Marcellus Drilling News

Energy Services | Schlumberger

Schlumberger 2Q16: The Worst is Over, Drilling on the Upswing
July 22, 2016July 22, 2016

Earlier this week MDN brought you the second quarter update from Halliburton, the world’s second largest oilfield services company (see Halliburton 2Q16: $3.2B Loss, Lays Off Another 5K, Thx to Obama DOJ). One of the (many) things said by Halliburton in their update is that it appears to them that the worst is now over–that drillers are beginning to drill again. Yesterday the worlds largest oilfield services company, Schlumberger, agreed. Sclumberger issued their 2Q16 update. The big news is that both Schlumberger and Halliburton have “called the bottom” of the oil and gas market. When they both agree, it’s a sure thing. Like Halliburton, Schlumberger also lost big money in 2Q16–$2.16 billion (vs. a $3.2 billion loss for Halliburton). In 2Q15 Schlumberger made $1.12 billion in profit. What a difference a year makes! At least we’re now turning it around. Here’s the Schlumberger 2Q16 update…
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Industrywide Issues | Pipelines | Regulation

Guidelines for Using Drones in the O&G Industry
July 22, 2016July 22, 2016

On July 13, 2016, Congress passed legislation to allow limited drone use by the energy industry as part of the reauthorization bill for the Federal Aviation Administration (see Congress Approves Unmanned Drone Use in O&G Industry). The legislation defines drones as “small unmanned aircraft” weighing less than 55 pounds. Pipeline companies, in particular, can make use of drones with cameras to fly along pipeline routes to spot hazards or potential problems. And they can do it much more quickly and efficiently than having boots on the ground. The legal beagles at top energy law firm Babst Calland have written a “Pipeline Safety Alert” briefing paper that tackles the updates to the FAA regs allowing drones in the oil and gas industry–what’s allowed, and what isn’t. If you’re a midstreamer or even a driller, it’s worth your time to read this short paper…
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CNG/LNG | Energy Companies | Exxon Mobil | Industrywide Issues | M&A

ExxonMobil Buying InterOil for $2.5B – Another LNG Love Story
July 22, 2016July 22, 2016

In early 2015, MDN brought you the news that Shell was making a play to buy BG Group for $69.7 billion (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). As we pointed out, the purchase was all about LNG, or liquefied natural gas. Shell consummated the deal in February of this year (see Shell & BG One Company After Today, Shell Ponies Up $14.4B Cash). The “man on the street” may not realize it, but the Shell/BG merger was the biggest such merger in the oil and gas industry since Exxon purchased and merged with Mobil in an $89 billion deal, back in 1999. ExxonMobil is now making its own LNG play. Yesterday the company announced a deal to purchase InterOil, an LNG company based in Papua New Guinea, for $2.5 billion. Yes, a MUCH smaller deal than the Shell/BG merger–but it points out the direction things are heading. Big Oil is making tracks to become Big Gas. The writing is on the wall. Eventually oil and petroleum-based products will recede. The obvious alternative is clean-burning natural gas. When the world’s largest oil companies say (and prove with their actions) that the future is in natural gas, well, that’s a tectonic shift in the oil and gas industry…
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Industrywide Issues | Research

EIA: NatGas the Biggest Gainer as an Energy Source in 2015
July 22, 2016July 22, 2016

Yet another report from our favorite government agency, the U.S. Energy Information Administration, points out the overwhelming use of fossil fuels as the primary energy source in the U.S. This most recent report highlights the changing mix used in our country to power our homes, vehicles and everything else that uses energy. The EIA reports that energy coming from nuclear plants stayed even in 2015. So-called renewable energy sources–which include solar, wind and hydro–increased by 1% in 2015. Coal took a nose dive and decreased 12% in 2015, thanks for Obama’s war on coal. Petroleum and its derivatives (oil, gasoline, etc.) increased by 2% in 2015. Natural gas? Consumption of natural gas increased 3% in 2015–the top mover among all energy sources…
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Hydraulic Fracturing | Industrywide Issues | Regulation

Fracking Legend Harold Hamm – Next Secretary of Energy?
July 22, 2016July 22, 2016

Harold Hamm

Harold Hamm is the legendary CEO of Continental Resources. Hamm is, along with George Mitchell, Aubrey McClendon, and a few others, one of the original pioneers who figured out how to combine fracking with horizontal drilling to access previously-trapped oil in shale deposits. Hamm’s claim to fame is drilling in the mighty Bakken oil fields of North Dakota. Harold Hamm is, by all accounts, one of the biggest frackers in the world. Hamm addressed the Republican National Convention this week, at the request and invitation of Republican nominee for President, Donald Trump. We are super excited to fan the flames of the rumor mill. Hamm is a leading contender to be the Secretary of the Dept. of Energy under a President Trump. What a coup! Can you imagine having someone who “gets it” with respect to the energy industry guiding the agency tasked with developing our national energy policy? Someone like Hamm who would have the President’s ear? This is VERY exciting…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jul 22, 2016
July 22, 2016July 22, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Fractivist puts on doctor’s clothese to hide hypocrisy; NH steam plant closing, customers switch to natgas; US drillers cutting another $150 billion in spending in 2017; Range shareholders meet to vote on MRD merger in Sept; Canada turning away from US to sell oil abroad; and more!
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Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Spectra Energy | Westmoreland County

Feds Find More Corrosion, Issue Order re Exploded TETCO Pipe in PA
July 21, 2016July 21, 2016

An update on Spectra Energy’s Texas Eastern Transmission’s (TETCO) “Delmont Line 27” which exploded in Westmoreland County, PA on April 29 (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). We previously told you that not only was Line 27 out of commission, so too were three other pipelines running through the same corridor, meaning 1 billion cubic feet of natural gas per day is not reaching certain mid-Atlantic markets (see Update on Spectra Pipeline Explosion Near Pittsburgh). The early evidence points to corrosion along welded seams, although the jury is still out and the exact cause may not be known for months. One of the four lines that was offline (Line 19) was examined and certified by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in early May to go back online (see TETCO Pipeline Up & Running Post-Explosion; Antis Exploit Accident). However, the other three lines have remained idle pending further investigation and won’t be online again until at least November (see Ruptured TETCO Pipeline in PA Offline Until November). In an order issued on Tuesday, federal regulators with the Pipeline and Hazardous Materials Safety Administration (PHMSA) are requiring Spectra Energy to perform more testing and take corrective actions on the remaining three lines. Although the cause of the explosion is still not 100% verified, it’s still thought to be corrosion around welded pipe joints, i.e. bad pipe tape…
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Hydraulic Fracturing | Industrywide Issues | Monongalia County | Research | West Virginia

Independent Research @ WVU Concludes Frack Waste is Safe
July 21, 2016July 21, 2016

In November 2014 MDN told you that West Virginia University and Ohio State University received an $11 million grant from the U.S. Dept. of Energy for a joint five-year study of Marcellus/Utica fracking and shale drilling (see WVU/OSU Get $11M Grant to Study Shale Energy Best Practices). The research project promptly got under way with baseline measurements and monitoring at the Morgantown (WV) Industrial Park where a new first-of-its-kind Marcellus Shale Energy and Environment Laboratory will be located. With baseline measurements for air, noise, light and water at the site complete, the drill bit to start chewing away at rock and dirt in June (see Drilling for WVU/OSU’s $11M Study Gets Underway in Morgantown). We already have some of the first results from the WVU researchers, who have studied drilling wastes produced at two research wells. What did they find? Drilling wastes coming from the wells are far below federal guidelines for radioactive or hazardous waste. That is, they’ve found frack waste is safe. Some of the reason may be due to the “green” drilling mud being used at the site…
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Atlas Energy | Energy Companies

Atlas Resource Partners Close to Chapter 11, NYSE De-lists Units
July 21, 2016July 26, 2016

Atlas Resource Partners (ARP) is a publicly-traded exploration and production master limited partnership (“MLP”) with operations in basins across the United States, including the Marcellus and Utica Shale plays. ARP is a subsidiary of Atlas Energy Partners (AEP), which owns 100% of the general partner interest, all the incentive distribution rights and an approximately 23% of the limited partner interest in ARP. Essentially ARP is a big division of AEP. Atlas, as we’ve pointed out in the past, has sold most of its Marcellus assets in two huge deals: a $4.3 billion deal with Chevron in 2011 and in a $7.7 billion deal with Targa Resources in 2014. Atlas operates mostly conventional (some unconventional) oil and gas wells in a number of states: New York, Pennsylvania, Ohio, West Virginia, Virginia, Tennessee, Indiana, Alabama, Colorado, Oklahoma, Texas and New Mexico. In February MDN broke the news that Atlas had laid off 150 employees (see Atlas Energy Issues 2015 Update + More Details on Company Layoffs). In March, we reported that AEP had lost its listing on the New York Stock Exchange and began trading on the Pink Sheets as a penny stock (see Atlas Energy “Penny Stocks” Begin Trading Today on OTCQX). ARP is following suit. Last week ARP reported the NYSE is in the processing of de-listing ARP’s units (the MLP equivalent of stocks). In addition to that news, we have some analysis below from a Seeking Alpha writer that ARP is heading for Chapter 11 bankruptcy…
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Energy Services | Industrywide Issues | Lackawanna County | Lebanon County | Monroe County | Pennsylvania | Pipelines | Regulation | Transco | Williams

PA Game Commission Cuts ROW Deal with Atlantic Sunrise Pipeline
July 21, 2016July 21, 2016

Atlantic Sunrise Pipeline map – click for larger version

More progress for the Williams Atlantic Sunrise Pipeline project. Atlantic Sunrise is a $3 billion, 198-mile project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from PA with the Williams’ Transco pipeline in southern Lancaster County. It is a much-needed pipeline to move more Marcellus gas south, to new markets. The progress is this: the Pennsylvania Game Commission has cut a right-of-way deal to allow the pipeline to traverse game lands in northern Lebanon County–including a crossing of the Appalachian Trail. But have no fear, Williams plans to drill under the Trail and not disturb the surface. In return for the right to cross a few acres of certain state-owned game lands in Lebanon County, the state is picking up a whopping 285 acres owned by Williams in Monroe and Lackawanna counties…
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Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Regulation | Statewide NY | Williams

Constitution Pipeline Gets a Little (Court) Help from Its Friends
July 21, 2016July 21, 2016

Constitution Pipeline map – click for larger version

In perhaps the sleaziest of sleazy political moves, New York Gov. Andrew Cuomo made the non-science-based political decision to deny the Constitution Pipeline stream crossing permits in April (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). The man is a menace to all New Yorkers. He caves to his radical, fringe left on a regular basis, as he did with his decision to deny the Constitution Pipeline. Williams, Cabot and the other partners in the project aren’t taking it laying down. They sued New York State in federal court with the very real possibility that the court will neuter NY’s decision-making role in the project (see Williams Sues NY Over Constitution Pipe – DEC May Lose Authority). The Constitution doesn’t stand alone. A number of national industry organizations are coming to the Constitution’s defense. On Tuesday the Natural Gas Supply Association (NGSA) and other groups together filed an amicus curiae brief with the U.S. Circuit Court of Appeals for the Second Circuit. “Amicus curiae” means “friend of the court” in Latin. The brief (full copy below) makes the point that states should not be the tail that wags the federal-oversight-of-such-projects dog. That is, the New York Dept. of Environmental Conservation (DEC) is preventing the Federal Energy Regulatory Commission (FERC) from doing its job. One government entity (especially a state) cannot block the power and authority of another government entity (in particular the federal government)…
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Energy Services | Halliburton

Halliburton 2Q16: $3.2B Loss, Lays Off Another 5K, Thx to Obama DOJ
July 21, 2016July 21, 2016

The second-largest oilfield services company in the world, Halliburton (once run by the evil puppet-master himself, Dick Cheney) issued their second quarter 2016 financial and operating update yesterday. The company reports losing $3.2 billion during 2Q16, largely because the Obama Dept. of Justice nixed a buyout of Baker Hughes by Halliburton, which triggered a $3.5 billion payment from Halliburton to BH (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated” and The Road Ahead for Baker Hughes – Post Halliburton Deal). Halliburton also reports revenue fell 15% and they laid off another 5,000 workers during the quarter. Here’s the update…
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CNG/LNG | Ethane | Exporting | Industrywide Issues

Bear Head LNG Parent Lays off 13 People, “LNG…difficult market”
July 21, 2016July 21, 2016

We’ve previously reported on a number of LNG (liquefied natural gas) export projects planned for the eastern shore of Canada. There are four to five such projects, depending on how you count them. However, one of those projects–Bear Head LNG in Nova Scotia–seems to have the most momentum. It seems the project has received most (if not all) of the necessary permits it needs to proceed, the most recent one issued just last week (see Bear Head LNG Gets GHG Plan Approval from Nova Scotia). However, the parent company building Bear Head LNG, Liquefied Natural Gas Limited (headquartered in Australia), reports laying off a group of 13 high level executives in a bid to save money. With tens of thousands of people losing their jobs over the past few years, a company laying off 13 people seems pretty minor. But the way LNG Limited is presenting the news, and the way it’s being covered in the media, it makes us wonder about the financial stability of the company and indeed the future of the Bear Head LNG project. After all, if they fire 13 people to save what amounts to $3.15 million (A$4.2 million), and a project like Bear Head costs billions of dollars to build, oy vey!…
Read More “Bear Head LNG Parent Lays off 13 People, “LNG…difficult market””
CNG/LNG | Exporting | Industrywide Issues

Carl Icahn’s Cheniere CEO Buys 37,604 Shares of Stock
July 21, 2016July 21, 2016

Jack Fusco

After firing Cheniere Energy’s CEO and co-founder last December, Charif Souki, corporate raider Carl Icahn then installed his own puppet to run the LNG exporting company (see Carl Icahn Installs New Puppet as CEO of Cheniere Energy). The man Carl hired is Jack Fusco. Apparently Jack is confident in himself and in the future of Cheniere. After all, people like Icahn buy just enough stock to control the company, then they fire a bunch of people and sell off assets in a bid to raise the stock price so they can sell and exit with gobs of money in their pockets. That’s what evil corporate raiders do. Back to Jack. Fusco is reported to have snapped up $1.5 million worth of Cheniere’s stock a few days ago. Which makes us wonder–what does Jack know that we don’t?…
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Electrical Generation | Industrywide Issues

Quick Primer on U.S. Electric Grid & How it Works
July 21, 2016July 21, 2016

As we’ve been saying for well more than a year now, it’s important to understand the electric generation market because natural gas and electric generation are joined at the hip. The U.S. Energy Information Administration (EIA) says that natural gas will power more electric generation in this country than another other source, including coal, THIS YEAR (see EIA Says NatGas-Fired PowerGen to Reach New Record High in 2016). The bright minds at EIA have just issued what we would call a tutorial on how the electric grid works in the U.S. It’s carved up into regions (called interconnections) and smaller networks exist within those regions to ensure reliability and backup. Here’s a quick and excellent look at how electric generation works in the U.S….
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Jul 21, 2016
July 21, 2016July 21, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Ohio natgas production up 1000% in 10 years; antis plot to compare fracking with Zika virus; PA health report destroys “fracking causes asthma” study; Vermont scales back on renewables; searching for gas under Jackson, MI; Obama spending your money to give solar panels to poor people; end of the road for Stone; and more!
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