Rex Energy Lost $109M in ’16, Drilling to Hold in ’17, NGLs in ’18
Earlier this week Rex Energy, a driller focused mainly on the Marcellus/Utica (headquartered in State College, PA), released their fourth quarter and full year 2016 financial update and held an earnings call with analysts to discuss. The company released their operational update back in January (see Rex Energy 4Q & 2016 Update – Production Slips from 2015). On the earnings call, Rex officials said 2017 will be spent focusing on drilling in OH and PA to hold existing acreage. With that done, and with the planned Mariner East 2 going online later this year, Rex intends to focus on drilling for NGLs in 2018. Much of 2016 was spent drilling in the company’s Moraine East area in western PA, and Warrior North area in Carroll County, OH. Rex sold off “noncore” Utica assets in southeastern OH in 2016. The company lost $109 million in 2016, which is a vast improvement over losing $373 million in 2015. So things are looking up for our little driller who could…
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New Jersey’s largest utility, Public Service Enterprise Group (PSE&G), is shopping its ownership stake in the $1 billion PennEast Pipeline project. Which may sound bad, but isn’t. Is PSE&G losing confidence in the project? Not happy with progress (or lack thereof)? Afraid it won’t ever get built? No, no and no. According to a company spokesman, the $10 billion PSE&G wants to focus on power projects, not pipelines. A little background and context is helpful. PennEast is largely being driven by Pennsylvania-based UGI, a natural gas and electric utility serving 700,000 customers in 45 counties in Pennsylvania and one county in Maryland. UGI is managing the project, and has the largest ownership stake. Other investors/owners of the project include PSE&G, which has only invested $11 million and owns a 10% stake; NJR Pipeline Company, a subsidiary of New Jersey Resources, an NJ utility; SJI Midstream, a direct subsidiary of South Jersey Industries; Southern Company Gas, a wholly owned subsidiary of Atlanta-based Southern Company, a midstreamer; and Spectra Energy, now a part of Enbridge, yet another pipeline company. Even though PSE&G wants to sell its share of the project for financial reasons, it will remain one of the customers for the PennEast Pipeline when (not if) it gets built…
A few fun facts for this festive Friday. In 2016, the state of Pennsylvania produced 5.26 trillion (with a “t”) cubic feet of natural gas–roughly 20% of all natural gas produced in the U.S. last year. Amazing! What’s even more amazing is that 10 years ago, prior to the Marcellus, PA produced 176 billion cubic feet of natgas–or just 3% of the natgas PA produced last year. Behold the miracle of the Marcellus Shale! Here’s some more details about PA’s natgas production history…
Sometimes this regulatory stuff gives us a headache. Like today. A common practice by anti-fossil fuel nutters when opposing a pipeline project at the Federal Energy Regulatory Commission (FERC) is to request a “re-hearing” on a decision FERC has made to authorize a project. It’s just standard operating procedure. If the antis can get FERC to agree to a re-hearing, it effectively slows, even stops, an active pipeline project. So in an effort to prevent important projects from being slowed or stopped, FERC developed something called a “tolling order”–which grants FERC more time to consider whether or not a full re-hearing is justified. During the time of the tolling order (which can last up to six months), work on a pipeline continues. Sometimes the work even gets completed! Which of course drives the antis bonkers. Antis claim FERC uses tolling orders to avoid lawsuits. You see, antis can’t take their frivolous cases to a court until FERC has officially denied a re-hearing request. So by using a tolling order, FERC can drag out the process of deciding to deny a re-hearing, avoiding the inevitable frivolous lawsuit that comes with it, and work on important projects gets done. This is how things must operate in our litigious society that tolerates the antics of anti-fossil fuelers (with seemingly bottomless pockets of money to litigate every project). New wrinkle: When FERC Commissioner Norman “cry baby” Bay resigned in a huff effective Feb. 3, it left FERC without enough Commissioners (without a quorum) to vote on tolling orders, re-hearing requests, etc. So on Feb. 3, before Bay left, the existing three Commissioners delegated their authority over re-hearings and tolling orders to FERC staffers–until a new Commissioner is appointed and sworn in. Antis against Atlantic Sunrise are using the delegated tolling order issue against FERC in their attempt to stop commencement of construction on Williams’ Atlantic Sunrise Pipeline project, claiming they are being deprived of their “due process”…
There are a few last, desperate gasps at attempting to stop Sunoco Logistics Partners’ Mariner East 2 natural gas liquids (NGL) pipeline from being built. The pipeline is currently under construction (see 
The Pennsylvania Dept. of Environmental Protection (DEP) says 2,400 staffers and $728 million (proposed for 2017-2018) isn’t enough. More! Feed me! I need more!! Appearing at a budget hearing yesterday with state legislators, Acting Secretary of the DEP Pat McDonnell cried the blues. The DEP is authorized, according to last year’s budget, to have 2,700 employees, but McDonnell says the agency currently has 2,400. Not sure what the 300 difference is about. But, whatever. He also says the federal EPA is about to whack the money it hands out to state agencies, including the DEP, and that has McDonnell concerned…
Letters are on their way to 283 Clinton County, PA property owners asking them to participate in a “free” (i.e. paid for by taxpayers) sampling of their well/drinking water supply. The U.S Geological Survey is conducting a study in the area in part to gauge the impact of nearby shale drilling on water supplies. What’s that? Is there ANY Marcellus drilling in Clinton County? As it turns out, there are a few wells–or at least there have been a handful of permits issued over the years, so we’re guessing some of those permits turned into drilled wells. Hey, we’re not complaining. Every time these types of studies are done they always come out the same way: shale drilling doesn’t impact water drinking water supplies. So have at it. We can always use yet one more study to prove what has already been proven…
Jim Sewell, the Environmental Manager for the Shell ethane cracker project being built in Beaver County, PA, recently gave an update on the project to members of the Ohio Valley Oil and Gas Association. Sewell spoke about the reason Shell chose the Monaca site. He also gave an update on progress at the site. The biggest problem they’re trying to solve right now? Parking for workers…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Range Resources CEO speaks out on oversupply, Range’s focus on dry gas (for now); Maryland frack ban advances in House, stalled in Senate; Utica permits “steady” in southeast OH; Florida Senate panel passes frack ban; antis heckle, boo, shout, shut down meeting in Colo.; what the o&g industry must learn from Trump’s win; EPA’s Pruitt intends to shake things up; shale moving from brute force to finesse; foreign buyers buying into US pipelines; and more!
Just as MDN was putting today’s list of stories to bed, news broke that President Trump plans to nominate Jones Day attorney Kevin McIntyre as chairman of the Federal Energy Regulatory Commission (FERC), and nominate Neil Chatterjee, senior energy adviser to Senate Majority Leader Mitch McConnell, as a member. There are currently three vacancies. No word on a third nominee and (so far) The White House is mum on the leak about McIntyre and Chatterjee. Here’s the leak, from Bloomberg…
Not long after the Pennsylvania legislature passed the Act 13 Marcellus Shale drilling law in 2012, signed into law by then-Gov. Tom Corbett, seven selfish towns sued, claiming they should have the right (via zoning laws) to determine just where an oil and gas well can be located within their borders. The challenge was brought by rabid anti-drillers and appealed all the way to the PA Supreme Court, where unfortunately the antis won (see 
When was the last time you heard of someone indicted on criminal charges and instead of doing time in jail, they just paid money? While some crimes involve fines, they always involve jail, or probation, or some form confinement/punishment other than just paying money. At least that’s what we always thought. But if you’re part of the Gestapo, otherwise known as the Environmental Crimes Unit of the Pennsylvania Attorney General’s Office, apparently the rules don’t apply. People in the AG’s office can accuse you of a crime, then shake you down for money, and give that money away to anyone they want. That’s what just happened with Anadarko. As we recently reported (see 
As MDN has noted over the past several months, the signs have been positive that Marcellus/Utica drilling is picking up once again. But that doesn’t mean it’s picking up in every location. Or does it? One of the hotbeds of drilling activity “back in the day” was in several northeastern/central Pennsylvania counties, including Tioga, Bradford, Lycoming and Sullivan. But then the bottom fell out of the industry (with super low prices) and drilling all but dried up in those counties. The good news is that there are signs of life, once again, in the central counties of PA. Between Nov. 1 and Mar. 6, 30 drilling permits were issued in Tioga County, 12 permits in Lycoming County, and (somewhat surprising), 8 permits issued in Sullivan County. Shale is coming back!…
On Feb. 3, the Federal Energy Regulatory Commission (FERC) approved a long-delayed project–National Fuel Gas Company’s (NFG) Northern Access 2016 pipeline project (see