Marcellus Drilling News

Energy Companies | EQT Corp | Equinor/Statoil | Harrison County | Tyler County | West Virginia | Wetzel County

EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M
May 3, 2016May 3, 2016

EQT, a major Marcellus (and Utica) driller based in Pittsburgh, announced yesterday it has cut a deal to purchase all of Norwegian Statoil’s Marcellus assets in West Virginia. The deal will give EQT another 62,500 net acres and 50 million cubic feet per day (50 Mcf/d) of natgas production for $407 million. The acreage is located in Wetzel, Tyler and Harrison counties in WV. The deal includes 31 Marcellus wells and ~500 drilling locations. It bumps up EQT’s available drilling locations by a big 29% and shows the company’s continued commitment to the mighty Marcellus Shale. How will they finance it? EQT released another announcement yesterday that says they are floating 10.5 million shares of new stock, hoping to get $67 per share for a total of $700 million for this deal and for “other potential acquisitions and for general corporate purposes.” Statoil is retaining ownership of its shale assets in Ohio and (for now) it’s non-operated Marcellus assets–i.e. joint venture deals where Statoil owns a portion of the lease but doesn’t do the drilling…
Read More “EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M”
Industrywide Issues | Research | Utica Shale

Updated Maps for the Utica Shale Play – from EIA
May 3, 2016May 3, 2016

Click for larger version

The more you drill in a given shale play, the more you know about it based on the performance of the wells you’ve drilled. And so it is with the newest, youngest, and fastest-growing play in the U.S.–the Utica Shale. Aubrey McClendon (God rest his soul) once said the Utica Shale is “the biggest thing to hit Ohio since the plow.” He was right. But the Utica extends beyond Ohio into West Virginia, Pennsylvania and even into New York. Since active drilling began in the Utica in 2011, more than 1,700 shale wells have been drilled in the Utica/Point Pleasant layer. That gives us (and our favorite government agency, the U.S. Energy Information Administration) a lot of useful information. The EIA has just released a series of revised Utica Shale maps based on the data accumulated over the past five years. We have their updated maps and insights below…
Read More “Updated Maps for the Utica Shale Play – from EIA”
Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Spectra Energy | Westmoreland County

Update on Spectra Pipeline Explosion Near Pittsburgh
May 3, 2016May 3, 2016

Yesterday MDN told you about the Texas Eastern Transmission Company (TETCO) pipeline explosion last Friday in Westmoreland County, PA (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). We still don’t know what caused the explosion. Spectra Energy, TETCO’s owner, is working with the Pipeline and Hazardous Materials Safety Administration (PHMSA) to investigate the incident and several pipelines in the area back to service. Spectra shut down the flows of our pipelines in close proximity to the explosion “out of an abundance of caution.” The stoppage means about 1 billion cubic feet per day of natural gas is not going to New York and New England, causing a price spike in the region. One local homeowner was seriously burned and sent to the UPMC Mercy Hospital burn unit in Pittsburgh. His condition has been upgraded from critical to serious. Below is an update with the latest we can find about the explosion and aftermath…
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CNG/LNG | Energy Services | Exporting | Industrywide Issues | Pipelines | Regulation | Spectra Energy

Critical Project for Canadian LNG Exports Gets Favorable FERC Review
May 3, 2016May 3, 2016

Click for larger version

Spectra Energy’s Atlantic Bridge project has just gotten an important “favorable” Environmental Assessment (EA) from the Federal Energy Regulatory Commission. A favorable EA is a signal that FERC will, later this year, grant a full approval for the project. And that’s really good news for Canadian LNG export plants–and equally good news for Marcellus drillers. Here’s how this news all ties together. The Atlantic Bridge project is a series of upgrades to two different pipeline systems already in existence: the Algonquin Gas Transmission (AGT) pipeline and the Maritimes & Northeast Pipeline (M&NE). The two pipelines will be connected along the coast of Massachusetts, near Boston. Thing is, right now the M&NE flow gas from north to south, from Canada to the U.S. Part of the Atlantic Bridge project is to make M&NE bidirectional, able to flow gas from south to north. The AGT will collect gas from the prolific Marcellus via a third Spectra-owned pipeline–the Texas Eastern Transmission Company (TETCO) pipeline–delivering Marcellus gas to New England. Yes, much/most of the gas will go to New England, but excess gas produced during periods of the year when not as much gas is used in New England will then be available to flow on up to Canada and to one of several new LNG export facilities either in planning or under construction. It all starts with a favorable EA…
Read More “Critical Project for Canadian LNG Exports Gets Favorable FERC Review”
Hydraulic Fracturing | Industrywide Issues | Ohio | Regulation | Statewide OH

Another Baby Step in Fracking Ohio’s Wayne National Forest
May 3, 2016May 3, 2016

Wayne National Forest – click for larger image

Wayne National Forest (WNF) is the only national forest in Ohio and portions of it are found in Athens, Gallia, Hocking, Jackson, Monroe, Morgan, Noble, Lawrence, Perry, Scioto, Vinton, and Washington counties. WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. Those mineral rights owners have been denied the use of their property rights going on a decade. The federal Bureau of Land Management (BLM) controls drilling on federally-protected lands like WNF. Last November the BLM held a series of hearings about finally beginning to drill in WNF. In January we told you that the BLM is working on a draft Environmental Assessment for drilling in WNF (see Small Progress with Drilling in Ohio’s Wayne National Forest). The BLM is ready to share the draft EA and wants public input–which means we now take another baby step toward drilling in WNF. As we previously pointed out in January, the BLM has decided to wait on pursuing drilling in the “Athens Unit” until 2017. However, the BLM is taking the next step in the “Marietta Unit” now. The draft EA is for the Marietta Unit (full copy of the draft EA embedded below)…
Read More “Another Baby Step in Fracking Ohio’s Wayne National Forest”
Lease & Royalty Payments | Ohio | Statewide OH

Leases Near Expiration for Many OH Utica Landowners – Tips for Re-Leasing
May 3, 2016May 3, 2016

It was four years ago last month that BP entered the Utica Shale in a big way by signing a lease with members of the Associated Landowners of the Ohio Valley (ALOV) group to lease 84,000 acres in Trumbull County, OH (see BP’s Big Utica Shale Deal, Leases 84K Acres in Ohio). BP and ALOV was all hush hush about the terms of the deal–but MDN found out and blabbed it to the world. Landowners got a $3,900 per acre signing bonus, and when/if their property is drilled, they would get a 17.5% royalty. When was the last time you heard about BP drilling a well? Yeah, us too. Like, never. Last year this time BP announced they were calling it quits in the Utica Shale (see BP Calls it Quits in the Utica Shale – Total Write-off). ALOV members were not the only group, or individuals, to sign leases 4+ years ago. There’s plenty more–and many of them never got drilled. So those 5-year leases are now coming up to expiration. What should landowners do? Re-sign with the same company? Try to renegotiate a new rate? Look for a different company to sign with? You’ve heard it before and you’ll hear it again from MDN: YOU NEED A LAWYER to review any such agreements. The legal beagles at Harrington, Hoppe & Mitchell have just issued a memo with some great tips for landowners–things to mull over as you think about whether or not to re-lease, and if you do, under what conditions…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

The Road Ahead for Baker Hughes – Post Halliburton Deal
May 3, 2016May 3, 2016

Yesterday MDN brought you the news that the Halliburton buyout of Baker Hughes is now officially dead (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). So what’s ahead for Baker Hughes? First up is that they will get a $3.5 billion (with a “b”) payment from Halliburton tomorrow. At least, they’re supposed to. Baker Hughes says they will use $1.5 billion of the money to buy back company stock, and the other $1 billion to pay off certain debts. The company will also “rationalize” (i.e. downsize/cut) certain segments of its business–like the onshore pressure pumping business. You have to wade through lots of euphemisms and management gobbledygook speak, but here’s the Baker Hughes “path to the future” statement they issued yesterday…
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Alternative Energy | Industrywide Issues

Low Emissions Goals “Out of Reach” Without Shale & Nuclear Energy
May 3, 2016May 3, 2016

Crazy Bernie Sanders believes that we can just stop fracking for oil and gas, and turn off our nuclear plants, and sing Kumbaya to each other and usher in the nirvana age of Bernie renewable energy. What a dope. The people who support him are bigger dopes (sorry if you’re a Bernie supporter–but you need to wise up, quick). Below is a column that points out that shale gas and nuclear are the PROVEN path to a lower carbon emissions future–not reverting back to the stone ages with everyone parking their cars and turning down the thermostat. Carbon emissions in the U.S. have gone down faster than anywhere else in the world–BEFORE Obama’s idiotic Clean Power Plan and BEFORE any of the draconian measures cooked up by the out-of-control federal Environmental Protection Agency. Why? Because of the dramatic increase in the use of shale gas to power energy plants. And because nuclear powers energy plants. Here’s the story Crazy Bernie doesn’t want you think about (thinking not a requirement to be a Bernie supporter)…
Read More “Low Emissions Goals “Out of Reach” Without Shale & Nuclear Energy”
Hydraulic Fracturing | Industrywide Issues

The Rolls-Royce of Fracking Technology
May 3, 2016May 3, 2016

EPIX is on the way. What is it? A joint venture between Weir Oil & Gas, the world’s leading provider of upstream pressure pumping equipment, and Rolls-Royce Power Systems subsidiary MTU, a market leader in heavy-duty industrial power systems based on diesel and gas engines. EPIX will provide the drilling industry’s first integrated system for hydraulic fracturing. Here’s the low down on the Rolls-Royce of fracking…
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Best of the Rest

Marcellus & Utica Shale Story Links: Tue, May 3, 2016
May 3, 2016May 3, 2016

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”
Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Spectra Energy | Westmoreland County

Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate
May 2, 2016May 2, 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”
Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A | Regulation

Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”
May 2, 2016May 2, 2016

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””
Energy Companies | Ultra Petroleum

Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy
May 2, 2016May 2, 2016

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”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan
May 2, 2016May 2, 2016

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”
Electrical Generation | Energy Services | Industrywide Issues | Lycoming County | Northumberland County | Pennsylvania | Pipelines | Regulation | Snyder County | UGI Energy Services | Union County

UGI Sunbury Pipeline Gets FERC Approval, Built by November?
May 2, 2016May 2, 2016

UGI Marcellus assets map – click for larger version

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?”
Coterra Energy (Cabot O&G) | Energy Companies

Cabot O&G 1Q16: $51M Loss, Production Up 10%, Marcellus Affection
May 2, 2016May 2, 2016

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”