Marcellus Drilling News

Energy Companies | EXCO Resources

EXCO 3Q16: Turns a Profit! Marcellus Production Continues to Fall
November 3, 2016November 3, 2016

EXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out in March, has pretty much abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). The company was able to slow the bleeding in 2Q16 (see EXCO Still Hammering Midstreamers re Contracts, Bleeding Slowed). What about 3Q16? EXCO finally turned a profit, going from losing $355 million in 3Q15 to making $51 million in 3Q16. Really, an astonishing turnaround for a company razor close to bankruptcy. However, EXCO’s Marcellus/Utica operations are essentially nil. They still produce from their wells, but because they haven’t drilled any new wells, production is steadily declining in the northeast–just 33 million cubic feet per day (MMcf/d), down 23% from 2Q16 and down 30% from 3Q15…
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Industrywide Issues | M&A | Marion County | West Virginia

Stalking Horse – Blue Wolf Hunts Extreme Plastics in Bankruptcy
November 3, 2016November 3, 2016

Blue Wolf Capital Partners is on the hunt to find bargains and believes they’ve found one with Extreme Plastics Plus (EPP). Headquartered in West Virginia, EPP provides oilfield environmental containment services in the Marcellus Shale, Utica Shale, Eagle Ford, Permian Basin and other Mid-Continent sites. EPP specializes in environmental lining, above ground storage tanks, composite rig mats, secondary steel wall containment systems and rig vac systems. EPP has a problem–they are in bankruptcy. Blue Wolf has been selected as the “stalking horse” bidder to buy the company and put it back on its feet…
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Industrywide Issues | Litigation | Regulation

31 States Ask Court to Dump Obama WOTUS Rule as Unconstitutional
November 3, 2016November 3, 2016

In May 2015 the Obama rogue Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act (see EPA Power Grab: Redefines Waters of the U.S. to Include Everything). Essentially the rule change redefines everything down to muddle puddles (we’re not exaggerating) as subject to the federal Clean Water Act. In October 2015 a federal judge stopped WOTUS from going into effect, while it’s litigated (see Sixth Circuit Court Stops EPA from Implementing WOTUS Anywhere). It’s taken a year, but earlier this week 31 states along with other entities filed briefs with the 6th U.S. Circuit Court of Appeals opposing the rule…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Nov 3, 2016
November 3, 2016November 3, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Cove Point LNG to begin exports in 2017; green billionaire Tom Steyer still trying to buy PA elections; New England screws itself re gas access; Dakota Access Pipeline criminal trespassers get pepper sprayed; pipeline woes in Marcellus give the Haynesville an opening; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Nov 3, 2016”
Braskem | Economic Impact | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

Philadelphia Loses $500M Petchem Plant from Lack of Pipelines
November 2, 2016November 2, 2016

Lack of pipelines for natural gas and natural gas liquids (NGLs) in the Northeast has very real economic and financial consequences. Yesterday the Greater Philadelphia Chamber of Commerce held a program titled “Fueling A Downstream Economy” in downtown Philly. One of the speakers was from petrochemical giant Braskem America Inc. If the name looks familiar, it should. Braskem and their Brazilian parent company Odebrecht are still considering building an ethane cracker plant in West Virginia (see A Pulse! WV Ethane Cracker Project Comes Back from the Dead). Another project Braskem wants to build is a $500 million polypropylene (i.e. plastics) plant. The decision on where to build it was between Philadelphia and Texas. Even though their preference was Philly, Braskem, in the end, selected Texas because of lack of pipeline infrastructure in Philly. A real heart-breaker. The brutal fact is that PA is not moving fast enough to approve new pipeline infrastructure. That was the message delivered loud and clear yesterday during the Chamber event…
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Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

PA Gov Wolf Launches (Gasp) Pipeline Investment Program
November 2, 2016November 3, 2016

11/3/16 Update: We should have known. Wolf didn’t even do this one thing right, as we had assumed–although he takes credit for it. Earlier this year the PA legislature directed this shift in funds–a move that Wolf did not support. See the note below for a full explanation.

Pennsylvania Gov. Tom Wolf, a complete disaster as a governor, has managed to do one thing right. Yesterday Wolf’s office announced he is shifting $24 million away from a boondoggle program called the PA Alternative Energy Investment Act and into a new program called the Pipeline Investment Program (PIPE). The PIPE program helps fund pipeline construction to manufacturers, hospitals and (double gasp) schools to provide clean-burning, abundant, cheap and home-grown Marcellus Shale gas to those organizations. As far as money goes, it’s a veritable drop in the bucket–but you wouldn’t know that by the reaction from Big Green Nazis. They’re having a cow, and we’re loving it…
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Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | Statewide PA

PA Green Radicals Hope They’ve Got a New Way to Stop Pipelines
November 2, 2016November 2, 2016

The well-funded Big Green radical movement–the movement that wants to end the use of all fossil fuels–thinks it has found a new legal tactic to use in their attempts to stop the Mariner East 2 (and other) pipeline in Pennsylvania. You may recall that in September the Democrat-controlled PA Supreme Court further eviscerated the 2012 Act 13 Marcellus drilling law (see PA Supreme Court Rules Against Act 13 Drilling Law, Yet Again). One of the items the Supremes decided to overturn is the use of eminent domain for gas storage. The judges said using eminent domain for gas storage facilities violates both the federal and PA state constitutions. Gas storage is tied to pipelines, so Big Green zealots believe the decision provides a legal loophole they can leverage in their quest to stop pipelines…
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Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Regulation | Statewide NY | Williams

Constitution Pipeline Case Goes to Court in 2 Weeks, Briefs Filed
November 2, 2016November 2, 2016

You may recall that in April, New York’s anti-drilling governor, Andrew Cuomo, decided he would cave to pressure from radical environmentalists once again and block the building of the federally-approved Constitution Pipeline (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Cuomo’s toadies at the Dept. of Environmental Conservation (DEC) denied the Constitution the permits it needs to cross creeks and swamps. That was finally enough for Williams and the other partners in the project, who promptly sued NY in federal, NOT state, court (see Williams Sues NY Over Constitution Pipe – DEC May Lose Authority). The court venue is important, because in NY our court system at the highest level is corrupt–the governor appoints judges and those judges like their big-salary jobs and want to get reappointed–so they “decide” cases the way Andy wants them decided (see Shale Drilling in NY is Over – High Court Upholds Town Bans). We’ve predicted, repeatedly, that the NY DEC runs the very real risk of being removed from the decision process when it comes to federally-approved pipeline projects. If they lose the Constitution case, they will no longer have a role to play. Even the libs at Bloomberg think the DEC has a weak case (see Bloomberg Predicts Court Will Strip NY’s Right to Stop Constitution). We’re now two weeks away from the court hearing date and Williams has filed a couple of briefs blasting the DEC (copies below), and the DEC has filed a brief responding (copy below). It’s turning into a legal brawl. Warning to Williams: be prepared to fight like a New York street-fighter. Fortunately, the case sits in U.S. Circuit Court of Appeals and not the NY Court of Appeals (NY’s highest court)…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Wastewater

PA Congressman Ask EPA for “Assurances” re Wastewater Rule
November 2, 2016November 3, 2016

11/3/16 Update: The Pennsylvania Independent Oil & Gas Association (PIOGA)–the only PA organization that represents both conventional and unconventional drillers–submitted comments to the EPA on Monday regarding this rule. PIOGA is urging the EPA to extend existing guidelines for an additional three years to allow PA’s conventional drillers an opportunity to work on alternative disposal methods. See a copy of the comments submitted below.

In June MDN reported on yet another new unlegislated law (called a “rule”) issued by the rogue federal Environmental Protection Agency (EPA) that bans the disposal of wastewater from oil and gas drilling via public wastewater/sewage treatment plants (see EPA Bans Disposal of Frack Wastewater at Public Sewer Plants). The rule is meant to ban wastewater coming from unconventional (shale) wells, and not conventionally drilled oil and gas wells, which are shallow wells compared to shale wells. However, conventional drillers in Pennsylvania raised the alarm that the way the rule is written, it will prevent them from disposing their shallow (and much lower volumes of) wastewater by carting it to the local sewage treatment plant–as many of them do now (see EPA Shale Wastewater Rule Will Crush PA’s Conventional Drillers). The upshot is that the EPA needs to revise its rule. But it hasn’t, and that has three PA congressman asking the EPA for “assurances.” We’re not holding our breath on that one…
Read More “PA Congressman Ask EPA for “Assurances” re Wastewater Rule”
CONSOL Energy | Energy Companies

CONSOL Energy 3Q16: In the Black, Production Up, Utica Focused
November 2, 2016November 2, 2016

Coming on the big news yesterday that CONSOL Energy is calling it splitsville with Noble Energy on their 2/3 of a million acres joint venture in the Marcellus (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture), CONSOL released its third quarter 2016 update. The company reports making $25 million in 3Q16, which is better than many who remain in the red. Production was up 12% for the quarter, year over year. They reactivated two rigs in August, both of which began drilling Utica wells in Monroe County, OH. They ended up drilling two Utica wells during the quarter. In the update, CONSOL crowed about the impressive Gaut 4IH well in Westmoreland County, PA. That well (a Utica well) produced 6.04 billion cubic feet (Bcf) even though it wasn’t brought online until the end of 3Q16…
Read More “CONSOL Energy 3Q16: In the Black, Production Up, Utica Focused”
Energy Companies | Noble Energy

Noble Energy 3Q16: Aside from Marcellus JV Divorce, Not Much
November 2, 2016November 2, 2016

As we pointed out yesterday in our story about CONSOL Energy and Noble Energy deciding to end their Marcellus joint venture (see Divorce: CONSOL & Noble Dissolve M-U Joint Venture), Noble Energy has decided to cool it with regard to new Marcellus drilling. Noble is focused on other (oily) shale plays. They issued their third quarter 2016 update yesterday, and the section about the Marcellus was pretty short. Noble completed 6 previously-drilled wells, but isn’t drilling any new Marcellus wells…
Read More “Noble Energy 3Q16: Aside from Marcellus JV Divorce, Not Much”
Energy Companies | Energy Services | EQT Corp | Industrywide Issues | Pipelines | WGL Holdings

WGL Midstream Buys More of Mountain Valley Pipeline
November 2, 2016November 2, 2016

Mountain Valley Pipeline revised route – click for larger version

The Mountain Valley Pipeline is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The project, which filed an official application with the Federal Energy Regulatory Commission in October 2015, is being built by EQT, NextEra Energy and several other partners (see Mountain Valley Pipeline Files FERC Appl, Now Just Matter of Time). One of those “several other partners” is WGL Midstream–the midstream arm of Washington (DC) Gas. Some of the 2 billion cubic feet per day (Bcf/d) of natural gas that will flow through Mountain Valley Pipeline will head in Washington Gas’ direction–hence their interest. On Monday WGL announced they are increasing their ownership in the Mountain Valley Pipeline project–from 7% to 10%. That 10% interest will cost WGL around $326 million…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Nov 2, 2016
November 2, 2016November 2, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: 11 Utica permits, rig count goes down; cracker plants will revitalize Ohio; fracking jobs are safer than most – the numbers prove it; smoking gun – Rockefellers promise access to InsideClimate News editor; was Baker Hughes/GE excitement premature?; coal to gas switching in the U.S. electric power industry; shale v OPEC; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Nov 2, 2016”
CONSOL Energy | Energy Companies | Noble Energy | Pennsylvania | Statewide PA | Statewide WV | West Virginia

Divorce: CONSOL & Noble Dissolve M-U Joint Venture
November 1, 2016November 1, 2016

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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Energy Companies | Energy Corporation of America | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA Landowners Win $1.1M Lawsuit Against ECA re Royalty Deductions
November 1, 2016November 1, 2016

On 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…
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Energy Services | Williams

Williams 3Q16: Pendulum Swings Half a Billion $, Now in the Black
November 1, 2016November 1, 2016

Midstream 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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