Rex Energy Swapping $631M in Private IOUs for Public IOUs
Rex Energy, a small Marcellus/Utica driller headquartered in State College, PA, is trying to keep its head above the financial waterline. It’s struggling, but making progress. In April Rex became the latest driller to convert outstanding debt in the form of notes (what we call IOUs) into equity, or stock ownership (see Rex Energy Converts IOUs into Common Stock, Avoids Bankruptcy?). But not all outstanding notes/IOUs got converted. Rex still has $631 million worth of IOUs hanging out there. Rex announced yesterday they are swapping out their $631 million worth of “private notes” for “exchange notes.” What does that mean?…
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Strong demand from electric power generators will push natural gas demand this summer up by an estimated 4 billion cubic feet per day (Bcf/d), according to a new report from the Natural Gas Supply Association (NGSA). However, even though there’s more demand, because supplies are so bountiful, the price of natural gas over the summer is actually expected to go down, not up. Using published data and independent analyses, NGSA evaluated the combined impact of weather, economic growth, customer demand, storage inventories and production activity on the direction of natural gas prices for the summer of 2016 compared to last summer. The NGSA says summer 2016 will see a “remarkable growth in demand.” Even so, NGSA expects “downward pressure on prices compared to last summer.” Bummer. It’s great news for consumers and power generating plants. But not so good news for drillers. Below we have a full copy of the NGSA report…
CNBC, not known for being an objective news source (witness the Republican debate debacle earlier this year), conducted a survey among 22 strategists, traders and analysts on the topic of the price of oil. MDN sometimes covers oil stories because natural gas oil are joined at the hip. Often the same E&Ps that drill for oil also drill for gas. And when you drill a hole in the ground, you get what you get–not only oil, but “associated gas” and gas liquids. Hydrocarbons of all kinds come out of the holes drilled. So it pays to pay attention to the oil market and what’s happening with the price of oil. According to the CNBC survey, those responding said overall they expect drilling to pick back up with the price hitting $50 per barrel. But they also said it won’t really pick up in earnest until the price hits $60 per barrel. Roughly half expect the price of oil to remain in the $40-$50 range until the end of 2016, with the other half thinking it will go higher. Only 9% believe come Dec. 31 the price will be at or above $60/barrel…
We’ve previously written about the so-called fossil fuel divestment movement–a push to get investors to dump stocks in oil and gas companies in a bid to bankrupt those companies (and send us all back to the energy Stone Age). Major universities hold huge investments of all kinds, including in fossil fuel companies. The crazies are pressuring them to dump those stocks. To their credit, the leaders of Cornell University said they will keep their fossil fuel investments (see 
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FERC hears from both sides on Access Northeast pipeline reversal; Marcellus “State of the Union” update; will ethane storage help the Marcellus/Utica?; OH Utica rig count drops; new Dimock study doesn’t link water issues to fracking; NJ heating costs will go down again; Virginia Tech changing from coal to natgas for power; why Williams is still pushing a deal with ETE; and more!
MDN previously reported on the injustice happening in Bulter County, PA where a handful of anti-drilling parents from the Mars School District (“Martians”), backed by money from Philadelphia Big Green groups Delaware Riverkeeper and Clean Air Council, have filed frivolous lawsuit after frivolous lawsuit. The effort is aimed at denying landowners in Middlesex Township revenue from legally permitted drilling. The actions by these radicalized parents have cost the taxpayers of Middlesex Township over $80,000 in legal fees. Landowners with leases got together and sued the radicals to stop this miscarriage of justice (see 
There’s an old saying that goes like this: “Success has many fathers, but failure is an orphan.” Not long ago MDN reported that Eclipse Resources had drilled what is believed to be the longest horizontal well (on land) in the world–the 3.5 mile “Purple Hayes” Utica Shale well (see 
When did it become “vindictive” to prosecute criminals? That’s what we’re supposed to believe about the prosecution of a radicalized, anti-fossil fuel environmentalist who was just, after nearly one and a half years, sentenced to serve 15 days in jail for lying, falsely claiming local police assaulted her. In February 2015 Heather Doyle, a radical “activist” climbed a crane at the Dominion Cove Point LNG export facility to hang a banner that said, “Dominion get out. Don’t frack Maryland. No gas exports. Save Cove Point.” It’s bad enough that she endangered herself along with another activist who aided her. She also endangered rescue workers and police who had to remove her from the crane. Then Doyle lied to the police and claimed Calvert County Sheriff’s Office deputies assaulted her as they were removing her from the crane SHE climbed up. That’s a very serious charge–especially in this day and age. The police investigated and discovered she was lying, so the District Attorney pressed charges. And it took this long for the case to play out. On May 27, Judge Marjorie Clagett of the Calvert County Circuit Court sentenced Doyle to three months in jail, with all but 15 days suspended, 240 hours of community service, two years of supervised probation, and $165 in court costs. It ain’t much, but it’s a little bit of justice against radicals who frequently break the law in a misguided attempt to protest fossil fuels…
A decision by the Middle District Court of Pennsylvania is worth noting–for both drillers AND landowners. A landowner in Susquehanna County, PA sold some land already under lease to a new landowner/rights owner. Neither the new landowner nor the previous landowner informed the driller of the change in ownership. The time came to renew the lease and under the terms of the contract the driller sent payment–but didn’t know about the change in ownership–so the driller sent the payment to the previous owner. The new landowner used that faux pas as a legal excuse to sue the driller to break the contract. The new landowner claimed the paperwork filed (not the full lease but an abstract) didn’t contain mention of informing the driller. In other words, the landowner used the “we didn’t know” excuse. The judge disagreed and said, a) the lease itself clearly outlines the responsibilities of the old/new landowners to inform the driller, b) there is a reasonable expectation for the new landowner to perform due diligence in seeking out a copy of the original lease to know that. Therefore the new landowner is still under lease. Here’s an outline of the case, with names…
Last week the federal EPA released a draft of its final Environmental Justice Strategic Plan for 2016-2020 (full copy below). The feds are now seeking comments, until July 7, which they will toss in the garbage can. The EPA is and remains a rogue agency–out of control and drunk on its own power (with a need to be reigned in). What is so-called “environmental justice” anyway? It’s coded language for screwing “rich” companies and giving the money to poor folk. The aims of the EPA’s enviro justice plan are: (1) radically expand “rulemaking”–which means enacting laws without the legislative branch doing it, and then enforcing the cockamamie laws they make up using their own thugs; (2) come down on state and local governments like a ton of bricks, forcing them to dance to the EPA’s tune; and (3) continue to use unrealistic standards to punish companies that dare to make money and provide jobs. That about sums up the EPA’s approach, in our estimation. The EPA gets to make up its own laws and then enforce those laws–bypassing Congress altogether. It is a gross violation of the U.S. Constitution. Here’s a copy of the EPA’s “justice” plan, along with a more “objective” (than we offered) description of what the EPA is attempting with this latest power grab…
We have nothing against renewable energy like wind and solar, per se. We just want them to compete with other forms of energy, like natural gas–without taxpayer money propping up renewable projects. Well-intentioned companies like Dominion frequently engage in dalliances with wind and solar projects–more of a public relations thing than a real effort at developing such sources. How can we say such a thing? Why be so harsh? Look at the recent announcement from Dominion that the U.S. Department of Energy has just withdrawn a promised $40 million grant the company was going to use to build two advanced-technology, 6-megawatt wind turbines in federal waters about 24 miles off the coast of Virginia Beach, VA. At peak production, the two turbines would generate enough electricity to power up to 3,000 homes. It will cost $300 – $380 million to build them. Compare that to a new natural gas-fired electric plant built by Dominion in Virginia that recently went online–the Brunswick Power Station. That plant cost $1.1 billion to build, produces 1,358 megawatts of electricity (even when the wind doesn’t blow) and powers 325,000 homes. So for about trip the cost the natgas plant powers 322,000 more homes than the wind project. That’s what we call a no-brainer–and a perfect illustration of why the government should not be in the business of funding dud wind projects…
In last Thursday’s episode of “As the (Midstream) World Turns” (ATMWT) MDN told you that Williams still wants to marry Energy Transfer Equity (ETE), even though both companies are suing each other over the proposed merger (see 
Last week presidential candidate Donald Trump gave a speech on energy and energy policies at the Williston Basin Petroleum Conference in Bismark, North Dakota. By all accounts, Trump hit the ball out of the park. Before a crowd of some 7,000 people, Trump delighted the audience with a pretty simple message: cut back on regulations that choke America’s exploration and production of energy–and frack a lot more. Which is contrary to “crooked Hillary’s” vision of enacting new regulations to the point that fracking will be banned (see 