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Diversified Gas & Oil Buys Core Appalachia for $183M
Diversified Gas & Oil continues its mission to buy as many non-shale (conventional) oil and gas wells as it can in the Appalachian Basin. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see Diversified Gas & Oil Adds to Conventional Assets in KY, VA, WV). They’ve just done it again. This week Diversified announced a deal to buy out Core Appalachia for $183 million, which includes ~5,000 producing wells (90% of production is natgas) and 1.3 million acres in West Virginia, Kentucky and Virginia.
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Each large (over 475 megawatts) gas-fired electric power plant is an economic bonanza. The plants cost hundreds of millions of dollars to build–over a billion dollars for the largest plants. They provide hundreds of jobs during construction, jobs that last several years. They provide millions in tax revenue to local municipalities and schools. And best of all, each one of these plants uses an enormous amount of Marcellus and Utica Shale gas. There are 29 of these incredible projects already built or in various stages of planning and construction in PA, OH and WV. We have the list below.
Each year MDN partners with the Oil & Gas Awards to promote their Northeast Awards–a way for companies in the oil and gas industry that operate with distinction to get recognized by their peers. In March 2019 the Northeast Oil & Gas Awards will celebrate their 7th year! We hope that you and your colleagues will be able to share *your* successes and participate in the greatest celebration of our industry at the Oil & Gas Awards in Pittsburgh in March 2019. The deadline to enter is Dec. 12. MDN has what we consider a way you and your company can gain an “unfair” advantage–stacking the deck in favor of your company winning.
Some 200 business and government leaders in West Virginia attended the state’s Economic Outlook Conference in Charleston this past Wednesday. A key focus of the event was a panel discussion on the topic of “downstream” natural gas development–meaning ethane cracker plants and manufacturing plants to take advantage of the coming flood of cheap plastics from cracker plants. The speakers spoke of urgency, to prevent a generational opportunity from slipping away.
We’ve seen this movie before. The U.S. Court of Appeals for the Fourth Circuit (quickly becoming the Fourth Circus) has once again listened to the arguments of anti-fossil fuel groups including the Sierra Club and Chesapeake Climate Action Network and has overturned a recently re-issued permit that allows Mountain Valley Pipeline (MVP) to use certain methods to build the pipeline across streams and rivers in West Virginia. The court action pretty much shuts down all work on MVP in WV.
We’re not quite sure how to tackle this story as there are so many aspects to it. Let’s start here: Two years ago lawsuits filed by some 200 West Virginia residents against Antero Resources were combined into a class action lawsuit. The lawsuits are called “nuisance” lawsuits because, according to the plantiffs, Antero is a nuisance to them (truck traffic, noise, lights at night, etc.). That massive class action lawsuit, filed in early 2016, is about to be heard by the WV Supreme Court–a court in disarray after all of its sitting justices were impeached and removed.
In July MDN said it’s time to reveal who is blocking new gas-fired electric plants in West Virginia (see 
What is it about teachers’ unions that makes them so greedy for other people’s money? We’ve told you, for years, about the quest by Pennsylvania’s teachers’ unions (most of them in the Philadelphia area) who want to raid the coffers of Marcellus drillers via a confiscatory severance tax slapped on top of an existing impact tax slapped on top of corporate income taxes. You can never have too many taxes in education-land. That’s the only way they get paid. In West Virginia it’s the same routine. WV already has a severance tax, a nosebleed-high severance tax of 5% (one of the highest in the country). And yet teachers want to increase it–so they can grab that money for moi (see 
Although the push is on to get Marcellus/Utica molecules to new markets where they can fetch higher prices, there is a group who has benefited in a major way from an abundance of cheap, clean-burning shale gas. That would be the residents and businesses located in West Virginia. Industry group Consumer Energy Alliance (CEA) has just published a new report that reveals WV residents and businesses have saved a cumulative $4 billion from 2006-2016 as a result of the decreasing price of natural gas in the state. You may recall not long ago CEA published a similar study for Pennsylvania (see 
Some exciting news to share. Southwestern Energy, headquartered in Texas, has cut a deal to sell all of their Fayetteville Shale (Arkansas) assets to Flywheel Energy for $1.865 billion in cash. The sale makes Southwestern a pure play, 100% focused driller on the Marcellus/Utica region (i.e. Appalachia). What will Southwestern do with an extra $1.865 billion? According to their announcement: (1) Spend $900 million of it on retiring IOUs (“notes”) previously issued. That is, debt retirement. (2) Buy back up to $200 million in outstanding shares of stock. (3) Spend $600 million of it over the next two years (2019 & 2020) on more Marcellus/Utica drilling. But not just any M-U drilling. Southwestern owns acreage in both northeastern PA and the northern panhandle of WV (with a some acreage in Washington County, PA). According to Southwestern’s announcement, the extra $600 million will go to drilling in the company’s “liquids-rich Appalachia assets.” Northeastern PA is dry dry dry–no liquids. WV landowners brace yourselves–Southwestern will soon bring an extra $600 million (over half a billion dollars) worth of drilling to your area. If you’re signed with Southwestern and haven’t yet seen drilling, you now stand a much better chance! Here’s the exciting news, along with extra resources we’ve located to better help you understand the news…
In an act still befuddling for us, West Virginia Gov. Jim Justice fired Commerce Secretary Woody Thrasher in June (see 
As we reported yesterday, EQT Midstream’s Mountain Valley Pipeline (MVP) got some excellent news–that the Federal Energy Regulatory Commission had lifted a stop-work order on the project (see