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Rig Counts for World, US & Marcellus/Utica Crash in February
March 8, 2016March 8, 2016

Just when you thought the rig count couldn’t possibly get any worse–it does. Baker Hughes released their average rig count data for February yesterday–and it’s not a pretty picture. Worldwide the total number of active rigs in February was 1,018, down 27 from the 1,045 counted in January. But in the U.S., the rig count was 532, down 122 from the 654 counted in January 2016. That’s a huge 19% in a single month. The Marcellus/Utica region was similarly affected. It used to be when rig counts were crashing everywhere else, they held firm or slightly declined in the northeast. No more. In February the Marcellus/Utica lost another 10 rigs, from 52 in January to 42 in February–or a 19% decrease in a single month. Ouch. Below are the full details and charts that tell the story…
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Industrywide Issues | Litigation | Pennsylvania | Statewide PA

PEDF Argues Before PA Supreme Court to End Drilling on Public Land
March 8, 2016March 8, 2016

Over a year ago in a crushing blow to the litigious anti-drilling group Pennsylvania Environmental Defense Foundation (PEDF), the PA Commonwealth Court ruled against the PEDF’s lawsuit that attempts to stop all drilling and leasing of state-owned lands for oil and gas drilling (see PA Court Rules to Allow More Leasing/Drilling of State-Owned Land). The court said a) such drilling is just fine and b) the decision of whether or not to allow drilling on state-owned lands (and which parcels) rests with the Department of Conservation and Natural Resources. The court further said that the General Assembly can decide how the monies received from leasing and production royalties will be spent–even as part of the general budget. The problem with the decision is how the court arrived at it (see Troubling Win in PA Court Victory that Allows State Land Drilling). It’s taken more than a year, but the PEDF appealed the lost case to PA’s Supreme Court and tomorrow the PEDF will argue before the high court that the state’s constitution is really meaningless and should be disregarded. Radical environmental organizations have filed a “friend of the court” brief in support of the PEDF. The radicals joining PEDF are the nutty Sierra Clubbers, THE Delaware Riverkeeper, PennFuture (the organization that spawned current DEP Secretary John Quigley), and the Pennsylvania Land Trust Association…
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5 Key Insights from MDN’s 2015 Databook Vol. 3 – Just Released
March 7, 2016March 18, 2016

MDN recently published Volume 3 of the 2015 Marcellus and Utica Shale Databook. In 103 jam-packed pages you will get the latest information on what’s happening (or not happening) with drilling in the Marcellus/Utica region. Much of the Databook is a series of county maps–one map for each county where there’s permit activity for Marcellus or Utica drilling. Each county map shows a dot for where a permit was issued–along with the name of the driller next to it. The maps also show major natural gas pipelines and compressor stations. Each map offers you a quick, visual way of understanding where drilling is happening, and who’s doing the drilling.

For this new edition, MDN editor Jim Willis spent several weeks compiling and completely revising a directory of frack waste facilities, including the addition of hundreds of injection wells. The 3-volume series is just $350 (single volumes are $225). All three volumes are meant to work together. This is the PERFECT resource for drillers, pipeline companies, law firms, landmen and many others. Below we’ve included sample pages along with 5 key insights from this latest edition of the Databook…
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Pennsylvania | Statewide PA

“Dramatic” Scale Back in Marcellus/Utica Drilling – Rigs Idled
March 7, 2016March 7, 2016

Over the past several weeks we’ve seen a flurry of quarterly updates for Marcellus and Utica Shale drillers. While the news hasn’t been all bad, a lot of it has been bad–and a lot of the news is about how these companies are spending less to drill in 2016 than they did in 2015. We’ve also seen the continuing downward trend in the number of active drilling rigs–both here in the northeast and across the country. All of that combines to a “dramatic” scale back for drillers in the Marcellus/Utica, according to a Sunday article in the Pittsburgh Tribune-Review. In fact, some of what had been (until recently) the biggest drillers in our region have zero rigs operating right now. Which ones?…
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Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP On Course to Jam New Regulations Down Drillers’ Throats
March 4, 2016March 4, 2016

In January, MDN told you that the Pennsylvania Dept. of Environmental Protection (DEP) finally pushed out new drilling regulations, required under the 2012 Act 13 law (see PA DEP Issues “Final” New Drilling Regulations; Industry Pushback). The new regulations were already done and ready to be adopted–and then radical leftist Tom Wolf took office and decided to put his own environmentalist fingerprints all over the regulations–ruining them. The industry is pushing back. Not at stricter controls here and there, but against superfluous and stupid requirements that cost a lot of money but don’t make the environment (or people) safer. Last month we told you that the DEP continue to keep secret some of the parts of the new regulations (see PA DEP Sec. Quigley Keeps Secret Key Part of New Drilling Regs). That’s shifty. Sneaky. Sleazy. So what’s the status? During an education presentation last week in Murrysville (Westmoreland County), PA, DEP deputy secretary for oil and gas management, Scott Perry, said the DEP will push through the new regulations as written. In other words, open wide drillers, here it comes…
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Industrywide Issues | Jobs | Pennsylvania | Regulation | Statewide PA

PA Gov. Wolf Refuses to Let DEP Hire People–When Money is There
March 2, 2016March 2, 2016

Yesterday Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was grilled by PA lawmakers as to why his department continues to be understaffed–when there’s money earmarked to hire new people. Quigley’s roundabout answer? His boss, Gov. Tom Wolf, won’t let him hire anyone new, using the excuse that last year’s budget is not finalized. The radically partisan Wolf continues to use the budget as a political weapon against Republicans. But here’s the thing–the money to hire new DEP personnel is already there, raised from fees assessed on drillers or transferred from the federal government. The money required for hiring many of the new people for the DEP isn’t part of the general fund. Yet Wolf won’t let Quigley hire, sleazily trying to spin it as a “Republicans won’t pass the budget” excuse. Shame on Wolf for lying about what he’s doing. Quigley was on the hot seat yesterday, and Republican legislators didn’t hold back, telling Quigley to quit whining and to start owning his own mess…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA Landowners Ask Judge to Intervene in Chesapeake Royalty Case
March 1, 2016March 1, 2016

In March 2015 MDN reported on the “Demchak” royalty case in which a group of Pennsylvania landowners had agreed to a settlement with Chesapeake over Chessy’s alleged shorting of royalty payments (see Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners). As we reported at the time, “several thousand” landowners (we now know the number is 9,000 landowners) would share two-thirds of the $11 million settlement (the other one-third going to the lawyers), which doesn’t seem all that great a deal to us. Toward the end of last year the issue got heated again as many landowners were faced with a decision of whether or not to opt out of the settlement (see Packed Meeting in Towanda Discusses Chesapeake Royalty Settlement). Then the whole thing came to a screeching half with a new lawsuit by PA Attorney General Kathleen Kane. Her lawsuit stopped the settlement from proceeding (see PA AG’s Lawsuit Derails Demchak/Chesapeake Royalty Settlement). Afraid that Chesapeake will file for bankruptcy protection (not related to this case), landowners in the Demchak case are asking a federal judge to appoint a mediator and finish the deal–so at least they will get pennies on the dollar instead of nothing at all…
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Atlas Energy | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Statewide PA

Atlas Energy Issues 2015 Update + More Details on Company Layoffs
February 26, 2016February 26, 2016

Yesterday Atlas Energy issued its fourth quarter and full year 2015 update. Atlas, as we’ve pointed out in the past, has sold most of its Marcellus assets in two huge deals: a $4.3 billion deal with Chevron in 2011 and in a $7.7 billion deal with Targa Resources in 2014. Atlas operates mostly conventional (some unconventional) oil and gas wells in a number of states: New York, Pennsylvania, Ohio, West Virginia, Virginia, Tennessee, Indiana, Alabama, Colorado, Oklahoma, Texas and New Mexico. Sizable company. Recently, as MDN has exclusively reported, the company laid off a number of its employees (see Atlas Energy Update – 125 Layoffs Companywide). We’ve since learned, from a highly placed source with knowledge of the layoffs, that the number of companywide layoffs is closer to 150–approximately 20% of the Atlas workforce. There’s no mention of that in yesterday’s update. So what does the update show? Atlas lost $240 million in 2015–but if you back out the paper losses of impairments and depreciation, the company actually made money. In the update Atlas mentions they shut in their prolific Marcellus wells in Lycoming County, PA during 4Q15 due to low prices. Below is the Atlas update, and more details about how many Atlas employees were laid off–and where…
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Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Sunoco LP Delays Construction of Mariner East 2 Pipeline
February 26, 2016February 26, 2016

On a quarterly analyst phone call yesterday, Sunoco Logistics Partners CEO Mike Hennigan admitted applying for and receiving “hundreds of permits” has delayed construction of the Mariner East 2 pipeline. There is no worry that the project won’t happen–it will. It’s just that the timetable for when construction begins (and ends) has changed from a year ago when they first announced the project. In prepared remarks, and then later under questioning from several analysts, we have discovered that Sunoco LP will not make a definitive go/no go decision on whether to build a second pipeline as part of the Mariner East 2 project, until the backhoes begin to dig for the original Mariner East 2 pipeline. When will that be? Hennigan was hard to pin down. One analyst made a reference to ME2 being ready in either first or second quarter 2017–but Hennigan would not verify that timeline. Below are select portions of the phone call transcript where Hennigan and others are talking about Mariner East 1, 2, 2X and the Marcus Hook refinery…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Statewide PA

Guest Post: 7 Important Points to Know About Dimock Trial
February 25, 2016February 25, 2016

By Phelim McAleer

The Ely and Hubert families of Dimock, Pennsylvania are suing Cabot Oil & Gas for allegedly polluting their water. The case is hugely significant because Dimock has been characterized as “Ground Zero” for water allegedly contaminated by fracking. It was featured in the documentaries Gasland 1 & 2 and has been the subject of national and international news reports. Countless celebrities have also pushed the lie that Dimock’s water was contaminated with fracking fluid. But the case has thrown serious doubts on the narrative being spun by activists. The plaintiffs’ case is looking very shaky, indeed. Here are seven key points that have emerged as the case enters its second day.
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Statewide PA

THE Delaware Riverkeeper Hosts Class to Stop PennEast Pipeline
February 24, 2016February 24, 2016

THE Delaware Riverkeeper, Maya van Rossum, has staked much of her credibility on stopping the PennEast Pipeline. The PennEast, as you may recall, is a $1.2 billion, 114-mile, 36-inch diameter pipeline that will deliver approximately 1 billion cubic feet of natural gas per day from the Marcellus gas fields of northeastern PA to locations in southeastern PA and across the border to Trenton, NJ (see PennEast Pipeline Files Official Application with FERC, Antis Mad). It’s a pipeline, buried in the ground and after a few years no one even knows where it’s buried without calling 811. And yet van Rossum and her ilk vehemently (we’d say irrationally) oppose it for one reason: it flows a fossil fuel through it. And so she’s staked her own credibility, and the credibility of the organization she leads (with Big Green money backing it) by stopping the PennEast. One way she’s trying to slow it down is by registering children as “intervenors” with the Federal Energy Regulatory Commission (FERC), the organization charged with reviewing and approving the project (see Delaware Riverkeeper Scams FERC in Review of PennEast Pipeline). Her latest angle of attack? Conduct a 6-hour “workshop” to train people as “volunteer monitors” to “document natural features that would be in jeopardy” from the pipeline–whatever that means…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget
February 23, 2016February 23, 2016

What happens when anti-drilling lib Dems, like PA Gov. Tom Wolf, get their way? Revenues dry up and the lib Dems have to raid other sources to make up for it. And that’s just what’s happening with the Pennsylvania Department of Conservation and Natural Resources (DCNR). Tom and the Dems made a big deal about not leasing nor allowing any more drilling on or under PA state lands. In fact, one of the first things Wolf did upon taking office in early 2015 was to slap a moratorium on any new state land drilling (see PA Gov Wolf Signs Exec Order to Ban Drilling Under State Land). What followed? No more lease payments for the DCNR, and royalties have fallen dramatically on land previously leased and drilled on/under. Now the DCNR faces a budget shortfall of $51 million–because of no new leases courtesy of Wolf. Wolf’s solution? Steal $61.3 million from the “general fund” to prop up DCNR. Typical…
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Lease & Royalty Payments | Pennsylvania | Statewide PA

The Marcellus Landman Leaveth
February 23, 2016February 23, 2016

The person who negotiates leases for drilling and pipelines (and for other oil and gas related transactions) is called a landman–regardless of whether the person doing the negotiating is a man or a woman. Landmen play an important part in the shale business–including here in the Marcellus/Utica. Sometimes they’re reviled as being “high pressure”–as in “sign this lease now while I’m here, I won’t come back, this is your one and only chance.” We don’t like landmen like that. But there are those who do the job and do it well–and we cherish them. They don’t use high pressure tactics, they wait for you to run your lease by a lawyer (as you ALWAYS should). They come back. They keep at it. They’re the best kinds. Thing is, landmen in the Marcellus/Utica are now a dying breed. They’re changing jobs. Why? Because there’s so little leasing going on these days. A recent article highlights the situation of what we call the Landman Leaveth…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pennsylvania | Pipelines | Regulation | Statewide OH | Statewide PA | Statewide WV | West Virginia

FERC Says Rover Pipeline as Planned Negatively Impacts Environment
February 22, 2016February 22, 2016

In December 2014 Energy Transfer Partners filed their draft Resource Reports of environmental survey data with the Federal Energy Regulatory Commission (FERC) for the ET Rover pipeline (see ET Rover Pipeline’s 800-Mile Journey Begins with FERC Filing). Rover is an 800-mile, $4.4 billion pipeline that will connect Pennsylvania, West Virginia and Ohio, crossing pretty much the entire state of Ohio heading northwest before entering Michigan and eventually taking a dog-leg into Ontario. In February of 2015, exactly a year ago, ET filed a full application with FERC. Last week FERC responded with a Draft Environmental Impact Statement (DEIS)–and the news was not so good for Rover. FERC found “adverse and significant” impacts from the project as planned and delivered to ET nearly 25 pages of recommendations that ET will need to fix before they get an approval. Is this a fatal blow to Rover? Or just a speed bump? Time will tell…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?
February 22, 2016February 22, 2016

One of the most left-wing partisans in Harrisburg, serving in the Tom Wolf Administration, is calling it quits. John Hanger, whom we once considered a reasonable man but who later proved he is not, is Wolf’s Secretary of Policy and Planning. Hanger has been one of the most shrill voices in Harrisburg in demanding a Marcellus-killing severance tax. Wolf is making a second ill-fated run at a severance tax and by all accounts Hanger was pushing it hard. And then he up and quit. Why? He says it’s because his wife and daughter live in Massachusetts (where she is vice-provost for faculty affairs at the University of Massachusetts Medical School.) To his credit, John has been married for 36 years to the same woman (she must be a saint!). However, we think he’s leaving for a different reason…
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Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

PA Pipeline Task Force Report: 658 Pages, 184 “Recommendations”
February 19, 2016February 19, 2016

In May 2015 Pennsylvania Gov. Tom Wolf and his underling Dept. of Environmental Protection (DEP) Secretary John Quigley created a “Task Force on Pipeline Infrastructure Development” (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). The purpose of the group was “to identify best practices for pipeline siting, permitting and safety.” We won’t recount all of the twists and turns–of how the Task Force was packed with government employees beholden to Wolf, etc. Along the way antis tried to protest and derail the meetings held by the Task Force (see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”). The final meeting has been held and the final report is now in. Yesterday Quigley released the Task Force’s Final Report, all 658 pages of it with 184 recommendations (full copy below). Along with the release of the final report, Quigley also issued what he calls the top 12 recommendations coming from the Task Force for how PA can and should handle a coming expansion of gathering pipelines in the state…
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