WV Sen. Charles Trump Introduces New Co-Tenancy, Joint Dev Bill
As MDN previously reported, perhaps the biggest energy-related issue for this year’s session of the West Virginia 60-day legislative session will not be a bill on forced pooling. Instead, the West Virginia Oil and Natural Gas Association (WVONGA) is pushing a legislation on co-tenancy and joint development (see WV Won’t Push Forced Pooling, Will Push Joint Dev. & Co-Tenancy). Senate Bill (SB) 244 was introduced in February to cover both co-tenancy and joint development (see WV Senate Bill 244 Introduced for Co-Tenancy & Joint Development). For an explanation of what co-tenancy and joint development means, read this post. WVONGA is supporting SB 244, but rights owners, including the West Virginia Royalty Owner’s Association (WVROA) is not. In an effort to get the two sides together and hammer out something that both could support, WV State Senator Charles Trump convened a meeting with both sides. He then drafted up new legislation to replace SB 244 (which was going nowhere fast). Last Friday, Trump introduced SB 576 (full copy below). Did Trump succeed in crafting something both sides can support?…
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Last Friday Bidell Gas Compression, a subsidiary of Canadian company Total Energy Services, announced it will establish its U.S. headquarters in Weirton (Hancock County), WV–in the northern panhandle of WV. According to their website, Biddel “is a leading supplier of reciprocating and rotary screw natural gas compressors from 20 to 8,000 brake horsepower.” That is, they manufacture and sell pipeline compressors. The site they chose includes a 100,000 square-foot building, part of the old ArcelorMittal machine shop operation. The investment will create 130 new jobs and spur new growth in other area businesses…
Three years ago in the closing hours of the 2014 legislative session, WV legislature passed SB373, the “storage tank” bill (see 
The Mountain Valley Pipeline (MVP) is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners. The project has faced stiff opposition from landowners in West Virginia (see 
The Baker Hughes rig count in the U.S. continued to be on fire in February. Whoops! Poor choice of words. The rig count continued its rocket ride. In January the average number of U.S. rigs was 683. In February, the count zoomed to 744, up 61 rigs in just a month. Each active rig translates into hundreds of jobs, both directly working at the rig and indirectly in services delivered to the rig and its workers. It also means more landowners will soon have royalty payments heading in their direction. When rigs are active, life is good. What about rig counts in the Marcellus/Utica? Total rig count went up another 3 rigs. Two of the rigs were added in WV (now 10), and one in PA (now 34). OH’s rig count remained the same (20 rigs) in February as January. Just 3 added rigs out of 61 means other shale plays (primarily the Permian and other oil plays) are where most of the rig action is happening. Here’s the full set of numbers, along with a pretty MDN chart showing the last 12 months of rig counts in the Marcellus/Utica…
Statoil, based in Norway, is a big player in the West Virginia Marcellus Shale. Statoil paid property taxes to Brooke, Marshall, Ohio and Wetzel counties (all in WV) in 2015 and later found, during an audit/review, that they had overpaid those counties. They overpaid Brooke by $1.8 million, Ohio by $2.9 million, Wetzel by $1.6 million and Marshall by $342,000 (see 
Here’s an interesting story. A religious commune of Hare Krishnas in Marshall County, WV steadfastly refused to sign an easement with Rover Pipeline to allow the pipeline across ~3,000 feet of commune-owned property. Rover had offered the Krishnas $7,000 for the easement, but no dice. You may recall that the Krishnas have no problem accepting oil and gas money, and have done so by leasing their land for shale drilling–even though the official view of the Krishnas is that “gas drilling is exploitative, that it is unsustainable and ‘contributes to the culture of death and toxicity’” (see 
The legislative session for West Virginia is in full swing–a session that lasts for 60 non-contiguous days at the beginning of each year. This year’s session opened on Jan. 11 and will conclude on Apr. 8th. As MDN previously reported, perhaps the biggest energy-related issue for this year’s session will NOT be (as it has in five previous sessions) a bill on forced pooling. Instead, the West Virginia Oil and Natural Gas Association (WVONGA) is pushing a legislation on co-tenancy and joint development (see 
West Virginia University (WVU) has joined a national effort to “turn natural gas into valuable products and do it at the well.” There are many locations in the Marcellus (and Utica) where pipelines don’t yet connect. Wells drilled but not hooked up to production. WVU has joined the newest branch of the U.S. Department of Energy’s National Network of Manufacturing Institutes. Called Rapid Advancement in Process Intensification Deployment institute, or RAPID, the institute “will focus on using advanced manufacturing to develop breakthrough technologies to boost the productivity and efficiency of some of industrial processes by 20 percent in the next five years.” That is, they plan to design modular reactors–think of them as teeny tiny crackers–that can be carted around well site to well site, converting methane, ethane and other hydrocarbons into new chemical products. It’s a very exciting concept. WV in particular has a lot of hilly terrain that makes installing pipelines difficult. This is a potential solution to that problem…
On Friday MDN ran a story of keen interest to both mineral rights owners and drillers in West Virginia–about an effort pushing new legislation this year in lieu of forced pooling, something called “co-tenancy” and “joint development” (see 
The colorful new Governor of West Virginia, Jim Justice, is wasting no time in showing his support and appreciation to the natural gas industry. During Justice’s State of the State address last week, he ordered his new head of the WV Dept. of Environmental Protection, Austin Caperton, to stop saying “no” to businesses that show up with requests (including the drilling industry). During a rambling address, Justice had this to say: “Now, I underline — underline, underline, underline — nobody loves the outdoors as much as me. Nobody loves water as much as me. We’re not going to break the law. We’re got going to do anything to damage the environment to the very best of our abilities. Or our waters. But we are not going to just say no.” And we have perhaps the first instance of that philosophy in action. The previous Gov. Earl Ray Tomblin Administration had enacted certain restrictions in WV permits for compressor stations–establishing noise and light restrictions to protect nearby residents. At the request of the West Virginia Oil and Natural Gas Association (WVONGA), Caperton removed those restrictions…
If you’re in business, you’ve no doubt heard of “leading indicators” and “lagging indicators.” Example: When it comes to employment, a leading indicator would be an increase in work at temporary agencies (a rapid ramp-up in new employees), which means the economy is about to heat up and do better. A lagging indicator would be the official unemployment numbers–higher unemployment means an economy doing worse, lower unemployment means an economy doing better. When it comes to drilling activity, MDN has long used two metrics as leading indicators–that drilling activity is about to pick up. One is new permits issued. Drillers don’t spend big bucks to apply for permits they don’t intend to use–and use soon. However, there’s another, even earlier leading indicator, a predictor that more drilling is on the way in the next 6-12 months. That indicator is packed record halls at the local county clerk’s office. Before lease deals are signed, sealed and delivered, drillers must first ensure there is a clear title–that the person who says he/she owns the mineral rights for a given property, actually does. That’s where abstractors come in. Abstractors research deed records at the county clerk’s office. In the past we’ve noted there are some counties where there is a waiting line to get in to access records (see 
Forced pooling legislation in West Virginia has been put forward five times in the past seven years–and each time it has failed to win enough votes in the WV legislature. In its most recent incarnation (last year), forced pooling would allow drillers to form a “unit” for drilling (typically one square mile, or 640 acres) from a group of properties where at least 80% of the mineral rights owners have signed a lease (see 
Marathon Petroleum subsidiary MarkWest Energy and Antero Resources’ midstream subsidiary Antero Midstream have announced a 50/50 joint venture focused on gathering and processing natural gas and natural gas liquids in northern West Virginia (Tyler, Wetzel and Richie counties). Antero Midstream will contribute its gathering operations for 195,000 acres in WV, boosting MarkWest’s total WV Marcellus gathering operation to a huge 360,000 acres. In addition, the JV will add three new processing plants to MarkWest’s Sherwood Complex in Doddridge County, WV. And get this: the JV contemplates building another eight (!) processing plants at Sherwood and a new/second location. Antero expects to invest “up to $800 million” through 2020, and has already made an initial $155 million investment. We think it’s no coincidence that on the same day Antero Midstream announced the deal (yesterday), they also announced a new round of units (i.e. shares of stock) they hope to pedal to raise $198 million. Here’s the details on the JV deal between Antero and MarkWest…
EQT, one of the biggest and best drillers in the Marcellus/Utica, issued their fourth quarter and full year 2016 update yesterday. As is typical when issuing the updates, EQT’s top brass held a conference call with analysts to discuss results and take questions. In reading through a transcript of the call, one of the most interesting passages (for us) was in the prepared comments by incoming EQT CEO (currently president) Steve Schlotterbeck. In a brief passage excerpted below, Steve provides a quick update on several items: the Mountain Valley Pipeline project, EQT’s Utica drilling program, and the fact that “this week” EQT has purchased an additional 14,000 “core” West Virginia acres in Marion and Monongalia counties for $130 million, which works out to be $9,286 per acre…
In December MDN reported on the huge West Virginia Supreme Court decision against driller EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see