Marcellus Drilling News

Energy Services | Energy Transfer Partners | Industrywide Issues | Litigation | M&A | Williams

Merger Turns Sour: Williams Sues ETE/CEO Kelcy Warren
April 7, 2016April 7, 2016

It was a long courting period before Energy Transfer Equity finally cajoled, harangued, and eventually forced the board of Williams to agree to a merger/takeover. ETE’s billionaire CEO Kelsy Warren revealed he had been propositioning Williams for over six months–offering Williams $64 per share to buy the company, totaling $48 billion (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). Williams resisted, but eventually they caved and agreed to the deal–although the deal price went down $10 billion by the time they accepted (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). But things changed. Prices for natural gas (and oil) went into the basement, and ETE/Kelsy Warren had second thoughts (see ETE Wants Out of Williams Merger/Takeover, Offering $2B Breakup Fee). Yesterday Williams sued ETE and Kelsy Warren over ETE’s issuance of private shares to select investors to help finance the deal, and they sued Warren for “interfering” with the merger by issuing said private shares. The upshot seems to be Williams feels as though their shareholders are getting shafted. Williams wants the deal done, and they want to get the agreed-to amount. That’s why they’re suing. ETE disputes Williams’ claims and says they will “vigorously defend” themselves. Looks like this marriage is already turning sour…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Litigation | M&A | Regulation

Obama DOJ Sues to Block Halliburton/Baker Hughes Merger
April 7, 2016April 7, 2016

That didn’t take long. Yesterday MDN told you that sources in the Obama Dept. of Justice (DOJ) were leaking to the press that they would soon file a lawsuit against the Halliburton/Baker Hughes merger, in order to block it (see DOJ “Preparing Lawsuit” Against Halliburton/BH – Deal Looks Dead). They did. Yesterday the DOJ filed to block the merger saying the “merger would eliminate significant head-to-head competition in oilfield services industry.” Halliburton and Baker Hughes were quick to respond saying they will “vigorously contest the U.S. Department of Justice’s (DOJ) effort to block [the] pending merger.” Bring on the lawyers! Halliburton/BH say the DOJ has “reached the wrong conclusion in its assessment of the transaction and that its action is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing.” Here’s the dueling press releases issued yesterday…
Read More “Obama DOJ Sues to Block Halliburton/Baker Hughes Merger”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Reignites Initiative re Inspections/Compliance/Enforcement
April 7, 2016April 7, 2016

On Tuesday the Pennsylvania Dept. of Environmental Protection (DEP) issued an ambiguous, slightly threatening-sounding announcement about “restarting a process” that will lead to more consistency with “inspections, compliance and enforcement activities.” The announcement does not specifically mention the oil and gas industry, but o&g is a large part of what the DEP does–so presumably this is a new effort to clamp down on drillers and midstream companies. How will the DEP become more “consistent” with inspections and compliance and enforcement? That’s left unsaid. The DEP says it is conducting an “internal review” now, to be completed in May. They promise a coming public notice and comment period this summer…
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Industrywide Issues | Marshall County | Sponsored Posts | Supply Chain | West Virginia

JLE Industries Launches Huge New Pipe/Casing Facility in WV
April 7, 2016April 7, 2016

Sponsored Post: MDN is proud to introduce our audience to a new advertiser: JLE Industries. JLE recently opened a new intermodal, 80,000 square foot facility in Benwood (Marshall County), WV to work on pipes and casings used in drilling. Until now, if a driller had a problem that required a casing to be reworked, there were only a handful of machine shops available. Typically the driller would send the work out of the region, slowing progress (time is money!). With the new Benwood location, JLE has a state-of-the-art facility in the heart of the Marcellus/Utica. Faster turnaround, top notch equipment, great folks to work with. What’s not to love! Below is a description of the services offered by JLE at their new facility, along with a personal invitation from MDN to visit them during an open house to be held on April 15 (Friday) from noon to 10pm…
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Energy Companies | Warren Resources

Warren Resources Preps for Bankruptcy, New Role for CEO
April 7, 2016April 7, 2016

We’ve heard of a Chief Executive Officer (CEO), a Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Marketing Officer (CMO) and Chief Risk Officer (CRO). But until now, we’d never heard of a Chief Restructuring Officer. Somebody who’s full-time job it is to work on keep the company from shutting its doors and liquidating the assets. Warren Resources has just appointed it’s current CEO and President, James Watt, as the company’s Chief Restructuring Officer. In February MDN reported that Warren–a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale–had missed a $7.5 million payment (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). At the time, Warren said if the company could not come to a workable agreement regarding an out-of-court restructuring, it would have to seek protection from its creditors through a bankruptcy proceeding. In Warren’s announcement yesterday, they once again warned of potential bankruptcy–for the third time. Without saying outright “we’re about to file for bankruptcy,” the company issued a very clear and loud signal that’s just what they’re about to do…
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Energy Companies | Halcon Resources

Halcon Update on “Charting a New Course” – I Feel Good!
April 7, 2016April 7, 2016

In March MDN reported Halcon Resources had hired a prominent law firm with a specialty in bankruptcies to assist the company to “chart a course” through the current downturn in gas and oil prices (see Halcon Resources Hires Bankruptcy Law Firm to Help “Chart Course”). Yesterday Halcon issued an update on their progress. According to the update, the company is “in discussions” with “certain stakeholders” to negotiate terms of a “potential transaction” to “materially reduce the Company’s indebtedness.” What does all of that coded language mean? You would think the company whose CEO is famous for his blunt language would just spit it out (see Halcon CEO Says No More S***** Wells in Northern OH Utica). We’re left to wonder…
Read More “Halcon Update on “Charting a New Course” – I Feel Good!”
Economic Impact | Industrywide Issues | Jobs | Research

U.S. Chemical Industry Investment Linked to Shale Gas Tops $164B!
April 7, 2016April 12, 2016

The American Chemistry Council (ACC) participated in a Hudson Institute event yesterday. During a presentation made by the ACC, they announced that U.S. chemical industry investment linked to plentiful and affordable natural gas and natural gas liquids (NGLs) from shale formations has reached an astonishing $164 billion. Some 40% of that investment is for the 264 projects – new facilities, expansions and factory re-starts – that is either completed or underway. Another 55% are for projects in the planning phase. This is a big deal folks. ACC’s research shows the investments tied to shale will lead to $105 billion per year in new chemical industry output and support 738,000 permanent new jobs across the U.S. economy by 2023–including 69,000 new chemical industry jobs, 357,000 jobs in supplier industries and 312,000 jobs in communities where workers spend their wages. Below we have a variety of resources for you. We have the ACC announcement with many interesting facts and figures. We also have a fact sheet summarizing their research, a copy of the slide deck used for the presentation (with really cool slides), and a copy of a study the ACC published in 2013 with a list of the companies who, at that time, had announced major downstream projects using shale-related natural gas and liquids…
Read More “U.S. Chemical Industry Investment Linked to Shale Gas Tops $164B!”
Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY

NY Antis Attempt to Stop Pilgrim Pipelines with Local Bans
April 7, 2016April 7, 2016

“Whoa, take ‘er easy there, Pilgrim.” – John Wayne in the movie “The Man Who Shot Liberty Valance” (1962) In November, MDN told you about Pilgrim Pipeline Holdings, developing an East Coast pipeline to carry refined petroleum products such as gasoline, diesel, heating oil, and jet and aviation fuel northbound from Linden, New Jersey to Albany, New York (178 miles). In addition, a second Pilgrim pipeline will carry crude oil from Albany south to NJ and other locations. Two pipelines, side by side, liquids flowing through them in different directions (see Will Pilgrim Pipeline be Allowed to Settle in the NY World?). Anti fossil fuel nutters who infest New York State are, however, attempting to block both pipelines by using a 107 year-old law and local bans. Will the antis succeed yet again?…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Apr 7, 2016
April 7, 2016April 7, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Let’s get ready to RUMA; when the fracking boom goes bust; FL LNG plant delayed; steady flows going to Sabine Pass LNG; new well drilling down 70% in 1Q16; Chesapeake needs higher prices to hold on; EPA’s Gina McCarthy ramming through methane rules; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Apr 7, 2016”
eCORP Stimulation Technologies | Energy Services | Fayette County | Hydraulic Fracturing | Industrywide Issues | Pennsylvania

ecorpStim Successfully Fracks PA Marcellus Well Using Baby Oil
April 6, 2016January 18, 2018

Every now and again eCORP Stimulation Technologies, or “ecorpStim” as they are known, reappears with a press release to announce they’re still around. The last such time MDN covered the company was in July 2014 (see ecorpStim Says New Manufacturing Process Lowers Non-Water Frack Cost). ecorpStim’s technology uses non-flammable liquefied propane as the fluid for fracking. It has the benefit of turning back into a gas and coming back out of the hole–captured and sold at a profit (or captured and re-used). One issue is, of course, the cost–although ecorpStim says they have worked hard to lower the cost. Another issue is potential flammability. However, last year ecorpStim began experimenting with “light alkanes” as an alternative fluid for fracking. In everyday language, light alkanes are “baby oil.” A big plus with using baby oil is that it’s nonflammable. It’s also safe for human ingestion and totally safe for the environment. ecorpStim released an announcement yesterday to say they have successfully fracked a Marcellus Shale well in Fayette County, PA using their new baby oil process…
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Energy Companies | Greene County (PA) | Industrywide Issues | Pennsylvania | Regulation | Rice Energy | Statewide PA | Washington County

Rice Energy Fined ~$400K by PA DEP for Not Asking “Mother May I?”
April 6, 2016April 6, 2016

The Pennsylvania Dept. of Environmental Protection (DEP) has slapped Rice Energy and a couple of Rice’s subsidiary companies with a hefty fine of $393,500. Egads! Must be Rice did some very nasty things, right? Turns out most of the reason why the DEP fined Rice was for not playing “Mother May I?” with the DEP. In one case Rice installed a waterline between a well pad and an impoundment–without “Mother May I?” permission from the DEP. In another case Rice built a pipeline through a swamp (i.e. “wetland”) without getting DEP “Mother May I?” permission. And in yet another case Rice installed three waterlines under a creek instead of one. Rice’s midstream subsidiary was cited for “not using best management practices”–a severe no no for the DEP. Rice Midstream’s lack of management practice decorum led to a small incidence of erosion that briefly turned a creek brown. Call in the EPA! That’s your PA DEP hard at work for the people–always on the job ensuring those nasty drillers tow the line and pay big fines…
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Energy Services | Patterson-UTI

How Low Can it Go? Patterson-UTI Rig Count Plunges to 64 in March
April 6, 2016April 6, 2016

As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Month by month Paterson’s rig count has declined from 5-10% (see Patterson-UTI Average Rig Count Falls to 74 in February). The latest numbers are out and Patterson’s rig count has dropped another 10 rigs, to 64. That’s a massive 14% drop in a single month. We seriously ask ourselves, just how low can it go?…
Read More “How Low Can it Go? Patterson-UTI Rig Count Plunges to 64 in March”
Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Litigation | M&A | Regulation

DOJ “Preparing Lawsuit” Against Halliburton/BH – Deal Looks Dead
April 6, 2016April 6, 2016

Yesterday MDN told you that the U.S. Dept. of Justice has sued investment firm ValueAct Capital with an accusation that ValueAct has inappropriately pulled strings with both Halliburton and Baker Hughes in their planned merger (see DOJ Sues ValueAct Capital for Meddling in Halliburton/BH Merger). It seems that’s not the only lawsuit the DOJ is going to lodge. According to the Wall Street Journal and other national media sources, the Obama DOJ has let leak they plan to sue Halliburton/Baker Hughes to stop the merger. It appears as if it’s all but dead. The Europeans are not fans of the plan (see Europe Puts Halliburton/BH Merger Under a Microscope). Brazil is also against the deal (see Is the Halliburton Buyout of Baker Hughes in Trouble?). If the DOJ turns against it–there’s no way the deal will happen, in our humble opinion. Here’s the latest in the shotgun wedding that may turn out to be a couple at the alter with no one willing to marry them…
Read More “DOJ “Preparing Lawsuit” Against Halliburton/BH – Deal Looks Dead”
Carroll County | Energy Services | Harrison County | Industrywide Issues | Marathon Petroleum | NGLs | Ohio | Pipelines

Cornerstone Pipeline Slightly Delayed, Construction Begins in May
April 6, 2016April 6, 2016

In the middle of March MDN brought you the news that Marathon Petroleum was saying they would begin construction on the Cornerstone Pipeline “in the next several weeks”–meaning by the beginning of April (see Cornerstone Liquids Pipeline Set to Begin Construction in E Ohio). The timeline has been moved back a month. Marathon officials are now saying construction won’t begin until May. Cornerstone is a $250 million, 50-mile liquids pipeline being built by Marathon from the MarkWest cryogenic processing plant in Cadiz (Harrison County, now owned by Marathon), northwest connecting to M3’s fractionator plant in Scio (also in Harrison County) and M3’s cryogenic processing plant in Leesville (Carroll County) before terminating and connecting to Marathon’s refinery in Canton, OH (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The pipeline will carry, at various times, crude oil, condensate and natural gasoline. No reason was given for the delay…
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Commodity Price | Industrywide Issues | Research

Moody’s Oil & Gas Liquidity Stress Index Hits New Worst Level
April 6, 2016April 6, 2016

In March Moody’s Oil & Gas Liquidity Stress Index, a measure of the liquidity health of oil and gas companies, hit a worst-ever high of 27.2% (see Moody’s Oil & Gas Liquidity Stress Index Hits Worst-ever Level). A month later and the same index has topped the previous bad record–now at 31.6%. Translation: there are a record number of energy companies stretched to the limit, ready to run dry in the cash department. If prices don’t turn around soon, some (many?) of these companies will go under…
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Albany County | Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | New York | Pipelines | Statewide NY | Williams

RFK Jr Invokes Religion at Anti-Pipeline Rally in Albany, NY
April 6, 2016April 6, 2016

A group of around 200 anti-fracking activists–or fractivists–protested at the steps of the New York State Capitol Building in Albany, NY yesterday. They were there nominally to protest Gov. Cuomo’s inevitable cave to allow the Constitution Pipeline to be built across the eastern portion of the state. However, the language from the speakers–in particular from the rather nutty Robert F. Kennedy, Jr. (i.e. “Junior”)–was instructive. These people are fossil fuel haters–and their speeches dripped with their irrational hatred for all fossil fuels. Junior called fossil fuels “the dirtiest fuels from hell,” and then he called so-called renewable energy “patriotic fuels from heaven.” Some of you have laughed and poked fun at MDN, some of you have written us in anger, some have even unsubscribed when we have commented in the past on the hysterical and irrational antics of anti-fossil fuelers, pointing out that their belief in man-made global warming is religious and faith-based and NOT rooted in science. Junior’s own words yesterday are 100% vindication of our position. He couches the debate over fossil fuels in religious language. We were, and always have been, right about anti-drillers. The vast majority of antis don’t oppose drilling because of “water contamination” or “air pollution” or “methane migration” or any of a hundred other red herring excuses. They object because they fervently choose to believe in global warming, with no scientific evidence whatsoever, making all fossil fuels “evil” in their twisted worldview…
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