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    Divorce: CONSOL & Noble Dissolve M-U Joint Venture

    divorce

    Yesterday CONSOL Energy and Noble Energy issued a joint press release to announce they are “separating” their Marcellus/Utica joint venture. We view it more like a divorce. This isn’t a “maybe we’ll get back together at some point” kind of agreement. It is an agreement for CONSOL to take one child (acreage in Pennsylvania) and Noble to take the other child (acreage in West Virginia) and permanently go their separate ways. That’s a divorce. The two companies stressed that their third child together–CONE Midstream–would remain in joint custody for the duration. CONSOL gets 306,000 acres and Noble gets 363,000 acres. Why the break up? The two were joined at the hip and had to agree on spending money to drill on some 669,000 jv acres. CONSOL wants to drill more, Noble wants to drill less. The break up lets each of them do what they want to do. CONSOL has big plans to drill more Utica wells, and Noble has big plans to drill in other shale plays. The net net appears to be expect more CONSOL drilling in the Utica in both PA and WV (where it will retain Utica rights), and less Marcellus drilling by Noble in PA/WV…
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    PA Landowners Win $1.1M Lawsuit Against ECA re Royalty Deductions

    lawsuitOn Monday, October 24, 2016, the Third Circuit Court of Appeals (in Western Pennsylvania) ruled that Marcellus driller ECA (Energy Corporation of America) did not prove a need for a new trial in the case it previously lost. Pennsylvania landowners sued ECA in federal court beginning in 2010, saying their royalty checks were shorted because ECA was improperly deducting post-production costs. Sound familiar? In February 2013 a federal judge upheld a split decision that said most of what ECA was deducting was OK, but the one thing they can’t deduct from royalty checks are charges for interstate pipeline transmission (for the full story, read our post Federal Judge Upholds Split Decision in PA Royalty Case). More legal wrangling ensued after that decision and a jury trial convened in March 2015. The trial was to determine whether or not the landowners were shorted royalty payments because ECA was deducting charges for transportation and marketing. The jury found for the landowners and against ECA, awarding the landowners a $1.1 million judgment. ECA asked for a new trial and they have now been denied…
    Read More “PA Landowners Win $1.1M Lawsuit Against ECA re Royalty Deductions”

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    Williams 3Q16: Pendulum Swings Half a Billion $, Now in the Black

    Williams logoMidstream giant Williams issued their third quarter 2016 update yesterday. According to Williams, the company had “strong” financial results in 3Q16. Indeed they did. The company swung from losing $194 million in 3Q15 to making $326 million in 3Q16–a net change of over half a billion dollars. Impressive! In the Marcellus/Utica, what Williams calls its Northeast G&P division, the company had revenue of $208 million, up from $189 million last year this time. On an investors phone call yesterday, CEO Alan Armstrong said the low prices in the Marcellus/Utica compared with other parts of the country will work themselves out, in time. That is, when more pipeline projects (like Williams Atlantic Sunrise and Constitution) go online to move the gas to other regions, the prices that gas fetches will go up and eventually gas prices in the northeast will be closer to the benchmark Henry Hub. Here’s the Williams 3Q16 update…
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    Dominion 3Q16: Profit Up 22% Y/Y; Cove Point LNG 75% Done

    dominionDominion, a major pipeline and utility company operating in the Marcellus/Utica region, released its third quarter 2016 update yesterday. Like Williams, Dominion showed an impressive swing up in revenue. They made $728 million in 3Q16 vs. $599 million in 3Q15, a healthy 22% increase. Several items in the update caught our interest: CEO Thomas Farrell mentioned that construction has begun on the largest natural gas-fired electric generating plant in Virginia, the 1,588-megawatt Greensville County plant. He also said that the Cove Point LNG export facility in Maryland is now 75% complete and “the facility continues on time and on budget for a late 2017 in-service date.” Farrell also said the company is working hard on the Atlantic Coast Pipeline and the related Supply Header project. He expects both projects to be online in late 2019. Here’s the 3Q16 update for Dominion…
    Read More “Dominion 3Q16: Profit Up 22% Y/Y; Cove Point LNG 75% Done”

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    Dominion Buys its Own Questar Pipeline in $1.7B ‘Dropdown’ Deal

    pickpocket.jpgIn September midstream giant Dominion completed its $4.4 billion takeover of Questar Corporation (see $4.4B Dominion-Questar Merger Happens Tomorrow). Yesterday Dominion issued an announcement that the company is transferring the Questar Pipeline to its midstream subsidiary in a transaction worth $1.725 billion. It’s all complicated financial mumbo jumbo called a “dropdown” deal. Essentially Dominion will take money out of one of its pockets and put the money back in another pocket. There are (potentially) different groups of investors for each, so there is a real consequence. We mention the transaction because Questar is a Rockies-based integrated natural gas company operating through three principal subsidiaries. The Dominion deal to buy Questar is an attempt by Dominion to diversify out of the northeast/Mid-Atlantic region. In other words, this is all a big distraction (from our point of view) to the work that needs to get done here at home in the Marcellus/Utica…
    Read More “Dominion Buys its Own Questar Pipeline in $1.7B ‘Dropdown’ Deal”

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    M&I Electric Supplying Power System for New England LNG Project

    aetiWe spotted an announcement that American Electric Technologies, Inc. (AETI) has won a contract to “provide a turnkey power delivery solution for a new Liquefied Natural Gas (LNG) liquefaction plant under construction” in New England. Well that caught our attention. Where is this new LNG liquefaction plant located? The announcement does not say. However, we have a guess…
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  • Marcellus & Utica Shale Story Links: Tue, Nov 1, 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: Labor was sold out by Hillary Clinton in NED pipeline; Cabot waits for pipeline progress; Deepwater Horizon attorneys get $555 MILLION; Jeff Immelt’s Baker Hughes purchase; the long term outlook for natgas; and more!
    Read More “Marcellus & Utica Shale Story Links: Tue, Nov 1, 2016”

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    Breaking: Who Needs Halliburton? Baker Hughes Merging with GE O&G

    M&AAs this post is being written and published, the world’s third largest oilfield services company, Baker Hughes, is holding an investor webcast to announce it has struck a deal to combine/merge with/sell itself to GE’s oil and gas business. The deal, according to the Wall Street Journal, will result in a new company that will be 65.5% owned by GE and 37.5% owned by Baker Hughes shareholders. The deal, IF it gets approved by the Dept. of Justice, will create a company with $32 billion in revenues. Make no mistake, aside from all of the “partnership” talk, this is GE buying out Baker Hughes. The CEO of the new company will be Lorenzo Simonelli, chief executive of GE Oil & Gas. The board of directors for the new company will have 5 members appointed by GE and 4 members appointed by Baker Hughes. The deal, if it happens, would catapult the new Baker Hughes (or whatever it will be called) past Halliburton to become the world’s second largest oilfield services company. Get this: The deal may even catapult the new company to become the world’s number one oilfield services company–eclipsing Schlumberger! The question now is, will the Dept. of Justice approve the deal? Earlier this year the Obama DOJ killed the proposed Baker Hughes merger with Halliburton (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). We suppose it depends on who wins the White House next week. Look for Hillary to approve the deal. She’s in bed (figuratively) with GE chief executive Jeff Immelt. As Secretary of State, Clinton lobbied Alergia for a GE power plant contract. After Alegeria gave GE the $1.9 BILLION contract, Jeff Immelt gave a $1 million “donation” to the Clinton Foundation (see GE’s Jeffrey Immelt roped into Clinton cash scandal). That’s how it works in the corrupt world of Clinton Inc. We’re not sure what Trump would do about the proposed deal. Here’s the lowdown on GE’s proposed buyout of Baker Hughes…
    Read More “Breaking: Who Needs Halliburton? Baker Hughes Merging with GE O&G”

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    Cabot O&G 3Q16: Record Production, 2018 an “Inflection Point”

    Cabot logoOne MDN’s favorite Marcellus drillers, Cabot Oil & Gas, released their third quarter 2016 update on Friday. Production once again set a new record with Cabot producing 144.4 billion cubic feet (Bcf) of natural gas in 3Q16 (up from 133 in 3Q15). The number of wells drilled decreased from 27 new wells drilled in 3Q15 to 11 new wells drilled in 3Q16. However, Cabot has/had plenty of drilled but uncompleted wells (DUCs). In 3Q15 Cabot completed 21 wells and in 3Q16 they completed 23 wells. Once again the company treaded water financial, losing $10 million in 3Q16 (down from losing $15.5M in 3Q15). Frankly, $10M is chump change in the o&g business. The biggest news (for us) in the Cabot update from Friday is their strategy announcement. It can be summed up in one slide from their analyst presentation (see it below) which is titled: INFRASTRUCTURE UPDATE: 2018 IS AN INFLECTION YEAR FOR CABOT. On that slide is a list of six infrastructure projects that are critical to the future of Cabot–all of them expected to go online in 2018. Yes, the Constitution Pipeline is one of the six. Can you guess the others?…
    Read More “Cabot O&G 3Q16: Record Production, 2018 an “Inflection Point””

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    Williams Confirms Atlantic Sunrise Pipe Delayed Until Mid-2018

    delayedOn Friday, ahead of releasing its third quarter update, Williams issued a press release to confirm what we already know: Atlantic Sunrise will be delayed. Atlantic Sunrise is a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from PA with the Williams’ Transco pipeline in southern Lancaster County. Two weeks ago the Federal Energy Regulatory Commission announced a delay in the environmental review of the project (see FERC Delays Enviro Review of Atlantic Sunrise Pipe to Dec 30). Williams is now acknowledging the FERC delay will delay the final in-service date for the project–to “mid-2018″…
    Read More “Williams Confirms Atlantic Sunrise Pipe Delayed Until Mid-2018”

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    OH Court Sides with Mariner East 2 Pipe in Eminent Domain Case

    Mariner East 2
    Mariner East 2 – click for larger version

    An Ohio landowner whose land Sunoco Logistics Partners wants to traverse with the Mariner East 2 pipeline tried a novel legal argument. The landowner’s attorneys argued in the Ohio Seventh District Court of Appeals that pure propane and pure butane–both of which would be transported through the pipeline from eastern Ohio all the way to the Marcus Hook refinery near Philadelphia–are not “petroleum.” At least, not petroleum for the purposes of the permit which grants Sunoco the right to use eminent domain to build the pipeline to transport petroleum products. The Court of Appeals justices rejected that argument and said, in essence, that propane and butane fit under the definition of petroleum as that word has been used for generations…
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    Mountaineer NGL Storage Test in OH a Success, Construction in 2017

    Mountaineer NGL StorageIn April of this year, Mountaineer NGL Storage announced an open season for a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see New Company Announces Open Season for NGL Storage in Ohio Utica). Natural gas liquids (NGLs), including ethane, would be stored at the facility. It is a key, missing component in a plan to build at least one, and likely more than one ethane cracker plants in the region. Storage facility for both natural gas and NGLs is a critical part of natural gas infrastructure. Mountaineer recognized the fact that the Marcellus/Utica will need such a storage facility. A month after the open season, Mountaineer announced it was successful and that they would move forward with the project (see Mountaineer NGL Storage Open Season Successful, Development Begins). An important, initial step in building such a storage facility has now taken place. Mountaineer completed a test well in the salt formation–testing it for thickness. The test was a success. Construction is planned for the latter part of next year…
    Read More “Mountaineer NGL Storage Test in OH a Success, Construction in 2017”

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    PA Bill to Regulate Unregulated Gathering Pipelines Fails

    failedTwo weeks ago MDN wrote a post outlining an initiative to begin regulating small, low-pressure gathering pipelines–something not now done (see PIOGA Opposes Bill to Regulate Unregulated PA Gathering Pipelines). Media articles about this issue misstate and obfuscate, purposely, what is happening. Senate Bill (SB) 1235 would “enhance” the existing 811 law in PA. (811 is the number you call before you dig, to be sure there are no buried pipelines or electric lines or other underground structures.) One of the “enhancements” in SB 1235 is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system. Many owners of excluded lines voluntarily participate in the programs. The bill would also transfer regulatory enforcement power over the lines from the Department of Labor to the Public Utility Commission. The Pennsylvania Independent Oil & Gas Association (PIOGA) pushed back against the removal of the exclusion for conventional production lines and rural (“Class 1” under federal law) gathering lines. PIOGA is not against knowing where pipeline are buried–they are against onerous new regulations on those pipelines. PIOGA instead pushed for another year to sort out the issue, instead of passing SB 1235 as/is and throwing the conventional oil and gas industry into regulatory chaos. PIOGA won…
    Read More “PA Bill to Regulate Unregulated Gathering Pipelines Fails”

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    PA Court Says Range Impoundment Did NOT Contaminate Water Well

    Gavel-falling.jpgYou may recall that for some time we’ve been following the back and forth between Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who is suing Range in civil court. The problem is, the DEP found that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing came back in December and (we thought) closed the door, once and for all, on the case (see DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well). But no, that was not the end. Kiskadden appealed again. Last week a Commonwealth Court appeals panel affirmed the EHB’s 2015 dismissal of Kiskadden’s appeal of the DEP 2011 ruling that Range’s Yeager site operations did not contaminate Kiskadden’s well water. Have we finally reached the end of this drawn-out saga?…
    Read More “PA Court Says Range Impoundment Did NOT Contaminate Water Well”

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    Marcellus/Utica Ethane Heads to India via Texas on Samsung Ships

    ethane-crystal
    Click for larger version

    This interesting story caught our eye, and as it turns out, there’s a Marcellus/Utica connection. We spotted a story that India’s Reliance Industries, the largest private sector corporation in India with fingers in many pies (including energy), has just taken possession of the world’s two largest ethane carrier ships. The ships, built by Samsung (of exploding phone fame) are known as Very Large Ethane Carriers, or VLECs. The two ships will load liquefied ethane at a port on the Houston Ship Channel and transport the ethane to India, where it will supply three Reliance cracker plants. The connection with Marcellus/Utica? At least part of the ethane getting liquefied and loaded onto the ships comes from the Marcellus/Utica via the ATEX (Appalachia to Texas) ethane pipeline. How cool is that (pun intended)?…
    Read More “Marcellus/Utica Ethane Heads to India via Texas on Samsung Ships”

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    There is Only One Candidate for President if You Support O&G

    nov-8-electionThis is not an electioneering site. We are not on the payroll of any candidate. We have tried to avoid most comments on the upcoming presidential election. You obviously know where our political sympathies lie, if you’ve read this site for any length of time. Below we bring you someone else’s words outlining, in succinct form, the energy positions and proposed policies of both Hillary Clinton and Donald Trump. When you read it, objectively, there is only one candidate who supports the oil and gas industry and is worthy of your vote next Tuesday, November 8th…
    Read More “There is Only One Candidate for President if You Support O&G”