LOLA Energy is Back! Scoops Up Rice Acreage EQT Let Expire

LOLA Energy was birthed near the end of 2015, by former EQT executives using private equity money from Denham Capital (see New Marcellus/Utica Drilling Company is Born – LOLA Energy). In July 2017, Rice Energy (later sold to EQT) bought the assets of LOLA Energy for $180 million, over the objections of LOLA CEO Jim Crockard (see Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell). Like a phoenix rising from the ashes, LOLA Energy and Jim Crockard are back. The company has scooped up leases that EQT inadvertently let expire, potentially blocking EQT from drilling some already-planned-and-in-the-works wells–until EQT pays LOLA.
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Another Post-Gazette Smear Job: Drill Cuttings Pollute Rivers

Yet another attack on the shale industry by two Pittsburgh Post-Gazette “reporters” (propagandists) who have made a career of unfairly attacking shale–Don Hopey and David Templeton. This latest smear job makes the claim that leachate coming from a landfill piped to a municipal wastewater treatment facility is “contaminated” with all sorts of nasty chemicals (what the heck do you think is in leachate, anyway?!). The claim is the chemicals in the leachate are present because of drillers dumping leftover rock and dirt that comes out of the ground when drilling new holes for shale wells into the landfill.
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Pittsburgh Media Attempts to Link Shale Drilling to Childhood Cancer

The Pittsburgh Post-Gazette seems to be doing its best to tie what it calls a “cancer cluster” to local shale drilling in the region. We first noticed a developing story about a potential cluster of rare Ewing sarcoma cancer cases among children in the Pittsburgh region a few months ago, when Pittsburgh media first began to report on it.
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SWPA Gas-fired Elec Plant Next to Pot Farm Gets Ready to Build

In October 2017, MDN told you a second Marcellus gas-fired electric generating plant is planned for Greene County, PA (see 2nd Marcellus-Fired Electric Plant Proposed for Greene County, PA). Hill Top Energy Center, based in Huntington Bay, N.Y., is planning to build a 620 megawatt plant on 41 acres of land off Thomas Road in Cumberland Township. We have indications that the project is finally getting ready to begin construction.
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CNX 1Q19 & Beyond: Go Big (in the Utica) AND Go Home

CNX Resources released its first quarter 2019 update yesterday, which shows the company lost $87 million, as opposed to making $527 million in profit in 1Q18. Even so, CEO Nicholas DeIuliis announced the company is upping its drilling budget from the previously announced $700 million to instead spend $885 million, largely to drill more “deep dry” Utica wells. Go big or go home!
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PA DEP Clips Rice Midstream $1.5M for Pipe Problems in SWPA

Even though Rice Midstream doesn’t exist anymore, it can still be fined. Rice Midstream became part of EQT when EQT bought out and merged in Rice Energy in 2017. Last year EQT, under pressure from investors, split itself in two–into EQT (the driller) and Equitrans (nee EQT Midstream, the pipeline company). What was Rice Midstream is now part of Equitrans. Yesterday the PA Dept. of Environmental Protection (DEP) levied a $1.5 million fine on Rice for work done in late 2017/early-to-mid 2018.
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PA DEP Threatens to Close Equitrans Gas Storage Field in SWPA

Natural gas storage fields are an important, but often overlooked, part of the natgas ecosystem. Equitrans (nee EQT Midstream) owns a natgas storage field in Greene County, PA, in the southwest corner of the state. The state Dept. of Environmental Protection (DEP) is threatening to shut down that storage field, because of coal mining in the area.
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Peregrine Energy Buys Royalty Rights in Greene County, PA

There are companies that will purchase landowners’ (rights owners) royalty payments–giving them a lump sum payment up front in return for signing over all future royalty payments to the company buying the rights. Peregrine Energy Partners is one such company and has just purchased an unspecified amount of royalty payments in Greene County, PA.
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CNX Midstream Sues Contractor for Walking Away from Pipe Project

On Monday, CNX Midstream sued West Virginia contractor Ronald Lane Inc. claiming the contractor “without warning or justification ceased work on the Project and abandoned the Project,” the Project being a package of water and gas pipelines in Greene and Washington counties in PA. And that, “Lane informed [CNX] that Lane intended to redirect all of its forces and efforts to other projects that Lane considered to be more profitable than the Project. Lane made it clear to [CNX] that Lane had no intention to perform any more work on the Project.” Lane was the winning bidder for the Project in late 2017 at a total cost of $7.1 million. According to the lawsuit, CNX claims Lane began construction in March and abandoned the Project in June.
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Did Shale Well Methane Migration Cause SWPA Home to Explode?

On Wednesday a man in Clarksville (Green County), PA turned on his gas stove and it exploded, catching fire to and leveling the entire house. The man, his girlfriend and young child were helicoptered to a hospital burn unit. The working theory/assumptions are (a) the man didn’t smell mercaptan, therefore the source of the gas that exploded was not from the stove or line into the house itself, and (b) because there is an EQT shale well “across the street” and a gathering pipeline that runs “next to the house,” methane “may have” migrated from the shale well to the home, or methane leaked from the gathering line into the home.
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PA Natural Gas Production Hits Another All-Time High in 2Q18

Last Thursday the PA Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for Apr-Jun 2018 (full copy below). It shows natgas production rose 9.9% compared to the same period last year–same as the increase in 1Q18 (see PA Natural Gas Production Hits New All-Time High in 1Q18). The report also shows the number of producing wells is up 10.4% from last year. Total natural gas production volume was 1,455.8 billion cubic feet (Bcf), and the number of producing wells in 2Q18 was 8,672 (of which 8,194 were shale wells). The biggest news is that once again 2Q18 saw the highest quarterly production of natural gas in the state–ever. This is the seventh quarter in a row there has been an increase in production. Two-thirds of the state’s natural gas production consistently comes from four counties: Susquehanna, Washington, Bradford and Greene. The #1 county for natgas production in 2Q18 was, as it was in each quarter of 2017 and in 1Q18, Susquehanna County, in the northeastern corner of the state. The #1 producing driller in Susquehanna County is Cabot Oil & Gas. Here’s the full 2Q18 natural gas production report from the IFO…
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PA DEP Seeks Comments on Pipe Project to Flow Marc Gas to Ohio

You don’t often read about pipeline projects that seek to flow more Pennsylvania Marcellus gas into the Ohio Utica region. In January, Dominion Energy filed a request with the Federal Energy Regulatory Commission (FERC) to expand capacity along the existing Dominion Energy Transmission Inc. (DETI) pipeline from Pennsylvania to Ohio (see Dominion Files FERC Request to Expand Pipeline from PA to OH). Why? To flow more gas that will be used to generate electricity for the Midwest market. The project, called the Sweden Valley Project, is projected to cost $48 million and add another 120 million cubic feet per day (MMcf/d) of PA Marcellus Shale gas to the existing flow along DETI. Dominion says all 120 MMcf/d is already contracted and spoken for–by an unnamed customer. The project expands existing capacity by building a tiny three miles of new pipeline, with the new pipeline lying next to existing pipeline (in Greene County, PA). The only greenfield/brand new construction is a 1.75-mile pipeline to connect with the Tennessee Gas Pipeline in Tuscarawas County, OH. The other main part of the project is updating three units a compressor station in Licking County, OH. In the constellation of pipeline projects that disturb earth and disrupt landowners, this one is pretty minor–yet it will deliver big results by flowing an extra 120 MMcf/d of gas west to a new market. The PA Dept. of Environmental Protection published a notice in the July 21 PA Bulletin asking for comments on the project in PA–in Greene and Armstrong counties…
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SWPA Gas-fired Elec Plant Next to Pot Farm Nears Final Approval

Last October MDN told you that a second Marcellus gas-fired electric generating plant is planned for Greene County, PA (see 2nd Marcellus-Fired Electric Plant Proposed for Greene County, PA). Hill Top Energy Center, based in Huntington Bay, N.Y., is planning to build a 620 megawatt plant on 41 acres of land off Thomas Road in Cumberland Township. The PA Dept. of Environmental Protection (DEP) held a public hearing in early November, and in early December the DEP issued an air quality permit for the project (see PA DEP Issues Air Permit for Gas-fired Elec Plant Next to Pot Farm). The plant will be built next door to a “medical marijuana operation”–i.e., a pot growing farm. Here’s an idea: Why not burn pot to generate the electricity instead of natgas? Roughly the same CO2 footprint, with the added benefit of lacing the air in the region with happy smoke. Oh well, back to reality. What’s left to do before construction begins on the Hill Top Energy Center? The facility needs a building permit from Cumberland Township. Plans will be reviewed at the next town meeting on July 2. If the plans are approved, a building permit will follow in short order. However, Hill Top says they don’t plan to begin construction until early 2019…
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EQT Pays PA DCNR $874,200 to Lease Under Ten Mile Creek

This is a story that continues to bug us. The state of Pennsylvania, specifically the Dept. of Conservation and Natural Resources (DCNR), is grabbing money that we think belongs to private landowners. The DCNR has been, for years, claimed that under a centuries-old law that the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks). We understand the state claiming the Delaware River, and maybe the Susquehanna River, is a “navigable” body of water. The DCNR uses the “navigable waterway” excuse to sign leases with drillers under much smaller waterways than the Delaware and Susquehanna–siphoning money that would have gone to landowners. A landowner might own the land on both sides of, say, Ten Mile Creek, as we’re sure happens. However, the land under Ten Mile Creek does not technically belong to them. In fact, certain long portions of the land under Ten Mile Creek are now leased to EQT, and EQT paid handsomely for it. The company leased 218.55 acres under Ten Mile Creek in Greene and Washington counties (southwestern PA) for $874,200, which works out to be exactly $4,000 per acre! Not to mention a whopping 20% royalty! That’s money that (in our opinion) should go to the landowners who own the land along the creek, not to the state. Until landowners sue or the legislature acts, the state will continue to pick the pockets of landowners who own land along PA’s waterways…
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Energy Corp of America Fined $1.7M for Drilling Violations in PA

The Pennsylvania Dept. of Environmental Protection (DEP) has just collected a whopping $1.7 million fine from Energy Corporation of America (ECA) for violations at 17 well sites in Cumberland, Jefferson, and Whiteley Townships in Greene County, and Goshen Township in Clearfield County. ECA’s violations? “Failure to properly contains fluids in onsite pits, unauthorized discharge of industrial waste into groundwater, unauthorized disposal of residual waste, failure to restore the pits and well sites, and operating solid waste storage, treatment, and transfer facilities without permits.” Pretty serious stuff. Essentially, ECA (according to DEP) was sloppy in how they handled flowback and brine, using open pits to store it long after their use was outlawed under new Chapter 78a regulations were adopted. Spills from those pits contaminated a water well of one nearby resident. It’s interesting to MDN that as you read the consent order (full copy below), not only is ECA listed, but also “Greylock Production.” You may recall our news from late last year that ECA reorganized itself under a new name–Greylock Energy–shafting existing shareholders in favor of a new investor, ArcLight Capital (see ECA Sells Marcellus/Utica Assets to ArcLight Capital – Shareholders Shafted). The fine was assessed against and paid by ECA and Greylock jointly, confirming our conclusion that ECA had simply changed the nameplate on the door to Greylock…
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CNX Resources Clipped $433.5K for Groundwater Violations in SWPA

The Pennsylvania Dept. of Environmental Protection (DEP) has fined CNX Resources (formerly CONSOL Energy/CNX Gas) $433,500 for violations at four shale well sites in Greene County, PA. The violations, which happened in 2015/2016, include failure to control and dispose of wastewater properly and failure to prevent erosion. Some of the flowback/wastewater ended up in a small stream called Jacobs Run. We always find the language of these announcements by the DEP somewhat strange: “CNX Gas Company, LLC (CNX) has agreed to two civil penalties totaling $433,500 for violations at well sites in Greene County.” Really? The company getting fined has to “agree” to accept the fine? Apparently we don’t fully understand how regulatory agencies work in PA. What if CNX didn’t agree to the fine? Would the DEP come back with a lower amount, “Will you accept this fine instead?” But we digress. CNX themselves noticed the problems and self-reported the violations. After doing so, they fired two of the service companies they were using. The unnamed service companies were obviously guilty of cutting corners that resulted in improper disposal of wastewater. Interesting factoid: Half of all the wells CNX has drilled in PA are located in Greene County…
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