Eclipse Res. 2Q17: $325M JV to Keep Drilling, Wants More Acreage
Last week Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released their second quarter 2017 update. Eclipse has been on a roll, drilling a series of longest-ever onshore lateral wells–in the world. It began last year when Eclipse drilled what they call their first “super lateral” Utica well in Guernsey County, OH–the Purple Hayes, at 18,500 feet long (see Eclipse Res. 1Q16: Drills Longest Shale Well Ever! “Purple Hayes”). Since that time, the Purple Hayes well has consistently been the #1 oil producing well in the state. In May of this year, Eclipse drilled a new longest-ever well, also in Guernsey County, the Great Scott 3H well at 19,300 feet long (see Great Scott! Eclipse Drills New Longest Lateral in World – in Utica). Barley a month later, in June, Eclipse drilled yet another record-breaker in Guernsey County–the Outlaw C 11H, a Utica well that is an incredible 19,500 feet long horizontally, some 3.7 miles long (see Eclipse Breaks Record Again – New Longest Shale Well in World!). Eclipse wants to keep on drillin’, but they need money to do so. Given the volatile nature of the commodity price of gas (and oil), and given the volatile nature of funding from Wall Street, Eclipse decided to form a $325 million joint venture (jv) with Sequel Energy Group LLC, an affiliate of GSO Capital Partners. That was last week’s really big news coming from Eclipse. They expect to close the jv deal in September and keep the drill bits turning on new super laterals. Meanwhile, Eclipse is partly done with completing (i.e. fracking) both the Great Scott and Outlaw wells. During the conference call, Eclipse CEO Ben Hulburt hinted that they may try super laterals in the Marcellus, given their success in the Utica. Hulburt also indicated the company is still in the market to lease new acreage–IF they can get it for $3,000-$5,000 per acre…
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Last week Rice Energy turned in their second quarter 2017 update. The company reports during 2Q17 they turned to sales 18 net Marcellus wells with an average lateral length of 9,200 feet and 7 net operated Utica wells with an average lateral length of 10,500 feet. 2Q17 development costs per lateral foot were under budget and averaged $805 in the Marcellus and $1,105 in the Utica for wells drilled and completed. As we report today in our story “Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell” the company also announced they paid $180 million for core acreage in PA and WV from “an undisclosed seller”–which we know is LOLA Energy. The Rice boys gave an update on a conference call about 2Q17 and the impending sale to/merger with EQT. However, because of the upcoming merger, they took no questions from analysts. So it was a quick call–done in less than 15 minutes. The Rice 2Q17 update shows the company hit new record production and throughput, significantly reduced operating costs, increased their core acreage position by almost 20,000 net acres and divested a non-core asset in the Barnett Shale. Here’s Rice’s 2Q17 update, beginning with portions of the conference call…
On July 25th, a Pennsylvania state environmental judge issued an order blocking all underground horizontal directional drilling (HDD) work being done across the state to install the Mariner East 2 (ME2) pipeline (see 
We’ve noticed a meme, largely started by an Associated Press article endlessly repeated and published in dozens of news outlets across Pennsylvania, that the recent budget deal (with a severance tax) passed by the traitorous Republican-controlled PA Senate “jams a shale tax and industry permits into unhappy package” that now sits before a House that essentially has no choice but to adopt it. Here’s the establishment “received wisdom” in a nutshell: Drillers don’t get what they want (a severance tax), but they do get what environmentalist wackos don’t want (streamlined approvals for permits). And guess what? “That’s politics.” And if you don’t like it, on either side of the equation, you’re an unrealistic dope who doesn’t know anything about politics. We manifestly reject that assertion. Here’s why this deal is one sided–a severance tax only deal. Big Green groups with endless pockets to fund litigation factories are already talking about how if this budget is passed with what they want (a high severance tax) but also with what they don’t want (streamlined approvals for permits), no problem. They’ll just sue to remove the streamlined permits part, leaving drillers with the high severance tax. That’s how “fairness” works for Democrats and antis. Get part of what you want, then litigate the rest–force it on people who don’t want it. That’s the strategy laid out in the AP article claiming both sides are unhappy, implying it’s a good deal because both sides are getting something they want and something they don’t want. The clear signal being sent by environmentalists is that they’ll litigate their way to happiness. Meanwhile the Marcellus industry will get the shaft, which is why the House MUST reject this budget as written…
Events related (or of interest) to the Marcellus and Utica Shale, primarily pro-drilling events.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Earthworks uses fossil fuels to travel from California to Ohio for a stop fossil fuels rally with 15 people; next BLM Wayne National Forest auction set for Sept.; 9 natgas facts you should know; what’s missing from 100% renewables debate; canceled LNG project hurts Canada’s biggest shale play; Germany hurting Ukraine re Russian pipeline; and more!
It’s not often these days we get to announce a new driller in the Marcellus/Utica. Today is one of those days. Actually, this company has been around since early 2015, but we’re only now becoming aware of them. Pin Oak Energy Partners, headquartered in Akron, OH, is an exploration and production company engaged in both conventional and unconventional oil and natural gas wells and the operation of associated assets (like pipelines). Pin Oak currently operates 363 wells producing nearly 5.7 MMcfe/d (32% liquids) across more than 32,000 acres in the Marcellus/Utica region. The company is also involved in midstream, field services and operations through its affiliate companies. Pin Oak is on an aggressive acquisition binge of shale AND midstream assets, as well as leasing new acreage. Who is Pin Oak? According to CEO Chris Halvorson, Pin Oak is comprised of folks who were formerly with AB Resources. You may recall that AB Resources built a position in the southwestern “core” of the Marcellus and sold out to Chevron several years ago. Pin Oak is “what’s next” for for the former AB folks. Their target: the Appalachian basin. In July, Pin Oak bought 9,300 acres of leases and 8 Utica wells from EQT in Guernsey, Muskingum, and Columbiana counties (Ohio). Earlier this week Pin Oak announced they’ve purchased another 7,700 acres of leases and 10 Utica wells from an undisclosed seller in Trumbull, Tuscarawas and Mahoning counties (in Ohio) and Mercer, Crawford and Venango counties (in Pennsylvania). Below are two recent announcements. Pin Oak can be summed up in one word: aggressive. Keep a close eye on this company in the coming months and years…
Yesterday the U.S. Senate finally approved Neil Chatterjee and Robert Powelson as the newest commissioners for the Federal Energy Regulatory Commission (FERC). Which means FERC now has a quorum of three voting members and can, once again, begin issuing final approvals for important pipeline projects that are currently stalled waiting for an approval. Among those important projects (in the Marcellus/Utica region) are Dominion’s Atlantic Coast Pipeline, PennEast Pipeline, NEXUS Pipeline and Mountain Valley Pipeline. FERC has not had a quorum of three (or more) voting members since February, when Norman “cry baby” Bay left the commission in a huff in early February over being demoted as chairman of FERC to just regular member (see 
Just when you thought we’d heard the last of “Dimock” and “fracking poisons water” nonsense, the storyline as pushed by mainstream fake news has come roaring back to life–thanks to the Trump Administration. Dimock, Pennsylvania was made famous in Josh Fox’s faux documentary Gasland, which aired on HBO a bizillion times. It was Fox’s 15 minutes of fame. He lied about fracking, painting it as an evil practice that polluted water wells around Dimock. His lies were later exposed by a real documentary called 
In June EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see 
What’s this? The Pennsylvania State Senate, which is controlled by the Republican Party, has added insult to injury. We’ve already told you about Republican traitors in the Senate who sold out their House counterparts by voting for a disastrous severance tax to raise money to give away to teachers’ unions (see 
We suspect Pennsylvania Gov. Tom Wolf (a Democrat) may be smoking some of the state’s medical marijuana–sampling the goods, just to be sure it’s safe, ya know. During an interview with a PA public radio station yesterday, commenting on the horrible budget bill passed by traitorous Senate Republicans, Wolf said, “I believe that the House will support the Marcellus Shale tax as well.” Notice the Freudian slip? Wolf WANTS to target the Marcellus industry. He called it a “Marcellus Shale tax” as opposed to a severance tax. The Dems are attempting to conflate a “Marcellus Shale tax” with things like a “cigarette tax.” Nasty, vile stuff–but if people want it, tax ’em to hell and back. RINOs in the Senate fell for the severance tax trap sprung by Wolf and the Dems. We predict the House will NOT pass the Marcellus tax, Mr. Wolf. We don’t smoke weed–so we have a clear head about these things…
New York’s corrupted Dept. of Environmental Conservation (DEC) is running scared. For 19 months the DEC has intentionally delayed granting a tiny, 9-mile spur Millennium Pipeline wants to build in Orange County, NY the necessary federal 401 stream crossing permit it needs. Millennium took the DEC to federal court, but the court refused to get involved, telling Millennium if the DEC is delaying, the Federal Energy Regulatory Commission (FERC) can jump in and override the DEC (see DC Court Tells Millennium FERC Can Override NY DEC Pipeline Delay). So that’s what Millennium did. They asked FERC to grant the stream crossing permits themselves (see 
In November 2015 MDN reported on a lawsuit filed by GreenHunter Resources (filed in October 2015) against two former GreenHunter employees and a competitor (see