April 2016 Rig Counts Continue to Slide in World, US, Marc/Utica
The rig count–both internationally and domestically here in the U.S.–continues its historic slide. Last Friday Baker Hughes announced the average rig count numbers for April. Rigs operating outside the U.S. slide another 39, from 985 in March to 946 in April. In the U.S., the count slide 41 from 478 in March to 437 in April. In the Marcellus/Utica, the count was down another 2–both rigs lost came in Pennsylvania, which now has the lowest count in decades: just 16 rigs operating in the state. Ohio and West Virginia held constant month over month with 11 rigs operating in the Buckeye State and 12 rigs operating in the Mountain State. Here’s the sad news of the continuing decline in rig counts…
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Last week midstream giant Spectra Energy provided their first quarter 2016 update, complete with earnings/analyst phone call. The official update (below) contains a number of project updates for major pipeline projects planned or under construction in the Marcellus/Utica region. The earnings phone call with analysts provided a lot of extra color commentary on the project updates. We’ve brought you both below. One thing that stood out to MDN as we read through it: Spectra makes it clear that their Access Northeast project, a competitor to the now defunct Kinder Morgan Northeast Energy Direct (NED) project, is not like NED. There are major differences that Spectra Energy credits with what they predict will be the success of their project where the NED project failed. Not only is there an update for Access Northeast, but also updates for NEXUS, AIM, Atlantic Bridge, and others below…
Be careful who you bank with. That’s the lesson from welding/fabricating company NuWeld Inc., headquartered in Williamsport, PA, NuWeld does a lot of business with the oil and gas industry, and lately that industry has been in decline in the Keystone State. The decline led to NuWeld’s bank, BB&T, getting skittish. BB&T, according to NuWeld, cleaned out their bank accounts. Took all of the money in them–and without money, NuWeld had to lay off all 150 employees. Apparently the money was the bank’s to take–but the reason they took it (cold feet instead of unpaid bills), is what grates. And the way they took it, without any warning, really grates. Here’s the story of “be careful who you bank with”…
Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (see 
Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15, and according to their 2015 year-in-review udpate, they won’t be drilling in the Marcellus/Utica in 2016 (see 
Last week midstream giant Williams issued its first quarter 2016 update. The company reported a net loss of $65 million in 1Q16, compared to making $70 million in 1Q15. The company said the difference was because of higher interest expenses and due to a change in internal accounting practices–not because of lost business. Along with the update Williams’ top brass held an analyst/earnings call. Notably on the call they refused to take any questions dealing with the impending merger/takeover by Energy Transfer Equity (ETE). Williams has sued ETE over that plan and apparently Williams’ lawyers put the fear of God into management that they could not talk about the case or the merger during the phone call–which is disappointing given that ETE did talk about it on their call (see 
Gulfport Energy, a sizable driller in the Utica Shale, lost a lot of money last year (see 
MDN noticed an announcement for the publication of a new dissertation by a student in the masters degree program at the University of Vermont. The title of the student’s dissertation is, “Influence of Mission, Audience, and Policy Context on Issue Framing: A Case Study of Mobilization Against Hydraulic Fracturing in the Marcellus Shale.” When you dig into the abstract (i.e. summary) of the dissertation, it appears the student did research on a number of anti-drilling Big Green groups in the Marcellus/Utica and the techniques they use to manipulate public opinion. Sort of a look at how the Joseph Goebbels of our day do propaganda. We thought, “Hey, this is great! Somebody will finally lay bare how these incestuously-funded Big Green groups lie to and manipulate public opinion!” We tried to download the paper and promptly found that it won’t be available to the public for download until April 2018–two years from now. What’s up with that?…
Events related to drilling in the Marcellus and Utica Shale, primarily pro-drilling.
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Borealis to import Marcellus/Utica ethane later this year; Rice Energy expands midstream footprint; Congressman calls out Gov. Cuomo over Constitution Pipeline refusal; Pittsburgh engineering firm tied to shale files for bankruptcy; Cali going coal-free; Obama doesn’t mind windmills killing bald eagles; and more!
Chesapeake Energy released its first quarter 2016 update yesterday. From the update we learn that the company lost $964 million in 1Q16–but most of it was a paper loss, their assets being written down in value given the low price of oil and gas. Chessy spent $365 million in 1Q16 vs. $1.5 billion in 1Q15. Perhaps most telling is that the company operated just 8 drilling rigs during 1Q16 vs. operating 54 during 1Q15. What about the Utica and Marcellus? During the earnings teleconference call, Chesapeake’s Executive Vice President for Exploration, Frank Patterson, and CEO Doug “the ax” Lawler had high praise for the Marcellus. Both calling it “a core asset” and “an incredibly powerful asset.” Currently the Marcellus produces about 1.8 billion cubic feet per day for Chesapeake. They are curtailing about 350 million cubic feet per day of Marcellus production. However, Chessy loves the Utica more–at least right now. While there are no plans to restart drilling in the Marcellus this year (as it stands right now), there are plans to drill more wells in the Utica. Why? Because the Utica has pipelines that can cart production to the Gulf Coast, via Spectra Energy’s OPEN (Ohio Pipeline Energy Network) pipeline. The Marcellus is currently pipeline challenged, which makes the recent announcements about both Kinder Morgan’s NED project and Williams’ Constitution Pipeline project all the more tragic. Chessy loves the Marcellus–but they’re waiting and watching until more pipeline capacity comes online. Here’s what was said vis-a-vis the Marcellus and Utica on yesterday’s analyst call…
Last year midstream giant Energy Transfer Equity and its CEO Kelsy Warren pursued Williams, for months, and finally got Williams to agree to a deal to sell itself to Warren for $38 billion (see 