• Marcellus & Utica Shale Story Links: Fri, May 5, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Shell nears completion of tree planting around cracker site; WV gas tax revenue on the increase; federal oil and gas leases can boost government revenue; nuclear and petroleum battle over subsidies; the future for Phillips 66 is pipelines and chemicals; is petchem industry approaching max capacity; OPEC’s oil price gains wiped out by shale boom; shale producer using artificial intelligence; and more!
    Read More “Marcellus & Utica Shale Story Links: Fri, May 5, 2017”

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    Green, OH Paying Lawyers $100K to Fund Stop NEXUS Crusade

    The City of Green, Ohio, located in Summit County (south of Akron, north of Canton) seems to have no problems with spending boatloads of taxpayer money on anti-pipeline efforts. A few weeks ago Green City Council voted to give $10,000 to the anti-pipeline CORN–Coalition to Reroute Nexus. We call the group CORNballs and have written extensively about their supposed desire to just see the NEXUS pipeline routed around them, pretending to be NIMBYs (see our CORN stories here). In reality, CORN wants the pipeline stopped, period. Anti-fossil fuel nuttery. But $10K for the CORNballs is small potatoes for Green–almost a distraction. The city has just “upped the ante” by voting to spend $100,000 to hire a Cleveland law firm to file a lawsuit “aimed at stopping the pipeline from being built or stopping the project altogether.” Since when was it legal for a city like Green to squander taxpayers’ money on cockamamie anti-fossil fuel lawsuits against legal American businesses that build energy infrastructure? Will someone please investigate Green council members and their ties to Big Green groups (no pun intended)? Smells to us like somebody is getting paid off somewhere…
    Read More “Green, OH Paying Lawyers $100K to Fund Stop NEXUS Crusade”

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    Patterson-UTI Huge Increase in Monthly Rig Count – SSE Factored?

    As we do every month (and have for two years), MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for rig count health in the Marcellus/Utica. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Patterson was our “canary down the mine shaft” for discerning when the deep, dark recession in drilling would turn around. It happened in June 2016–and every single month since that time, including the month of April. In March, Patterson’s rig count jumped up by 10, to an average of 88 active rigs operating in the U.S. That has been the biggest single monthly increase since they began adding rigs again last June–until April. Last month the Patterson rig count rocketed to 115, up an amazing 27 rigs in a single month. What in the world happened? We have an answer…
    Read More “Patterson-UTI Huge Increase in Monthly Rig Count – SSE Factored?”

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    Southwestern Energy – Pedal to the Metal in the Marcellus/Utica

    Earlier this week MDN brought you the latest quarterly update from Southwestern Energy (see Southwestern Energy 1Q17: Production Falls 14%, Profits Soar). As we noted, production was down, but profits up. Southwestern is investing 85% of their budget in the Marcellus/Utica this year. In covering the Southwestern story, we neglected to bring you a portion of the earnings call where Jack Bergeron talks. Bergeron is Southwestern Senior Vice President for E&P Operations. He had some things to say about the company’s Marcellus/Utica drilling program that we think you’ll find interesting. What kinds of things? Like details about the company’s move from using 3,500 pounds of sand per foot to 5,000 lbs/ft. And details about the increase in Estimated Ultimate Recovery (EUR) the company is seeing–from 11 billion cubic feet per well to 15 Bcf/well–from using a new completion method. We also have more comments by Southwestern CEO Bill Way, about the number of wells the company plans to drill in Susquehanna County, PA…
    Read More “Southwestern Energy – Pedal to the Metal in the Marcellus/Utica”

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    Dominion Faces Hostile Crowd in Ithaca re New Market Project

    In June 2014, MDN told you about the Dominion New Market Project–a project that will build two new compressor plants and upgrade one other compressor station in upstate New York–to help flow more abundant, cheap and clean-burning Marcellus Shale gas from Pennsylvania (and beyond) into the northeast (see Dominion Asks FERC for New Compressors in Upstate NY, WV). The project is projected to cost $159 million and provide 112,000 dekatherms per day (Dth/d) of extra natural gas capacity along ~200 miles of existing Dominion pipeline across upstate New York. The existing Dominion pipeline runs through the Horseheads, Ithaca, Syracuse and Albany areas. The Federal Energy Regulatory Commission (FERC) approved Dominion’s New Market Project in October 2015 (see FERC Approves Expansion of Dominion Pipeline in Upstate NY). And then a real miracle happened. The corrupt New York Dept. of Environmental Conservation (DEC) approved the New Market compressor stations on Dec. 23, 2016 (see Miracle! NY DEC Approves Dominion’s New Compressor Stations). Needless to say, anti-fossil fuel freaks are freaked out that the project is now a reality. The lone compressor station that will get an upgrade (not being built from scratch) is located near Ithaca, NY, home of some of the nuttiest of the nutjobs. On Monday night, Dominion personnel donned their armor and held a public meeting to answer questions by a crowd that was, by all accounts, hostile… Read More “Dominion Faces Hostile Crowd in Ithaca re New Market Project”

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    New Coalition Forms in NY to Push for More NatGas, Pipelines

    Something has to be done about New York’s out-of-control governor (Andy Cuomo) and his opposition to natural gas pipelines. MDN’s beloved home state uses more and more natural gas each year–yet Cuomo refuses to allow new pipelines to be built allowing more gas supplies into the state. He is strangling the state economically–particularly Upstate. Two important pipeline projects have been rejected by Cuomo’s corrupt Dept. of Environmental Conservation (DEC)–Williams’ Constitution and NFG’s Northern Access Pipeline. Both companies have sued in federal court to force the state to back down (a years-long process). In the meantime, business, economic and o&g industry leaders have decided they need to do something. So a number of major organizations and businesses, including chambers of commerce, large midstream companies, labor unions and more have joined together to form a new coalition called New Yorkers for Affordable Energy. The group says it “supports increasing access to natural gas for manufacturing facilities, power production, transportation, and other purposes to support New York’s economy and quality of life.” Amen to that! For too long a small but dedicated group of anti-fossil fuel nutters have driven the narrative in The Empire State. It’s time that the our side gets heard. No, we won’t hold our breath that mainstream media will actually cover this new group favorably (they won’t). However, this new groups has influence in other ways. It represents billions of dollars that flow into and through New York State. Cuomo will listen to this new group–if he wants to get reelected… Read More “New Coalition Forms in NY to Push for More NatGas, Pipelines”

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    PA Supreme Court Rejects Range Resources Well Contamination Case

    For years we’ve followed the story of Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who sued Range in civil court. The problem is, the DEP determined that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing came in December 2015 and, we thought, finally closed the door, once and for all (see DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well). But no, that was not the end. Kiskadden appealed again, and in October 2016 a Commonwealth Court appeals panel affirmed the EHB’s 2015 dismissal of Kiskadden’s appeal of the DEP 2011 ruling that Range’s Yeager site operations did not contaminate Kiskadden’s well water. Case closed, right? Nope. Kiskadden had one card left to play and he did it–filing an appeal with the PA Supreme Court (see Landowner Appeals Range Well Contamination Case to PA Supreme Crt). Earlier this week, the Supreme Court sent back the appeal marked “case denied.” The fat lady has now sung…
    Read More “PA Supreme Court Rejects Range Resources Well Contamination Case”

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    High Stakes Game of Chicken Between Westinghouse & Mariner East 2

    Westinghouse Electric tried “an ambitious new approach to building nuclear power plants” by building sections of the plants in one location before sending them to the construction site for assembly. They tried the process with two nuke plants–one in Georgia and the other in South Carolina. The process they “innovated” failed and took the company down–into bankruptcy. What does that have to do with the Mariner East 2 (ME2) Pipeline project? Westinghouse Electric is headquartered just outside of Pittsburgh and owns a fair amount of land. Mariner East 2 intends to cross a portion of that land. Sunoco Logistics Partners, builder of ME2, attempted to negotiate a payment for an easement to cross Westinghouse’s land–but Westinghouse wanted more than ME2 offered. So ME2 filed paperwork to use eminent domain and “condemn” the Westinghouse property. In other words, let a judge decide how much is fair. Westinghouse joined the chorus that “ME2 isn’t really a public utility”–sounding no different than the Sierra Club and others who oppose the project. That strategy went nowhere, so Westinghouse eventually came back to the bargaining table and this time, worked out a deal–to sell some of their land to ME2. Now Westinghouse is asking the bankruptcy judge in charge of their case to approve the land sale, ahead of the judge’s decision on other matters to do with the bankruptcy. Here’s an account of the high stakes of “chicken” between Westinghouse and ME2…
    Read More “High Stakes Game of Chicken Between Westinghouse & Mariner East 2”

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    Commerce Secretary: Shale Gas is the Future of West Virginia

    More than 300 people attended the West Virginia Manufacturers Association’s Marcellus and Manufacturing Development Conference in Morgantown yesterday. Among the topics discussed–the need for faster approvals of pipelines, and the positive economic of shale on the Mountain State. Among the speakers was new State Commerce Secretary Woody Thrasher–who spent most of his career in the private sector. According to Thrasher, “shale gas is the future of economic opportunity in West Virginia.” Thrasher said the industry with the biggest potential for growth in WV is shale energy–and it’s “only begun to emerge.” He urged audience members to get involved and make their voices heard–at the local, state and federal level. We think it’s a fair statement to say that Thrasher rallied the troops and is leading the charge to see more shale energy developed in WV… Read More “Commerce Secretary: Shale Gas is the Future of West Virginia”

  • Marcellus & Utica Shale Story Links: Thu, May 4, 2017

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FERC to complete EA for Dominion’s Eastern Market Access by mid-June; Range recalls ‘incredibly creative solution’ for Marcellus/Utica ‘problem’; coal-fired plants in East threatened by gas-fired plants; LNG export terminal on the Chesapeake Bay; 9 permits issued in OH Utica last week; Thornbury stands by decision to issue ME2 permits; ME2 work begins in Lower Swatara; the uncivil story of how fracking opposition arises; snow in Cali suppresses gas prices in Texas; midstream organization asks EPA to withdraw TRI proposal; and more!
    Read More “Marcellus & Utica Shale Story Links: Thu, May 4, 2017”

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    Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?

    Yesterday Noble Energy dropped a bombshell that it has sold its 100% interest in 385,000 Marcellus/Utica acres and wells producing 415 million cubic feet equivalent of natural gas in West Virginia and Pennsylvania for $1.225 billion to “an undisclosed buyer.” That works out to be $3,181 per acre. Not included in the sale is Noble’s half operating interest in the CONE Midstream pipeline gathering system. It was just three years ago that Noble announced it would lease 138,000 feet in a new office building in Southpointe, and move in 200 employees (see Noble Energy’s Huge Vote of Confidence in the Marcellus). At the time, Noble’s CEO said the Marcellus is “the premiere gas play in the United States” and that the Marcellus figures prominently in Noble’s future plans. That was then, this is now. Noble will use the money from the sale to pay down essentially all of the debt the company incurred from its recent $2.7 billion purchase of Clayton Williams Energy–a deal that expanded Noble’s “core Delaware Basin position” (i.e. the Permian Shale in Texas, an oil play). All of the above is what you get from other news sources. The reason you read MDN is because we’ve found out who the buyer of the Noble acreage is…
    Read More “Noble Energy Sells Remaining M-U Assets for $1.2B – Who Bought?”

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    Huntley & Huntley Targets New Drilling in Westmoreland County, PA

    Click for larger version

    It’s been a few years since MDN has written a post about seismic testing. Typically before land gets leased and drilled on, drillers will contract with seismic testing companies to conduct a mapping survey of the land. The survey does not show the surface, but rather the sub-surface–a kind of “x-ray” of what the rock layers look like deep underground. Drillers then use that information to determine the best places to drill. Seismic surveys, like every aspect of drilling, is not without controversy (see our previous stories about seismic testing here). Folks understandably have concerns. Will the survey company use dynamite charges? Will they use those big “thumper” trucks? Will it affect water wells? Sewer lines? All legitimate questions. On Monday city officials from Lower Burrell (Westmoreland County), PA asked a lot of tough questions of seismic contractors hired by Huntley and Huntley to map the township–presumably (and the point of this post) so that H&H can soon apply for permits and commence with new drilling in the town. Here’s how it went…
    Read More “Huntley & Huntley Targets New Drilling in Westmoreland County, PA”

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    WV Supreme Court Post-Production Royalty Case Hinges on 3 Words

    Yesterday the five justices of the West Virginia Supreme Court reheard a case involving post-production deductions from royalty payments. Last week we reported that the court *might* rehear the case this week–if they didn’t grant a late-breaking motion to dismiss the rehearing (see WV Supreme Court to Rehear EQT Post Production Royalty Case, Maybe). In December MDN reported on the huge West Virginia 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 D. Walker has 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, and yesterday the lawyers were in court arguing. As it turns out, the lawyers mainly argued over the meaning of three short words: “at the wellhead”… Read More “WV Supreme Court Post-Production Royalty Case Hinges on 3 Words”

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    Ohio Legislators Push to Allow Fracking in State Parks, Forests

    Thumbing their collective noses at Ohio RINO Gov. John “foreigner hunter” Kasich, Republican legislators in the House added a “little-noticed provision” in the state budget deal that will give the legislature, and not the governor, the power to select members of the Ohio Oil and Gas Commission. That small change would have huge consequences. How? the Oil and Gas Commission is charged with approving potential drillers on state land. Five years ago, Kasich flip-flopped on the issue and since then has not allowed shale drilling in state-owned forests and state-owned parks–by refusing to add any new members to the Commission. It is a de facto moratorium from the governor that prevents fracking on state-owned land. Enough is enough. Republicans intend to change it this year…
    Read More “Ohio Legislators Push to Allow Fracking in State Parks, Forests”

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    Radical Green Groups Sue Fed Govt to Block Fracking in Ohio WNF

    After 10 long years, the Bureau of Land Management (BLM) auctioned 719 acres in Ohio’s Wayne National Forest (WNF) last December (see BLM Auction Leases 17 Parcels, 719 Acres in OH Wayne Natl Forest). In March, the BLM held a second auction for 1,180 acres (see 2nd Wayne Natl Forest Lease Sale Hauls in $5.2M, Double Expectations). Ultimately there are some 18,000 acres under consideration for leasing by the BLM in WNF. WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. Those mineral rights owners have been denied the use of their property rights for more than a decade. Until now, with these lease sales. Just when progress was being made, three radical Big Green groups have sued the BLM and the U.S. Forest Service to prevent fracking in WNF. Yesterday the odious Sierra Club, Ohio Environmental Council, and Center for Biological Diversity filed a lawsuit (copy below) in federal court to block fracking in WNF…
    Read More “Radical Green Groups Sue Fed Govt to Block Fracking in Ohio WNF”

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    CONSOL Energy 1Q17 – Posts Loss, Selling Everything in Sight

    Yesterday CONSOL Energy, one of the larger drillers in the Marcellus/Utica, released its first quarter 2017 update. The company reports losing $34 million in 1Q17. Production was down too–but just slightly at less than 2% less than 1Q16. The big news is how fast CONSOL is selling stuff. CONSOL sold $108 million worth of assets in the Marcellus/Utica in 1Q17, part of their plan to sell off a total of $400-$600 million in assets this year. According to a CONSOL statement, the company “recently closed on three asset sale transactions for total cash consideration of $108 million…One of the transactions was the sale of approximately 6,300 net undeveloped acres of the Utica-Point Pleasant Shale in Jefferson, Belmont and Guernsey counties, Ohio, for total cash consideration of approximately $77 million, or approximately $12,200 per undeveloped acre.” We have a highly placed source that tells MDN that Ascent Resources is the buyer. CONSOL CEO Nick DeIuliis said on an earnings call yesterday that the bust-up with Noble Energy last year has allowed CONSOL to sell off acreage that was previously tied up in the joint venture. Noble is doing the same (see today’s lead story). Below we have the full update from CONSOL, including financial statements, along with the latest PowerPoint presentation…
    Read More “CONSOL Energy 1Q17 – Posts Loss, Selling Everything in Sight”