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    New Life for Constitution Pipe – Williams Asks White House for Help

    In April 2016 the New York Dept. of Environmental Conservation (DEC) caved to corrupt political pressure from Andrew Cuomo and denied the Williams Constitution Pipeline a necessary federal 401 stream crossing permit, blocking the project (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). At that moment, the DEC stepped off a cliff. It’s been a long, slow process, but we’ve watched them fall ever since. And now, they will soon hit the bottom. They were dead (metaphorically) the moment they issued their denial. It was a foregone conclusion that their illegal action would not stand–that the DEC would eventually be overruled and their role in permitting such projects would be stripped away. But you have to remember those were heady days for the left, when Cuomo was full of himself and the future seemed certain that the hapless Hillary would win the White House and further corrupt federal agencies like the Federal Energy Regulatory Commission (FERC), the agency that oversees projects like the Constitution. But the unthinkable happened. Hillary lost (thank God!). And now Cuomo and his corrupted DEC have no backstop at the federal level. Last week on a conference call to discuss second quarter earnings, Williams CEO Alan Armstrong responded to a question about the long-stalled Constitution Pipeline. He said Williams is working with The White House to get the Constitution project back on track. Reading between the lines, Williams is asking The White House to ask FERC to overrule the NY DEC and grant the stream crossing permits for the project. Armstrong now says he believes it will get built, and will be up and running, sometime in the second quarter of 2019…
    Read More “New Life for Constitution Pipe – Williams Asks White House for Help”

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    Antero 2Q17: Record High 2.2 Bcfe/d Production, Gets $3.41/Mcf

    Antero Resources, one of the biggest and best drillers in the Marcellus/Utica concentrating on just those two plays, turned in their second quarter 2017 numbers last week, and held an earnings call to discuss the results. The company has a lot to crow about. Antero’s gas (and liquids) production hit a new record high of 2.2 billion cubic feet equivalent per day (Bcfe/d) in 2Q17. They continue to be the best hedging company in the Marcellus/Utica, getting an average of $3.15 per thousand cubic feet (Mcf) for the gas they sold BEFORE hedging. After hedging Antero got $3.41/Mcf for gas and equivalents (oil, NGLS). Antero’s hedging program is one of the greatest untold success stories of the Marcellus/Utica. The company lost $5 million in 2Q17, a vast improvement over losing $596 million in 2Q16. Antero completed and placed online 29 horizontal Marcellus wells during 2Q17 with an average lateral length of 9,380 feet. They drilled an average of 5,200 lateral feet per day, a 50% increase compared to 2016. In the Utica, Antero completed and placed online 5 horizontal wells with an average lateral length of 11,222 feet. During 2Q17, Antero set a record for drilling its longest lateral to date at 17,380 feet. The company also announced a big bump up in proved reserves…
    Read More “Antero 2Q17: Record High 2.2 Bcfe/d Production, Gets $3.41/Mcf”

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    NFG 2Q17: NY Pipeline Holdup Causes Shift to More Utica Drilling

    Last week National Fuel Gas Company, headquartered in Western New York State with drilling subsidiary Seneca Resources and pipeline subsidiary Empire Pipeline, issued its third quarter (everyone else’s second quarter) 2017 update. NFG produced 567 million cubic feet per day (MMcf/d) of natural gas last quarter, a 6% increase over the same quarter a year ago. NFG realized an average price of $2.94 per thousand cubic feet (Mcf), up $0.08 per Mcf from the prior year. Compare that with Antero’s hedged average of $3.41/Mcf (see today’s story about Antero 2Q17). NFG CEO Ronald Tanski had some interesting remarks with respect to the company’s stalled Northern Access Pipeline project. As you may recall, the Andrew Cuomo New York Dept. of Environmental Conservation (DEC) is blocking Northern Access, like they blocked the Constitution Pipeline and a tiny spur project for the Millennium. Because NFG’s Northern Access project is stalled, they are shifting their budget and drilling further west, to do Utica drilling in locations where there is already pipeline infrastructure. So this is yet another case of the NY screwing up Marcellus drilling PA that would otherwise be happening. Landowners in PA can thank NY Gov. Cuomo for screwing them over. Tanski also mentioned the court case for Northern Access, and that FERC (Federal Energy Regulatory Commission) may step in and overrule the NY DEC, as is now being considered in the Constitution Pipeline case (see today’s lead story). Here’s the update from NFG…
    Read More “NFG 2Q17: NY Pipeline Holdup Causes Shift to More Utica Drilling”

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    PA DEP to Hold Final Atlantic Sunrise Hearing, Antis Plan Walkout

    For those of us who have long supported the Williams Atlantic Sunrise Pipeline project, it seems like it has taken FOREVER for the Pennsylvania Dept. of Environmental Protection (DEP) to issue final water and air permits for the pipeline. Atlantic Sunrise is a $3 billion, 198-mile natural gas pipeline project, most of which will get built in northeast Pennsylvania. In an attempt to get the DEP moving, Williams co-hosted an event a few weeks ago in Wyoming County to pressure the DEP into granting final permits (see Atlantic Sunrise Pipe Rally: ‘Time to Kick Politicians in the Ass’). Perhaps the event helped. On the very same day as the event, the DEP announced a supplemental 30-day public comment period to begin on July 22. During this time, the DEP will hold one final public hearing–for feedback on an Air Quality Plan Approval for construction activities related to Atlantic Sunrise. That final public hearing will be held on Monday, August 14, in Lancaster. The anti-pipeline group Lancaster Against Pipelines (organized by some of the same people who illegally protested against the Dakota Access Pipeline in North Dakota), are planning a mass temper tantrum at the hearing. They will stage a “walkout” at the meeting. Adults behaving like spoiled rotten children. We’ve come to expect it from them. MDN encourages pro-pipeliners (i.e. adults) to show up in large numbers so that when the 10-15 antis walk out, nobody will even notice…
    Read More “PA DEP to Hold Final Atlantic Sunrise Hearing, Antis Plan Walkout”

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    NEXUS Pipeline to FERC: Please Approve Project – NOW

    In late January, Federal Energy Regulatory Commission member Norman Bay announced he was quitting, in a huff, because President Trump has elevating another commission member to be chairperson (see FERC Commissioner Resigns Threatening Major M-U Pipeline Projects). That announcement set off a flurry of activity. After Bay left, there would no longer be a quorum of voting members to approve projects. On his way out the door, Bay and the other two commission members approved a list of major Marcellus/Utica projects. But time was limited and there was one project left standing in the FERC game of musical chairs (see In FERC’s Game of Musical Chairs, NEXUS Pipeline Left Standing). NEXUS is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. Originally the project was due to be up and running this year, but in July NEXUS officials admitted that ain’t gonna happen (see NEXUS Pipeline Startup Slips to 2018 Due to Quorumless FERC). In addition to lack of a voting quorum at FERC, NEXUS faces legal action by a small group of antis (see CORNballs Accuse FERC of Illegally Approving NEXUS Pipeline in OH). However, now that FERC does have a quorum, NEXUS is wasting no time. They want to be first in line for an approval. Last Friday NEXUS sent FERC a letter “respectfully” requesting “immediate issuance” of the certificate so they can begin construction NOW…
    Read More “NEXUS Pipeline to FERC: Please Approve Project – NOW”

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    OH Landowner Vents Frustration with Rover Work on His Land

    Below is a story of an Ohio landowner who “worked to get good easements and good language” in the contract he signed with Rover Pipeline. But, according to the landowner, once construction began, “everyone seemed to forget” what they promised in the contract. And so landowner Roger Meggyesy has been vigilant to point out violations to third-party pipeline inspectors who report on Rover’s activities to the Federal Energy Regulatory Commission (FERC). As Meggyesy rhetorically asks, “Why do we have to come and fight after the fact?” It is disheartening to read these kinds of accounts. This guy did everything right, got it all in writing–and yet it’s still an uphill fight. We bring you this story because it’s important to air the problems along with highlighting the good stuff when it comes to these big pipeline projects…
    Read More “OH Landowner Vents Frustration with Rover Work on His Land”

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    3 PA Senate Bills Would Fundamentally Change Pipeline Economics

    Senator Andy Dinniman

    Pennsylvania State Senator Andy Dinniman (Democrat from Chester County, PA, near Philadelphia) is an anti-driller and anti-pipeliner. Dinniman recently introduced three bills that would, if passed, fundamentally change the economics and likelihood of whether or not pipelines are built in the Keystone State. The first bill Dinniman sponsored would create an “impact fee” on pipelines: 50% of the fee raised would go to the counties where the pipeline crosses, 40% would go to the local municipality where the pipeline is located, and 10% would go to the PA Public Utility Commission. The next bill would allow local municipalities and school districts to slap a big tax on pipelines–on top of the impact fee previously referenced. The final bill requires pipeline land agents to be registered with the Pennsylvania Real Estate Commission. There are elements in each of the bills that, under other circumstances, are interesting and we might even be able to support. SOME elements–not all. But coming from Dinniman the purpose is clear–he aims to shut down natural gas pipelines in PA…
    Read More “3 PA Senate Bills Would Fundamentally Change Pipeline Economics”

  • Marcellus & Utica Shale Story Links: Tue, Aug 8, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Natgas producers drilling longer wells in Marcellus/Utica; what the new FERC quorum means for Marcellus/Utica; Upstate NY dying as antis hold up pipelines; natgas efficiency improvements ‘terrifying’; Trump files official notice to withdraw from Paris climate deal; news media finally wakes up and notices Trump is getting a lot done–in energy; peak oil demand fantasy; EPA resignation facts; and more!
    Read More “Marcellus & Utica Shale Story Links: Tue, Aug 8, 2017”

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    Chesapeake 2Q17: “Rambo” Marcellus Well Produces Record 61 MMcf/d

    Chesapeake Energy reported second quarter 2017 results last week. As is typical, the company hosted a conference call with analysts to discuss those results. However, Chesapeake CEO Doug “the ax” Lawler had some rather exciting news about the Marcellus to report–late breaking news. In recent weeks Chesapeake has brought online an experimental well drilled in Wyoming County, PA (northeastern part of the state) with an initial production of 61 million cubic feet equivalent per day (MMcfe/d). This is a MONSTER Marcellus well! The most productive onshore shale well we know of is EQT’s Utica well in Greene County, PA, with a 72.9 MMcfe/d IP rate, drilled in July 2015 (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!). The Chesapeake McGavin well in Wyoming County, with a 10,500 foot lateral, has the highest IP of any Marcellus well we’ve heard of. How did Chessy do it? They unleashed “32 million pounds of Hell on Earth” (meaning frac sand) to frack the well. Workers called it “the Rambo frac” because they needed to attack the formation like Rambo would a POW camp. The well cost is estimated to be $8.5 million–a tad more expensive that others they’ve drilled in the area, but a bargain with those kinds of flow rates. Below is the information we could glean about the “Rambo” well, along with the full update from Chesapeake for 2Q17…
    Read More “Chesapeake 2Q17: “Rambo” Marcellus Well Produces Record 61 MMcf/d”

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    ET Says Accident or Anti Sabotage Caused Diesel in Rover Mud Leaks

    Rover Pipeline is Energy Transfer’s $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. On April 13, Rover workers experienced an “inadvertent return” of “horizontal directional drilling fluid”. That is, they sprung a leak and spilled nearly 2 million gallons of drilling mud (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). The leak did not spill into the Tuscarawas River (thankfully), but into a wetland next to the river. As we pointed out at the time, “Fortunately the primary component of said drilling fluid is nontoxic bentonite–the same ingredient used to make shampoo, deodorant, toothpaste and kitty litter.” The Ohio Environmental Protection Agency (OEPA) investigated the spill, following an “anonymous tip” and found the presence of diesel fuel in the spilled mud. Diesel fuel IS toxic–and its presence is not a good thing. OEPA’s testing found “very very low levels” of diesel fuel, whatever that means. Even very very low amounts are not good–and in fact are illegal. Since that time Energy Transfer has tried to figure out why there is diesel in the drilling mud–because they sure didn’t order it, and they firmly believe their drilling contractor did not add it to the mud. So how did it get there? On Friday Energy Transfer offered two theories–either an accident spilled diesel into the mud, or it was intentionally placed there by antis, as an act of sabotage. We do find it interesting that OEPA Director Craig Butler, who has been combative against Energy Transfer and the Rover project, claims an anonymous source tipped him to the presence of the mud. Was the anonymous source a whistle blower who worked for the contractor and claimed this is a routine practice? Did OEPA find diesel in unused drilling mud? Have they found the presence of diesel at ANY other locations where HDD is being used? We certainly had the thought fly through our brains, for only a moment, “What if an anti deliberately put diesel in the mud?” when this story first broke several months ago. But we immediately dismissed the idea. Not even antis would stoop so low as to poison Mother Earth to advance their cause. Or would they?…
    Read More “ET Says Accident or Anti Sabotage Caused Diesel in Rover Mud Leaks”

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    WV Shale Well Initial Production Rates Jump 20% in One Year

    Of the three Marcellus/Utica producing states–Pennsylvania, Ohio and West Virginia–only WV reports well production on an annual basis. Not frequent enough! In July WV published production numbers for 2016. The exciting news is that on average, initial production (IP) of Marcellus/Utica shale wells surged 20% over 2015. IP is the amount of gas (or oil or NGLs) flowing from a well. However, when you dig into the numbers, you learn that IP rates did not go up universally across the state. Some counties had big increases, other counties went the other way. The same with drillers. Some drillers (like Antero) saw a big bump up in average IP rates. Other’s (like Southwestern Energy) saw a dip in IP rates from 2015 to 2016…
    Read More “WV Shale Well Initial Production Rates Jump 20% in One Year”

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    Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell

    In July MDN brought you the news that Rice Energy had bought out the assets of LOLA Energy (see LOLA Energy Sells Out to Rice Energy, Deal Kept Hush-Hush). NGI’s ace reporter Jamison Cocklin was the first to break the news. Since that time, neither Rice nor the company buying Rice, EQT, have talked about it. In fact, they have refused to comment on it. Last week other news sources observed that Rice Energy’s quarterly update contains information about purchasing LOLA Energy (although even the quarterly update doesn’t use the name LOLA). The interesting thing is that the quarterly update pegs the amount. Rice Energy paid $180 million for the assets of LOLA Energy. LOLA was birthed near the end of 2015, by former EQT executives using $250 million of private equity money from Denham Capital (see New Marcellus/Utica Drilling Company is Born – LOLA Energy). Hmmm. Investors put up $250 million, but two years later the company sells for $180 million. We don’t pretend to be high finance experts, but it sure looks to us like a negative ROI on the transaction. Yet we read claims that “everybody who put in money made money.” How does that work?…

    Update: see a note in the comments. It appears that although $250M was promised by investors, not all of it is paid up front. Thx to MDN reader Venture Energy for enlightening us!
    Read More “Rice Energy Paid $180M for LOLA Energy; CEO Didn’t Want to Sell”

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    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…
    Read More “Eclipse Res. 2Q17: $325M JV to Keep Drilling, Wants More Acreage”

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    Rice Energy 2Q17: Sale to EQT on Track, Record High Production

    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…
    Read More “Rice Energy 2Q17: Sale to EQT on Track, Record High Production”

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    PA Enviro Judge Lets Sunoco Restart ME2 Drilling 16 of 55 Locations

    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 PA Enviro Judge Puts 2-Week Pause on ME2 Pipeline Drilling). The order stopped drilling at some 55 different locations where ME2 must drill underground–say under a stream or roadway. The order was in response to an appeal by radical Big Green groups, including the anti-fossil fuel Clean Air Council (of Philly), THE Delaware Riverkeeper (Maya van Rossum), and Mountain Watershed Association (see Antis’ Fake Outrage at ME2 Construction “Spills,” Demand Stop Work). As we said at the time, although temporary, the two-week pause is troublesome and problematic because Big Green groups have convinced a DEP judge to hear a case that ultimately aims to stop the ME2 project. The somewhat good news is that last Thursday the same judge lifted the HDD drilling ban for 16 of 55 locations. Bear in mind digging trenches for the pipeline (over 90% of the work being done) continues and is not subject to the judge’s order. The odoriferous Clean Air Council (CAC) is the primary group doing the suing. In an interesting development, mainstream news is reporting Sunoco Logistics Partners (building the pipeline) is in “settlement negotiations” with CAC. Settling what, we don’t know. We’re not even sure why the CAC has standing to bring a lawsuit against the project in the first place…
    Read More “PA Enviro Judge Lets Sunoco Restart ME2 Drilling 16 of 55 Locations”

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    Why the PA House Must Reject 1-Sided Budget/Tax Deal from Senate

    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…
    Read More “Why the PA House Must Reject 1-Sided Budget/Tax Deal from Senate”