Susquehanna County

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    PA Briggs “Rule of Capture” Case Turns on Concept of Drainage

    In April, MDN brought you the news that Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of the three overturned the lower court and sided with the landowner. Southwestern, following that decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case. Sadly, in June the Superiors proved they aren’t so superior after all, declining to rehear the case (see PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal). Southwestern then appealed the case to the PA Supreme Court in early July (see Southwestern Appeals “Briggs” Trespass Case to PA Supreme Court). No word yet on whether or not the Supremes will take the case. In the meantime, this case and its ultimate effect on drilling in PA and beyond is still a hot topic of discussion throughout the industry. We spotted two recent articles tackling it–one from a lawyer who does a great job of crystallizing the important elements in the case–that this case turns on the concept of drainage, and the other article which tackles the broader topic of how energy law in PA is charting its own path separate from Texas and other big oil/gas states…
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    Southwestern Appeals “Briggs” Trespass Case to PA Supreme Court

    Southwestern Energy has taken the next step of appealing the “Briggs” trespass case to the Pennsylvania Supreme Court–a case of tremendous importance. In April, MDN brought you the news that Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of the three overturned the lower court and sided with the landowner. Southwestern, following the decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case. Sadly, in June the Superiors proved they aren’t so superior after all, declining to rehear the case (see PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal). Southwestern promised to appeal this critically important case to the PA Supreme Court, and yesterday they did just that. We have a comment from Southwestern below, along with a copy of the brief they filed, and our own thoughts on where this may go after the Supreme Court…
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    New Yale U Study Finds Fracking Does Not Affect PA Water Wells

    Here’s what happens when the Heinz Endowments, William Penn Foundation, National Resources Defense Council and other far-left “environmental” funders don’t fund a study: real science gets done. We’ve knocked Yale University in the past when so-called studies (junk science) were released about fracking in the Marcellus/Utica (example from March 2018: Yale Study Claims Ohio Utica Fracking Causes STDs). Those studies are almost always funded by Big Green groups and the results conform to Big Green’s predetermined outcomes. This time, a group of Yale students and professors conducted a field experiment where they drilled a number of water wells in an area where there would soon be (and subsequently was) Marcellus wells drilled–in Susquehanna County, PA. A controlled experiment to find out if drilling shale wells leads to water contamination via methane migration. The results are in. According to the Yale researchers, there was NO (zero, nada) impact on the water wells from nearby shale well drilling. Case closed. The study (full copy below) was published yesterday in the Proceedings of the National Academy of Sciences. It’s the third such study in the past few months to be released showing the same thing: NO impact from Marcellus/Utica drilling on groundwater supplies. The funny thing is how biased mainstream media, like (Dis)Associated Press, is reporting it. They can’t paper over the results of these studies, so they spin the story and the headline instead. Try this headline out from an AP article running in dozens (maybe hundreds) of newspapers: “Studies show groundwater holding own against drilling boom.” The truth is there is no impact from Marcellus Shale drilling on groundwater. But AP simply can’t present the bold, honest truth. Instead, they spin it to imply “Water has to hold it’s own and fight off fracking. That water is brave. It’s courageous. Even though those nasty frackers WANT to pollute our precious groundwater, that old water just hangs in there and holds its own.” That’s the impression left by AP’s headline and the accompanying story…
    Read More “New Yale U Study Finds Fracking Does Not Affect PA Water Wells”

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    PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal

    An unwelcome and troubling development in the Southwestern Energy “Briggs” court case. MDN brought you important news in April that the Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of the three overturned the lower court and sided with the landowner. Southwestern, following the decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case (see Southwestern Appeals “Trespass” Case to Entire PA Superior Court). Sadly, on Friday, the Superiors declined to rehear the case. The next step? Southwestern has appealed the case directly to the PA Supreme Court…
    Read More “PA Superior Court Rejects Southwestern “Briggs” Trespass Appeal”

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    PA Natural Gas Production Hits New All-Time High in 1Q18

    Yesterday, the PA Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for Jan-Mar 2018 (full copy below). It shows natgas production rose 9.9% compared to the same period last year. It also shows the number of producing wells is up 9.1% from last year. Total natural gas production volume was 1,441.2 billion cubic feet (Bcf), and the number of producing wells in 1Q18 was 8,402 (of which 7,913 were shale wells). The biggest news is that once again 1Q18 saw the highest quarterly production of natural gas in the state–ever. The previous quarterly report had been the highest ever until this report (see PA Natural Gas Production Hits Another All-Time High in 4Q17). Two-thirds of the state’s natural gas production comes from four counties: Susquehanna, Washington, Bradford and Greene. The #1 county for natgas production in 1Q18 was, as it was in each quarter of 2017, Susquehanna County, in the northeastern corner of the state. The #1 producing driller in Susquehanna County is Cabot Oil & Gas. Here’s the full 1Q18 natural gas production report from the IFO…
    Read More “PA Natural Gas Production Hits New All-Time High in 1Q18”

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    UGI Expanding NEPA Gathering System to Flow More Cabot Gas

    UGI, a large utility (and pipeline) company located in Pennsylvania, has announced they will expand a northeastern PA pipeline gathering system. UGI built what they call the Auburn Gathering System between 2011 and 2015–46 miles of pipe, two compressors stations and various other pipeline related facilities located in Susquehanna, Wyoming, and Luzerne counties (near Scranton). UGI spent $215 million to build the system, a system that currently flows 470 million cubic feet per day (MMcf/d) of natural gas. Much (most?) of that the gas comes from Cabot Oil and Gas in Susquehanna County. The new news is that UGI will build two new compressor stations, adding to the existing two, which will increase flows through the system by another 150 MMcf/d–all of the increase coming from Cabot. Here’s the good news that more Cabot gas will soon flow through the Auburn System, connecting with two of the biggest pipeline systems in the country–the Tennessee Gas Pipeline (Kinder Morgan) and the Transco Pipeline (Williams)…
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    Unease Over PA Rule of Capture Case Spreads Nationwide

    This much is clear: The “Briggs” court decision in Pennsylvania cannot stand as it is without threatening to end the shale miracle, certainly in Pennsylvania, and perhaps across the country. Some believe we’re making too much of the Briggs decision recently handed down by two judges sitting on PA’s Superior Court (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Two of them voted to overturn the lower court decision in favor of Southwestern and sent the case back to a lower court where the landowners (the Briggs) now have to prove Southwestern trespassed and work out how much gas they believe was “taken.” Southwestern has asked the full Superior Court–all 20 judges–to hear the case again. No word yet on whether that will happen. We have, from the beginning, considered the Briggs decision to be an existential threat to the Marcellus industry in PA. In a recent Bloomberg article, some experts believe the threat has the potential to spread beyond PA. Below we explain how might happen, and provide some historical perspective on the rule of capture…
    Read More “Unease Over PA Rule of Capture Case Spreads Nationwide”

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    Another Look at “Rule of Capture” Case that Threatens PA Marcellus

    MDN brought you important news in April that the Pennsylvania Superior Court had handed down a decision (known as the “Briggs” case) that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that the Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Southwestern successfully argued in a lower court that the odd crack here and there that may slip under a neighbor’s property is permissible. The landowner appealed to Superior Court and three judges heard the case. Southwestern, following the decision, petitioned the Superior Court to have all of the sitting justices (called en banc) hear the case (see Southwestern Appeals “Trespass” Case to Entire PA Superior Court). No word yet on whether the Superiors will do it. In the meantime, we spotted an article by the ace lawyers at the Blank Rome law firm discussing the case and its implications. We can’t stress enough just how critical this case is to the future of drilling in Pennsylvania, which is why we bring you the following…
    Read More “Another Look at “Rule of Capture” Case that Threatens PA Marcellus”

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    Cabot O&G 1Q18: Important New Markets Opening Up Now

    Note: A previous version of this post incorrectly stated Cabot is pumping 3.75 Bcf/d of natural gas now. The correction is that according to the CEO, the company has the capability to pump that much as soon as all pipelines are in place and existing planned wells are online–likely in 2020. We regret the error!

    One of our favorite Marcellus drillers, Cabot Oil & Gas, provided their first quarter 2018 update on Friday. Cabot never disappoints! What did we learn from the update? For one thing, when all pipeline infrastructure is in place and all planned wells are drilled and online, the company will be pumping a massive 3.75 billion cubic feet per day (Bcf/d) of natural gas out of Susquehanna County, PA. Cabot is working with Williams to increase the capacity of their gathering system to support even more gas than 3.75 Bcf/d. It would not surprise us if Cabot becomes the first 4 Bcf/d Marcellus/Utica driller in the next few years. So Cabot has plenty of production. What about demand? Lots of production with little or no demand equals prices in the basement. There was good news on the demand front too. Cabot said there are two gas-fired electric plants starting up by June 1st–both of them powered with Cabot Marcellus gas. Add to that the now-operational Cove Point LNG export plant with Cabot’s contract to sell gas to Japan–and it equals a massive increase in demand for Cabot’s gas going into the second quarter. Later this year, in the second half sometime, Atlantic Sunrise will come online increasing Cabot’s flow to new markets even more. We’d call Cabot’s Friday 1Q18 update the “stars are finally in alignment” update for Cabot. Here are some more pickings from the update, along with a copy of the full update…
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    Cabot Completes $2.5M Endowment for Lackawanna College 1 Yr Early

    Cabot O&G regional HQ in Dimock, PA

    Cabot Oil & Gas is such an impressive company. They are, without a doubt, one of our favorite Marcellus/Utica drillers. We know! You’re not supposed to have favorites among your “children.” We can’t help it. Cabot is a favorite child for us. The company pumped $4.6 billion into Susquehanna County the first 10 years they were in the county (see Amazing: Cabot O&G Invests $4.6 BILLION in One PA County in 10 Yrs). Some $1.5 billion of that amount was lease bonuses and royalty payments–direct into the pockets of landowners. The other $3.1 billion was money Cabot spent in the county to drill there–money that was spread around to contractors, suppliers and workers. It is an incredible story, and certainly would be “enough” if Cabot left it at that. But Cabot hasn’t settled for just benefiting the community with an enormous amount of investment–an investment that benefits Cabot’s own business. Cabot is also one of the biggest philanthropists in Susquehanna County (perhaps THE biggest). In 2012, Cabot gave $2.2 million, that was matched, helping to raise $4.4 million for a new hospital in the county (see Cabot Effort Raises $4.4 Million for PA Physicians Clinic). Then in April 2014, Cabot announced it would donate $2.5 million to Lackawanna College (Scranton, PA) over a five-year period (Cabot Oil & Gas Does it Again – $2.5 Million Gift to Lackawanna College). The gift funds the School of Petroleum & Natural Gas located in New Milford, PA, and is the largest single private donation in the history of Lackawanna College. Cabot has just completed fully funding the $2.5 million Lackawanna gift–a full year ahead of schedule…
    Read More “Cabot Completes $2.5M Endowment for Lackawanna College 1 Yr Early”

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    Fracking Trespass Case (Rule of Capture) Still Reverberating in PA

    Last week MDN brought you the news that the Pennsylvania Superior Court handed down a decision that has the power to greatly restrict, perhaps even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well and PA “Rule of Capture” Case has Power to Limit Marcellus Drilling). The issue, in brief, is that last week’s Superior Court decision disallows using an age-old principle called the “rule of capture” when it comes to shale drilling and fracking. It opens the door to a myriad of frivolous lawsuits claiming that a fracture, a crack created during fracking, is draining gas from a neighbor’s property without justly compensating the neighbor for the gas. Was the court’s decision a big deal? Or was is not such a big deal? We’ve seen stories appear every day since the decision, some indicating the decision is monumental in scope and impact–others saying meh, not so big after all. Which is it? We still believe the issue turns on how far cracks extend out from a wellbore during fracking–and whether you can accurately measure the distance of such fractures. If the cracks extend just a few hundred feet, the court decision is not a big deal. Most drillers stay at least 350 feet from the boundary line when drilling a well–meaning the cracks that drain gas do not extend to neighboring properties. However, if the cracks, the fractures, extend out more than a few hundred feet, say more than 300 feet, that’s a problem. Southwestern Energy responded in the lawsuit that IF their cracks had intruded (trespassed) under the boundary line, it would fall under “rule of capture”–the legal principle of he who gets there first, wins. The court ruled otherwise. We’re still haunted by the definition used (and accepted) in the lawsuit that says fracking fluid and sand can travel up to 3,000 feet…
    Read More “Fracking Trespass Case (Rule of Capture) Still Reverberating in PA”

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    PA “Rule of Capture” Case has Power to Limit Marcellus Drilling

    As we indicated in our post yesterday, the Pennsylvania Superior Court has handed down a decision that has the power to greatly restrict, even stop, Marcellus drilling in PA (see PA Superior Court Overturns “Rule of Capture” for Marcellus Well). This is a legal issue–and MDN is not written by a lawyer. Hence our earlier misreading of the importance and facts in the Superior Court decision. The issue, in brief, is that Monday’s court decision disallows using an age-old principle called the rule of capture, which we previously described. The rule of capture works for conventional drilling where underground deposits of oil and gas are in pools and the pool may exist underneath multiple surface property owners. Whoever gets there first and sucks the oil/gas out, wins. That’s the rule of capture in a nutshell. And it makes sense. You can’t be held responsible for oil and gas moving from one place to another as it’s extracted. And who knows how much of the pool is located under your property, or your neighbor’s property? The Superior Court justices ruled that the rule of capture doesn’t work for hydraulic fracturing because gas (and oil) trapped in shale rock does not freely move from one place to another as it does in a pool. The judges say the gas would “stay forever” where it is without fracking. In the case of Briggs v. Southwestern Energy, the Briggs family (in Susquehanna County, PA) alleges that when Southwestern drilled and fracked on the Briggs’ neighbor, the fracking was done close enough to their property that some of the gas located under their property (unleased) was released and extracted through the Southwestern well–a “trepass.” Southwestern countered that IF such a “trespass” took place, it falls under the rule of capture. The ultimate issue boils down to this: How far do fractures extend from a lateral well? An expert energy attorney told MDN off the record that Monday’s decision “could change the entire Pennsylvania shale industry” in two important ways…
    Read More “PA “Rule of Capture” Case has Power to Limit Marcellus Drilling”

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    A (Very) Rough Method for Calculating Royalties on Cabot Wells

    Cabot Oil & Gas, one of our favorite Marcellus drillers, has just published a new PowerPoint slide deck presentation as part of an investor’s conference they attended earlier this week (the Scotia Howard Weil Energy Conference). Normally a new slide deck isn’t all that big a deal. However, thanks to MDN friend Chris Acker who pointed it out to us, there is some new information in the deck worthy of note. Back in December MDN brought you the news that Cabot had signed a deal to sell off their Texas Eagle Ford Shale assets in order to concentrate solely on the Marcellus (see Cabot O&G Sells Texas Eagle Ford Assets for $765M, Focus on Marc.). The slide deck notes that the Eagle Ford divestiture closed on Feb. 28th (slide #3). Also in the slide deck is a mention that Cabot plans to experiment with drilling “upper Marcellus” wells in the second half of 2018 (slide #11). Most (all?) of the wells they’ve drilled to date are “lower Marcellus.” A successful program of drilling upper Marcellus certainly bodes well for existing landowners with existing lower Marcellus wells–perhaps Cabot will revisit those pads to drill new wells? Slide #11 has some great information on it. We’ve used it to create a (very) rough royalty estimation calculator for Cabot landowners…
    Read More “A (Very) Rough Method for Calculating Royalties on Cabot Wells”

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    Cabot O&G Continues Tradition of Philanthropy in NEPA Communities

    The following guest post was written by Rick Hiduk:

    Cabot Warming Hearts at Coldest Time of Year

    It has been a particularly cold couple of months, and those most effected by winter’s bite tend to be the less fortunate families in our region and their children. Since Thanksgiving, Cabot Oil & Gas has been reaching out to the community in a variety of ways and brightening the lives of hundreds of area residents. While Cabot has become known for its ongoing philanthropy, the initiatives covering the holiday season were especially well received, helping more than 800 families in northeast Pennsylvania…
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    Cabot Asks Court for Stiffer Fine Against NEPA Lawbreaking Anti

    A little-known (outside of northeast Pennsylvania) anti-driller, Vera Scroggins, was fined $1,000 in April 2015 in Susquehanna County court (see PA Anti-Driller Fined $1K for Trespassing on Cabot O&G Site, Jail?). Vera’s biggest claim to fame is her potty mouth treatment of FrackNation filmmaker Phelim McAleer (watch it here). She is a repeat trespasser on Cabot Oil & Gas drilling sites and has been warned, repeatedly, to stay off their land–for her own safety and the safety of others. Scroggins runs so-called tours where she shows New York City celebrities and other urbanites (who don’t know the difference between a cow’s udder and a roof gutter) the gas fields of Susquehanna County, claiming drilling operations somehow harm local residents. In 2015, the judge had enough. He said at the hearing that Vera had 45 days to pay the $1,000 fine for her latest violation and if she didn’t, she was going to jail. Apparently she paid. However, she’s at it again. Cabot says Vera has continued her trespassing ways and is now (allegedly) in contempt of court for disobeying the judge’s orders. Cabot is requesting Vera be find $5,000 and chip in money for their legal fees. Some people never learn…
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