Marcellus Drilling News

Chesapeake Energy | Energy Companies

Chesapeake Considers Unusual 1.5 Lien Debt Exchange
March 18, 2016March 18, 2016

If you can help us figure this one out–please do! Reuters is reporting that Chesapeake Energy is considering swapping out some existing debt for “new 1.5 lien debt.” We know a first lien means you have “first dibs”–you’re first in line to receive something/anything if a company goes bankrupt. A second lien means you’re second in line, behind the first guy. But a one and a half lien? Apparently its possible to create a legal situation where someone is behind the first guy but ahead of the second guy in line–the 1.5 guy. Boggles the mind. What it says to us is that Chesapeake is engaged in some dramatic financial contortions in order to avoid bankruptcy court…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Mar 18, 2016
March 18, 2016March 18, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Go West young molecule; Dimock lawsuit likely to spur other lawsuits; natgas perfect storm; regulators want new regs for old pipelines; little change in natgas storage; financial lifelines for drillers “slipping away”; Canada sees new potential for shale gas; and more!
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Ohio | Statewide OH | Utica Shale

MDN Exclusive Analysis of Ohio’s 2015 & 4Q15 Shale Production
March 17, 2016March 17, 2016

As MDN previously reported, as of the third quarter 2015 Ohio’s oil and natural gas production from shale deposits had already surpassed production for all of 2014 (see OH Shale Wells Already Smash 2014 Record, 3Q15 Results). The Ohio Dept. of Natural Resources (ODNR) recently issued production numbers for the fourth quarter of 2015, as well as reporting on the entire year. Ohio’s oil production from shale in 2015 doubled over 2014–up 99.9%. Ohio’s natural gas production in 2015 more than doubled, up 110% over 2014. Below we have the ODNR’s high level overview of the numbers, along with MDN’s own exclusive analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference! The longer an oil or gas well is online, the less it produces. Newer wells produce more. So we show you which wells are not just producing the most quantity overall, but which wells are producing at the fastest (most productive) rates–even if they haven’t yet been online a full three months. We also include a link to the complete list of 1,265 wells that had at least some Utica oil or gas production in 4Q15, in a more usable format than that provided by the ODNR…
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Industrywide Issues | Pennsylvania | Warren County | Wastewater

Concerned Citizens Test Water Near NWPA Injection Well, No Leaks
March 17, 2016March 17, 2016

In early 2013 Bear Lake Properties in Warren County, PA (near the New York border) opened a new injection well to accept Marcellus Shale wastewater (see NW PA Frack Wastewater Injection Well Begins Operation). The new injection well faced stiff opposition. Columbus Township, where the well is located, originally passed and later rescinded a ban on injection wells under threat of lawsuit (see Columbus Twp, PA Ban on Injection Wells Rescinded). A few local residents tried to pressure the federal EPA, the agency that permits and oversees all injection wells, into reconsidering their approval (see Local Residents Protest 2 Wastewater Injection Wells in NW PA). Finally, anti-drilling group Clean Water Action tried to get the EPA to reverse their decision (see Anti-Drillers Go After EPA on PA Injection Wells Approvals). In the end, it didn’t matter. The EPA reviewed and re-reviewed and said the location and construction for the well is safe. Since that time, a group of local citizens began and have continued testing every well, pond, creek, swamp and mud puddle anywhere close to the injection well, looking for evidence that the well is leaking. Guess what they’ve found? Nothing…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pipelines

30 Big Green Groups Ask FERC to Pay Them to Oppose Pipelines!
March 17, 2016March 17, 2016

In a day and age when we see our country slipping away from us at an alarming rate, and we witness outrage after outrage, when yet a new outage appears, it’s hard to focus attention on it and get worked up about it. We’ve told you the about the latest angle of attack against the fossil fuel industry by fossil haters like THE Delaware Riverkeeper. That angle is to attack the Federal Energy Regulatory Commission (FERC) with multiple lawsuits, hoping to tie it up in knots and make it dysfunctional (see THE Delaware Riverkeeper Sues FERC, Tries to Close it Down and Dela. Riverkeeper Sues FERC Again – Over Leidy Pipeline Expansion). Here’s the latest outrage that has us hopping mad. Some 30 Big Green groups have filed a petition with FERC asking the agency to set up an Office of Public Participation. The groups, including such luminaries as the Sierra Clubbers, National Resources Defense Council and the Environmental Defense Fund, want to be able to aggressively challenge pipeline (and other) projects that come before FERC–and get this, they want to be compensated for the work they do to challenge those projects! Can you believe it!! They want TAXPAYERS to pay their staffers and lawyers to try and stop the very projects that benefit those same taxpayers! Simply amazing. We’ve truly fallen Through the Looking Glass, Alice…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Regulation

How Rich White Billionaires Control the EPA – Connecting the Dots
March 17, 2016March 17, 2016

Ever wonder how in the world fossil fuel haters have such success in places like liberal New York? There’s a pretty simple explanation: follow the money. Anti-drilling shills forever bleat about Big Oil and powerful corporations with deep pockets having undue influence. It’s actually the reverse. Rich, white, liberal billionaires are using their money to buy influence over environmental policy adopted by states and the federal government. How do we know? In 2014 the U.S. Senate Committee on Environment & Public Works published the results of an investigation into how the EPA and other agencies are being influenced by big money in the Big Green movement. The report is titled “The Chain of Environmental Command: How a Club of Billionaires and Their Foundations Control the Environmental Movement and Obama’s EPA” (full copy below). The report name names and fingers foundations like the odious Park Foundation as being behind many of the anti-drilling efforts in the Marcellus/Utica region. The report connects the dots between billionaires, the tax exempt foundations they fund, and how money gets laundered through those foundations and put into the hands of anti-drilling activist groups. Although the report is from 2014, we only recently became aware of it when an MDN reader pointed it out to us (thanks Frank!). The report exposes the irrefutable corruption that exists in the environmental movement…
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Dominion Energy | Energy Services | Ohio | Statewide OH

Dominion East Ohio Distributes $110,000 Community Impact Awards
March 17, 2016March 17, 2016

Last September MDN told you that Dominion East Ohio had allocated $110,000 to award in community grants to non-profits that have “made a difference” in the Ohio communities they serve (see Dominion Does It Again – $110K in Grants to OH Community Groups). As we said at the time, Dominion is a company that is “doing it the right way” with respect to giving back to the communities in which they operate. Yesterday Dominion announced they’ve awarded that $110,000 to 15 groups. Here’s who the winners are…
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Hydraulic Fracturing | Industrywide Issues

Just What is in Frack Fluid Anyway?
March 17, 2016March 17, 2016

It’s been a while since we’ve revisited the topic of “Just what the heck is in fracking fluid anyway?” Recently Energy in Depth published a graphic to illustrate what’s in a drop of fracking fluid. First up, did you know that 99.51% of fracking fluid is–water and sand? No, we didn’t think you knew that. For all of the nightmare, scary talk fossil fuel haters pedal, somehow they forget to mention that almost all fracking fluid is water and sand. “But it takes millions of gallons of frack fluid for each well, so maybe the chemicals in that other one-half percent really do pose a threat.” Fair enough. What’s in the other 1/2 of 1% of fracking fluid–the other few thousand gallons used to frack a shale well? Things like instant coffee, walnut shells, table salt, laundry detergent, make-up remover, lemon juice and soap. Everything in fracking fluid is stuff you find under your kitchen sink or in your bathroom medicine cabinet. Here’s that excellent graphic from EID…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Mar 17, 2016
March 17, 2016March 17, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Residents oppose NEXUS compressor station in OH; WV budget busted thx to low coal & natgas royalties; VA lawmakers back pipeline; final Clean Power Plan a trojan horse meant to kill natgas; Obama disallows Atlantic Coast drilling by fiat; Chesapeake & Anadarko wisely hedged in 4Q15; Brazil taking all LNG exports from Sabine Pass; and more!
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Energy Companies | Rex Energy

Rex Energy 2015: $373M Paper Loss; Production Up 27%
March 16, 2016March 16, 2016

Rex Energy, a Marcellus/Utica driller based in State College, PA, filed its fourth quarter and full year 2015 financial and operating update yesterday. Although production was down in 4Q15 compared with 3Q15 and 4Q14 (4% and 5% respectively), overall production for Rex for all of 2015 increased 27% over 2014. On paper Rex lost $373 million in 2015–but most of that loss was from the write-down of assets, or “impairments”–meaning it’s a paper loss and not an out-of-pocket money loss. As we’ve previously noted, Rex entered a joint venture deal to get money to keep drilling in the Marcellus and Utica (see Stayin’ Alive: Rex Energy $175M JV to Keep Drilling in PA & OH). What previously escaped our attention is that the NASDAQ stock exchange put Rex on notice that the company’s stock will be delisted if it doesn’t get the per share price over $1 for ten consecutive days. Below yesterday’s update along with information about Rex’s liquidity issues…
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Energy Services | Ethane | Industrywide Issues | NOVA Chemicals | Pipelines

Canadian Cracker Gets $400M Upgrade to Handle More Marc. Ethane
March 16, 2016March 16, 2016

Nova Chemicals’ Corunna (Ontario, Canada) cracker plant is in for a $400 million makeover to convert the plant into using 100% ethane feedstock. The project will also invest in a second pipeline to feed ethane from the Marcellus/Utica to the plant. Nova’s board of directors recently approved the investment and work is scheduled for 2017/2018. This is good news for Marcellus/Utica drillers who are waiting (seems like FOREVER) for a regional ethane cracker plant to get built somewhere in the northeast. Even if one of the three major (and one minor) cracker plants is green lighted for the Marcellus/Utica, will will take 4-5 years to build it. In the meantime, if they can contract pipeline space, drillers can send their ethane to nearby Corunna cracker plant–so this is good news indeed. Here’s the details…
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Bradford County | Greene County (PA) | Pennsylvania | Statewide PA | Susquehanna County | Washington County

SWPA Created Bulk of PA’s NatGas Production Increase in 2015
March 16, 2016March 16, 2016

Pennsylvania natural gas production continues to impress, despite rigs being laid down in the later half of last year. Looking at all of 2015, the top two producing counties in the state likely won’t surprise you: #1 was Susquehanna County (where Cabot Oil & Gas drills). Susquehanna produced about 25% of all natural gas produced in the state last year! The #2 producing county was Bradford, also in northeast PA. But counties #3 and #4 in the list may surprise you: Washington and Greene counties, both in southwestern PA. In fact, an analysis done by the Pittsburgh Business Times finds that the 11-county southwestern PA region accounted for 86% of the state’s growth in production last year. That is an amazing statistic! Here’s more of their analysis of PA’s natgas production numbers for 2015…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation

FERC Approves TGP Connecticut Expansion Pipeline Project
March 16, 2016March 16, 2016

The Federal Energy Regulatory Commission (FERC) last Friday approved Tennessee Gas Pipeline’s (TGP) Connecticut Expansion project. The project includes building 13.42 miles of new pipeline loops in three states: Connecticut, Massachusetts and New York. When completed, the new looping will serve an additional 72,100 dekatherms of (mostly) Marcellus Shale gas to three utility companies in Connecticut. The $86 million project is in no way connected to TGP’s Northeast Energy Direct (NED) pipeline project. Below are the details for the project, along with a project map…
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Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

Landowners vs Drillers: PA Minimum Royalty Bill Gets a Hearing
March 16, 2016June 20, 2016

There is a renewed push in Harrisburg to pass a minimum royalty bill to protect landowners from getting the shaft by drillers deducting expenses from royalty checks. We’ve tracked this issue for the past few years–an issue that came to the forefront when Chesapeake Energy started to screw landowners in Bradford County (and other locations) out of royalty money (see Bradford County, PA Landowners Sue Chesapeake over Royalties). Bills were introduced in the PA legislature and went nowhere. Last year another new bill was introduced by State Rep. Garth Everett: House Bill (HB) 1391 (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). Organizations like the PA chapter of the National Association of Royalty Owners (NARO) fully supports the bill. However, drillers make the counterargument that duly signed contracts which allow for certain deductions should not be swept away with the stroke of a pen. As we’ve previously commented, the issue is one of those rare times when landowners and the industry are on different pages altogether (see Rare Schism Between Landowners & Drillers over PA Royalty Law). HB 1391 is once again being pushed–under discussion yesterday in the PA House…
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Electrical Generation | Industrywide Issues | Lackawanna County | Pennsylvania | Regulation

PA DEP Issues Wastewater Permit for Invenergy Jessup Power Plant
March 16, 2016March 16, 2016

Last week MDN told you that members of the Jessup Borough Council (Lackawanna County, PA) approved several measures clearing the way for Invenergy to begin building Pennsylvania’s largest natural gas-powered electric generating plant (see Jessup Borough Final Approval for PA’s Largest NatGas Power Plant). We thought Invenergy had all of the necessary permits to begin moving earth and building the plant. But it seems there’s no end of government permits for such a project. The PA Dept. of Environmental Protection yesterday issued a National Pollution Discharge Elimination System (NPDES) permit to Invenergy so they can discharge treated wastewater used to cool the plant…
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Hydraulic Fracturing | Industrywide Issues

Fracking Miracle! Oil from Fracked Shale Wells Now 51% of Total
March 16, 2016March 16, 2016

We don’t say it often enough anymore: Hydraulic fracturing (i.e. fracking) is a MIRACLE that has enhanced and bettered the lives of millions of people across the planet. Contrary to the propaganda pedaled by fossil fuel haters (totally insane people in our humble opinion), fracking is perhaps the most important human invention/innovation of the past quarter century. Take this statistic as proof: According to our favorite government agency, the U.S. Energy Information Administration, oil extracted from fracked wells (as opposed to oil from conventional wells) is now responsible for 51% of all oil produced by the United States. A quarter century ago oil from horizontally fracked wells produced zero oil. What a truly stupendous breakthrough by George Mitchell, Aubrey McClendon, Harold Hamm and other early innovators. Here’s the EIA’s story about the ascendance of oil from horizontally fracked wells…
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