Ascent Resources Continues Aubrey’s Borrowing Ways: $1.5B in IOUs
Feed me, feed me! Let’s be honest. Aubrey McClendon (God rest his soul) almost bankrupted Chesapeake Energy. The company’s stock price took a nose dive when the price of oil and natural gas went over a cliff. Aubrey had the company leveraged to the eyeballs and it teetered on the edge of bankruptcy until last year, when CEO Doug “the ax” Lawler claimed the company was out of the woods. We won’t recount our disdain for how Aubrey was ejected from the company he founded (by evil corporate raider Carl Ichan). After leaving Chesapeake, Aubrey started a new company–American Energy Partners (AEP). That company, AEP, set up a number of subsidiary companies to target different shale plays. One of the largest was aimed squarely at the Ohio Utica. That company later left the AEP fold (under pressure from investors) and became an independent company, renaming itself as Ascent Resources. However, Ascent, just like pappa Aubrey, went on a money-raising binge. In March 2016 Ascent floated 2.2 billion common units (think shares of stock) to raise $500 million (see Ascent Resources Sells More of Company to Pay Down Debt). Ascent planned to use that money to pay off existing notes, or IOUs. In August 2016, Ascent flirted with bankruptcy but pulled its bacon out of the fire by restructuring its debt (see Ascent Resources Talking to Creditors to Restructure $1.2B Debt). In November last year Ascent sold another 3.5 billion common units, hoping to raise $787 million to (yes) pay down outstanding debt (see Ascent Resources Sells Another 3.5 Billion Units for $787 Million). Here we are four months later, and Ascent is back, floating (yep)–new debt. New IOUs. Ascent pushed out an announcement yesterday that the company is offering $1.5 billion of senior unsecured notes. Unsecured means if they go belly up, investors in those notes won’t see a penny…
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In January 2016, the Obama Dept. of Interior posted a new rule that will make it all but impossible for oil and gas drillers to drill on federal lands (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Maryland Senate panel OKs ban on fracking; NY AG’s private email history raises questions about anti-Exxon campaign; Ohio’s ad valorem tax positively impacts Guernsey County; Solebury Twp, PA takes steps to oppose PennEast Pipe; MarkWest establishes scholarship at WCCF; VA conservation agency puts new restrictions on Atlantic Coast Pipe; ICE to start trading first US LNG futures contract; Rex Tillerson says his wife convinced him to take Sec State job; and more!
Back in January MDN reported that Denise Brinley, a special assistant to the Secretary of the state Department of Community and Economic Development, spilled the beans on an upcoming report PA had commissioned. Brinley said the report would be released “in the coming weeks” and it would show that Pennsylvania can easily handle another two ethane cracker plants (aside from the already under construction Shell cracker), and that Ohio or West Virginia could also handle another two cracker plants (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 
We are super excited to bring you an exclusive report that has just been released by MDN subscriber 
The West Virginia Oil & Natural Gas Association (WVONGA) has just raised the stakes significantly in a bid to pass new “forced pooling lite” legislation. In the past six years, the oil and gas industry in WV has pushed for a forced pooling law five times. It’s failed every time. So this year the industry, represented by WVONGA, said it would not push forced pooling but instead would try to get a bill passed to address two of the issues that were previously part of a larger forced pooling bill–something called co-tenancy and joint development (see 
The Pennsylvania Dept. of Environmental Protection (DEP) yesterday released a new online search tool for the public which enables anyone to search through electronic documents filed by Marcellus Shale drillers. Last year the DEP created new regulations for shale drillers called Chapter 78a (see 
Oilfield services company (OFS) Mammoth Energy Services, headquartered in Oklahoma City, OK, operates in both the Utica Shale and Permian Basin. Mammoth offers services like “completion and production services, natural sand proppant services, contract land and directional drilling services and remote accommodation services.” Mammoth is a baby company, formed in 2014, but growing rapidly. The company booked $243 million in revenue for the 12 months ended June 30, 2016 (see 
Jeff Quigley, director of energy markets at Stratas Advisors, says that electric power generation is “one of the biggest incremental drivers of new demand” for Marcellus Shale gas. A close second behind powergen, according to Quigley, are industrial sources. That is, big manufacturing plants. Also according to Quigley, while “there’s still a place for coal” in the U.S. energy mix, natural gas is “on pace to eventually displace coal for power generation.” Quigley is speaking today at the Guttman Energy 2017 Energy Forum in Canonsburg, PA. Here’s a preview of his comments…
Regina Mayor is leader of energy and natural resources for the consulting firm KPMG. She’s located in Houston. However, she recently made a trip to California to speak at the Stanford University Precourt Institute for Energy. Her topic? “How Energy CEOs are Adapting in the Downturn.” We have a video of her full talk below. It’s compelling. Mayor recounts how oil and gas companies had to figure out how to make money in a low price environment. She also observes that all sectors of the energy industry are pumped on Trump: “Everyone in the industry seems to think that they’re going to be a winner under this administration. The wind and solar guys and gals, the coal folks, the gas, the upstream, the downstream, everyone believes that they’re going to win…where I come from, you always know that that can’t be the case. Logic tells you that can’t be the case. But I do find the level of optimism quite fascinating.” Below is a summary of her talk, and the video…
The Ohio Dept. of Natural Resources (ODNR) has just issued production numbers for the fourth quarter of 2016. The bad news is that oil production continued to slide in 4Q16, down 44% from the same quarter in 2015. The good news continues to be natural gas production, which was up 14% over the same period in 2015. The even better news: Natural gas production in Ohio for all of 2016 was 1.37 trillion cubic feet, vs. 955.61 billion cubic feet in 2015. Awesome! Ascent Resources (formerly Aubrey McClendon’s American Energy) continued to dominate in natural gas production. Ascent had the top producing well in 4Q16, as they did in 3Q16. In fact, Ascent had 9 of the top 10 producing natural gas wells in Ohio during 4Q16. Gulfport Energy was the only other producer to break the top 10, with one well. Over on the oil side of the isle, Eclipse Resources once again had the top producing oil well with their Purple Hayes well–currently the longest horizontal well drilled in the United States at 3.5 miles long (located in Guernsey County). Purple Hayes is the gift that keeps on giving, quarter after quarter! Below we have the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference…
Last May, Range Resources sold its portion of a joint venture in northeast Pennsylvania (see 
We find it kind of amusing. Anti-drillers and Democrats (usually one and the same) in Pennsylvania bellyache and moan and groan that PA is “the only oil and gas state without a severance tax” and how life would be SO much better if only PA had a severance…blah blah blah. They point out that Ohio has a severance tax. West Virginia has a severance tax. EVERYBODY has a severance tax. Of course they conveniently ignore (or lie about) the fact that PA has an impact fee, or an impact tax, if you will. The impact fee levies a charge on new wells for a number a years on a sliding scale. Think of the impact fee like a property tax, and a severance tax like a sales tax on goods sold. The beauty of the impact fee is that 60% of it stays in the communities where drilling actually happens. Impact fee revenue goes to local municipalities to offset the “impacts” of drilling in those communities, money used for things like fire departments, police, roads, etc. An impact fee is superior to a severance tax in many ways. While OH and WV’s severance tax revenue went over a cliff when the price of natural gas went over a cliff, PA’s impact fee was far less affected. But the point of this post is not in the relative merits in the type of taxation. The point is that legislators in Ohio want to reallocate some of their severance tax revenue to be used in communities where Utica drilling happens. That is, they want to convert some of the OH severance tax into, essentially, an impact fee. So while PA bellyaches about having an impact fee and not a severance tax, states (like OH) that actually have a severance tax, would rather have an impact fee!…