Rice Energy Floats New Round of Stock, Hopes to Raise $488M
MDN’s lead story today is that Rice Energy has made a $200 million offer to buy the Marcellus/Utica assets from now bankrupt coal company Alpha Natural Resources (ANR). As you know, drillers like Rice (and every other driller on the planet) are currently in a cash crunch. Rice doesn’t have an extra $200M laying around ready to use for such a purchase. So in addition to the ANR deal announced yesterday, Rice also announced they will float another 29 million shares of common stock hoping to raise an additional $488 million, part of which will go for the ANR acreage purchase. What happens if Rice doesn’t consummate the ANR acreage deal? They’ll use the money raised from this new stock offering “for general corporate purposes”…
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NGLs, or natural gas liquids, are the “other” hydrocarbons that come out of the ground along with methane, or natural gas. The most common NGLs that come out of Marcellus and Utica boreholes in southwestern PA, eastern OH and northern WV are ethane, propane and butane. Ever so gradually new markets are opening up to sell NGLs. Right now for many drillers in the region ethane, the most common NGL, actually costs drillers to dispose of. It is an expense. But ethane could be used to feed cracker plants and so much more! Pipelines are beginning to cart NGLs to other regions like Canada, the Gulf Coast and (now) to the Philadelphia area where the NGLs can either be used in petrochemical plants or exported to be used in petchem plants overseas. But what if drillers had a way of storing NGLs until they could get access to pipelines or rail or new petchem plants to use it? That’s the premise behind a brand new startup called Mountaineer NGL Storage. Started by a group of industry veterans and backed with big money from Goldman Sachs, Mountaineer NGL Storage is developing a new underground storage facility in Monroe County, Ohio, near Clarington, along the Ohio River. Yesterday the company announced a non-binding open season for drillers who want to reserve storage capacity in the new facility when it goes live sometime in 2018…
Please bow your head in a moment of silence for the 70,000 fallen. Who? More like what. In June 2014 crews were working to frack a Utica Shale well at a Statoil drill pad in Monroe County, OH when hydraulic tubing (not to be confused with fracking) from some of the equipment caught fire. The fire quickly spread to 20 trucks lined up at the pad, burning the trucks (some of them exploding) and creating thick, black smoke that billowed for hours (see 
Yesterday the Pennsylvania State House and Senate energy committees voted to disapprove the state Dept. of Environmental Protection’s proposed new Article 78 and 78a drilling rules. In February when the Pennsylvania Environmental Quality Board (EQB) approved the new regulations after those regs were vigorously opposed by conventional drillers in the state, the Pennsylvania Independent Oil & Gas Association (PIOGA) blasted the decision calling the DEP “deceptive” (see 
Last week MDN brought you news that mainstream media has all but ignored, in hopes of burying it: Cabot Oil & Gas has filed a legal motion to appeal the OJ jury decision to award two landowner families in Dimock, PA $4.24 million (see 
Forget about drilling, infrastructure is where it’s at baby! That’s our words summarizing a new study just released by the Interstate Natural Gas Association of America (INGAA). The new study, titled “North American Midstream Infrastructure Through 2035: Leaning into the Headwinds” (full copy below) says the U.S. and Canada need to invest $546 billion (real 2015$) total over the 21-year period from 2015 to 2035–or $26 billion per year–in natural gas, crude oil and natural gas liquids infrastructure. Natural gas infrastructure includes “gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage and liquefied natural gas export facilities” (NGI). Our tongue-in-cheek opening statement isn’t completely true. You need drilling or sooner or later you have no gas to flow through the infrastructure. However, for the time being, investors (and engineers and construction firms, etc.) need to pay attention to infrastructure buildout…
The International Gas Union (IGU) released their “2016 World LNG Report” at the LNG18 conference yesterday taking place in Perth, Australia. The report (we have a full copy below) shows global LNG, or liquefied natural gas, is set to grow. It will play an increasingly important role in the world’s energy mix. In addition to giving a great overview of the worldwide LNG industry, the report contains some really cool appendices, including a list of active liquefaction (i.e. export) plants, a list of export plants under construction, a list of receiving terminals (and terminals under construction), and a list of LNG ships that cart it from point A to point B. LNG, as we’ve said a number of times, will be an important market for Marcellus/Utica drillers. We look at this report like “everything you wanted to know about LNG”…
In an interview on CNBC, Chevron chairman and CEO John Watson said some interesting things. Among them: Watson believes the oil markets will “balance out” (price/production-wise) in the “coming months.” He also spoke about the prospects for LNG, saying it’s “maturing” and we are entering “a new phase”…
Rex Energy has stepped up to be the second Marcellus/Utica driller to cut a deal using the Mariner East pipeline to ship ethane, propane and (eventually) butane from western PA to the Marcus Hook refinery in Philadelphia, and from there load it onto ships heading to (in this case) Europe. Range Resources was the first driller to use Sunoco Logistics Partners’ Mariner East pipeline to send ethane to Marcus Hook and on to exporting (see 
Don’t tell Crazy Bernie Sanders, but apparently Big Banks (like the ones he wants to dissolve) believe Chesapeake Energy is (like the banks themselves) “too big to fail.” Yesterday Chesapeake’s Big Bank backers reaffirmed the company’s $4 billion line of credit. Twice each year oil and gas company holdings/assets are evaluated and a determination made of their value–because those holdings/assets are used as collateral should a company like Chesapeake go bankrupt. Which lately has seemed like a distinct possibility (see 
Yesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. First interesting observation about the report just issued: The rate of production decline in the Marcellus has gone down. That is, although the Marcellus is predicted to produce less shale gas in May than it will in April, the amount of less production has decreased–meaning we may be close to equilibrium where the Marcellus produces around the same amount of gas each month, month after month. Second interesting observation: Utica natgas production has continued to grow each month while the other six plays have declined in production each month. The EIA is predicting that in May the Utica will not grow by much–just 1 million cubic feet per day of additional production. Essentially, Utica production of natgas is now flat month over month. Will it also go in the red when the next monthly report comes out?…
Last week MDN updated you on progress (or lack thereof) for Marathon’s Cornerstone Pipeline project–a 50-mile liquids pipeline connecting several processing plants in Ohio to Marathon’s refinery in Canton (see 
On May 18, the Ben Franklin Shale Gas Innovation & Commercialization Center (SGICC) will announce four $20,000 winners of this year’s Shale Gas Innovation Contest. In addition to showcasing the 12 finalists, this year’s event will also feature a Poster Contest highlighting research underway related to the oil and gas sector–from four major regional research universities. Below we have the list of all 12 finalists with a description of their qualifying technologies. Among the list is one of our favorite companies, HalenHardy, a previous winner of another SGICC award for Shale Gas Environmental, Health, & Safety (see 
Last week 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. MDN previously gathered up reported comments from the person who seemed to steal the show, Maria Cortez of energy research firm/consultant Wood Mackenzie (see