Marcellus Drilling News

Energy Companies | Rice Energy

Rice Energy Board Member Exits to Become CEO of Tapstone Energy
December 21, 2016December 21, 2016

Steve Dixon

Steven Dixon, who had been a member of the board of directors at Rice Energy since 2014, has resigned from the Rice board in order to become CEO of Tapstone Energy, which drills in shale plays in Oklahoma, Texas and Kansas. Dixon is a geologist by training. He worked at Chesapeake Energy for a number of years. In 2006 Dixon was named chief operating officer (COO) in 2006. He was upgraded to vice president of operations and geoscience in 2010. And after Carl Icahn booted Aubrey McClendon from the company he had co-founded, Dixon was acting CEO of the mighty Chesapeake for a period of time in 2013. While a single board member departing won’t negatively affect a company like Rice (financially), we’re sure his presence and deep experience will be missed. Here’s the announcements from both Rice about Dixon leaving, and Tapstone about Dixon arriving…
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1st NRG | Energy Companies | Utica Shale

1st NRG Pops Back Up 2 Years Later – Still in Love with the Utica
December 21, 2016December 21, 2016

Going all the way back to 2012, MDN has chronicled, from time to time, the myriad press releases issued by a small driller headquartered in Denver called 1st NRG Corp. They’ve been saying since that time that they really really really really want to drill in the Utica Shale–on a small 7,000 acre leasehold they own (see our stories about 1st NRG here). Ever hear of the boy who cried wolf? Eventually they did participate in drilling a Utica well, in 2014 (see 1st NRG Begins Pushing Dirt on First Utica Well Pad). That was the last time we wrote about 1st NRG–until today. Turns out the well they drilled, which was supposed to be a horizontal Utica “test” well, turned into a vertical Beekmantown Dolomite well. But 1st NRG hasn’t given up. In a “corporate update 2016” press release issued yesterday, the company said “these are exciting times” for the company, and that they are on a “growth trajectory for 2017.” What has the company so jazzed? They expect that Dolomite well to get hooked up to production in January. Although they still love the Utica, the company will focus on the reviving activity in the Clabaugh Ranch field in Wyoming in 1Q17 (coal bed methane, not shale drilling). Finally, the company is working on the purchase of a 364-mile natural gas gathering pipeline system, which they “hope” to close in 1Q17. The company cagily does not identify where the gathering system is located. Here’s the recent update from 1st NRG, along with a slightly older announcement about the pipeline gathering system they “hope” to buy…
Read More “1st NRG Pops Back Up 2 Years Later – Still in Love with the Utica”
Energy Services | Nuverra Environmental

Nuverra Environmental Line of Credit Expanded, Payback Extended
December 21, 2016December 21, 2016

Nuverra Environmental Solutions is one of the largest companies in the United States that handles transportation and disposal of shale drilling wastewater and leftover rock and dirt from drilling. The company has major operations in the Marcellus/Utica region. In January the company, going through tough economic times, was de-listed from the New York Stock Exchange (see Nuverra Environmental Delisted from NYSE, Now a Penny Stock). We recently noted that in 3Q16 the company “only” lost $38 million–which is $90 million less than they lost in 3Q15 (see Nuverra Environmental 3Q16: Still in the Red, but Improving). The company continues to struggle financially. We make that statement based on a recent 8-K filing made with the Securities and Exchange Commission. In that filing Nuverra discloses that they have worked out an agreement with their bank, Wells Fargo, to extend the payback date for a loan made on a line of credit from December 31 of this year to March 31 of next year–an additional three months. The disclosure also shows Nuverra will be allowed to borrow more money–going from the current $30.6 million cap to $58.1 million. When you consider companies like Chesapeake Energy have over $9 billion in debt, Nuverra’s debt seems pretty tiny. But the fact remains they’re pushing out the time for repayment, and potentially borrowing more money…
Read More “Nuverra Environmental Line of Credit Expanded, Payback Extended”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Union (Once Again) Lies About PA Marcellus Severance Tax
December 21, 2016December 21, 2016

From the beginning of Pennsylvania Gov. Tom Wolf’s disastrous administration, we have told you the unvarnished truth: Wolf’s call for a high tax on Marcellus Shale gas production is a giveaway, a pay-back, to teachers unions for their support of him in defeating Republican Gov. Tom Corbett (see PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax). Wolf held up the first budget by nine months, wreaking havoc on the state, over this very issue–screw the Marcellus industry to give its money to teachers (i.e. for “education” and “for the children”). What a boatload of horse manure. As we’ve repeatedly SHOUTED–PA already has the equivalent of a severance tax. It’s called an impact fee plus a corporate income tax. When you take the two together, the average “tax” paid by Marcellus drillers is HIGHER than that paid in other big oil and gas states, like Texas and Oklahoma. Enacting an ADDITIONAL severance tax on top of it–even in place of it–would be a disaster, shutting down most Marcellus drilling. And yes, there is gas in other states and yes drillers will leave PA if such a tax is enacted. And yet unions, like AFSCME Council 13, continue to pedal lies about the severance tax…
Read More “Union (Once Again) Lies About PA Marcellus Severance Tax”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Desperate Antis Try One Last Legal Maneuver to Stop Mariner East 2
December 21, 2016December 21, 2016

You may recall our story about the daughter of a Huntingdon County, PA landowner, radicalized by Big Green groups (as evidenced by her association with well known protesters previously arrested), who took to a tree on her mom’s property in order to illegally stop crews working on tree clearing for the Mariner East 2 pipeline (see PA Anti Literally Goes Up a Tree to Stop Mariner East 2 Pipeline). It ultimately didn’t matter, because Sunoco came back and cut down the few trees they need to cut anyway (see Sunoco Tricks Radicalized Protester – Returns and Cuts More Trees). Eventually law enforcement got around to arresting the daughter, and the mom (who also trespassed during tree clearing). Law enforcement also arrested a serial criminal trespasser/anti who aided and radicalized them. Unfortunately, in a miscarriage of justice, the charges against all three were dropped (see Charges Dismissed Against Tree Sitting Anti in Huntingdon County). The up-a-tree girl and her mom, with backing by Big Green money, continue to litigate. They are being used by Big Green, and fossil fuel-hating Big Green lawyers for the mom and daughter think they’ve found a clever legal tactic to stop Mariner East 2–not just from their property, but from being built across the state period. It is their final “hail Mary” pass…
Read More “Desperate Antis Try One Last Legal Maneuver to Stop Mariner East 2”
Baker Hughes | Energy Services | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

Cool Tool Shows Where Working Rigs are Located in M-U
December 21, 2016December 21, 2016

The GoMarcellusShale Forum where landowners and others interested in shale drilling hang out and swap messages back and forth was recently updated to become ShaleForum.com. It’s an excellent site with lots of great chatter going on for those with an interest in shale-related matters, including a very active Marcellus/Utica discussion. One of those discussions recently caught our eye. A poster on ShaleForum provided a link to an interactive map application hosted by Baker Hughes. We had not previously seen the app and found it to be very useful. The app shows where all of the active rigs currently drilling are located–across the entire country. You can filter the app to show only states or regions you are interested in. We played with it a bit to show you maps for PA, WV and OH where shale rigs are currently located…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Dec 21, 2016
December 21, 2016December 21, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Drilling facts ignored; Pittsburgh law firms adjust to down energy market; PA firms poised to benefit from Shell cracker plant; o&g 2016 year in review; ten things to know about EPA’s final fracking/groundwater report; natural gas price in denial; China’s LNG imports hit record high, again; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Dec 21, 2016”
Eclipse Resources | Energy Companies | Monroe County | Noble County | Ohio

Eclipse Sells 9,900 “Non-Core” Acres in OH for $6,444/Acre
December 20, 2016December 20, 2016

Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, announced yesterday they sold 9,900 net acres in eastern Noble County and western Monroe County, OH for $63.8 million to an undisclosed buyer. That works out to be $6,444 per acre. The assets are in areas that are (currently) undeveloped, according to the company, and not in the “core” of where Eclipse wants to drill. Here’s the company announcement…
Read More “Eclipse Sells 9,900 “Non-Core” Acres in OH for $6,444/Acre”
Eclipse Resources | Energy Companies | Flat Rock Development | Gulfport Energy | Lease & Royalty Payments | Ohio | Statewide OH

OH Wayne National Forest – List of Auction Winners
December 20, 2016January 6, 2017

As we previously noted, last week the Bureau of Land Management (BLM) proceeded with an online auction for BLM-controlled land in Ohio’s Wayne National Forest (see BLM Auction Leases 17 Parcels, 719 Acres in OH Wayne Natl Forest). The BLM plan was to auction 33 parcels totaling 1,600 acres. As it turns out, only 17 parcels totaling 719 acres actually got auctioned. At the last minute the BLM withdrew 881 acres (16 parcels) because there are remaining issues with ownership title of the mineral rights. Who purchased and how much? Just four drillers won the bids, which totaled $1.7 million. Three of the four have active drilling programs in the Utica Shale. Here is who won, and how much they paid (by parcel)…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation

KM Files to Reverse Louisiana Pipe, Send Marcellus Gas to Gulf
December 20, 2016December 20, 2016

Seems like every few weeks we read about yet another pipeline either getting built, or reversed, in order to send Marcellus/Utica gas to other parts of the country. The latest one that surprised us (hadn’t heard of it before) is Kinder Morgan’s plan to add bidirectional capacity to their Kinder Morgan Louisiana pipeline (KMLP) to flow gas to Cheniere Energy’s Sabine Pass LNG export facility. KMLP is a pipeline in Louisiana–how does reversing it get Marcellus gas to Sabine Pass? As you might have guessed, KMLP connects with other pipeline systems, including Columbia Gulf Transmission and ANR Pipeline. Both of those pipeline systems, which flow Marcellus gas, are adding bidirectional capacity as well. When it’s all done, (more of) our gas will head to Sabine Pass for liquefaction and then export to other countries. How cool is that? Here’s an update on KMLP changing directions…
Read More “KM Files to Reverse Louisiana Pipe, Send Marcellus Gas to Gulf”
Enbridge | Energy Services | Industrywide Issues | M&A | Spectra Energy

Spectra, Enbridge Shareholders Approve $28B Merger
December 20, 2016December 20, 2016

Combined infrastructure – click for a larger version

In September MDN told you about the proposed deal by Canadian pipeline operator Enbridge Inc. to buy out pipeline operator Spectra Energy (based in Houston) in an all-stock deal (see Canadian Enbridge Buying US Spectra Energy for $28B). Spectra has a number of critical pipeline infrastructure projects under way or planned in the Marcellus/Utica region, including the planned Access Northeast pipeline to New England, the mighty NEXUS pipeline planned to span Ohio, the currently under construction Algonquin Incremental Marketing (AIM) pipeline project, and three projects (Access South, Adair Southwest and Lebanon Express) under way to expand one of the largest natural gas pipelines in the U.S. (and in the northeast)–the Texas Eastern Transmission (Tetco) pipeline. This is a big deal for our region. Last week the shareholders of both companies voted to approve the proposed buyout/merger. Provided everything goes according to plan, the marriage will take place in 1Q17…
Read More “Spectra, Enbridge Shareholders Approve $28B Merger”
Chesapeake Energy | Energy Companies

Chesapeake Energy Out of Bankruptcy Danger, Hedges for 2017
December 20, 2016December 20, 2016

In a rare sit-down interview, Chesapeake Energy’s CEO, Doug “the ax” Lawler told reporters the company is stable, strong and growing, and that is will not need to file for bankruptcy, as many had predicted would happen. Through hard work (and axing thousands of employees) Chesapeake has managed to cut an astonishing $10.9 billion worth of debt and leverage from its balance sheet. Hats off to Lawler. Total debt for the company has gone from $21 billion to $9 billion. At its height, Chessy employed 13,000 people. Today? Just 3,500 people. Hence our moniker for Lawler of “the ax” (see Chesapeake’s Doug Lawler Gave Himself a Raise After Firing 1,500+). As part of the “new” Chesapeake, the company recently dumped its old logo and replaced it with a butt-ugly new logo (see Chesapeake Energy Gets New Logo – Dumps Blue NatGas Flame). Chessy plans to stay out of the bankruptcy woods. They’ve cut deals to sell 2017 estimated production at pre-arranged prices (called hedging). Chesapeake has hedged 63% of its estimated 2017 natural gas production for a sale price of $3.07 per thousand cubic feet (Mcf). They’ve hedge 50% of their estimated oil production at $49.68 per barrel. Here’s an update on Chesapeake Energy’s exit from bankruptcy woods…
Read More “Chesapeake Energy Out of Bankruptcy Danger, Hedges for 2017”
Anti-Drilling/Fossil Fuel | Dominion Energy | Energy Services | Industrywide Issues | NEXUS Pipeline | Pipelines | Regulation

Sierra Club Targets Marcellus Pipe Projects Using Antitrust Laws
December 20, 2016December 20, 2016

The litigious and environmentally radical Sierra Club, backed by Big Green money from billionaires like Tom Steyer, is attempting to block two important pipeline projects in the Marcellus: Dominion’s $5 billion, 594-mile Atlantic Coast Pipeline (ACP), a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina; and DTE Energy/Spectra Energy’s NEXUS Pipeline, a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. It’s no secret groups like the Sierra Club have tried to stop such projects. But their latest strategy in opposing these two projects is worthy of examination. The Clubbers are claiming that ACP and NEXUS have an unfair competitive advantage over alternative energy sources, like wind and solar, and therefore should be stopped. That is, the Sierra Club is attempting to use U.S. antitrust laws dating back to the late 1800s in an attempt to claim these pipelines are anti-competitive and therefore should be canceled. Talk about chutzpah…
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Energy Services | Industrywide Issues | NEXUS Pipeline | Pipelines

NEXUS Pipeline Gets a President – Jim Grech
December 20, 2016December 20, 2016

James “Jim” Grech

The NEXUS Pipeline project is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. It is a critically needed pipeline to move Utica and Marcellus Shale gas from an over-saturated market in the northeast to markets in the Midwest and Canada. It is a joint venture between DTE Energy and Spectra Energy. Earlier this month we brought you the great news that the Federal Energy Regulatory Commission (FERC) has approved the project (see FERC Approves NEXUS Pipeline, Project on Track for 2017). As we get close to beginning construction, which will happen sometime early next year, the project needs a leader. It now has one. James “Jim” Grech, formerly an executive vice president at CONSOL Energy, is the new president of NEXUS Pipeline…
Read More “NEXUS Pipeline Gets a President – Jim Grech”
CNG/LNG | Energy Services | Exporting | Industrywide Issues | Kinder Morgan | Regulation

Elba Island LNG Update: Non-FTA Exports Approved, Dump Truck City
December 20, 2016December 20, 2016

Elba Island LNG

Kinder Morgan’s Elba Island, Georgia (near Savannah) proposed LNG export facility received a green light from the Federal Energy Regulatory Commission (FERC) in June (see KM’s Elba Island LNG Export Plant Approved by FERC). Kinder has since started construction at the site. Further good news: the U.S. Dept. of Energy has just granted Elba Island permission to export LNG to non-Free Trade Agreement countries. What does the Georgia’s Elba LNG plant have to do with Marcellus/Utica? The Williams Transco pipeline runs through Georgia. Kinder owns and operates the 200-mile Elba Express pipeline, which connects the LNG facility to the Transco. Currently Elba Island imports LNG, getting it to market via the Transco. However, Williams has been on a mission to send Marcellus gas south–including to Georgia (see Marcellus Gas Heading to Georgia via Transco Pipeline). Marcellus Shale gas will, via the Transco, be at least some of, if not the primary, source for gas exported from the Elba Island facility. After getting FERC approval, Kinder began work on the expansion project last month. Currently some 325 dump trucks come and go every day at the site (7,800 per month!). Below is the news about DOE granting permission for non-FTA exports to Elba, along with an update on the frenetic pace of activity to build the new facility…
Read More “Elba Island LNG Update: Non-FTA Exports Approved, Dump Truck City”
CNG/LNG | Energy Companies | Exporting | Industrywide Issues | Total

French Supermajor Total Buys 23% Stake in Tellurian LNG
December 20, 2016December 20, 2016

Charif Souki

Total, a French multinational integrated oil and gas company and one of the six “Supermajor” oil companies in the world, has just purchased a 23% stake in Tellurian Investments for $207 million. Tellurian is building the Driftwood LNG export facility in southern Louisiana (see Fired Cheniere Energy CEO Charif Souki’s Revenge: Driftwood LNG). Tellurian CEO Charif Souki was fired one year ago this month by Carl Icahan from Cheniere Energy, the LNG exporting company he co-founded (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). We used to feel bad for Souki, but no more–not since he made an ass of himself by saying in a CNBC interview he would reconsider his American citizenship if Donald Trump won the presidency (see Will Charif Souki Renounce His American Citizenship?). We’re still waiting for Souki to go back to his native Egypt–or perhaps now, to France. That would be fitting. At any rate, here’s the details on Total investing in Souki’s Tellurian investments, which is a play to get in on the hot LNG export action in the U.S….
Read More “French Supermajor Total Buys 23% Stake in Tellurian LNG”