Statewide WV

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    Another Look at WV’s Co-tenancy & Joint Development Proposals

    When MDN editor Jim Willis attended the Shale Insight conference in Pittsburgh two weeks ago, one of the recurring themes he heard from West Virginia officials is that the state urgently needs to pass “mineral efficiency” laws. What they meant by mineral efficiency is another name for co-tenancy and joint development. We’ve written a fair bit about the topic–what we call “forced pooling lite.” In August the West Virginia Oil & Natural Gas Association (WVONGA) announced its intention to push, once again, for co-tenancy and joint development (see WVONGA Makes Plans to Push Forced Pooling Lite in 2018). We spotted an editorial from the co-founder of the West Virginia Surface Owners Rights Organization on the topic co-tenancy and joint development. He has a unique perspective. He calls co-tenancy “majority rules” and joint development “invisible ink.” What does he mean? And what would these two measures do if adopted? And is there really an urgent need for them? Let’s tackle this issue once again…
    Read More “Another Look at WV’s Co-tenancy & Joint Development Proposals”

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    Carbon Natural Gas Buys 780K Acres, 3,100 Mi. of WV Pipe for $41M

    Carbon Natural Gas Company, through its affiliate Carbon Appalachian Company, announced earlier this week that the company has purchased another 780,000 acres of conventional (non-shale) leases, along with 3,100 miles of gathering pipelines located “predominantly” in West Virginia–for $41.3 million. You may recall Carbon Natural Gas picked up all of Cabot Oil & Gas’ conventional assets in WV for $21.5 million back in August (see Carbon Natural Gas Buys Cabot’s Conventional Wells in WV-OH-VA). Once again Carbon does not name the seller for this latest round (they also did not with the Cabot deal, MDN pieced that information together). This time we don’t have any evidence or clues to tell you who did the selling. One thing is clear: Now with a total of 1.7 million acres of leases, 7,900 operating conventional wells and 4,700 miles of pipelines, Carbon Natural Gas is locking down much (most?) of the conventional gas business in the Mountain State…

    Oct 7, 2017 Update: An MDN source tells us the seller was EXCO Resources. We have not been able to independently verify the tip, but our source is reliable and we wanted to pass along the tip.
    Read More “Carbon Natural Gas Buys 780K Acres, 3,100 Mi. of WV Pipe for $41M”

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    Shale Insight 2017 – Day One News Roundup

    MDN is once again attending the Shale Insight event–in Pittsburgh. Yesterday was the first day of the event. The crowd was definitely smaller than last year when then-candidate Trump spoke to attendees. However, Day One saw a number of heavy-hitting speakers, including Secretary of Labor Alexander Acosta, Deputy Secretary of Energy Dan Brouillette, XTO Energy President Sara Ortwein, Chevron Appalachia President Stacey Olson, and People’s Natural Gas CEO Morgan O’Brien. Marcellus Shale Coalition President Dave Spigelmyer served as master of ceremonies and seemed to be everywhere-present during the event (how does he DO that?). From the opening session to the exhibit floor to attending the breakout sessions, MDN editor Jim Willis made the rounds–and took lots of notes. In the coming days he will write up those notes and share them. For now, we have links and extracts of articles from other publications attending and reporting on this year’s Shale Insight…
    Read More “Shale Insight 2017 – Day One News Roundup”

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    WV Sec Commerce Says State Unfriendly to Gas-Fired Power Plants

    WV Commerce Sec. Woody Thrasher

    West Virginia Secretary of Commerce Woody Thrasher had some harsh words when he gave a speech to House and Senate legislators about his own state. Thrasher said one of the reasons why WV is trailing both OH and PA economically is because WV treats natural gas-fired electric plant projects so poorly. Thrasher had data to back up his claim. In Ohio, 19 natgas-fired plants have been built. In PA? Some 22 natgas-fired plants! Although there’s been plenty of talk–for years–that such plants are coming in WV–the number of gas-fired plants that has actually broken ground to date in WV is…ZERO. Nada. None. Thrasher says power plant owners have concluded it’s just easier, due to regulations and fewer hoops to jump through, to avoid WV and build their projects in OH or PA. Thrasher’s comments were some verbal cold water splashed on the faces of WV’s legislators, in an attempt to get them to address the situation, or risk forever being behind the eight ball…
    Read More “WV Sec Commerce Says State Unfriendly to Gas-Fired Power Plants”

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    Shale Boom Foundation on Which WV Manufacturing Will be Built

    Brooks McCabe

    Brooks McCabe is a former West Virginia state senator and the a current WV Public Service Commissioner. In a recent editorial, McCabe made some pretty bold, even startling, claims. He said that the Marcellus/Utica shale in the state is the “foundation for West Virginia’s new manufacturing economy.” That is, shale drilling is just the tip of the iceberg for WV, economically speaking. McCabe went on to say this: “This [shale] economy has the potential to lift the state out from under a cloud of mediocrity and self-doubt to perhaps the brightest future the state has ever known.” Holy cow! That’s some high praise for the power of shale gas and oil! The key is, of course, in the downstream–the petrochemical sector. In a word, plastics. You do know that plastics come from hydrocarbons (oil and gas), right? That modern-day existence would not be possible apart from oil and gas. That we would still be living in the Stone Ages were it not for fossil fuels. What will it take for WV to take full advantage of this opportunity? McCabe has some thoughts on that…
    Read More “Shale Boom Foundation on Which WV Manufacturing Will be Built”

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    Texas Private Equity Firm Forms to Invest in Marcellus/Utica

    District 5 Investments, an energy-focused private equity firm based in Texas, has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region. According to an announcement yesterday, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but starting first in the Marcellus/Utica. Investment sizes range from $5 million to $35 million. Here’s the latest investor to grab a piece of the Marcellus/Utica pie…
    Read More “Texas Private Equity Firm Forms to Invest in Marcellus/Utica”

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    WV State Agency Rejects Anti Appeal to Stop US Methanol Plant

    Antis in West Virginia who filed an appeal of a permit allowing US Methanol to build a plant in Institute, WV have been rejected by the WV Air Quality Board. Earlier this month US Methanol broke ground in Institute (Kanawha County), WV for its very first methanol production plant (see US Methanol Breaks Ground on First Plant in West Virginia). This is the first of what is rumored to be up to five such methanol plants to be built in the Mountain State by US Methanol. Methanol plants convert natural gas into methanol, used as a chemical feedstock (or raw material) to create other things, like gasoline, antifreeze, plastic bottles–even LED and LCD screens. A number of dignitaries attended the groundbreaking in Institute, including colorful WV Governor Jim Justice. People Concerned, a Big Green group, has painted nightmare scenarios that “if” a 1.2 million gallon methanol holding tank explodes, it’s the end of the world for anyone and everyone in the Institute area. In an unbelievable act of disgust, the attorney for People Concerned “reminded” the Air Quality Board that the location of the US Methanol plant is located next to “a historically black university”–implying there’s something racist about the plant and the so-called safety threats it may hold for black students. Loathsome. Fortunately the Air Quality Board refused the appeal by People Concerned, meaning the plant will continue construction as planned, going online by mid-next year…
    Read More “WV State Agency Rejects Anti Appeal to Stop US Methanol Plant”

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    Time for FERC, Congress to Slap States into Line re Pipe Refusals

    West Virginia Dept. of Environmental Protection’s (WVDEP) capricious decision to yank a permit it previously granted for the Mountain Valley Pipeline is “the last straw” according to the legal beagles at the Blank Rome law firm. Last week WVDEP, under pressure in a lawsuit brought by the radical Sierra Club, decided to revoke a previously granted water crossing permit (see Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit). The corrupt New York Dept. of Environmental Conservation is now making a habit of refusing these types of permits for projects in our beloved home state–so far refusing permits for the Constitution Pipeline, Millennium Pipeline, and Northern Access Pipeline projects. Given this recent activism by state agencies, the lawyers at Blank Rome say it is now time for both the Federal Energy Regulatory Commission (FERC) and Congress to act, to “stem this overreach by States.” In our words, it’s time to slap the states back into line. They lay out a case to do so…
    Read More “Time for FERC, Congress to Slap States into Line re Pipe Refusals”

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    OH, WV Landowners Sue Antero re Post-Production Royalty Deductions

    Lawsuits filed against Antero Resources in both Ohio and West Virginia seek class action status. Both lawsuits make similar claims: Namely that Antero has improperly deducted post-production expenses from royalty checks (not allowed under lease terms), and that Antero has avoided, with creative accounting, paying royalties on natural gas liquids (NGLs) produced. The OH lawsuit was first filed in January of this year, followed by a lawsuit filed in WV in May. We have copies of both complaints below, so you can read the language for yourself. In the case of the OH lawsuit, Antero filed a motion to dismiss. The landowners amended the complaint and Antero dropped their motion to dismiss. The OH lawsuit, and as near as we can tell, the WV lawsuit, are both moving forward. Here’s our summary of both lawsuits–the MDN Cliffs Notes version…
    Read More “OH, WV Landowners Sue Antero re Post-Production Royalty Deductions”

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    Lawyers ask US Supreme Court to Hear WV EQT Royalty Case

    WV Supreme Court Justice Beth Walker

    In a decision that thrilled drillers, but angered landowners, the West Virginia Supreme Court decided in May to overturn its own previous decision (from last December) and allow driller EQT to deduct post-production expenses from royalty payments (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). Last December MDN reported on the huge WV Supreme Court decision against driller 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). The justices, in their ruling, said that drillers can “not deduct from that (royalty) amount any expenses that have been incurred in gathering, transporting or treating the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production.” A really big deal. Then in February, 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). Those who won the 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. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). In the May decision, the justices reversed their earlier decision, voting 4-1 in favor of allowing EQT to deduct “reasonable” post-production expenses. Newly elected Justice Beth Walker, with (according to the other side) conflicts of interest, voted in favor of EQT. On the basis that Walker should not have been part of the process at all, lawyers for the losing landowners have appealed the case all the way to the United States Supreme Court…
    Read More “Lawyers ask US Supreme Court to Hear WV EQT Royalty Case”

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    Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit

    In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the 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 (see WV DEP Grants Mountain Valley Pipeline Water Crossing Permit). In June, a group of profoundly radical “environmental” organizations (Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network) filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit against the WVDEP for doing their job issuing the permit (see Radicals File Lawsuit Against WV DEP for Approving MV Pipeline). Because of the pressure of that lawsuit, last week the WVDEP caved and reversed their decision, rescinding (called “vacating”) the permit for MVP. The WVDEP says they will now “re-evaluate the complete application to determine whether the state’s certification is in compliance with Section 401 of the federal Clean Water Act.” Another victory for the forces of evil…
    Read More “Trouble for Mountain Valley Pipe: WV DEP Withdraws Water Permit”

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    Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases

    Ridgetop Capital Partners, founded in 2007 and headquartered in the Pittsburgh area, is a private institutional investment firm focused mainly on the oil and gas space. That is, they raise money from rich people (and businesses) and invest that money in projects which they closely watch and influence, hoping to make their money back with a generous interest rate. A LOT of private money funds oil and gas development–there is nothing new or novel about Ridgetop. However, what is new and novel is that the company has just closed on another round of fundraising–chasing $200 million through the door–which they will now use to buy natural gas mineral rights (i.e. leases) in the Marcellus/Utica. The company previously invested ~$130 million in our region’s shale, snapping up ownership in over 30,000 acres (most, perhaps all of it, in joint ventures with major M-U drillers). Where will Ridgetop likely invest to buy new acreage? They’ve given us a big clue…
    Read More “Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases”

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    WV Surface Owners Win Important Case Against EQT re Drill Pad

    A West Virginia Circuit Court case decided last week (by jury) found in favor of surface owners against a well pad constructed by EQT. The decision has far-reaching implications for not only surface owners and drillers, but mineral rights owners too. From the first time we read about so-called “joint development” legislation being promoted by the drilling industry in WV (back in February), we’ve not been fans (see More on WV’s Push for “Joint Development” Instead of Forced Pooling). In brief, there are a number of existing old leases in WV, signed before shale drilling began, that prevents drillers from drilling a horizontal well across an individual property boundary line–until a new lease is signed. Joint development says if the driller already owns the leases on all adjoining properties they want to combine into a drilling unit, they can do so without signing a new lease. The proposed joint development law seemed to us to be a way for drillers to avoid negotiating and paying more for new leases–which they should be willing to do! However, the case of Crowder and Wentz v EQT puts joint development in a new light for us. The case appears (to us) to be an abuse of power by surface owners against both drillers and mineral rights owners–by using the current prohibition against joint development. We certainly understand why surface rights owners would resist having a drill pad on their property, however, that’s life. They bought land (or inherited it, etc.) that doesn’t have mineral rights attached. Under existing WV law, a well pad can be drilled, taking 10-15 acres of the surface land (against the surface landowner’s wishes, but with compensation), in order to access the minerals under that specific piece of property. However, the court ruled last week in Crowder and Wentz v EQT that a driller cannot then use that same already-constructed well pad to further drill wells that access minerals under other, adjacent properties. Which in our book makes a strong case for a joint development law, to avoid this kind of misuse by surface landowners…
    Read More “WV Surface Owners Win Important Case Against EQT re Drill Pad”

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    WB XPress Pipeline Gets Important USDA Approval for Natl Forest

    TransCanada’s WP XPress pipeline project has just scored an important permit from the U.S. Dept. of Agriculture (USDA) Forest Service that allows the project to move forward in the Monongahela National Forest. In Jan. 2016, Columbia Pipeline Group (now owned by TransCanada) filed a full, official application with the Federal Energy Regulatory Commission (FERC) for approval of the $850 million WB XPress Project (see Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA). WB XPress consists of two new compressor stations, 26 miles of pipeline replacement located along existing corridors (11.6 miles of it in Monongahela National Forest), and 2.9 miles of new pipeline in Virginia and West Virginia. The WB XPress Project will expand capacity of the Columbia Gas Transmission pipeline system in the region by 1.3 billion cubic feet per day (Bcf/d), linking Marcellus gas supplies to new markets. FERC issued a favorable environmental assessment for the project in March of this year (see FERC Gives Columbia WB XPress Enviro Thumbs Up). While the Forest Service has given its blessing, the project still needs a final approval from FERC before it can begin construction–something TransCanada asked for just last week. Here’s where things stand with the WP XPress project…
    Read More “WB XPress Pipeline Gets Important USDA Approval for Natl Forest”

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    VA, WV Landowners Sue FERC re Pipelines, Seek to Gut Natural Gas Act

    A group of 57 gentry landowners in Virginia and West Virginia, backed by an out-of-state Big Green group, have just sued the Federal Energy Regulatory Commission (FERC) in an attempt to gut the 80-year old Natural Gas Act that gives FERC the right to grant eminent domain for pipeline projects. Specifically, the colluding landowners oppose Dominion’s $5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina, and EQT’s $3.5 billion Mountain Valley Pipeline project, a 303-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The frivolous lawsuit filed yesterday in the U.S. District Court for the District of Columbia (full copy below) claims the landowners’ property is a “taking” not properly compensated under the U.S. Constitution–even though landowners are paid and they can continue to use their land as they see fit, as long as they don’t put a building overtop the pipeline. Here’s the latest on Big Green’s effort to oppose every square inch of new natural gas pipelines anywhere, including in the Marcellus/Utica…
    Read More “VA, WV Landowners Sue FERC re Pipelines, Seek to Gut Natural Gas Act”

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    WVU Appalachia Ethane Storage Hub Final Report – We Need it Bad

    A research team from West Virginia University spent the past year studying geologic regions in 50 counties in the Marcellus/Utica Shale region to see if our region would support a proposed $10 billion ethane storage hub. The conclusion was delivered last week at a meeting in Southpointe, PA: Heck yeah! Some 100 geologists, chemical engineers, oil and gas people members of academia gathered to hear about the results. WVU researchers released their findings in a published 181-page report titled “A Geologic Study to Determine the Potential to Create an Appalachian Storage Hub for Natural Gas Liquids” (full copy below). Among the study’s findings: A shale ethane storage hub could help create $36 billion in investment and more than 100,000 permanent jobs. It’s HUGE! Our region currently produces three times the amount of ethane that can be used by the mighty Shell ethane cracker, pointing out the need for more cracker plants. Here’s the exciting news that we need an ethane storage hub, and we need it bad…
    Read More “WVU Appalachia Ethane Storage Hub Final Report – We Need it Bad”