Seneca Resources 100% PA Utica Focused by ‘End of Fiscal Year’

While Buffalo “Marcellus” Bills owner Terry Pegula’s JKLM Energy has been “steadily increasing activity” in Potter County, PA (northcentral PA) grabbing headlines, another company, National Fuel Gas (NFG) subsidiary Seneca Resources, is also active in Potter and several neighboring northcentral PA counties (Cameron, McKean, Elk, and Lycoming). We spotted a pair of stories in a local newspaper recounting Seneca’s activity to date, and outlining plans for the future. One statement in particular stood out for us: Seneca will be “shifting to 100-percent Utica development by the end of this fiscal year.” At first blush, you might think “end of fiscal year” means by Dec. 31, 2017. However, NFG and subsidiary Seneca operate on a strange fiscal year. Fourth quarter 2017 (Oct-Dec) is NFG/Seneca’s first quarter 2018 fiscal period. Since the quote about focusing 100% on PA Utica drilling came at the end of November, we interpret the quote to mean “Seneca will be 100% focused on the PA Utica by September 2018.” At any rate, let’s not get caught up in semantics and timing. The takeaways from the pair of articles below, which appeared about a week apart at end of November/beginning of December, are: (1) Seneca is shifting to 100% Utica drilling; (2) Seneca spent 60% more on drilling in 2017 than 2016; (3) Seneca is currently running either 1 or 2 rigs, depending on which quote from which story you read; and (4) between royalty payments, impact tax payments and money spent with local PA businesses, Seneca has now spent nearly $1 billion on shale drilling–all of it in northcentral PA…
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Pin Oak Energy Snaps Up 4,300 Acres, 16 Wells from Seneca in NWPA

In August MDN introduced you to a new-to-us driller based in Akron, Ohio–Pin Oak Energy Partners (see New Marcellus/Utica Driller Snaps Up Assets in OH, PA). Pin Oak is owns both conventional and unconventional (shale) oil and natural gas wells, along with associated assets (like pipelines). At the time, Pin Oak currently operated 363 wells producing nearly 5.7 MMcfe/d (32% liquids) across more than 32,000 acres in the Marcellus/Utica region. You can now add another 16 wells (14 Marcellus, 2 Utica) and 4,300 acres to those totals. Yesterday Pin Oak announced they have purchased wells and acreage from Seneca Resources–in Forest, Elk, McKean and Cameron counties in Pennsylvania. Terms of the deal were not disclosed. We can also tell you that last week Pin Oak got an increase in their line of credit with the bank–now able to borrow up to $150 million. Here’s the latest on the newest (rapidly growing) entrant to the Marcellus/Utica…
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Fed Judge Rules for Seneca Resources in PA Injection Well Fight

An update in the ongoing case of a proposed injection well in Highland Township (Elk County), PA. In 2013 the radical leftist group Community Environmental Legal Defense Fund (CELDF) convinced ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance in Highland prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to block the lawsuit. Didn’t work. The lawsuit advanced. New supervisors were elected and promptly voted to overturn the so-called Community Bill of Rights (see Elk County Town Wises Up, Abandons Effort to Block Injection Well), enraging the nutters. However, last November enough locals remained fleeced to pass a so-called home rule charter which contained language making injection wells illegal. The charter was/is essentially the Community Bill of Rights under a different name and different legal structure. In an effort to extract itself from a legal hellhole of its own making, the new Highland supervisors asked a federal judge to rule in favor of Seneca Resources, but to not make Highland pay legal fees and penalties for delaying the injection well (see PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns). Last Friday the judge did rule in favor of Seneca, gutting provisions in the home rule charter that attempt to regulate oil and gas (and its waste). It is a legal victory for Seneca Resources and their plan to drill an injection well in Elk County…
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Seneca Resources Fined $375K by PA DEP for “Multiple Violations”

The Pennsylvania Dept. of Environmental Protection has just fined driller Seneca Resources $325,000 for a series of violations that occurred between 2013 and 2015. It seems in moving dirt around when building drill pads, Seneca caused erosion to occur. They also spilled ~100 barrels of crude oil in one location, and ~500 barrels of wastewater at another location. The violations happened in Forest, McKean, and Elk Counties. Here’s the notice issued by the PA DEP…
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2 PA Townships Won’t Enforce “Home Rule” Against Injection Wells

We’ve previously reported on the story of two Pennsylvania towns that were either hoodwinked, or perhaps willing led astray, by the radical Community Environmental Legal Defense Fund (CELDF) into passing (now overturned) bans on fracking and injection wells in their towns–Highland Twp (Elk County) and Grant Twp (Indiana County). The two townships thought they would do an end-run around the state’s authority to issue permits for two injection wells–one in each township, by re-incorporating under so-called home rule charters. The towns essentially declared themselves independent of the state for a variety of matters, including oil and gas permits–which the PA state constitution clearly says is a function of ONLY the state Dept. of Environmental Protection. In March, the DEP issued final permits to each town, and at the same time sued each town to get those portions of their home rule charters, dealing with oil and gas, overturned (see PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns). The new news is that the towns will “stand down” and, during their lawsuits, not oppose the DEP’s permits. The towns have “temporarily” acquiesced and will allow the companies building the wells to proceed…
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PA DEP Issues 2 Wastewater Injection Well Permits, Sues 2 Towns

Good news for Pennsylvania drillers: the PA Dept. of Environmental Protection (DEP) finally, after years of review, granted permission to two different companies to operate two new wastewater injection wells in the Keystone State. One well is located in Elk County, the other in Indiana County. With these two new injection wells coming online, the state will have a total of eight operating injection wells (vs. hundreds in Ohio). You may have seen news about the newly authorized injection wells from other news sources yesterday. But you read MDN for “the rest of the story.” And here it is, something you won’t find anywhere else (until other news sources read MDN): As soon as the DEP issued the permits for the injection wells, the DEP filed lawsuits against the two townships where the injection wells will be located, because both of those townships–Highland Township in Elk County, and Grant Township in Indiana County–had previously passed so-called Home Rule Charters in an attempt to prevent the injection wells from being located in their towns. The DEP has sued each of them (copy of the Highland lawsuit below) to correct laws that attempt to prevent the DEP from doing its job in authorizing the injection wells. We have the full news of the DEP’s decision to permit the injection wells, along with details about the lawsuits, below…
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Marcellus Gas Saves 438 Jobs at PA Paper Manufacturer

Domtar Corporation designs, manufactures, markets, and distributes pulp, paper, and personal care products from facilities in Elk and Clearfield counties in North Central Pennsylvania. PA Gov. Tom Wolf’s office excitedly announced yesterday that the company has decided to stay in PA and not move, making “significant infrastructure and equipment upgrades at its facilities.” The decision means that 438 jobs will stay in the Keystone State rather than move elsewhere–good for Pennsylvania. Which is all mildly interesting. However, the primary reason they’re sticking around is what caught our eye: the operation is converting from burning coal for energy to burning clean, cheap Marcellus Shale gas. The PA Commonwealth Financing Authority is kicking in $1 million from the Pipeline Investment Program (PIPE) grant fund to pay for a three-mile natural gas pipeline to Domtar’s Elk County paper mill facility…
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SWEPI Auctioning 189K PA/NY Conventional Acres, 1,500 Active Wells

SWEPI, formerly known as Shell Western E&P Inc., is the North American land-based drilling arm of giant Royal Dutch Shell. SWEPI has an active drilling program in the Marcellus/Utica region. Some of that active program has traditionally been in shallow, or conventional (not shale) drilling. Using a broker, SWEPI has put up a mammoth 189,000 acres of its conventional/shallow leases and wells for sale by auction. The leases and some 1,500 active oil and gas wells are located in Forest, Elk, McKean, and Warren counties in Pennsylvania, and Cattaraugus County in New York. The sale includes shallow rights (not shale rights) only. SWEPI claims there are another 10,000 potential well locations. Here’s the details…
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Elk County Town Wises Up, Abandons Effort to Block Injection Well

I Give UpThere is a new development in the case of an illegal ban on injection wells passed by Highland Township in Elk County, PA. In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to prevent the lawsuit. In March of this year, U.S. Magistrate Judge Susan Paradise Baxter ruled that Seneca has standing to sue and allowed the lawsuit to go forward (see Judge Rules Seneca May Challenge Injection Well Ban in Elk County). Faced with losing the lawsuit and taxpayers owing Seneca big money, township supervisors voted to overturn the so-called Community Bill of Rights. Another crushing defeat for the CELDF…
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Seneca Resources & IOG Extend JV to Drill More Wells in PA

Seneca ResourcesIn December MDN told you that Seneca Resources (a wholly owned subsidiary of National Fuel Gas Company) had cut a deal with energy investor IOG Capital to essentially fund Seneca’s Marcellus drilling program in Elk, McKean and Cameron counties in north-central Pennsylvania (see Seneca Res. Cuts Deal with IOG Capital to Fund Up to 80 PA Wells). The deal was for IOG to fund development for an initial 75 wells. So far 39 of the 75 wells have been drilled. Yesterday Seneca announced that their deal with IOG has been revised and extended. The new total well count that IOG will participate in is 82. The royalty split has also been revised with Seneca’s royalty in 36 of the wells going down–from 10% to 7.5%. Here’s the full details on this somewhat complicated arrangement that allows Seneca to keep on drilling…
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PA Town May Change Charter as Tactic to Stop Injection Well

dodo bird
dodo bird

In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced enough ignoramuses in Highland Township (Elk County, PA) to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp passed prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to prevent the lawsuit. In late March of this year, a judge overruled the objections of the radical CELDF and the nutjobs from town board (see Judge Rules Seneca May Challenge Injection Well Ban in Elk County). The latest in this ongoing saga is that the obstinate dupes from Highland, still listening to the CELDF (which has lost every home rule case brought against it) now plans to set up a home-rule charter commission–essentially change the town’s incorporation status. It’s a tactic of the desperate to try and circumvent state law…
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Judge Rules Seneca May Challenge Injection Well Ban in Elk County

There is a new development in the case of an illegal ban on injection wells passed by Highland Township in Elk County, PA. In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced enough ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to prevent the lawsuit. Last week U.S. Magistrate Judge Susan Paradise Baxter ruled that Seneca has standing to sue and the lawsuit will now go forward. By the way, in October of 2015, Judge Baxter ruled in an almost identical case in Grant Township (located in nearby Indiana County) that the town’s injection well ban was illegal (see Fed Judge Overturns Grant Twp, PA Ban on Injection Wells). Even the dullards who enacted the ban in Highland should be able to see the writing on the wall. They’re about to lose. Taxpayers in Highland who are footing the bill (since the CELDF doesn’t pay for legal fees and judgments) are the biggest losers. They may want to remember that come election time…
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Seneca Res. Cuts Deal with IOG Capital to Fund Up to 80 PA Wells

Art of the DealYesterday National Fuel Gas Company, the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, announced that Seneca has partnered up with energy investor IOG Capital to essentially fund Seneca’s Marcellus drilling program in Elk, McKean and Cameron counties in north-central Pennsylvania. The outlines of the deal are thus: IOG will provide the cash and Seneca will do the drilling on up to 80 Marcellus wells on 10,500 acres in the Clermont/Rich Valley area of PA. IOG will get an 80% working interest in the wells. In addition to drilling the wells, National Fuel’s midstream subsidiary will connect the wells and get the gas to market. What this deal means is that Marcellus drilling activity in the Clermont/Rich Valley area will pick up over the few years. Here’s the details of this somewhat complicated deal…
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Grant Twp, PA Calls DEP “Chicken $h*t” re Injection Well Permit

potty mouthGrant Township in Indiana County, PA has a problem: They’ve hired a potty mouth lawyer to represent them who has a HUGE conflict of interest. Grant’s town attorney is also the lawyer for (and executive director of) the litigious and extreme left-wing group Community Environmental Legal Defense Fund (CELDF), a group committed to ending the use of fossil fuels. We’ve written plenty about the antics of the CELDF, including their lawsuit on behalf of an ecosystem (see It Speaks! An “Ecosystem” has Filed to Join a Lawsuit in PA). CELDF/Grant Twp. attorney Thomas Linzey is calling the PA Dept. of Environmental Protection (DEP) “chicken shit” for their decision to delay a decision on whether to grant a permit for an non-controversial injection well in the township…
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It Speaks! An “Ecosystem” has Filed to Join a Lawsuit in PA

Better be careful, the water table running under your property may decide to sue you for sinking a water well into it and withdrawing water for drinking, showers, etc. What…Absurd? Funny? Foolish? We’re not kidding. It seems that water tables and rock and dirt are now considered “ecosystems” and, if a lawsuit is allowed to stand in a Pennsylvania court, such an “ecosystem” has the right, under law, to sue. A motion has been filed by the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) on behalf of an ecosystem to intervene in a federal lawsuit to defend its own “right” to exist and flourish. Background: In 2013 the CELDF convinced enough ignoramuses in Highland Township in Elk County, PA to pass a so-called Community Bill of Rights. Essentially it’s a way to prevent wastewater injection wells from being drilled in the township. Seneca Resources filed a lawsuit to overturn the illegal law. Highland Twp taxpayers are now defending their illegal action with $upport from the deep pockets of Big Green groups (i.e. the CELDF). In an attempt to bully Seneca into backing down from the lawsuit, the CELDF claims to speak for the ecosystem and has filed a lawsuit on behalf of the ecosystem. It’s utter bull crap of the highest order–but a dangerous precedent if allowed. We can see your dog suing you, the trees that ring your property suing you, wrongful death lawsuits for killing a snake…you get the idea. An ecosystem filing a lawsuit would be funny, if it weren’t such a tragically vicious attack against the fabric of this country and the HUMANS that live in it (the only living things with “rights” under our Constitutional form of law)…
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PA Republican Senator Hands Out $2M+ in Impact Fee Money

Being President Pro Tempore of the Pennsylvania State Senate has its privileges–like handing out $2,086,132 in grants for six energy, trail and water and sewer projects in your district–just two weeks before the election. Senator Joe Scarnati (R-Jefferson) announced awards yesterday to fund projects including $150K for a recreation trail in Elk County, nearly half a mil for a flood mitigation project in Senator’s home county of Jefferson, and $546K to buy some sort of biogas contraption for a pig farm in Tioga County (something that turns pig crap into electricity). All of these projects are funded by PA shale drillers through the Act 13 law and the impact fee collected…
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