy sued XTO in 2015 claiming that XTO is breaking the lease agreement by paying royalties below 1/8 of what XTO receives in revenue for the gas (see PA Landowners Sue XTO Energy for Shorting Them on Royalties). The case, known as Marburger et al V. XTO Energy Inc., asserted the lease signed with landowners did not include language that would allow XTO to deduct post-production charges (that they had been deducting). The two landowning families that launched the lawsuit, the Marburgers and the Thieles, sought to turn the lawsuit into a class action, involving potentially hundreds or thousands of others. It didn’t take long for XTO to oppose the lawsuit and its certification as a class action (see XTO Files Motion to Dismiss Royalty Lawsuit in Butler County, PA). Since that time we’ve not heard much of anything about the lawsuit. And then out the blue comes word that via arbitration, XTO has agreed to settle the lawsuit. The settlement includes turning it into a class action, and paying out a total of $11,010,000. As part of the settlement, XTO admits to nothing. That is, they do not concede the plantiffs have a valid case against them. It’s simply cheaper to settle it and move on rather than to keep fighting. Below we have the relevant court documents with the details of the settlement…
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Rex Energy 3Q17: $47M Loss, 10 More Utica Wells on the Way

Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), issued their third quarter 2017 update earlier this week. The company continues to bleed money, losing $47 million in 3Q17, versus losing $55 million in 3Q16. An improvement, but showing a profit would be a whole lot better than a loss at this point. Highlights for 3Q17: Rex placed the four-well Wilson pad into sales (Butler County, PA) with initial 24-hour average sales rate per well of ~10.9 million cubic feet equivalent per day (MMcfe/d). Total production averaged 182 MMcfe/d–with 38% of that liquids production. Rex drills in both western PA and eastern OH. Rex officials said they are currently working on 10 new wells in Carroll County, OH that will go online in 2018. So far Rex has drilled 30 wells in the Buckeye State. Below is the full 3Q17 update, along with excerpts from the analyst phone call and the latest Rex slide deck…
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“Health Experts” Meet in Pitt. to Demonize Shale, Shell Cracker

A group of so-called “health experts” pontificated at an event yesterday hosted by the League of [Liberal Democrat] Women Voters in Pittsburgh. They were supposedly there to discuss shale and public health. One of the gripe sessions took aim against Shell’s now-under construction ethane cracker facility. Speakers tried hard not to come right out and curse shale and the cracker–but they couldn’t help themselves. In the end they made untrue statements that imply the cracker will poison the community and make it unlivable. One speaker’s solution? “Don’t build it.” Typical. All you need to know about yesterday’s meeting is that one of the panelists is the staff attorney for the radical enviro organization Earthjustice. Truth was the main casualty at yesterday’s meeting…
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Rex Energy Improves Production for New Wells in Butler, PA

Ahead of providing its third quarter 2017 update, yesterday Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA) has issued an update on two wells recently connected to sales. The two wells are located in Rex’s Butler County, PA “Moraine East” area. What’s unique is that both wells were completed with a newly revamped/tweaked completion design. Completions is that part of drilling a well when you frack it and hook it up to production. Rex doesn’t comment on how they tweaked their completion design. Typically, changing up completions may involve how long each frack stage is, the type (and quantity) of sand or other proppant used, the kind of slick water used, etc. Rex worked with an engineering firm to review their completions process and made some changes–and they are happy with the results. Initial daily production for the two wells averaged 9.4 million cubic feet equivalent per day (MMcfe/d). Rex reports the methane (natural gas) portion was 4 MMcf/d, NGLs of 820 barrels per day, and condensate averaged 70 barrels per day. Looks like Rex has a couple of winners, with more on the way using the new completion design…
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Rex Energy Update – Brings 10 New Wells Online in Butler Co. PA

Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), is a plucky company. Although it has faced its share of financial challenges, it continues to drill in the Marcellus/Utica–bringing new wells online. Rex released an announcement yesterday to tout two new wells pads with a cumulative 10 new wells between them that the company has now brought online into production. Rex always refers to their drilling program in three areas: “Bulter Legacy” and “Moraine East” are drilled on Rex’s leases in Butler County, PA; “Warrior North” refers to Rex’s drilling program on land in Carroll County, OH. The latest two pads were both drilled in Rex’s Moraine East area of Butler County. One of the pads, the “Shields” pad with six wells, produced an initial cumulative rate of 9.2 million cubic feet equivalent per day (MMcfe/d), dropping to 7.9 MMcfe/d after 30 days. The “Mackrell” pad with four wells produced an initial cumulative rate of 8.4 MMcfe/d. No 30-day rate (yet) for the Mackrell pad. Here’s the particulars of our “little driller that could”…
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Rex Energy 2Q17: Sells Waterline, Deal with BP to Market NGLs

Earlier this week Rex Energy issued its second quarter 2017 update. During 2Q17 Rex drilled 2, completed 6 and put online into sales 4 wells in their Butler County, PA acreage. They also began drilling a new 4-well pad in Butler. In the company’s Carroll County, OH acreage, Rex drilled a 3 wells on a single pad. The big news from the update was a deal with BP to market Rex’s natural gas liquids (or C3+) production, and the sale of a water pipeline owned by Rex in Salineville, OH for $8 million. Rex’s finances didn’t do so well. In 2Q17 the company lost $10 million versus making a $16 million profit in 2Q16. Production picked up a bit, from 173.4 million cubic feet equivalent per day (MMcfe/d) in 1Q17 to 177.1 MMcfe/d in 2Q17. The official statement said 2Q17 production was “constrained” during the quarter “due to unplanned maintenance downtime in the company’s midstream services.” Which means they had hoped it would have been higher than 177.1 MMcfe/d. Looking forward to 3Q17 Rex says they plan to bring 12 new wells in Butler County online…
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Rex Energy Crows re Results from New 4-Well Pad in Butler County, PA

Rex Energy began selling natural gas, gas liquids and condensate from its four newest wells, part of the “Baird” pad (in Butler County, PA) on May 31st. The company issued a press release yesterday to do some well-deserved crowing about their wells. Two of the wells (the 1H and 4H) are Marcellus wells and initial production is averaging 12.1 million cubic feet equivalent per day (Mmcfe/d). The other two wells (the 2H & 3H) target the Upper Devonian layer and initial production for those wells has been 8.1 Mmcfe/d. Rex also posted a new company PowerPoint presentation (full copy below) which shows a new 6-well pad in Butler County will go online to sales in August, another 4-well pad in September, and a 2-well pad and 4-well pad sometime in the fourth quarter. In addition, Rex expects to begin drilling a 3-well pad in the Ohio Utica (in Carroll County) in July…
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Dela. Riverkeeper Loses Martian Case to Stop Rex Energy Drilling

THE Delaware Riverkeeper (i.e. Maya van Rossum) and a small group of anti-drilling parents from the Mars School District (“Martians”) in Butler County, PA, have just suffered a crushing defeat in their years-long battle to prevent Rex Energy from drilling wells “near” a local school. Backed by money and legal help from Philadelphia Big Green groups Delaware Riverkeeper and Clean Air Council, the Martians filed frivolous lawsuit after frivolous lawsuit. The effort is aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. The lawsuits have cost the taxpayers of Middlesex Township over $80,000 in legal fees. Even amid the back and forth lawsuits, at least two of the wells were permitted and drilled by Rex Energy, despite the bleatings of the Martians (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). But that didn’t stop the frivolous lawsuits. Using legal assistance from THE Delaware Riverkeeper, the Martians appealed a town ordinance that allows the wells to be drilled about 3/4 of a mile from the local Mars School. A panel of three western PA judges in Commonwealth Court heard arguments in the case last November (see Martians Use Riverkeeper to Continue Court Battle Against Rex). This week the three-judge panel ruled–against Riverkeeper and the Martians…Continue reading

Rex Energy 1Q17 Full Update – Swings to Black, Drilling Picks Up

In April, Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), issued an operational update (see Rex Energy 1Q17: Production Drops 8.5%). Earlier this week the company issued a full 1Q17 update. What does it show? Rex swung from losing $62 million in 1Q16 to making $2.1 million in 1Q17–quite a turnaround! This update also includes a fuller look at the drilling that did happen in 1Q17, and what the company plans for the balance of 2017. In Rex’s Legacy Butler Operated Area (Butler County, PA), the company has begun drilling 4 wells on a single pad and plans to have them completed and online in 3Q17. In Rex’s Moraine East Area (also Butler County) the company drilled 7 gross (3.3 net) wells and completed 4 gross (1.4 net) wells in 1Q17. In addition, Rex had 12 gross (5.5 net) wells awaiting completion at the end of 1Q17. In Rex’s Warrior North Area (Carroll County, OH), the company plans to drill 12 gross (10.2 net) wells by the end of 2017, with most of them not going online until 2018. Below is the full update, along with select portions of the earnings call where Rex’s CEO shares some interesting insights…Continue reading

PA DEP Fines Butler County Gathering Pipeline $185K for Erosion

MDN spotted an announcement issue by the Pennsylvania Dept. of Environmental Protection (DEP) stating they’ve assessed a $185,000 fine on the Constellation Pipeline and its builder EM Energy (i.e. EdgeMarc) for a series of violations when building the pipeline in 2014-2015. That sent us digging. We don’t recall a Constellation Pipeline (and we’ve been writing MDN since 2009). What is the pipeline? Where, in PA, is it located? What is its purpose? We think we found most of the answers…
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Top 20 Marcellus Drillers in Southwest Pennsylvania

The sharp folks over at the Pittsburgh Business Times have been looking through data from the Pennsylvania Department of Environmental Protection (DEP) and have compiled a list of 20 drillers who have at least a dozen shale wells in the southwest PA region. And they ranked them from lowest to highest. We’ve grabbed the list below. The interesting thing for MDN is that there is one name in the list not familiar to us, and we’ve been watching this space since 2009. Always fun to learn something new. Here’s the list of southwest PA’s “Top 20” Marcellus drillers…
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Handful of Butler Co. Residents Still Suing Rex Energy 5 Years Later

For years MDN has reported on a lingering/ongoing story of a community in western Pennsylvania (in Butler County) who say that nearby drilling by Rex Energy led to contamination of their well water supplies (see PA Residents Weary of Fight with Rex over Water Contamination and Rex Energy Water Contamination Case Shifts Focus to Water Pipeline). Several of the families sued Rex. The PA Dept. of Environmental Protection, after an extensive investigation, said that Rex’s drilling is not at fault in the situation. However, for most of the families, the issue progressed beyond blame–apparently water quality in the area was never the greatest to begin with. Rex had built a water line in the area to supply water for fracking and had expected to turn over control/ownership of that line in 2013. That water line can potentially be used to supply fresh water to the affected homes. The debate has been: Who will pay to hook up the homes and to maintain the pipes and infrastructure required? Since Rex, according to the DEP, is not to blame for the poor water quality in the area, the company understandably doesn’t want to pay big bucks to connect and maintain the line to residences in the area. As far as we can tell, the line is not hooked up. The families with bad water still have bad water and depend on donated water to this day for drinking and cooking…
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