West Virginia

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    New WV Facility Ships First Compressors for M-U Pipe Customers

    Bidell Gas Compression facility in Weirton, WV (click for larger version)

    In March 2017, Bidell Gas Compression, a subsidiary of Canadian company Total Energy Services, announced it would establish its U.S. manufacturing headquarters in Weirton (Hancock County), WV–in the northern panhandle of WV (see Biddel Gas Compression Selects WV Northern Panhandle for US HQ). Biddel manufactures and sells pipeline compressors. The site they chose in Weirton includes a 100,000 square-foot building, part of the old ArcelorMittal machine shop operation. On Monday, Biddel shipped out from the new Weirton facility, their very first truckload of newly manufactured compressors. The news article we spotted says delivery of the compressors will happen today. We’re assuming delivery is to a Marcellus/Utica pipeline project, somewhere in our region, given the short time between shipment and delivery. This is a feel-good story. It is one more evidence that our industry, which used to import everything from workers to equipment, has matured. We now make what we use right here at home! Here’s the deets on Biddel’s first compressor shipment…
    Read More “New WV Facility Ships First Compressors for M-U Pipe Customers”

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    Brooke County WV Power Plant Wins State Approval

    Last September none other than West Virginia’s Secretary of Commerce, Woody Thrasher, admitted publicly that his beloved state is decidedly unfriendly to new natgas-fired electric plant projects (see WV Sec Commerce Says State Unfriendly to Gas-Fired Power Plants). In a speech before state legislators, Thrasher said while Ohio has built 19 new gas-fired power plants, and Pennsylvania has built 22 new gas-fired power plants, WV has built NONE. Zero. Nada. And that has to change. Pressure from the coal industry and regulatory red tape are preventing new projects from happening. A few years ago it seemed as though a project in Marshall County was ready to begin construction (see Progress for 3 WV NatGas Electric Plants; 1 Breaks Ground in 2016). However, that project is stalled–perhaps even dead (according to rumors we’ve heard). Last week there was a sliver of light when Harrison County commissioners voted to pass a resolution supporting a long-delayed gas power plant project there (see Harrison County, WV Commissioners Vote to Help Delayed Elec Plant). And now, finally, some sunshine breaks through! A power plant project in Brooke County, WV (same developers, Energy Solutions Consortium or ESC) received a siting certificate approval from the WV Public Service Commission. This is a good sign. Finally, a power plant project in WV that is moving forward…
    Read More “Brooke County WV Power Plant Wins State Approval”

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    WV Royalty Owners Push Bill to Fix Post-Production Deductions

    West Virginia royalty owners (which sometimes means landowners, sometimes not) are pushing Senate Bill (SB) 360 to fix the issue of post-production deductions drillers take from royalty checks. A brief history: In December 2016, MDN reported on the huge WV Supreme Court decision against EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see WV Supreme Court Rules EQT Can’t Deduct P-P Costs from Royalties). In February 2017, with a brand new justice on the bench, the WV Supreme Court agreed to rehear the case after an appeal filed by EQT–a rare and unusual step (see EQT Catches Big Break in WV Supreme Court re Royalty Deductions). In May 2017, the WV Supreme Court ruled on the reheard case, overturning its previous decision. The court ruled to allow EQT to deduct “reasonable” post-production expenses (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Those who won the original case (and lost the reheard case) say newly elected Supreme Court Justice Elizabeth Walker had conflicts of interest and should not have been allowed to vote to rehear the case in the first place (which she did). On that basis, they tried to avoid the rehearing altogether, but that failed. Newly elected Justice Walker, with (according to the losing side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, the case was appealed to the U.S. Supreme Court. However, the Supremes refused to hear the appeal, making post-production deductions the law in WV (see U.S. Supreme Court Rejects Appeal of WV EQT Royalty Case). The only path left to royalty/landowners is to pass a new law. That new law is SB 360…
    Read More “WV Royalty Owners Push Bill to Fix Post-Production Deductions”

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    WV’s Northern Panhandle Sits in the Shale Catbird Seat

    The Northern Panhandle of West Virginia is doubly blessed. The Panhandle is four counties: Hancock, Brooke, Ohio and Marshall. Some add a fifth–Wetzel County. The first four counties in the list sit in a slice of real estate located between Pennsylvania and Ohio. The Panhandle currently produces 38% of WV’s natural gas production, and nearly 70% of its oil production. That’s the first blessing–good rock sits under those counties. The second blessing is the panhandle’s location between PA and OH. On one side, sitting just a few minutes away, is the mighty Shell ethane cracker plant, currently under construction in Monaca (Beaver County, PA). On the other side, also just a few minutes away, sits the proposed PTT Global Chemical ethane cracker site in Dilles Bottom (Belmont County, OH). The second blessing is this: many petrochemical and manufacturing companies will build, even relocate, their operations to take advantage of the raw materials that will come from both cracker plants. And guess where many of them will choose to locate? Yep–right smack in the middle, which is where the Northern Panhandle happens to be–sitting in the catbird seat…
    Read More “WV’s Northern Panhandle Sits in the Shale Catbird Seat”

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    Co-Tenancy Bill Passes WV House, Goes to Senate for Final Vote

    MDN has written a number of posts about an effort in West Virginia to correct an ongoing issue called co-tenancy (see our co-tenancy stories here). In some cases rights owners can’t be found to sign leases, resulting in a great deal of acreage being unavailable for drilling that otherwise would be. In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation by allowing 75% of rights owners to agree/sign for everyone. Yesterday we told you that the full House of Delegates was slated to vote on House Bill (HB) 4268, “Co-tenancy Modernization and Majority Protection Act” (see WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today). Indeed they did vote, and the bill passed–60 voting for, 40 against. Which is good news for everyone–for drillers AND for rights owners. The bill now goes to the WV Senate for consideration. Here’s an update on yesterday’s vote…
    Read More “Co-Tenancy Bill Passes WV House, Goes to Senate for Final Vote”

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    Rover Pipeline’s SWPA Burgettstown Lateral Ready for Startup

    Click map for larger version

    On Tuesday, Rover Pipeline (Energy Transfer Partners) sent an official request to the Federal Energy Regulatory Commission (FERC) asking for permission to begin service on one of the remaining legs of the pipeline not yet up and running as part of Phase 1 development. Rover wants to begin service on the Burgettstown Lateral by Feb. 26. The Burgettstown Lateral (see the map below) extends from Burgettstown (Washington County), PA through Hancock County, WV and into eastern Ohio, connecting to the main Rover Pipeline in Carroll County. The Burgettstown Lateral is 51.3 miles long and includes a compressor station in/near Burgettstown to push the gas along the entire length of the lateral. Rover still maintains they will have the entire Rover Pipeline network up and running by the end of March. There are still some areas in Ohio where they are working (drilling for a second pipeline under the Tuscarawas River), however, most of the work remaining to be done is in Michigan–Phase 2 of the project. When it’s all done, up and running, Rover will flow 3.25 billion cubic feet per day of Marcellus/Utica gas to the Midwest, Gulf Coast and Canada. Below is Rover’s request to “start me up” for the Burgettstown Lateral, along with a map of the lateral…
    Read More “Rover Pipeline’s SWPA Burgettstown Lateral Ready for Startup”

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    WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today

    Two days ago we reported that the West Virginia House of Delegates was due to vote on House Bill (HB) 4268, the “Co-tenancy Modernization and Majority Protection Act” (see WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away). In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. A vote by the full House didn’t end up happening on Tuesday, as originally predicted. Amendments to the bill were offered. One of the amendments would have changed the ratio of rights owners who must sign on the dotted line to allow leasing from 75% all the way up to 90%–which isn’t feasible. Fortunately that amendment was voted down 57-40. However, another amendment–to reallocate half of the unclaimed royalties to fund health insurance for public employees including teachers–did pass (50-47). In the original bill 100% of unclaimed royalty revenue was to be used to cap orphan wells. Now the orphans only get half the funding. Perhaps most importantly, an amendment to limit co-tenancy to properties with seven or more rights owners passed 90-6. That amendment is intended to keep WV out of family squabbles, where just a few people own the mineral rights. The now fully-amended, fully-discussed bill is ready for a final final House vote, which is scheduled for today. After the House votes, it’s on to the Senate. Below are reports about the amendment process in the House…
    Read More “WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today”

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    FERC Grants MVP OK to Begin Pipeline Construction in Virginia & W.V.

    In January, MDN reported that Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–had received permission from the Federal Energy Regulatory Commission (FERC) to begin tree clearing and construction of access roads and construction yards in five West Virginia counties: Wetzel, Harrison, Doddridge, Lewis and Braxton counties (see Mountain Valley Pipe Gets FERC Approval to Begin WV Construction). That was MVP’s very first permission to begin construction-related activities. It was the trickle. The flood gates burst open late last week when FERC began issuing what is (so far) four new orders. The new orders grant MVP permission to continue not only tree clearing and building roads, but also to begin construction of the actual pipeline itself. That is, digging trenches and laying steel in the ground–not only in WV, but also in Virginia. Construction is now under way in multiple counties in both states. We lay out where MVP is getting built, and what activities are now green lighted by FERC, below…
    Read More “FERC Grants MVP OK to Begin Pipeline Construction in Virginia & W.V.”

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    WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away

    Today a co-tenancy bill is due for a vote by the full House of Delegates and from there will get sent on to the WV Senate. Co-tenancy is NOT forced pooling. It is legislation that will give a majority of rights owners in a property the authority to sign a lease on behalf of all the rights owners. In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. In the current bill, House Bill (HB) 4268, if 75% of the rights owners agree to lease the property for oil and gas drilling, that’s “good enough.” The bill will open up more Marcellus and Utica acreage to be drilled. As we previously reported, almost everyone is in favor it, including landowner groups (see WV Co-Tenancy Bill Picks Up Support from Landowner Group). Last Friday, the House of Delegates’ Judiciary Committee held a public hearing to gather more input from the public, and then voted to approve the bill, sending it to the full House for a vote. The public hearing was not without some drama. An anti-fossil fueler who is running for a House seat this fall, Democrat Lissa Lucas, got up to the mic during the public hearing and instead of addressing the merits (or lack thereof) for HB 4268, she proceeded to read the names of House members and contributions to their campaigns from the oil and gas industry. When asked to refrain from her stunt, she didn’t, so two men gently took her by the arms and escorted her out of the hearing. She now (hilariously) claims she was “dragged” out of the hearing. Here’s the latest on co-tenancy in WV–and the nutjobs who oppose it…
    Read More “WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away”

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    Harrison County, WV Commissioners Vote to Help Delayed Elec Plant

    Last June, the West Virginia Public Service Commission held a public hearing in Clarksburg, WV on the proposed ESC Harrison County Power Plant project (see Public Hearing Held for Harrison County, WV NatGas Electric Plant). ESC (Energy Solutions Consortium) was founded by father and son team Andrew and Matthew Dorn, based in Buffalo, NY. The Dorns are behind a series of WV natgas-fired electric plants, the first of which will get built in Marshall County (see Progress for 3 WV NatGas Electric Plants; 1 Breaks Ground in 2016). At the public hearing last June, the only person to speak against the project was from the Sierra Club–opposed because the Clubbers claim the plant will contribute to man-made global warming. Whatever. The PSC reported receiving 540 positive comments, and one negative comment. What does that tell you? Last July we reported the project still needs a few more permits (air and water) and was jumping through multiple government hoops to get them (see Harrison County, WV NatGas Electric Plant Close to Final Approval). Here we are, seven months later, and the project is STILL not fully permitted! What in the world is going on in WV? Why is it taking so long? Harrison County commissioners, hoping they can further goose the process and get it dragged across the finish line, will vote tomorrow to issue a resolution giving their full-throated support for the project. Let’s hope their vote of confidence finally does the trick…
    Read More “Harrison County, WV Commissioners Vote to Help Delayed Elec Plant”

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    Unions in WV Hiring Workers as Pipeline Construction Begins

    Tree clearing for Dominion’s $5 billion Atlantic Coast Pipeline (ACP) has already begun in West Virginia (see Atlantic Coast Pipeline Begins Cutting Trees in WV & VA (Not NC)). Construction for ACP in WV will begin this spring. Tree clearing for EQT’s $3.5 billion Mountain Valley Pipeline (MVP), along with construction of access roads and construction yards, has not yet begun but soon will in WV (see Mountain Valley Pipe Gets FERC Approval to Begin WV Construction). What it all means is that a lot of workers will be needed in a hurry as construction gets underway. Enter trade unions. Union workers will perform the bulk of construction–everything from driving trucks to delivery of supplies (and people), to operating heavy equipment, to digging trenches, to welding–even cutting down the trees, an activity happening now. Unions in WV are currently recruiting new members who want a good-paying, hard-working jobs in the pipeline industry in the Mountain State…
    Read More “Unions in WV Hiring Workers as Pipeline Construction Begins”

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    Ascent Resources Marcellus Plans to Exit Bankruptcy in Record Time

    On Wednesday MDN brought you the news that Ascent Resources Marcellus, a company founded by Aubrey McClendon after he left Chesapeake Energy, has filed for Chapter 11 bankruptcy (see Ascent Resources’ Marcellus Unit Files for Chapter 11 Bankruptcy). Ascent Marcellus is one of several companies using the Ascent name. The Ascent Marcellus piece of the pie owns 43,000 of leases and has drilled some 547 wells in West Virginia. Big operation. The good news is that, according to Ascent, 75% of the shareholders in the company are already on board with a plan to hand over ownership to existing debtholders. Ascent worked hard to put all of their ducks in a row and presented a “prepackaged” bankruptcy plan to the court–a plan that should make things go fast. In fact, Ascent Marcellus expects to exit bankruptcy by March 31st. Below we details about who Ascent owes money to, and how they plan to order “one prepackaged bankruptcy to go” at the bankruptcy court drive-thru window…
    Read More “Ascent Resources Marcellus Plans to Exit Bankruptcy in Record Time”

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    WV DEP Issues Permit for Mountaineer Gas Pipeline in Eastern WV

    In 2017 Mountaineer Gas launched the Eastern Panhandle Expansion pipeline project–a project to deliver natural gas via local distribution channels to a new industrial facility in Berkeley County, WV, and to provide gas to other local businesses and residents in the Tri-State area. There are three phases to the Eastern Panhandle Expansion project: Phase One runs a 22.5-mile, 10-inch-diameter steel pipeline from Morgan County to Martinsburg; Phase Two includes a loop to Charles Town; and Phase Three will build a four mile segment of pipeline into Martinsburg. The West Virginia Dept. of Environmental Protection held a hearing on Phase One in January, at the Berkeley Springs High School (see Old Hippies Turn Out at WV DEP Hearing to Oppose Mountaineer Pipe). All of the people who spoke at the hearing, some 33 of the 80 people present, spoke against the project. Even though local residents object, on Wednesday the WV DEP issued a permit for the project…
    Read More “WV DEP Issues Permit for Mountaineer Gas Pipeline in Eastern WV”

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    CNX Sells WV Gathering System to Former CONE Midstream for $265M

    CNX Resources, in addition to issuing an announcement about proved reserves yesterday (see today’s companion story), also issued an announcement about CNX the drilling company selling its Shirley-Pennsboro gathering system in West Virginia to CNX the pipeline company (CNX Midstream) for $265 million. Yes, in a sense it is moving assets around on paper. However, this seemingly innocuous announcement is interesting to MDN for a couple of reasons. First, there is a trend of splitting companies apart–to spin out the pipeline/midstream stuff into its own standalone company, separate from the drilling part of the company. EQT, a major CNX competitor, is going through the process of evaluating whether or not to spin off their pipeline subsidiary into its own company (see EQT Begins Process of Separating Midstream…into New Company?). When we see moves like this from CNX, we wonder if they too are also preparing for such a split. We have no evidence that such a move is in the cards–just idle speculation on our part. However, the fact that CNX is moving pipeline assets into the midstream subsidiary certainly sets up the possibility that the pipeline subsidiary may (one day) become a standalone company. Second, the pipeline subsidiary is called CNX Midstream. That’s a new name. As of early January you would have known it as CONE Midstream. CNX bought out its joint venture partner in CONE (Noble Energy) late last year and now owns all of CONE. CNX renamed CONE as CNX Midstream in early January (see CONE Midstream Gets a New Name: CNX Midstream Partners). We’ve not seen anyone else point out the fact that the former CONE is the buyer of this asset. For those two reasons–the trend of splitting drilling and pipelines into different companies, and the fact that CONE was the buyer–our interest was piqued in CNX’s seemingly innocuous announcement yesterday…
    Read More “CNX Sells WV Gathering System to Former CONE Midstream for $265M”

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    Ascent Resources’ Marcellus Unit Files for Chapter 11 Bankruptcy

    Please see comments from Ascent Resources below in the 2/7/18 update…

    We have to confess, we did not see this one coming. Ascent Resources Marcellus, a company founded by Aubrey McClendon after he left Chesapeake Energy, has filed for Chapter 11 bankruptcy. Note that Ascent, which was spun off from the McClendon company American Energy Partners, has a split corporate structure. On paper there are a number of “Ascent Resources” companies: Ascent Resources, LLC; Ascent Resources Utica Holdings, LLC; Ascent Resources – Utica, LLC; Ascent Resources Management Services, LLC; and, Ascent Resources Marcellus Holdings, LLC. Same management team for all and frankly, as a practical matter, they are all one company. But it is the last one in the list, Ascent Marcellus, that is seeking bankruptcy protection. According to the company website, Ascent Marcellus focuses its drilling activity on 43,000 leased acres in West Virginia. Ascent Marcellus has a couple of loans it can’t repay, so it’s taking the bankruptcy route which will transfer ownership of that portion of the company from existing shareholder to debtholders. We’ve seen this movie before. Nobody gets screwed except existing shareholders–at least, that’s the theory. According to an announcement by Ascent, the “restructuring” as it’s called, will not affect landowners or vendors. This is “an operational restructuring and is not intended to restructure or compromise any vendor, service provider, contractor, lessor, working interest owner or royalty owner obligations.” Of course “intent” and reality are sometimes two different things. We’ll keep a close eye out as this develops…

    2/7/18 Update: Ascent Resources sent clarifications to our statements and assumptions above. Below are Ascent’s comments as provided, verbatim. We thank Ascent for taking the time to comment.

    Regarding the comment that they are basically the same company:

    It isn’t all the same company. This is a very important distinction. There are several different companies with similar names that are managed by another separate company that also has a similar name. The Marcellus company always had separate assets in West Virginia, a separate capital structure and separate debt that was collateralized solely by the West Virginia assets. It’s not all the same company.

    Regarding the comment that “Nobody gets screwed except existing shareholders–at least, that’s the theory.”

    You should know that Marcellus private equity owners hold more than 75% of the stock and control the board, so they were integrally involved in determining the most appropriate outcome for shareholders as part of the Chapter 11 discussions. So “in theory” does not apply to the detailed plan of reorganization that has been worked out between the company’s owners and the creditors. Read More “Ascent Resources’ Marcellus Unit Files for Chapter 11 Bankruptcy”

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    Wheeling WV Eyes $2M Signing Bonus for M-U Drilling Under City Land

    Wheeling, West Virginia–known as “the Friendly City”–is about to get an even bigger smile on its face. Wheeling city leaders are about to sign a lease agreement to allow American Petroleum Partners to drill under several “old city landfills” that have been closed for decades. The up-front signing bonus for 336 acres of Wheeling-owned land will be $2 million–which works out to ~$5,952 per acre. Once gas begins flowing, the city will get an 18.5% royalty. The money will be used for “paving, playgrounds, economic development and other city functions.” Does American Petroleum Partners (APP) sound familiar? In December we brought you the news that APP had leased the 66-acre Wheeling Park High School campus for shale drilling–under (not on) the campus–for $6,000 per acre (see Wheeling, WV High School Leased for Shale Drilling, $6K/Acre). We first wrote about the low-key, avoiding-the-limelight APP in March 2016 (see New Marcellus/Utica Driller Quietly Launches w/$800M Investment). APP is headed by Rice Energy alumnus Varun Mishra, who is the founder and CEO. Apollo Global Management invested $411 million in APP with the option to double it up to $800 million. It’s great to see this relatively young company locking up acreage and beginning to drill. Here’s the details on the latest APP lease deal–with the City of Wheeling…
    Read More “Wheeling WV Eyes $2M Signing Bonus for M-U Drilling Under City Land”