The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Inside Climate News should be a RICO target; National Oilwell Varco cuts 6,000 jobs, closes 200 facilities; Clean Energy signs LNG deal with Hawaii Gas; Exxon Mobil reaches for the credit card; Enbridge considers dumping U.S. natgas business; and more!
Read More “Marcellus & Utica Shale Story Links: Tue, May 3, 2016”
There was an explosion and fire in Spectra Energy’s Texas Eastern Transmission’s “Delmont Line 27” pipeline last Friday. The explosion occurred in Salem Township (Westmoreland County), PA, about 30 miles east of Pittsburgh. One man was seriously burned when his house caught on fire (his house was destroyed). Nine homes in the area of the explosion/blaze were evacuated. As of yesterday six of the nine were able to return to their homes. Texas Eastern Transmission is one of the largest natural gas pipelines in the U.S.–running from the Gulf Coast through Marcellus/Utica country to New Jersey. The really disgusting part was the way the NJ chapter of the radical Sierra Club immediately, with a few hours, used the explosion by implying this is what awaits homeowners if the PennEast Pipeline is built. FYI, the Texas Eastern pipeline was built in 1981 and the portion that exploded was last inspected in 2012. Below are pieces of news accounts and the running response from Spectra about the accident…
Read More “Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate”
It’s a sad day for Halliburton and Baker Hughes. The two companies intended to get married, with Halliburton buying out BH and merging it in a deal worth $35 billion (see Shotgun Wedding: Halliburton Forces Baker Hughes to Sell). That was in November 2014. Since then, the two companies have jumped through every hoop demanded of them, including shedding assets (see Halliburton/Baker Hughes Hold a Pre-Merger Garage Sale). By the end of last year, rumors were circulating that the deal is in trouble (see Whispers Turning in Chorus, Halliburton/BH Deal in Trouble). Then European regulators began throwing cold water on the deal (see Europe Puts Halliburton/BH Merger Under a Microscope). No problem–HalliHughes thought they could still pull it off. But then the bullies of the Obama Justice Department got involved and sued to block the deal (see Obama DOJ Sues to Block Halliburton/Baker Hughes Merger). We can’t remember a time when the DOJ opposed a big deal it ended up happening. And so it is with this one. The bullies have won. In a rare Sunday press release, Baker Hughes says the deal is now off–and Halliburton owes Baker Hughes $3.5 billion in a breakup fee–due by this Wednesday. Happy May Day, Halli!…
Read More “Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated””
Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. On Friday Ultra filed for Chapter 11 bankruptcy protection in Houston. The company listed $1.28 billion in assets and $3.92 billion in debt. One (we would say stupid) investor owns a whopping $1.46 billion in unsecured IOUs (i.e. notes) from Ultra. Good luck with getting that paid. Here’s the low down on Ultra’s bankruptcy filing…
Read More “Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy”
Reuters has written a wide ranging article on Magnum Hunter Resources (MHR) and the results of bankruptcy. The article implies MHR is nearly out of bankruptcy now (although it looks to us like a hearing in June will likely be the grande finale). The deal that MHR cut with debtors was to turn their debt into equity–note and bond holders are now stockholders. So MHR CEO Gary Evans now has a new board of directors composed of the new owners of the company. The problem is, the investors who used to hold stock in the company before bankruptcy have essentially lost their ownership–with the value of their previously issued stock now worthless. At least that’s our understanding of how this works (we’re open to being corrected on this). The Reuters article does a close-up of Gary Evans and recounts how he assured investors that a major asset sale was in the works that would save the company–shortly before he had the company file for bankruptcy. Some investors are not very happy with Mr. Evans over what they consider a deceptive practice…
Read More “Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan”
Contrary to the lies spread by anti-pipeline groups like THE Delaware Riverkeeper, the Federal Energy Regulatory Commission is no rubber stamp for the oil and gas industry. In December 2014 Pennsylvania utility company UGI pre-filed an application to build a new 35-mile pipeline to feed a natgas-powered electric generating plant in Snyder County, PA (see UGI Pre-Files with FERC for New Marcellus Pipeline in Central PA and UGI Building 35-Mile Pipeline for Panda Power Electric Plant). The project was estimated to cost $150 million–money that goes into the local economy. It took long enough, but last week the Federal Energy Regulatory Commission (FERC) finally approved the project. The 20-inch Sunbury Pipeline will start in Lycoming County and travel through Montour, Union, and Northumberland counties, cross the Susquehanna River and ending up at Hummel Station Plant in Shamokin Dam in Synder County…
Read More “UGI Sunbury Pipeline Gets FERC Approval, Built by November?”
Cabot Oil & Gas issued their first quarter 2016 update last Friday. The company reports losing $51 million in 1Q16 (compared to making a $40 million profit in 1Q15) because the price for natural gas slide 40% last year. Production numbers continue to impress. While they operate just a single rig in the PA Marcellus (in Susquehanna County), Cabot’s production increased 10% from 4Q15 to a whopping 1.628 million cubic feet per day average. In addition to the official update, we also selected out portions of Friday’s analyst phone call with Cabot’s top management. Among the topics discussed: the Constitution Pipeline, Cabot’s love of the PA Marcellus, “keep it in the ground” anti-drilling nutjobs and more…
Read More “Cabot O&G 1Q16: $51M Loss, Production Up 10%, Marcellus Affection”
A circuit court judge recently ruled on a case in West Virginia with implications for unitization or pooling. No, NOT forced pooling–or forcing landowners who haven’t signed a lease into a drilling unit, forcing drilling under their land. That’s not what this case was about. This case was about landowners with an already-signed lease for vertical wells now being used to allow that land to be pooled with other land and a horizontal well allowed to be drilled under it. The landowners, who wanted a new lease for horizontal drilling (and more money, which is reasonable in our opinion) said because the lease was silent on the matter of pooling or unitizing, it should not be allowed. The judge disagreed and found in favor of the energy company, in this case American Energy…
Read More “WV Court Declares “Implied Right” to Pool Oil & Gas Leases”
As we pointed out to you last December, evil corporate raider Carl Icahn (invests in companies so he can fire a bunch of people, boost the stock and pocket the profit) had fired Cheniere Energy CEO Charif Souki (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Ichan was uncharacteristically quiet following Souki’s exit. However, a braggart and bully like Icahn can’t stay silent forever! He went on CNBC last Thursday and bragged about his role in firing Souki…
Read More “Corp Raider Carl Icahn Admits He Fired Cheniere CEO Charif Souki”
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NGL prices in Appalachia heading higher; inside the NY fracking decision; the corrupt Cuomo Constitution Pipeline decision; New England pipelines update; the important role of natgas in Virginia’s power plan; natgas imports lowest since 1986; $840B decline in o&g reserves; and more!
Read More “Marcellus & Utica Shale Story Links: Mon, May 2, 2016”
Range Resources, the very first driller to sink a hole in the Marcellus Shale back in 2004, issued their first quarter 2016 update yesterday. Range reports losing $92 million in 1Q16 after making $28 million in 1Q15 (not uncommon among drillers right now). The company cut production costs by 10%, always a good thing when every penny counts, and they secured a $3 billion borrowing base. During 1Q16 Range became the first U.S. driller to export ethane to Europe, a shipment that left from Marcus Hook near Philadelphia. Marcellus production was up 17% over 1Q15, and according to Range, they recently completed a new Utica well that “appears to be one of the best in the play” based on early results from the well. Range is currently operating three rigs in the Marcellus/Utica and plans to keep them busy for the rest of 2016. Here’s the full update from Range…
Read More “Range Res. 1Q16: Still Running 3 Rigs, Drilled a Big Utica Well”
National Fuel Gas Company (NFG), the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, issued what they call their second quarter 2016 update yesterday. NFG’s second quarter is everyone else’s first quarter–it covers January through March. Seneca was negatively impacted by low prices for the natural gas it drills for. NFG’s “upstream” unit (Seneca) lost $213 million in 1Q16, even though its hedging program got the company an average of $2.99 per thousand cubic feet (Mcf) for their gas–about $1.12/Mcf above the going Nymex rate. The loss was all a paper loss–not out of pocket money–due to a writedown of assets. If you take out the writedown, Seneca actually made $17 million in profit for the quarter. NFG’s other units fared better on paper. The midstream unit (pipelines and storage) made $21.2 million in profit for 1Q16; NFG’s utility division made $32 million for the quarter; and their energy marketing unit made $3.5 million. Seneca’s production was up nearly 10% from a year ago. They continue to operate a single rig in the Marcellus/Utica region. Here’s the NFG/Seneca update…
Read More “NFG/Seneca Resources 1Q16: Big Paper Loss, Still Operating 1 Rig”
Bucking the trend of other drillers, EQT Corporation, a major Marcellus/Utica drillers, posted a $5.6 million profit for first quarter 2016. Also of interest in EQT’s latest quarterly update: Production volume was 24% higher than last year this time, the price they got for natural gas was 35% lower than last year, and they still have a $1.5 billion line of credit with the bank–so far undrawn. EQT plans to drill 72 Marcellus wells in 2016, and 5-10 Utica wells. Here’s the update…
Read More “EQT 1Q16: $5.6M Profit, Prod. Up 24%, Drilling ~80 Wells in ’16”
Tallgrass Energy, builder and operator of the mighty Rockies Express (REX) Pipeline issued their first quarter 2016 update yesterday. Among the interesting bits of news in the update is that Tallgrass is buying out Sempra Power & Gas’ 25% ownership interest in REX. Sempra Power & Gas is a subsidiary/division of Sempra Energy. Just last month Tallgrass bought out Sempra Energy’s existing ownership stake in REX for $440 million (see Tallgrass Buys Out Sempra’s Portion of REX Pipeline for $440M). Apparently a division of Sempra still owned a large stake in the pipeline, and now Tallgrass is buying out that interest as well. REX is a 1,712-mile pipeline which runs from Colorado and Wyoming to Ohio, originally built to flow western natural gas to the Midwest and East. But then the Marcellus/Utica took off like a rocket and all of a sudden there was no market for western gas in our neighborhood. So Tallgrass reversed the flow for part of the REX (see Rockies Express Pipeline Reverses Flow from Utica to Midwest). Tallgrass turned what could have been a company-killing decision into the crown jewel asset of the company, simply by reversing the flow. Here’s the 1Q16 update from Tallgrass…
Read More “REX Buying Back Another 25% of Pipeline from Sempra”
Each month MDN tracks the number of active rigs deployed by oilfield services drilling company Patterson-UTI Energy (see our Patterson-UTI stories here). Patterson deploys a number of rigs in the Marcellus/Utica, so we use them as a proxy for trends in rig counts in our region. The news has not been good for Patterson. The most recent monthly count, for March, was it’s lowest yet (see How Low Can it Go? Patterson-UTI Rig Count Plunges to 64 in March). Yesterday Patterson issued its first quarter 2016 update, and the news was, well, not very good. The company lost $70.5 million in 1Q16, compared with making $9.1 million in 1Q15. Revenues were WAY down–from $658 million in 1Q15 to $269 million in 1Q16. Ouch. Management expects to see a further 20% decline in the second quarter. Here’s the full, sad story…
Read More “Patterson-UTI 1Q16: $70M Loss, Rig Counts Down, Still Bleeding”
As we reported in March, EV Energy Partners (EVEP)–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–is in survival mode (see EV Energy Partners: No New Utica Wells in 2016, in Survival Mode). EVEP has no plans to drill new Utica wells in 2016. Earlier this month EVEP announced they have had to decrease their borrowing base from $625 million to $450 million (see EV Energy Partners Lowers Borrowing Base by 28%). A company’s borrowing base is the value of its assets–in this case the value of the leases and oil/gas wells EVEP owns. Those assets are used as collateral to back up loans and IOUs. A lower borrowing base means a) they can borrow less money, and b) they will pay more in interest for the money they do borrow. The company continues in survival mode: They’ve just announced they are suspending cash payments to unit holders (think dividend payments to stockholders)…
Read More “Problem: EV Energy Partners Quits Paying Unit Holders”