Statewide WV

Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

US Forest Service Blocks Atlantic Coast Pipeline in National Forests
January 25, 2016January 25, 2016

Cow Knob Salamander

In the end it was the cow nobs and red spruce that have slowed down Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project from West Virginia through Virginia and into North Carolina. Specifically, the U.S. Forest Service (USFS) has refused to grant Dominion a special permit to cross teeny tiny sections of the Monongahela and George Washington national forests in West Virginia and Virginia. Why? Because of concerns about cow knob salamanders, northern flying squirrels and red spruce trees. Just last November MDN told you that Dominion and ACP were bending backwards, forwards and sideways to avoid running through cow nob salamander territory (see Dominion Files Pipeline Route Change to Avoid Salamanders, Swamp). Apparently the USFS doesn’t think Dominion’s plan is good enough. It’s now back to the drawing board to see where, in those regions, ACP can safely be run to avoid radical environmentalist demands. Of course the answer is “no where” as they are always unreasonable about these things. There is no “how can we work this out to your satisfaction” when it comes to nut cases. The antis simply demand, like petulant children, that you not do it at all. Which is just what the other side is now saying about ACP…
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Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Southwestern Energy | Statewide PA | Statewide WV | West Virginia

Southwestern Energy Cuts Workforce 44%, 200 Marcellus Jobs Gone
January 22, 2016January 22, 2016

We have some very sad news to share today. Yesterday Southwestern Energy Company, one of the largest drillers in the Marcellus/Utica and the third largest independent natural gas driller in the U.S., announced it will lay off 1,100 people and pause its drilling program. That 1,100 is out of 2,500 employees–or 44% of the company. It was just a few weeks ago that Southwestern got a new CEO, Bill Way (see Southwestern Energy Gets New CEO – What’s Ahead for 2016?). We mused at the time: “When there’s a change in leadership, it has the potential to impact company strategy. So we’re always interested when changes of this type come along. The question now is, what’s ahead for 2016 with Bill Way at the helm?” Indeed. We can see what kind of changes Mr. Way is bringing. In October 2014 Southwestern announced a deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Then in December 2014, Southwestern bought 46,700 net acres of leases in northeastern PA from WPX for $300 million (see First Shoe Drops: WPX Sells 1/2 Marcellus Assets to Southwestern). Southwestern holds about 755,000 acres total in the Marcellus/Utica region. When everyone else was slowing down, Southwestern was doubling down on their drilling program (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). It seems that the wind has finally gone out of Southwestern’s sails. The company did not post an official press release on their website, so we’ve pieced together coverage from a number of sources to try and give you a complete picture of what they said yesterday…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Gov. Tomblin Proposes to LOWER Oil & Gas Severance Tax
January 22, 2016January 22, 2016

Ohio Gov. John “foreigner hunter” Kasich has been hellbent on raising Ohio’s oil and gas severance tax–for years. As recently as last June Kasich predicted his 6.5% proposed severance tax would get adopted (see Kasich Predicts Severance Tax Deal Will Happen, Others Say No). Last fall OH Republicans continued to flirt with the idea (see Ohio Legislators Continue Dalliance with Kasich Severance Tax). The state still has not raised it, even though Kasich has lobbied hard for over three years. Pennsylvania, on the other hand, continues to consider converting their better impact fee for a less better severance tax. Republicans there are getting weak-kneed too (see Some PA Republicans Beginning to Cave on Severance Tax). It seems the severance tax is like the mythical siren song attempting to lure states onto the rocks of less drilling. But hold on to your hat. In contrast to OH and PA, there’s one state, and one governor, who’s not falling for higher severance taxes. PA Democrats trot out West Virginia as their shining example of how severance taxes don’t chase drillers away–to bolster their argument that PA should adopt a severance tax. Guess what? WV figured out high severance taxes DO chase drillers away, and WV’s Democrat governor, Earl Ray Tomblin, is proposing the state LOWER its oil and gas severance tax in 2016! It’s a devastating blow to PA Gov. Tom Wolf and his obsessive-compulsive insistence on a severance tax…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Some Give Up, Others Continue to Oppose WV Forced Pooling Law
January 22, 2016January 22, 2016

The fight for a forced pooling law in West Virginia continues. Some who have opposed such a law in the past are now changing position and attempting to get as favorable terms as possible. They’re throwing in the towel. Others are still hoping to stop the bill, for a fifth time. So far the forced pooling bill has not been introduced, even though the WV legislature began its 60-day session last Wednesday, Jan. 13…
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Statewide WV | West Virginia

WV’s 2014 Natural Gas Production was “Shocking” – 1 Tcf
January 19, 2016January 19, 2016

The most recent year full production numbers are available for West Virginia is 2014, recently released. In talking about how much the Mountain State produced for natural gas, oil, and NGLs (natural gas liquids, like ethane, pentane, propane and butane), the head of the Independent Oil and Gas Association of West Virginia (IOGAWV), Charlie Burd, said the production numbers are “shocking”–in a good way. Example: If you include conventional and unconventional natural gas production in the state, in 2014 WV produced 1 trillion cubic feet of natgas…
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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

Bill Sponsor Says It’s Now or Never for WV Forced Pooling Law
January 11, 2016January 11, 2016

At 11 pm on the last day of the 2015 legislative session in West Virginia, a session that lasts only 60 days at the beginning of each year, the WV legislature voted down what everyone thought was a sure thing to pass–House Bill (HB) 2688, otherwise known as the forced pooling bill (see The Real Story of Why Forced Pooling Bill Failed in WV). As we reported at the time, it was defeated by Democrats who had their knickers in a twist over another bill they wanted passed that Republicans defeated. So the Dems decided to give as good as they got and voted down HB2688 in retribution. Last March, following the negative vote, we said this: “Forced pooling is a dead issue in WV this year. Will it be back next year? You can bank on it.” And back it is. The Republican chairman of the House Energy Committee, Lynwood “Woody” Ireland believes a new version of the forced pooling bill is as fair as it gets for both landowners and drillers. Ireland also believes if the bill doesn’t pass this year, it is likely a dead issue–period. It’s “now or never” for a forced pooling bill in WV…
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Columbia Pipeline Group | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

Columbia Pipeline Files to Build $850M WB XPress Project in WV/VA
January 11, 2016January 11, 2016

In addition to receiving Federal Energy Regulatory Commission (FERC) approval for the Utica Access Project, Columbia Pipeline Group has just filed their full, official application with FERC for approval of the $850 million WB XPress Project, consisting of two new compressor stations, 26 miles of pipeline replacement located along existing corridors, 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 in the region by 1.3 billion cubic feet per day, linking Marcellus gas supplies to new markets…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Battle Lines Drawn as WV Forced Pooling Bill Nears Introduction
December 28, 2015December 28, 2015

As MDN told you in mid-November, West Virginia legislators will revisit the topic, and likely vote on the issue of, forced pooling in the 60-day legislative session that will begin in early January (see WV Forced Pooling Bill Coming Around Again in 2016). The battle lines–in the Republican party–are already being drawn in a contentious issue that has been brought before the WV legislature in five of the last six years…
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Commodity Price | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

2016: Fewer Rigs Operating, Less Gas Flowing in Marcellus/Utica
December 28, 2015December 28, 2015

This is the time of year when prognosticators come out of their prognostication holes to prognosticate about the rapidly-approaching New Year. Some of those predictions involve the Marcellus/Utica industry and what we may see coming our way in 2016. And what might we see? Most believe we’ll see cut-backs in drilling–most companies have announced such plans. However, one thing we won’t see is all drilling stop. As we highlight in a companion story today (see Why Do Marcellus Drillers Continue Drilling with Prices in the Basement?), drillers will keep drilling in the Marcellus in 2016. Perhaps not as much as they drilled in 2015–but make no mistake, the industry is not finished. So if they will continue to drill, even though prices are in the basement, where will they get the money to do so? That’s the focus of this particular piece of prognostication…
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Energy Companies | Gastar Exploration | Lease & Royalty Payments | Marshall County | Statewide WV | West Virginia | Wetzel County

Gastar Deal to Lease Under the Ohio River in WV Falls Apart
December 21, 2015December 21, 2015

Remember the brouhaha over energy companies bidding to drill on land underneath the Ohio River in West Virginia? We told you about one such lease–Gastar won a bid on a 232-acre tract underlying the river at the border of Marshall and Wetzel counties. They paid $3,500 per acre as a signing bonus and 20% royalties in their winning bid (see Gastar Wins Lease to Drill Under Ohio River in WV). There were just a few minor details to settle before the deal closed. Guess what? Gastar never closed the deal. Since October 2014 the price of natural gas has crashed, making it uneconomical to drill in many (most?) locations, and Gastar didn’t want to part with its precious capital–so no deal was never finalized. And now the West Virginia Division of Natural Resources is about to call the deal dead and shop it again. Problem is, it’s now a buyer’s market for leases, not a seller’s market as it was in October 2014. WV won’t get anywhere near the same terms this time around, of that we’re sure…
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Ethane | Industrywide Issues | Pipelines | Processing Plants | Statewide WV | West Virginia

IOGAWV Rep Says Marcellus/Utica Can Support “8 or 9 Crackers”
December 21, 2015December 21, 2015

The president and CEO of Eagle Manufacturing in Wellsburg, WV is Joe Eddy. During a recent meeting in Oglebay Park, Eddy represnted the WV Indpendent Oil and Gas Association. He had some interesting things to say. Among them: the Marcellus/Utica region could right now support “eight or nine crackers.” He also spoke out against three ethane pipelines that transport northeast ethane to other regions…
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Economic Impact | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Statewide OH | Statewide PA | Statewide WV | West Virginia

Poly(ethylene) Wants a Cracker: OH Study Predicts Ethane Tsunami
December 14, 2015December 14, 2015

A researcher and “Executive in Residence” from Cleveland State University, Andrew Thomas, writes about a new study produced by the University “to better understand the ramifications of huge quantities of natural gas and liquid ethane being produced in Ohio.” Unfortunately we were unable to track down a copy of the full study and its results, but we do have the summary as contributed by Thomas in writing for Crain’s Cleveland Business. And wow, what insights we gain! Thomas says the study he worked on concludes that even in this down market, Ohio’s production of natural gas liquids (NGLs), specifically ethane, is on a rocket ride to the moon. He says, “Ohio’s about to see an ethane tsunami.” He also says if all four ethane crackers that have been floated as possibilities for the region get built, that would only sop up one-third of the ethane supply projected to be produced in the Marcellus/Utica. Here’s the high-level but very exciting and insightful news coming from this study…
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Pennsylvania | Statewide PA | Statewide WV | West Virginia

5th Annual Shale Gas Innovation Contest Now Accepting Applications
December 9, 2015December 9, 2015

Once again the Ben Franklin Shale Gas Innovation and Commercialization Center (SGICC) is back with their annual Shale Gas Innovation Contest. This is the fifth annual contest and four winners will split an $80,000 prize purse. It’s time to enter the contest! Any idea OR already commercialized product/service related to the shale energy space is eligible. ANY. Examples include: well pad EH&S products/services, novel materials or chemicals (to enhance performance, prevent corrosion, or improve product yield), remote site monitoring technologies, natural gas or NGL conversion technologies, and water management or remediation technologies. Why not enter your product or service? Details below…
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Crime | Energy Companies | Industrywide Issues | Statewide WV | West Virginia | XTO

Former XTO Marcellus Landman Gets 5+ Years in Prison for Fraud
December 4, 2015December 4, 2015

In a somewhat complicated scam, a former landman for XTO Energy, Steven E. Fisackerly (33 years old) defrauded XTO out of more than $1 million with fake lease deals in the West Virginia Marcellus Shale region. He cooked up bogus documents and passed them off as real, pocketing commissions. He even worked with a supposed/fake mineral rights owner to pocket kickbacks from lease payments sent to the fake rights owner. It was elaborate and convoluted–and ultimately stupid. Fisackerly plead guilty in May and will enter prison on January 4. His sentence? Pay back more than $1 million he defrauded from XTO, and serve 63 months (over 5 years) in federal prison…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Politicians: Raise Severance Tax, Lower Property Tax
November 23, 2015November 23, 2015

What is it about politicians needing to get their grubby hands on YOUR money? A group of West Virginia state politicians–delegates and one state senator, both Democrats and Republicans–held a town hall meeting at West Virginia Northern Community College last Thursday in which they pontificated that the severance tax in WV is too low, and property taxes for Marcellus/Utica Shale landowners are too high. Below is a summary of the back and forth at the meeting. The somewhat ominous (from our perspective) talk at the meeting is that in this down market politicians want to further kill the drilling industry (the one bright spot) in their state by taxing it higher…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Forced Pooling Bill Coming Around Again in 2016
November 17, 2015November 17, 2015

West Virginia landowners and mineral rights owners get prepared: the forced pooling issue is coming around again. After five years of trying, it seemed that a forced pooling bill was finally going to pass in West Virginia during the 2015 WV 60-day legislative session. But at the literal eleventh hour of the last day of the session, it failed (see The Real Story of Why Forced Pooling Bill Failed in WV). In April we told you that the forced pooling bill may get a vote this fall, although that never materialized (see WV Forced Pooling Bill HB 2688 May Get Another Vote This Fall). However, yesterday legislators got a look at a revised version of the bill that died earlier this year. The plan, as it currently stands, is to re-introduce it in January when the WV legislature meets for its annual 60-day session…
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