Marcellus Drilling News

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!
Read More “Marcellus & Utica Shale Story Links: Thu, Mar 17, 2016”
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…
Read More “Rex Energy 2015: $373M Paper Loss; Production Up 27%”
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…
Read More “Canadian Cracker Gets $400M Upgrade to Handle More Marc. Ethane”
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…
Read More “SWPA Created Bulk of PA’s NatGas Production Increase in 2015”
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…
Read More “FERC Approves TGP Connecticut Expansion Pipeline Project”
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…
Read More “Landowners vs Drillers: PA Minimum Royalty Bill Gets a Hearing”
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…
Read More “PA DEP Issues Wastewater Permit for Invenergy Jessup Power Plant”
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…
Read More “Fracking Miracle! Oil from Fracked Shale Wells Now 51% of Total”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Mar 16, 2016
March 16, 2016March 16, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Universities team up for energy innovation; ODNR issues 8 new Utica permits in OH; Penn State going 100% natgas; fractivist journalism; VA lawmakers want Atlantic Coast Pipeline–bad; GTL plant coming to central Arkansas; propane stocks – what goes up must come down; study refutes EPA’s methane numbers; cheap oil, new pipelines end rail transport; Halcon holding on by a thread; what’s next for Europe’s natgas market?; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Mar 16, 2016”
American Energy Partners | Chesapeake Energy | Energy Companies

Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?
March 15, 2016March 16, 2016

More details are coming from an investigation into the one-vehicle crash that killed Aubrey McClendon on March 2nd (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). From the beginning, investigators have implied McClendon’s death was a suicide. They didn’t say it outright–but they certainly indicated it with their language. He was going “at a high rate of speed” and “didn’t hit his breaks” before driving into the concrete wall holding up a bridge. We later found out his friends wouldn’t give him any more money, which seems to support the suicide theory (see WSJ: Aubrey McClendon was in Debt Up to His Eyeballs). The black box in Aubrey’s SUV has been examined (did you know your vehicle has a black box?), and investigators say Aubrey was driving at speeds up to 89 miles per hour, and when he crashed into the bridge support, he hit it going 78 mph. Although he tapped on the brakes a few times in the moments before hitting, Aubrey never pressed down on the brakes hard. However, friends say Aubrey was known to drive fast and multi-task, using his cell phone. So we’re still left wondering–was it suicide? Or distracted driving?…
Read More “Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?”
Anti-Drilling/Fossil Fuel | Athens County | Hydraulic Fracturing | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH

Mad Moms Hopping Mad Over Court Decision re Broadview Heights, OH
March 15, 2016March 15, 2016

In 2012 Broadview Heights, OH, a Cleveland suburb, passed an illegal “Community Bill of Rights” law that bans oil and gas drilling in their township. Ohio law specifically and plainly states that only the state–not local municipalities–have the sole right to regulate the oil and gas industry. The law was promptly thrown out by a lower court, which resulted in anti-drilling groups including the Ohio Community Rights Network (OHCRN) and Mothers Against Drilling in Our Neighborhoods (MADION), with Big Green money backing from the odious PA-based Community Environmental Legal Defense Fund (CELDF), appealing the decision. It eventually made its way up the chain to the 8th District Court of Appeals. The nutters were so ecstatic when the 8th District agreed to hear the case, they celebrated with “street dramatizations” (see Antis Celebrate OH Appeals Court Hearing with Street Dramatization). They’re not celebrating anymore. The 8th District has ruled against the Broadview Heights law. Not only that, the 8th District is the first court to directly address the so-called “bill of rights” argument. In a crushing blow to the nutters, the 8th District Court said, in essence, “No. Towns don’t have inalienable rights to create laws that supersede the state’s laws.” However, nutters never go away–they blat and bleat and carry on, as they are doing now with this decision. At least we have some resolution in Ohio. This decision is a resounding refutation of the CELDF and their predatory behavior of pressuring towns into passing “bill of rights” laws that ban drilling and fracking…
Read More “Mad Moms Hopping Mad Over Court Decision re Broadview Heights, OH”
Baker Hughes | Clinton County | Energy Services | Industrywide Issues | Jobs | Pennsylvania

Baker Hughes Closes $40M Facility in Clinton County, PA
March 15, 2016March 15, 2016

The slowdown in Marcellus drilling continues–and it continues to take a big bite out of local jobs and local economies. The latest victim comes in Clinton County. Baker Hughes has closed its pressure pumping facility in Lamar Township in Clinton County. That $40 million facility was only opened in 2012. The company, which has laid off thousands of people over the past year or so, says those who worked at the Clinton facility “may be eligible for redeployment.” Here’s the sad news…
Read More “Baker Hughes Closes $40M Facility in Clinton County, PA”
Ascent Resources | Energy Companies

Ascent Resources Sells More of Company to Pay Down Debt
March 15, 2016March 15, 2016

In what appears (to us) to be a complex financial transaction, Ascent Resources (formerly Aubrey McClendon’s American Energy Partners’ Utica Shale company) is floating 2.2 billion (with a “b”) common units in order to raise $500 million. Ascent then plans to use that money to pay off existing notes, or IOUs. What confuses us is that Ascent is an LLC, a Limited Liability Company (i.e. corporation). Common units are the equivalent of shares of stock for an MLP, or Master Limited Partnership–a different form of company often used for midstream companies. How can a corporation/LLC issue common units as if it’s an MLP? Perhaps one of our sharp MDN readers can enlighten us? The bottom line in all of the financial mumbo jumbo you’ll read below is this: Ascent is selling more of the company (equity) in return for retiring notes (debt). It is trading equity for debt. That’s the upshot of this latest offering…
Read More “Ascent Resources Sells More of Company to Pay Down Debt”
Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Statewide PA

Reaction to Dimock Court Decision Continues
March 15, 2016March 15, 2016

Last week a brain dead, OJ-style jury awarded two families $4.25 million (one of the families already being millionaires) in the six year-old case claiming Cabot Oil & Gas contaminated water wells in Dimock, PA with their drilling activities (see Dimock Jury Levies $4.25M Judgement Against Cabot in Dimock Case). The jury rewarded the plantiffs for being unreasonable and refusing to allow their water to be fixed–because methane in water CAN be fixed. The plantiffs held out, hoping to shake down Cabot, and they got an obtuse jury to agree with them. The case is still generating shock waves with both supporters of shale energy, and irrational detractors of fossil energy. Below is reaction to the decision from the Pennsylvania chapter of the National Association of Royalty Owners (NARO), the litigious radicals at Food & Water Watch, and from Penn State’s Marcellus Center for Outreach and Research…
Read More “Reaction to Dimock Court Decision Continues”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Education Doing Just Fine Without Marcellus Tax in PA
March 15, 2016March 15, 2016

Guess what’s just happened? The fiscal year for Pennsylvania is in its last four months. Republicans held firm against an out-of-control-spending governor, Tom Wolf, with no increase in income taxes and no new Marcellus severance tax. And schools went on as they always do. Teachers taught, students learned. The educational Holocaust didn’t happen without hundreds of millions of dollars being transferred from Marcellus drillers to teachers unions. And everything is just fine. Illustrating that Wolf lied about the need for a new/high severance tax. But don’t worry, Democrats are consistent if anything. Wolf is absolutely insisting on a 6.5% severance tax this year, instead of the 5% severance tax he wanted last year. He’s doubling down on the tax, even though it was just proved it’s not needed…
Read More “Education Doing Just Fine Without Marcellus Tax in PA”
Economic Impact | Electrical Generation | Industrywide Issues

Connecticut NatGas Electric Plant Gets Funding, Construction Soon
March 15, 2016March 15, 2016

Competitive Power Ventures (CPV) and GE Energy Financial Services announced last week they have closed financing on the 785 megawatt CPV Towantic Energy Center in the western Connecticut town of Oxford. Some 16 investors ponied up a combined $753 million and the project, green lighted back in 1999 but on hold until it made sense economically, will now be built. The plant will be powered by clean-burning natural gas. No doubt it will be Marcellus/Utica gas flowing to the plant to power it. The project represents one of the largest private-sector infrastructure projects in the state. And it’s all thanks to shale gas. Here’s the announcement with details…
Read More “Connecticut NatGas Electric Plant Gets Funding, Construction Soon”