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    Dominion Signs Contract with Builder for Atlantic Coast Pipeline

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    In August MDN reported that Dominion’s $5 billion, 594-mile Atlantic Coast Pipeline–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina–had received the very good news that the Federal Energy Regulatory Commission (FERC) finally released timing for when they will approve the project (see Atlantic Coast Pipeline Makes Progress, FERC Timing Announced). FERC set June 30, 2017 as the date by which the agency will issue their final environmental impact statement for the project. Yesterday Dominion announced another major milestone for the project–the naming of Spring Ridge Constructors as the entity that will actually build the pipeline. Spring Ridge is a consortium of five major natural gas pipeline companies…
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    Epsilon Deal to Buy More Marcellus Acreage from JV Partner Dies

    Epsilon EnergyCanadian driller and midstream company Epsilon Energy had a shareholder rebellion in 2013 and threw out the sitting board of directors (see Shareholder Rebellion at Epsilon Energy – New Board as of Today). Epsilon CEO Michael Raleigh announced at the time that the company had embarked on a turnaround strategy of focusing on the Marcellus Shale–less than a year after saying they would scale back in the Marcellus (see Epsilon Energy Makes “About-Face” on Marcellus Drilling). Epsilon was and remains a very small player in the Marcellus–but the Marcellus is the company’s entire focus. The company released its second quarter 2016 update in July (see Epsilon Energy: Still No Marcellus Drilling, Focused on NEPA Pipe). From what we could tell, the company has not drilled, and doesn’t plan to drill, a single Marcellus well since 2014. However, they do own a 35% interest in the Auburn Gas Gathering system in the northeast PA Marcellus (Williams is majority owner with 44%). Epsilon’s capital expenditures for 2Q16 were a grand total of $100,000, all of it spent on the Auburn system. Epsilon released an announcement yesterday that, unbeknownst to us, they had signed an agreement with one of their joint venture drilling partners back in February to pick up an additional 4% interest in the jv acreage. But, according to yesterday’s announcement, the PSA (production sharing agreement) to pick up the extra 4% has expired and the deal is, for now, dead…
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    TransCanada’s Plan to Lowball Marcellus/Utica Gas Delayed

    delayedYou may recall that TransCanada, one of Canada’s leading midstream/pipeline companies, cooked up a deal to pipe natural gas from Canada’s West Coast to the East Coast in order to fend off cheap supplies of Marcellus/Utica gas that will flow into Canada when/if the NEXUS and Rover pipelines get built (see TransCanada Pipe Drops Price 42% to Compete with Marcellus/Utica). TransCanada dropped their pipeline price by 42% to lure drillers by (theoretically) making it less expensive to get gas from Western Canada, some 2,400 miles away, than from the Marcellus, just 400 miles away. But all is not butterflies and unicorns with the TransCanada plan. Drillers are balking at having to sign a 10-year agreement in order to get the favorable pricing. Their reticence is leading to a delay in TransCanada’s master plan to conquer the Mighty Marcellus…
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    Dispelling the Notion that PennEast Pipe Gas Will Get Exported

    penneastFor the gazillionth time, PennEast Pipeline is addressing the lie spread by opponents that “most a that thar gas will get exported overseas.” Virulent anti-drillers try to whip up opposition to the pipeline any way they can, including spreading the lie that PennEast gas will not stay local and benefit local residents. The single counter-argument that utterly destroys that lie is this: In order to export gas, PennEast would first have to apply for and receive permission from the U.S. Dept. of Energy. Guess what? PennEast has not (nor is going to) apply to the DOE for export permission, as they indicate in the following Letter to the Editor…
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    Saudi War on American Frackers Led to More Productive U.S. Wells

    harder_better_faster_stronger1The Saudis sure didn’t see this one coming. Back in 2014 Saudi Arabia and their toadies in OPEC declared open war on the American shale industry. The aim was to bankrupt our shale drillers by pumping so much oil for so cheap, that our small potatoes drillers would go out of business. The thinking was that the Kingdom could outlast our private companies–for years if necessary. And sure enough, some of our o&g companies have gone bankrupt–nearly 100 of them since 2015. But here’s what happened along the way–the unintended consequence. Good old American ingenuity kicked in and our companies innovated–figured out how to drill for less money and get even more oil (and gas) out of the ground while doing it. That is, the Saudis’ action in trying to bury us was to make us better and stronger. One of the major ways we became better and stronger was through the lowly grain of silicon–as in sand. Can anyone say, “mega-frack”?…
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    Corp Raider Carl Icahn Sells Half of His Chesapeake Stock

    wizard-of-oz-curtain“Pay no attention to that corporate raider behind the curtain! I am the great and powerful Oz!!” Carl Icahn is an evil corporate raider who buys just enough stock in a company to fire a bunch of people and force the company to sell key assets–all so the stock price will pop up and he can then sell his shares at a tidy profit. Icahn has been doing it for years. He tried it with Chesapeake, firing co-founder Aubrey McClendon back in 2013 (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). Bad move because Icahn’s raider strategy at Chesapeake failed miserably. He’s just sold half of his 9.4% stake in the company at a loss–and we’re being told it’s “for tax purposes.” Yeah, right. We can tell you with 100% certainty when Icahn bought his Chessy stock it wasn’t so he would end up losing a bunch of money. He screwed up and now the whole world knows–and Chesapeake’s stock has taken a nosedive…
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    PA DCNR Recovers $1.3 Million in Shorted Gas Royalties

    paybackThe Pennsylvania Dept. of Conservation and Natural Resources (DCNR) used to, once upon a time, lease a small fraction of the land under its oversight to allow Marcellus Shale drilling. And like any private landowner, the DCNR received bonus payments when leasing, and royalties when the gas began to flow. In fact, when Marcellus drilling had hit its peak in 2013, the DCNR received almost enough just from bonuses and royalties they were nearly self-funding (see PA DCNR Nears Total Self-Funding from Marcellus Leases/Royalties). All good things must come to an end. When Democrat Tom Wolf assumed the governorship in PA, he banned any new leases/drilling on state-owned land, plunging the department deeply into the red (see PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget). However, even before the Wolf disaster, the DCNR felt like some landowners–that they may be getting screwed out of royalty payments by some of the drillers who have leased state land (see DCNR Says PA May be Getting Shorted on Royalties for State Land). Seems that DCNR’s feeling was correct. The agency got themselves a new accountant and went over the books with a fine-toothed comb, and over the past year, they’ve collected $1.3 million in royalties they had been shorted…
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    Maryland Will Miss Important Fracking Deadline on Oct 1

    deadlineMaryland is supposedly working on revisions to revisions of revisions of fracking regulations that will allow the state to begin fracking on or about October 1, 2017. At least, that’s the theory. There has been some evidence that work is actually getting done to revise the revisions already released by former Gov. Martin O’Malley. In June the Maryland Dept. of the Environment held public hearings where anti-drilling nutjobs paraded around spreading lies about how fracking will kill ya (see Maryland Holds Hearings on Fracking, Crazies Turn Out to Complain). In order to meet the deadline of Oct. 1, 2017 (the date when the current two-year moratorium expires), newly revised regulations need to be published a year in advance–by Oct. 1, 2016. According to “officials” who spoke to the very liberal Baltimore Sun, that isn’t going to happen. So what now? If the two-year moratorium runs out, can drillers begin drilling–without the revised revisions of the revisions of the regulations? Theoretically, yes they could. The better question is: Will anyone try to drill even if they could?…
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    Landowners Go to Harrisburg to Pressure Lawmakers on Royalty Bill

    Mr. Smith Goes to Washington
    Mr. Smith Goes to Washington

    Pennsylvania landowners are, as we recently pointed out, in a civil war with the Marcellus industry over the issue of royalties (see Deep Dive: PA Royalties Civil War Between Landowners & Drillers). Landowners want House Bill (HB) 1391 passed–a bill guaranteeing landowners will receive a minimum 12.5% royalty payment regardless of post-production costs. Drillers, being represented by the Marcellus Shale Coalition, are pushing back by saying landowners must live under the contracts they’ve signed. It’s complicated–read our previous articles about it here. With a short time left in this legislative session, landowners continue to press their case with lawmakers. The latest in the skirmish is that landowners have set up a table in the Capitol Rotunda in Harrisburg to lobby (i.e. pressure) lawmakers into taking action on the bill…
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    NatGas Trades Above $3/Mcf 1st Time in > 1 Yr, Still Low in M-U

    natgas-priceWe’ve just hit a milestone worth mentioning. Yesterday the price of natural gas as traded at the benchmark Henry Hub delivery point (in southern Louisiana) closed at over $3 per thousand cubic feet (Mcf). It’s an important psychological barrier that gives traders (and drillers) hope for higher prices. However, before we begin popping the champagne corks here in the Marcellus/Utica, you should understand that there is no “the price” in natural gas. Gas is traded at hundreds of locations along major gas pipelines. The venerable Henry Hub is important because it is the benchmark, setting prices that many gas contracts are tied to. But the reality of natural gas prices for the Marcellus and Utica is one of low prices due to lack of pipeline capacity to move our oversupply to other markets. So while the price of gas trading at the Henry Hub yesterday closed at $3.08/Mcf (according to price experts Natural Gas Intelligence), the price of gas trading at the Tennessee Gas Pipeline Zone 5 300L in northeastern PA closed yesterday at $1.26/Mcf (NGI). Here’s more on yesterday’s important Henry Hub breaking through $3 story, and why the price is going higher right now…
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    Cheniere Energy Upsizes IOU Offering from $1B to $1.5B

    friskyCheniere Energy operates the only liquefied natural gas (LNG) export facility in the United States–currently. There are others planned, like the Cove Point, Maryland facility currently under construction. We keep tabs on Cheniere, even though it’s located in Louisiana, because the pipelines that serve it either are or soon will have Marcellus/Utica natural gas flowing through them–to the Cheniere plant. It’s potentially a very important market for our natural gas. We’ve had plenty of Cheniere news lately. Earlier this week we told you about a major restructuring at the top of the company, and the news that Train 2 at the plant is about ready to rock and roll (see Cheniere Restructures Management Team, Finishes Train 2). We have more news. The company had planned to float a big $1 billion of new “notes”–what we call IOUs. The news is that Cheniere is feeling frisky and has upsized the note offering. They’re now floating $1.5 billion of new senior notes…
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    IPAA Launches Campaign to Defeat EPA Methane Regs

    Yesterday MDN reported on the scorching remarks by two U.S. Congressman with regard to the federal Environmental Protection Agency’s rogue actions to try and regulate oil and gas drilling by imposing new methane emissions regulations (see Congressmen Blast EPA Over New Methane Regulations). Let’s keep the heat on. The premier organization representing independent oil and gas drillers is the Independent Petroleum Association of America (IPAA). The IPAA is at the forefront in fighting the EPA to defeat these draconian new regulations. According to the IPAA (quoting the EIA), these new regulations would make marginal oil and gas wells unprofitable to operate. Those so-called marginal wells represent 15% of all the natgas produced in the U.S., and 20% of the oil produced. Can you imagine what would happen to prices if you suddenly shut down that much production? No, the Obama EPA doesn’t think of things like that–and that’s the problem. Or if they do think about it, they certainly don’t give a fig. The IPAA sent around a letter outlining their game plan for fighting the EPA’s draconian methane emissions regs. Huddle up–here’s the plan…
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    Shale Insight Starts Today – Visit MDN in Booth 208

    Shale InsightWelcome to Pittsburgh! MDN editor Jim Willis always enjoys the City of Bridges. Today begins Shale Insight. If you’re attending (and a number of MDN subscribers do attend), please stop by Booth 208 and say hello. There will be a number of top notch speakers both today and tomorrow. The person grabbing most of the headlines is Donald Trump, who will speak tomorrow. However, there are many other noteworthy speakers on the agenda. Harold Hamm, CEO of Continental Resources is one of them. Gary Heminger, CEO of Marathon Petroleum is another. Other standouts for MDN: Stacey Olson, the new president of Chevron Appalachia; Gladys Brown, chairwoman of the PA Public Utility Commission; Keith Burdette, Secretary of the West Virginia Department of Commerce; Camera Bartolotta, PA Senator; and Alex Epstein, author of the book, “The Moral Case for Fossil Fuels” (great book, Jim has read it). For the list of speakers and a full agenda, visit: //shaleinsight.com. See you in Pittsburgh!

  • Marcellus & Utica Shale Story Links: Wed, Sep 21, 2016

    best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Utica Shale rigs drop by 2; Maine regulators seek proposals for LNG storage; rigs not ever going over 800 again says Raymond James; global natgas prices will key off Henry Hub; wind generation and price volatility in natgas; new acoustic service from Halliburton; oil at $70? not a chance!; electronic LNG auction starting up in October; and more!
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    Fossil-Fuel-Hating Sierra Clubbers Plan to Protest Shale Insight

    haterAnti-coal, anti-natural gas, anti-oil, anti-logic…the radicals who make up the Sierra Club are anti-everything. They can’t even stand themselves! Self-loathing seems to be a requirement for membership. The Allegheny sub-group of the Sierra Club is planning to protest in front of the David L Lawrence Convention Center in Pittsburgh this coming Thursday morning. Why? Because presidential candidate Donald Trump is scheduled to speak and they HATE HIS GUTS. They also hate frackers and those who support them, like your humble editor. There’s no better unifier on the left than hatred. MDN will be on location at the event and if we get a chance we’ll snap a picture or two of the nutters out front protesting. Meanwhile, here’s the Sierra Club game plan for Thursday…
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    Range Resources Completes Buyout/Merger with Memorial Resource

    tie-the-knot.jpgAs MDN previously reported, Range Resources, the very first driller in the Marcellus Shale (in 2004) and one of the largest Marcellus drillers, has decided to take advantage of the down market and branch out into another shale play (see Range Resources Buys Louisiana Driller in Deal Worth $4.4B). In May Range announced a deal to buy Memorial Resource Development Corp. (MRD) in a stock swap/debt assumption deal worth $4.4 billion. MRD holds 220,000 acres of leases and drills in the Terryville Field in northern Louisiana. Essentially Range has purchased themselves a Gulf Coast operation which sets them up nicely to export natural gas to Mexico. That’s at least part of the attraction. Perhaps another part of the attraction is that gas from Terryville Field, part of the Cotton Valley Tight Gas formation, is cheaper to drill and in many cases just as productive as shale wells in the Marcellus. Last Thursday Range reported receiving final stockholder approval for the merger/buyout, and last Friday Range reported that the deal is now done…
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