Schlumberger Throws Weatherford a Lifeline, Challenges Halliburton
Schlumberger is the world’s largest oilfield services (OFS) company. Weatherford International is the world’s fourth largest OFS company. They both have operations in the Marcellus/Utica region. We’ve posted a number of stories about Weatherford’s financial troubles–and seemingly inevitable march toward bankruptcy (see our stories here). However, Weatherford may have just gotten a reprieve from its much larger competitor. On Friday, Schlumberger and Weatherford announced they have formed a joint venture called OneStim, “to deliver completions products and services for the development of unconventional resource plays in the United States and Canada land markets. The joint venture will offer one of the broadest multistage completions portfolios in the market combined with one of the largest hydraulic fracturing fleets in the industry.” Hmmm. Interesting. Here’s why. The world’s second largest OFS company is Halliburton. However, Halliburton is the world’s largest fracking company. The media is universally claiming the Schlumberg/Weatherford jv is squarely aimed at overtaking Halliburton to become the world’s largest fracking service. Can they do it? Another interesting observation: Earlier this month Mark McCollum, who had been Chief Financial Officer (CFO) of Halliburton left to become the CEO of Weatherford (see Halliburton CFO Leaves to Become Weatherford CEO). We don’t think it’s a coincidence that Weatherford is now making a play to best its larger rival Halliburton, leveraging McCollum’s knowledge of how Halliburton became king of fracking. Two thoughts on the Sclumberger/Weatherford hook-up: (1) it keeps Weatherford out of bankruptcy by infusing $535 million of cash, (2) We think it may be the prelude to a full-out sale of Weatherford to Schlumberger down the road…
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The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: LNG storage tanks arrive in Jacksonville Port; oil now flowing under Missouri River via Dakota Access Pipeline; vapid actress Shailene Woodley pleads guilty to disorderly conduct charge related to Dakota Access “protest”; tech still the key in shale plays; nuke plants closing hit small towns hard; green groups promise violence to stop Keystone XL pipeline; US natgas exports to Mexico skyrocket, Mexicans worried about depending on gringos; LNG hub in Asia; and more!
In May 2016 a landowner in Wayne County, PA–in the Delaware River Basin–filed a lawsuit against the Delaware River Basin Commission (DRBC) asking a judge to declare the DRBC does not have jurisdiction to prevent construction of a natural gas well (see 
The West Virginia Oil & Natural Gas Association (WVONGA) is pushing hard to get legislation passed that we call “forced pooling lite”–WV Senate Bill 576 which addresses the issues of co-tenancy and joint development (see 
Radical green agitating groups, including the Sierra Club, Lancaster Against Pipelines, Lebanon Pipeline Awareness, Allegheny Defense Project, Clean Air Council, Concerned Citizens of Lebanon County, and Heartwood, have filed a lawsuit in the liberal U.S. Court of Appeals for the District of Columbia in an attempt to block construction of the $3 billion Atlantic Sunrise Pipeline project in Pennsylvania. Instead of waiting for the Federal Energy Regulatory Commission (FERC) to consider a so-called re-hearing of their decision to authorize Atlantic Sunrise, a group of radical green organizations are jumping the queue and going directly to court, demanding that a judge stop construction until a quorum is in effect at FERC. Yes, it’s all complicated. We’ll break it down for you. What you need to know up front is that more Big Green money is behind the lawsuit to stop Atlantic Sunrise…
Delays in turning around permit applications for new Marcellus drilling is hurting the industry, according to the Marcellus Shale Coalition (MSC). MSC president Dave Spigelmyer says lack of certainty in the PA Marcellus means more drilling goes to neighboring West Virginia and Ohio–even to Louisiana. The PA Dept. of Environmental Protection (DEP), responsible for reviewing and issuing permits, sounds somewhat defensive about their lack of performance, blaming delays on staff shortages, staff turnover, and “enhanced scrutiny of permit applications.” The Pittsburgh office now takes over 200 days (over 6 months!) to process an erosion control permit–up from 139 days in 2015. Simply not acceptable…
There are signs that the Marcellus industry in Pennsylvania is beginning to rebound. We’ve been noting it for months. Our early prediction of an upswing came last June (nine months ago) when we noticed an uptick in the number of drilling rigs operated by Patterson-UTI changed from a monthly drop to a monthly gain (see 
As MDN previously reported, anti-fossil fuelers opposed to the Williams Atlantic Sunrise Pipeline project–a $3 billion, 198-mile pipeline running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from PA with the Williams’ Transco pipeline in southern Lancaster County–are using the same (losing) playbook to oppose Atlantic Sunrise as they used to oppose the Dakota Access Pipeline (see 
We spotted an article on The Motley Fool website by one of our favorite authors, Matt DiLallo. The article shines a light on the states that produce the most shale oil. Surprisingly (for us), the Marcellus/Utica was in the list. Appreciable amounts of shale oil are coming from Ohio, Pennsylvania and West Virginia, from both the Marcellus and Utica formations. Of course the amount produced in our neighborhood pales in comparison to the enormous amounts of oil coming from the Texas Permian and North Dakota Bakken. But hey, the fact that we even show up in such a list is kind of exciting…
In a “hasty” and “rare” operations call last Friday, Halliburton, the world’s second largest oilfield services (OFS) company, offered up some interesting comments. The call was apparently an attempt to blunt the coming news that the company will likely miss analyst’s expectations for profit/loss and dividends, due to rising costs and weak demand in international markets. Top brass at Halliburton wisely know that “he who gets there with the bad news first, wins.” However, the call was wide-ranging and included some good news: After trimming 35,000 jobs over the past couple of years, Halli is adding back 2,000 jobs. That’s better than a sharp stick in the eye. CEO Dave Lesar also had this rather bizarre statement on the call, in his ebullience over the drilling comeback in North America: “This diverse and exciting market has created a surge of activity and supports my thesis that the animal spirits are back in U.S. land.” OoooKay. We’ll go with it. Animal spirits. Here’s the news coming from last week’s hasty Halliburton homily…
Events related to drilling in the Marcellus and Utica Shale, primarily pro-drilling.
Two days ago MDN reported on comments delivered by Rob Powelson, currently a member of Pennsylvania Public Utility Commission (PUC) and via that role, currently the president of the National Association of Regulatory Utility Commissioners (NARUC). Powelson gave a talk at the Upstream PA conference in State College earlier this week–in which he said, “The jihad has begun…At the Federal Energy Regulatory Commission groups actually show up at commissioners’ homes to make sure we don’t get this gas to market. How irresponsible is that?” (see 
After 10 loooooong years of waiting, the Bureau of Land Management (BLM) finally auctioned its first round of property leases for shale drilling in Wayne National Forest (WNF)–located in Ohio (see 