Marcellus Drilling News

Industrywide Issues | Ohio | Pipelines | Regulation | Statewide OH

Ohio EPA Seeks Comments on New Permits for Compressor Stations
April 8, 2016April 8, 2016

The Ohio Environmental Protection Agency (Ohio EPA) has just issued a series of draft general permits for compressor stations in the state and is inviting public comment. Currently each compressor station and the operations surrounding such a station are evaluated on a case-by-case basis in the Buckeye State. The general permits (plural) would create a template–a standard that everyone must meet–to streamline the process. Sounds reasonable. That is, until you dig into the requirements. We haven’t gone through the various draft general permit documents ourselves, but the radicals at the Environmental Defense Fund have–and they like what they see. Which means it’s bad for the oil and gas industry…
Read More “Ohio EPA Seeks Comments on New Permits for Compressor Stations”
Baker Hughes | Energy Services | Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

Rig Counts for World, US Continue Steep Slide in March; M-U Down 1
April 8, 2016April 8, 2016

We’ve now gone beyond cutting into the bone and sinew with rig count losses–we’re now severing limbs. February’s Baker Hughes rig counts were awful, with both international and U.S. counts hitting record lows (see Rig Counts for World, US & Marcellus/Utica Crash in February). Somehow, it got worse in March. International rig counts went down 33 from 1,018 counted in February to 985 in March. In the U.S., rig counts went from 532 in February to 478 in March–a loss of 54 (10%). Month after month it just keeps going lower. Will the patient survive the carnage? On a more positive note, the number of rigs in PA, OH and WV cumulatively (the Marcellus-Utica) went down by just 1 rig. PA’s count went up 1 rig, OH’s count went down 2 rigs, and WV’s count stayed the same. Here’s the details…
Read More “Rig Counts for World, US Continue Steep Slide in March; M-U Down 1”
Energy Services | Industrywide Issues | Meetings | NEXUS Pipeline | Ohio | Pipelines | Research | Statewide OH | Utica Shale

Utica Event: OH Landowners Will Lose $6.5B in 5 Yrs, NEXUS May Get Nixed
April 8, 2016April 17, 2016

4/17/16 NOTE: Spectra Energy contacted MDN to express concerns that our headline leaves the wrong impression. A Spectra spokesman commented: “The story, particularly the headline, portrays the NEXUS Gas Transmission project as being canceled. This is untrue; NEXUS filed a Certificate Application with the FERC in November of 2015 and has consistently met its regulatory milestones since that time. The project is on schedule and we anticipate FERC issuing its approval to proceed in the second-half of 2016, thereby allowing us to achieve our in-service date of late 2017.” MDN does not mean to imply the project won’t happen–the speaker at the conference we reported on is the one saying that. We’re simply reporting what she said, which we found newsworthy. Spectra takes issue with the opinion that the project may get canceled–they are committed to building it. We have modified the shorter headline that did say “NEXUS Nixed” to say “NEXUS May Get Nixed” to be more accurate. We regret any wrong impression it may have left. Make no mistake, MDN hopes NEXUS happens! We’re rooting for it!

On Wednesday, the Canton Regional Chamber of Commerce and ShaleDirectories.com co-hosted the Utica Upstream conference at the Pro Football Hall of Fame in Canton, OH. By all accounts we’ve read, it was an excellent event. (Note: ShaleDirectories is partnering with Sourcewater to present UpStream PA 2016 in State College on April 19). We spotted several articles about Utica Upstream, and all of them focused totally, or in part, on the presentation made by Maria Cortez of energy research firm/consultant Wood Mackenzie. Cortez was clearly the bell of the ball. Among her observations on Wednesday: Ohio landowners will lose $6.5 billion in lost income in the next five years thanks to the drilling slowdown; drillers will buy out other drillers at a rapid pace this year and next; the Utica needs at least 11 rigs to keep production at current levels (right now they’re running 11!); some 150-250 drilled but uncompleted wells (DUCs) will be the focus for drillers for the time being; and the NEXUS pipeline likely will NOT get built. But wait, there’s more!…
Read More “Utica Event: OH Landowners Will Lose $6.5B in 5 Yrs, NEXUS May Get Nixed”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pipelines

NJ Residents “Get Rowdy” in Opposition to NY-NJ Pilgrim Pipeline
April 8, 2016April 8, 2016

Yesterday MDN reported on the antics of anti-fossil fuelers in New York in their quest to stop an oil pipeline from Albany to New Jersey (see NY Antis Attempt to Stop Pilgrim Pipelines with Local Bans). Antis in NY aren’t the only ones up in arms over the Pilgrim Pipeline project. A “rowdy” group of New Jerseyites are also miffed and want their county government to put the kibosh to the pipeline plan…
Read More “NJ Residents “Get Rowdy” in Opposition to NY-NJ Pilgrim Pipeline”
Industrywide Issues | Litigation | Regulation | Sand/Proppant

OSHA Sued to Prevent New Silica Dust Rule – but Not by O&G
April 8, 2016April 8, 2016

Last week MDN told you that the federal Occupational Safety & Health Administration (OSHA) has published new rules for the handling of silica and silica dust (see OSHA Publishes New Silica Dust Rule, O&G Must Comply by 2018). As we pointed out at the time, the “good news” if there is any, is that the new rules don’t take effect for the oil and gas industry for two years. However, more than just the oil and gas industry are affected by the rules. The Louisiana chapter of The Associated General Contractors of America (AGC) has filed a petition against OSHA to block the new rules. AGC represents more than 26,000 firms, including over 6,500 general contractors and over 9,000 specialty-contracting firms. AGC was joined by an alphabet soup of other associations in their petition. A second petition was filed by the American Foundry Society (AFS) and the National Association of Manufacturers (NAM). Both petitions were filed with the U.S. District Court for the 5th Circuit. Notably, associations for the oil and gas industry, while critical of the proposed new rules, have not (yet) joined these other industry groups in filing a petition with the court…
Read More “OSHA Sued to Prevent New Silica Dust Rule – but Not by O&G”
Energy Services | Industrywide Issues | M&A | Schlumberger

Oilfield Services Co. Schlumberger Completes Merger with Cameron
April 8, 2016April 8, 2016

Houston-based Schlumberger (pronounced Shlum-Bur-Zhay) is the world’s largest oilfield services company. Halliburton is #2, and not even close in size. As we reported yesterday, the Obama Dept. of Justice is opposing Halliburton’s merger plan to buy out Baker Hughes (see Obama DOJ Sues to Block Halliburton/Baker Hughes Merger). In a similar move, Schlumberger made a bid for Cameron International–a leading provider of flow equipment products, systems and services to worldwide oil and gas companies. While the DOJ is giving Halliburton/BH the stink eye, they approved the Schlumberger/Cameron deal in near record time. Last week Schlumberger completed the merger and the two are now one company…
Read More “Oilfield Services Co. Schlumberger Completes Merger with Cameron”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Apr 8, 2016
April 8, 2016April 8, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Everyone expects more Marcellus/Utica dry gas this year; Big Green groups try to block northeast pipelines; Rockefeller o&g divestment shown a fraud; rural PA under siege by Gov; should PA DEP Secretary be an elected position?; western PA rentals tank; Philly energy hub a chicken & egg issue; global warming consensus myth; drillers go rigless; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Apr 8, 2016”
Electrical Generation | Industrywide Issues | Ohio | Trumbull County

Lordstown, OH Gas-Powered Electric Plant Gets New Owners
April 7, 2016April 8, 2016

Two SGT6-8000H gas turbines will be installed in the Lordstown Energy Center.

UPDATE: After posting this story, MDN received a tip from a subscriber with knowledge of the Lordstown project that our assumption that Clean Energy Future didn’t have the necessary funds to finish the project was incorrect. The plan from the beginning was to bring in other big-money partners. In fact, Siemens was a partner in the project from the start. Thank you to our great MDN audience for setting the record straight!

In April 2014, MDN told you about a proposal from Clean Energy Future to build an $800 million electric generation plant in Lordstown (Trumbull County), OH. The plant will be fired by natural gas from the Utica and Marcellus (see Clean Energy Plans NatGas Electric Generation Plant in Lordstown). In May, Lordstown Village Council gave their blessing for the project (see Lordstown $800M Gas-Powered Electric Plant Gets Village Approval). And last September the Ohio Power Siting Board (OPSB) gave its stamp of approval on the project (see Lordstown $800M Gas-Powered Electric Plant Gets OH State Approval). The project, at that point, had all necessary approvals. It was/is “shovel ready.” The only thing left to do was to begin construction. Except…it appears the project didn’t have enough money to start. That’s now changed. Yesterday Macquarie Infrastructure Partners III and Siemens Financial Services announced they will build the new facility. Which means they now own the majority share of the project because they will ponying up the necessary money to build it. Which means there was an agreement to buy it from Clean Energy Future, although Clean Energy will “retain an interest” in the project. Here are the details, including what kind of turbines and generators will be used to power the Lordstown plant…
Read More “Lordstown, OH Gas-Powered Electric Plant Gets New Owners”
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…
Read More “Merger Turns Sour: Williams Sues ETE/CEO Kelcy Warren”
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…
Read More “PA DEP Reignites Initiative re Inspections/Compliance/Enforcement”
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…
Read More “JLE Industries Launches Huge New Pipe/Casing Facility in WV”
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…
Read More “Warren Resources Preps for Bankruptcy, New Role for CEO”
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?…
Read More “NY Antis Attempt to Stop Pilgrim Pipelines with Local Bans”