Rice Energy 1Q17 – $35M Loss, Production Soars 86%, Laser Focus
On Wednesday Rice Energy released its first quarter 2017 update, and yesterday the company held an earnings call to discuss it. On the down side, Rice continued to lose money during the quarter. Rice lost $21 million in 1Q16, and the loss widened to $35 million in 1Q17. But it seems to us the rest of the news they shared was pretty darned good. Production soared–from 61.4 billion cubic feet equivalent (Bcfe) in 1Q16, to 114.5 Bcfe in 1Q17–an 86% increase year over year (vast majority of that was natural gas). Rice’s lateral length now measures over 9,000 feet on average. In 1Q17 Rice added 2,000 Marcellus acres and 2,000 Utica acres to its portfolio, and the company says it’s on track to add a total of 15,000 acres this year. During 1Q17, Rice brought 15 new Marcellus wells online, and 10 new Utica wells. Rice CEO Dan Rice, on the earnings call, said (our words) while everyone is zigging, they like to zag. While everyone else is trying to buy up acreage all over Hades half acre, Rice prefers to concentrate and narrow its focus on truly prime locations that will produce stellar wells. Dan also said the company is in the catbird seat when it comes to new pipelines coming online over the next several years. We’ll explain. Below are excerpts from the earnings call, the 1Q17 update (with financials), and the latest PowerPoint slide deck…
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Yesterday midstream and utility giant Dominion issued its first quarter 2017 update. Along with the update Dominion held an earnings call. On that call we learned new information about both the Atlantic Coast Pipeline (ACP) project, Dominion’s Cove Point LNG export project, and a plethora of other projects, including natgas-fired power plants and more pipelines in the works. Dominion CEO Tom Farrell shared the exciting news that Cove Point is now 89% complete and will be “in service” later this year. As for Atlantic Coast Pipeline, Dominion has now purchased 80% of the materials they will need to build it. Farrell said the pipeline will be online in the second half of 2019. Another six pipeline projects are underway (at a cost of $700 million)–with five of the six due to be done THIS YEAR. Dominion is a happening company. Below are extracts from the earnings call, the 1Q17 update (with financials), and the newest PowerPoint slide deck used during the earnings call…
The U.S. The House of Representatives’ Committee on Energy and Commerce held a hearing on Wednesday to hear testimony on a proposed plan to grant the Federal Energy Regulatory Commission (FERC) more authority to speed up the pipeline approval process. Up for discuss is an amendment to the Natural Gas Act to grant FERC more authority in coordinating what is, admittedly, a complex review process. A more powerful FERC would, for example, likely be able to override states like New York that refuse to grant water crossing permits (permits that are issued under a federal law!). Don Santa, executive director of the Interstate Natural Gas Association of America, was one of the people testifying before the assembled Congressmen. He said things have gotten pretty bad over the past two years–yes with FERC, but also with other federal and state agencies. Here’s some of what was said at the hearing…
Did you know that even with our super-productive fracking methods, we still only pull out an estimated 5% of oil found in shale, and an estimated 20% of natural gas? That’s abysmal! Can’t we do better? Indeed, perhaps we can. Shale oil and gas is locked up in teeny tiny pores in shale rock–very small “pockets” if you want to think of it that way. The reason we don’t currently do a better job of accessing more of those small pockets is lack of understanding in how fluids flow through these small pores, which measure nanometers across. It takes one billion nanometers to make up one meter, or roughly three feet. Exciting new research shared this week in the journal Physics of Fluids sheds new light on the physics of fluids flowing through shale rock. The research paper, “Many-body dissipative particle dynamics modeling of fluid flow in fine-grained nanoporous shales” (full copy below). This new research means we are on the path to learning how to extract even more oil and gas from the same shale rock. Now that’s something to celebrate!…
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!
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 (
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…
Earlier this week MDN brought you the latest quarterly update from Southwestern Energy (see 
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 
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 
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 
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…
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… 