Financial Finagling: Patterson-UTI Extends Date for Line of Credit
Each month MDN reports on the rig count for oilfield services company Patterson-UTI Energy. Why? Because Patterson-UTI has major operations in the Marcellus/Utica and we use their rig count as a proxy for predicting the pickup or slowdown of drilling in the northeast. Last week we reported the exciting news that Patterson’s rig count had, after more than a year, reversed and went up (see Tide has Turned: Patterson-UTI June Rig Count Ticks Up by 2). Today we report that Patterson is, like so many other companies in the oil and gas sector, playing around with its financing. Patterson announced it has extended its line of credit. Some $358 million of the company’s $500 million line of credit was due to be paid off by September 2017. They cut a deal with their bankers to extend that to March 2019. Plus they’re doing some other financial finagling…
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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: Nobody wins if northeast pipelines don’t get built; PA Gov Wolf to veto tweaked drilling rules; more on Shell’s PA cracker plant; PA’s conventional drilling industry regulation in disarray; US gas glut disappearing; future of shale production hinges on high tech; shale hits bottom in 1H16, what’s next; Bloomberg analyst predicts the end of the fossil fuel industry (yawn); Obama science advisor says keep-it-in-the-ground movement “unrealistic”; OPEC output nears 8-year high; and more!
PA’s very liberal Governor, Tom Wolf, has been obstinate in demanding onerous new drilling rules for the conventional, as well as unconventional (shale) drilling industry since he took office. Reworked drilling rules were done and ready to go under previous Governor, Tom Corbett. Then Corbett lost to Wolf, and Wolf demanded to change common sense rules everyone had already agreed to (see 
MDN has previously told you about the temper tantrum by radical environmentalists and the idiot kids they foment to try and get universities to divest from owning stock in fossil fuel companies. The very liberal Cornell University didn’t fall for it (see 
What happens to the regulatory environment for the energy industry, in particular oil and gas, should Donald Trump win the presidency? What if (perish the thought) Hillary Clinton wins? What can we expect under each administration? That was the theme for comments by Tom Sansonetti, partner with the Holland and Hart law firm, at the recent Independent Petroleum Association of America (IPAA) 86th Midyear Meeting, held in Colorado Springs two weeks ago. The IPAA knows a number of people could not make the meeting and wants to disseminate Sansonetti’s comments, so they sent along a copy of his “what if?” analysis. We found it interesting and think you will too…
Is this the future of engines for large gas-hauling ships? Mitsui Engineering & Shipbuilding Co. announced two weeks ago they have completed the world’s very first ethane-operated two-stroke diesel engine. The engine is one of three the company is building to power three LEG (liquefied ethylene gas) tanker ships for Hartmann Schiffahrt of Germany and Ocean Yield of Norway. The ships are being built in China. Why ethane as fuel? For one thing, it’s cheaper than heavy fuel oil (HFO), the traditional fuel source for ship engines. Plus it burns a whole lot cleaner–something increasingly important with new emissions regulations coming along. But the obvious reason is that a tanker full of ethane can always tap into that ethane as fuel for the ship, should the need arise. The Marcellus/Utica produces ethane in abundance and ethane exports now regularly take place via ship from the Marcus Hook refinery near Philadelphia. Might we one day see an ethane-powered ship hauling ethane leaving Marcus Hook for Norway? Maybe, since some of the Marcus Hook exports to date have gone to Norway (see 
The electric power and natural gas sectors are increasingly joined at the hip, as we observed in January (see 
This pipeline project has been, until now, completely off our radar screen. As pipeline projects go, it’s pretty small. But building even a single square inch of new pipeline, or expanding a compressor station, is anathema to anti-fossil fuel nutters. So we expect this project will be in the headlines starting this week, with a pair open house meetings in the Philadelphia area (and one in Delaware) where the project will get built. The project is being built by Eastern Shore Natural Gas and is called the 2017 System Expansion project. In March 2015, Eastern Shore ran a non-binding open season to see if customers want more natural gas in the Delmarva Peninsula area (includes most of Delaware and portions of Maryland and Virginia). It looks like Eastern Shore’s customers expressed enough interest that they plan to move forward with an expansion project that will bring new sources of natgas from an interconnection Eastern Shore has with the mighty TETCo (Texas Eastern Company) pipeline near Philadelphia. Below we have details on the expansion project, and details for the open house meetings scheduled for this week in PA and DE…
It’s not all doom and gloom in the Marcellus/Utica. Seems like for the best part of a year we’ve only heard about layoffs and companies filing for bankruptcy, due to the major slowdown in drilling in our neck of the woods. But that’s not an accurate picture. Take an old steel plant in the Wheeling, WV area that had been closed for 30 years. A new business now occupies the old Wheeling-Pittsburgh Steel Corp. plant in Benwood, WV. JLE Industries has set up shop in the old plant with (so far) 25 full-time workers to inspect and repair metal tubes used in shale drilling. Chris Harris, the owner/operator, believes the company will continue to grow…
We’re starting to crack a smile of hope that drilling has once again picked up. Our first bit of evidence that the tide is turning came last week when we reported that Patterson-UTI Energy’s rig count had gone up by two in June (see 
In May MDN told you that EQT, a major Marcellus (and Utica) driller based in Pittsburgh, had cut a deal to purchase all of Norwegian Statoil’s Marcellus assets in West Virginia (see 
Are we finally, blessedly “done” with the ongoing soap opera that was the proposed takeover/merger of midstream giant Williams by fellow midstream giant Energy Transfer Equity? Can Williams now go back to its “considerable pile of knitting” (that pile meaning some 16 expansion projects)? Well, in a word, yes! Except….except if another suitor comes along who wants to buy Williams, which is a very real possibility. A couple of analysts mull over the possibilities now that the ETE plan to buy Williams is dead…