Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy
Here’s a business you might not think about nor associate with Marcellus/Utica drilling–fuel deliveries. If you own a home and live outside of an urban area, you know all about fuel deliveries, because you likely either burn fuel oil or propane to heat your home. What you may not know is that drilling operations need a similar service–diesel fuel deliveries (mostly) at drill pads, to run the engines that generate electricity to run drilling and fracking operations. And fuel deliveries to trucking fleets, to keep the trucks moving. Perhaps an unglamorous part of the business–but vital nonetheless. Fuel deliveries run 24/7 in the oilfield, just like every other activity associated with drilling wells. Sprague Resources, founded in 1870 (not a typo!), is one of the largest independent suppliers of energy and materials handling services in the Northeast with products including home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague has just bought out Coen Energy, headquartered in Washington, PA. Coen pretty much does the same thing, but specializes in servicing the fueling (and storage) needs of Marcellus/Utica drillers. No financial details were included in the announcement, other than Sprague expects the addition of Coen to its company will result in an extra $7-$8 million of revenue per year. Here’s the news about one competitor gobbling up another in order to expand its presence in the Marcellus/Utica…
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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”…
It’s funny how mainstream media–and liberal Democrats–can turn on a dime. It was just a few days ago we read an AP story endlessly regurgitated across PA about how the PA budget fight had turned “ugly” and “personal” (see 
Bad news for the Sisters of the Corn and the radicals at Lancaster Against Pipelines. On Friday the Federal Energy Regulatory Commission (FERC) granted Williams permission to begin construction on Atlantic Sunrise, a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. Last week the Sierra Club and a mish mash of other nutball groups begged FERC to delay issuing an order that Williams can commence with construction, claiming FERC’s delay in considering a rehearing delayed a lawsuit and the lawsuit hasn’t had enough time to work it’s way through the court system (see 
It certainly isn’t journalism. It’s one-sided, anti-fossil fuel advocacy. And it’s profoundly biased. StateImpact Pennsylvania, a Public Broadcasting initiative that’s funded, in part, with taxpayer money, is about to expand by adding another three propagandists to the three it has now. Joy. Four PBS organizations, led by WITF in Harrisburg, PA, is receiving a $652,902 grant from the Corporation for Public Broadcasting (CPB) to expand its propaganda operation and write more anti-drilling, anti-pipeline stories. Stories that are one-sided. Aren’t you glad your taxpayer dollars go to fund this “reporting?” They’ll throw in a little global warming hysteria, just to spice it up…
Republicans hold majorities in both the Pennsylvania Senate and the Pennsylvania House. As is happening on the national level, the Republican Party in PA is also rife with establishment, left-leaning members who are not in their positions to benefit their constituents and all residents of the Keystone State, but are there to feather their own nests. Swamp dwellers. They are Republicans In Name Only (RINOs). One such RINO is PA Rep. Kate Harper, a “Republican” from Montgomery County–a Philadelphia suburb. Harper has been in the House since Jan. 2, 2001 (16 years, long past time she was voted out of office). Harper proposed an insane severance tax as part of this year’s budget deal. It’s not her first time at the trough. Harper has been proposing a severance tax for years (see 
According to expert analysis by the legal beagles at the Blank Rome law firm, a recent decision by the Superior Court of Pennsylvania disregards established precedent law and has created a new law in PA, possibly “leaving lessees [drillers] in limbo, possibly giving unscrupulous lessors [landowners] a unilateral tool to terminate oil and gas leases, and ultimately harming both lessors and lessees in the process.” In Montgomery v. R. Oil & Gas Enterprises, two (out of three) judges ruled that oil and gas leases could be severed (terminated) both “vertically” and “horizontally” by unilateral actions of the landowner. In this case “vertical” means shale or other rock layers under the ground, and “horizontal” means surface ownership. As with most things legal, this is a complicated case with a lot of history we won’t attempt to recount it chapter and verse. If we can boil it all down, the judges found that a landowner who had purchased a piece of property with an old lease that contained terms for shallow rock layers and deeper rock layers, could, unilaterally, terminate one aspect of that lease (in this case the shallow layer portion of the lease) while keeping the other aspect of the lease intact (the deeper layers, already drilled and producing). The Blank Rome analysis below does a deep dive into the case, frankly ripping the decision to shreds, and postulates the theory that it may lead to cases in which a landowner with a decades-old lease in which the shallow layers are held by production can separate and convey the deeper layers to a family member or family trust, and then terminate the deeper layer lease, re-releasing it to a different driller…
In July when the Pennsylvania Senate passed their awful budget bill that includes a variety of new taxes, including a new severance tax on the Marcellus industry, they also slipped in Section 1610 which changes established lease law with respect to oil and gas wells that no longer produce anything (see 
Last week the Pennsylvania Dept. of Environmental Protection (DEP) issued the final permit needed by Williams to begin construction on Atlantic Sunrise, a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County (see 
It is a story we see happening more and more frequently–local distribution companies (LDCs, your local gas & electric company) are adding new customers in places previously not served by natural gas lines–because of the presence of the abundant, cheap, and clean-burning Marcellus Shale. The latest such story we noticed of this type comes from the Scranton/Wilkes-Barre area. If you ever whiz through Scranton, and then Wilkes-Barre, motoring down Interstate 81 (as we’ve done hundreds of times over the years), one of the townships you pass through without knowing it is Dupont (in Luzerne County)–quite close to the regional airport in Avoca, not far from Montage Mountain ski resort, and a whisker away from Moosic. Utility giant UGI has begun a program to install natural gas pipelines to 123 homes in Dupont, to provide Marcellus Shale gas to those homes…
Well they did it. Yesterday at a regularly scheduled meeting of the Delaware River Basin Commission (DRBC), representatives for the five voting members voted to begin the process of formalizing a permanent ban on fracking in the Delaware River Basin. It wasn’t unexpected, but it was hotly contested–by both sides in the debate. As we’ve previously chronicled, the DRBC is composed of five voting members: the governors of Pennsylvania, New York, Delaware, New Jersey, along with the U.S. Army Corps of Engineers. The governors all sent people to represent them at the meeting, with clear instructions. The three Democrat governors–Tom Wolf (PA), Andrew Cuomo (NY), and John Carney (DE) all voted in favor of a resolution to take the next step in the process of a permanent ban, voting to adopt a draft resolution MDN previously shared (see 
Three cheers for Pennsylvania House Republicans. Hip hip, hooray! House Republicans did the near impossible–they held the line against a cockamamie plan to raise all sorts of taxes, including slapping a severance tax on the Marcellus gas industry (on top of the existing impact tax). You may recall our story about a group of hardworking Republican House members who, during the recent recess, did a masterful forensic accounting job of locating existing money sitting idle in a variety of programs and departments–money that can used to plug a deficit in the budget this year (see 
Following yesterday’s vote by the Delaware River Basin Commission (DRBC) to take the first step in a permanent ban on fracking in the Delaware River Basin (DRB), reaction from those who support drilling was swift. The American Petroleum Institute issued a statement saying, among other things, that the DRBC’s intention to permanently ban fracking in the DRB is “bad public policy.” More than a few Pennsylvania legislators took issue with PA Gov. Wolf’s vote to endorse a permanent frack ban. Three ranking State Senators–Senate President Pro Tempore Joe Scarnati, Senate Majority Leader Jake Corman, and Senate Environmental Resources and Energy Chair Gene Yaw, ripped into Wolf with a joint press release yesterday, saying they “strongly objected” to Wolf’s vote. The three said a permanent ban on natural gas drilling in the Delaware River Basin is “arbitrary, short-sighted and a blow to economic development, job-creation and landowner’s rights.” We appreciate their support. However, those same three Senators recently sold out the gas industry when they voted for a severance tax. They were part of the high-tax cabal that made the job of the House that much harder (thank God the House passed a no-severance-tax budget yesterday, see today’s companion story). While we appreciate the Senators’ support on the DRB frack ban issue, their bloviating against Wolf on the frack ban vote doesn’t remove the stain of their betrayal of the gas industry in voting for the severance tax. All three Senators need to go at the next primary…
Monroeville, PA (Allegheny County, suburb of Pittsburgh) voted last night to restrict seismic testing within municipal boundaries–a move meant to restrict future shale well drilling in the area by Huntley & Huntley. In a July story, MDN brought you the news that Cougar Land Services, a subcontractor working with Huntley & Huntley, is planning to conduct seismic testing in two rural areas of the municipality, including “small portions” of Monroeville’s northernmost and southernmost tips (see 
In an incredible story of how Marcellus Shale drilling benefits local communities, the Municipal Authority of Westmoreland County (i.e. the water authority) reports that it expects royalties received from 52 shale wells drilled on authority-owned land will jump another $1 million this year, to a total of over $3 million. The authority is still pushing forward with a three-year rate hike plan that began in 2016–so customers will get a 7% rate hike this year. Even though the authority has all of that extra cash. Why not suspend the rate hike because of the extra royalty money? Because, says an authority official, “The rate hikes were designed to help pay for a $140 million loan finalized last year for capital improvements to the water system that serves more than 120,000 customers in five counties as well as nearly 25,000 sewer customers.” What will the authority do with the extra $1 million they hadn’t planned on receiving? It’s “more money to be reinvested into the system.” Here’s the lowdown on Westmoreland’s windfall from gas royalties, and why royalties are jumping this year…