Marcellus Drilling News

Energy Services | Energy Transfer Partners | Industrywide Issues | Marathon Petroleum | NEXUS Pipeline | Ohio | Pipelines | Spectra Energy | Statewide OH

Updates on 3 Major OH Pipelines at Utica Midstream Seminar
June 9, 2016June 9, 2016

Some 160 people showed up for the Utica Midstream Seminar held yesterday at the National Football Hall of Fame in Canton, OH. The event, sponsored by the Canton Regional Chamber of Commerce and ShaleDirectories.com, provided updates on three major pipeline projects either under construction or soon to be under construction in the Buckeye State: Marathon Petroleum’s Cornerstone Pipeline, Spectra Energy’s NEXUS pipeline project, and Energy Transfer’s Rover pipeline project. Here’s what reps from each organization had to say about their respective projects…
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Energy Services | Rice Midstream

Rice Midstream Floats Another Public Offering – Feed the Beast!
June 9, 2016June 9, 2016

On Tuesday Rice Midstream, the pipeline subsidiary of Rice Energy (operating in the Marcellus/Utica region) announced they will offer new “units” (think shares of stock) in the company. Rice said they will float an initial 8 million units, with an option of selling an additional 1.2 million units. The company hopes to get $18.50 per unit, meaning they are looking to raise $148 – $170 million by selling off more of the company. Rice first spun the midstream division into its own company (on paper) in December 2014. They got $16.50 per unit at the time, a total of $441.6 million (see Rice Midstream IPO Falls Short of Goal by Approx. $134M). Since that time Rice has continued to sell off pieces of ownership in the midstream division. Last December Rice received a $500 million investment in the midstream company in return for an ownership stake from an unnamed investor (see Rice Energy Sells Part Ownership in Rice Midstream for $500M). In February, Rice sold an 8.5% stake in the midstream company to EIG for $375 million (see Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M). And now they’re looking for another $150 million or so. Are you getting the idea (like us) that Rice Midstream has some pretty big plans ahead? Plans that require a LOT of money…
Read More “Rice Midstream Floats Another Public Offering – Feed the Beast!”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

New $2.5 Million Penn State Initiative Aims to Stop Pipelines
June 9, 2016June 9, 2016

This is the story of wasting $2.5 million of taxpayer’s money. Penn State has given us some of the best research (and personnel) we’ve ever seen when it comes to the Marcellus Shale. In particular we’re thinking of Penn State’s Marcellus Center for Outreach and Research (MCOR). Great people. Super research. But then there are others at Penn State who don’t like shale energy and concoct some pretty creative ways to stop it. We recently came across something called Marcellus by Design from Penn State’s Department of Landscape Architecture. This new initiative from Penn State received $2.5 million from the National Science Foundation (funded by your tax dollars and mine) to travel around the state and use a website to “educate” people about the aesthetics of the Marcellus. In other words, where should you put a pipeline? And how will it look? They’ve designed online “games” to help in this mission. Yes, it’s as stupid as it sounds. The aim is, of course, to not install a pipeline at all. It’s an elaborate anti-drilling hoax cloaked to look like something it is not. After a pipeline is in the ground for a few years, you can’t even tell it’s there. We think the $2.5 million grant would have been better spent on where to site windmills in PA. We’ve traveled through northeast and southeast PA quite a bit, and it never ceases to amaze us (going down the PA Turnpike from Wilkes-Barre to Philadelphia, for example) to spot entire hillsides covered with ugly, imposing windmills–destroying the natural beauty of the area–not to mention being huge bird killers. Why didn’t the Dept. of Landscape Architecture study that, instead of Marcellus pipelines?…
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Crestwood Midstream | Energy Services | Industrywide Issues | Pipelines

Con Ed & Crestwood Seal the Deal on Marcellus Pipeline/Storage JV
June 9, 2016June 9, 2016

In April MDN brought you the news that New York City’s largest utility company–Consolidated Edison Inc.–had formed a 50/50 joint venture to purchase ownership of pipelines and storage facilities from Crestwood Equity Partners in the PA and NY Marcellus region (see Utility Giant ConEdison Buys a Piece of the Marcellus Midstream). The newly formed jv, called Stagecoach Gas Services, will be operated by Crestwood and includes four natural gas storage facilities (Stagecoach, Thomas Corners, Steuben and Seneca Lake) with a combined storage capacity of approximately 41 billion cubic feet; and three natural gas pipelines (MARC I, North/South and the East Pipeline) with a combined throughput capacity of 2.96 billion cubic feet per day. The deal closed earlier this week. Con Ed ponied up $945 million, and together with the pipelines and facilities “donated” by Crestwood to the jv, the new Stagecoach Gas Services company is worth an estimated $2 billion…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Moodys Downgrades Halliburton/Baker Hughes Debt Post-Failed-Merger
June 9, 2016June 9, 2016

Ever hear the phrase, “Better to try and fail than never to try at all.” That’s actually the name of a poem from William O’Brien (dead poet, read his famous poem here). Contrary to the wisdom of O’Brien’s poem, in some cases it may be better to never have tried in the first place. At least that’s what Halliburton and Baker Hughes may be thinking about their failed attempt to merge (see Obama DOJ Kills Halliburton/Baker Hughes Merger, Deal “Terminated”). Halliburton ended up having to pay Baker Hughes a $3.5 billion break-up fee (see The Road Ahead for Baker Hughes – Post Halliburton Deal). Ouch. But that’s not all. Last week Moody’s Investors Service downgraded the debt for both Halliburton and Baker Hughes–from A2 to Baa1. Why? In part because of the failed merger deal. That’s what Moody’s says. What does the credit downgrade mean? It means their outstanding debt is harder to buy and sell, affecting $12.8 billion of debt for Halliburton and $3.9 billion of debt for Baker Hughes. It also means should either company want to borrow more money, the cost will be higher to do so…
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Industrywide Issues | Research

EIA Says NatGas Production Nearly Doubles Next 25 Yrs from Shale
June 9, 2016June 9, 2016

Over the past five years, the amount of natural gas production has blossomed–because of shale and fracking. But according to the U.S. Energy Information Administration (EIA), you ain’t seen nothin’ yet! The EIA predicts natgas production will nearly double over the next 25 years–and almost all of the growth will come from shale (take a look at the chart below). Here’s the latest analysis from our favorite government agency…
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Anti-Drilling/Fossil Fuel | Industrywide Issues

Environmental Radicals: The Gangsters Among Us
June 9, 2016June 9, 2016

Dr. Jack Rafuse

Dr. Jack Rafuse is a former White House energy adviser and current principal of the Rafuse Organization. He advises government agencies, policy centers, businesses and associations on energy, trade, sanctions, national security issues and their interrelationships. Yeah, he’s a really smart guy who knows a LOT about energy. He’s forgotten more about energy that we’ll ever know! In a recent column published in Ohio Gas & Oil Magazine Rafuse doesn’t beat around the bush. He calls the organized protests we’ve been seeing from radical Big Green groups like 350.org exactly what it is: “Gangsterism paid for by billionaires.” Rafuse points out the silly, empty-headed protesters are nothing more than useful idiots for big money bullies behind them–out for a thrill, paid for by someone else. Thing is, there are very real and tragic consequences to their actions that affect all of us…
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Anti-Drilling/Fossil Fuel | Industrywide Issues

Enviro Gangsters Arrested in Vermont for Stopping Pipeline Work
June 9, 2016June 9, 2016

Five more wackos were recently arrested in Vermont, chaining themselves to a short pipeline being built to deliver more clean-burning natural gas. The so-called “protesters” (whom we will now refer to as enviro gangsters, see today’s companion story) endangered themselves, pipeline workers and emergency personnel who had to extricate them. Keep a sharp eye out. When these kind of nutters wake up and understand their tactics aren’t working, they sometimes tip over into eco-terrorism. We’ve seen it before…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Jun 9, 2016
June 9, 2016June 9, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus/Utica pipeline overbuild; the economics of a new gas pipeline in the NE; secret is out, NY AG began RICO investigation BEFORE InsideClimate story; Ohio Valley lures manufacturers with low natgas prices; DTE retiring 8 coal plants in Michigan by 2023; federal pipeline rules to complex; how pigging works; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Jun 9, 2016”
Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell | Statewide PA

Shell PA Cracker Plant Project a Lot Bigger Than First Thought
June 8, 2016June 8, 2016

Artist’s rendering of Shell Monaca Ethane Complex – click for larger version

Yesterday MDN was one of the first to bring you the fantastic news that Shell has decided to move forward with building their multi-billion dollar ethane cracker plant (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). Shell mentioned their positive final investment decision (FID) as part of a larger, wide-ranging announcement on their plans for the next few years and beyond. They were slow off the mark, but Shell finally issued a separate press release about the FID for the Monaca, PA ethane cracker plant complex. As usually happens with a story this big, more details have come out after the initial announcement. For example: Shell’s initial estimate for the cost of the project, more than four years ago, was “$2-$3 billion.” Now? They won’t say. But some news sources are reporting it will be closer to a $6 billion investment. One even goes as high as $11 billion! What Shell *is* saying is that construction on the main part of the facility will begin in 18 months, with production expected to flow beginning “early in the next decade”–which we take to mean sometime around 2020 or 2021. Shell says the project will provide work for 6,000 temporary construction workers while it’s being built, and 600 permanent, full-time employees to operate the facility once it is built. Needless to say, local economic and government leaders in the Pittsburgh region are ecstatic with the news. Here’s more details about the Shell ethane cracker coming to PA, along with select reaction and comments…
Read More “Shell PA Cracker Plant Project a Lot Bigger Than First Thought”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

PA Gov Wolf Attempts to Take Credit for Shell Cracker Decision
June 8, 2016June 8, 2016

Former PA Gov. Tom Corbett – the reason Shell decided to build a cracker

You know what’s really sleazy about politicians? When they take credit for something they had NOTHING to do with. Like Pennsylvania Gov. Wolf is doing with the fantastic news that Shell will build an ethane cracker plant in the state (see yesterday and today’s stories). The reason Shell even considered PA in the first place is because of Wolf’s far more able and talented predecessor, Gov. Tom Corbett. Corbett fought tooth and nail to get Shell to locate the cracker in the Keystone state. Part of Corbett’s fight included getting $1.7 billion in tax breaks approved, to lure the plant to PA (see Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break). The cracker decision kept getting delayed during Corbett’s tenure, something he took a lot of heat over. If Shell had committed sooner, PA may have had a different election result (re-electing Corbett instead of the disastrous Wolf). Anywho, that was yesteryear, and today, Tom Wolf is taking credit for something Tom Corbett did. Typical…
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Energy Services | Seventy Seven Energy

Seventy Seven Energy Officially Files for Prepackaged Bankruptcy
June 8, 2016June 8, 2016

In May MDN told you that Seventy Seven Energy (SSE), the old Chesapeake Oilfield Operating unit that was spun into its own company a few years ago, was planning to screw shareholders by devaluing their shares to worthless status and converting the company’s considerable outstanding debts into new shares of ownership (see Seventy Seven Energy Makes Progress in “Pre-Packaged” Bankruptcy). It’s called a “pre-packaged” bankruptcy–where a company cuts a deal with note holders (those who hold IOUs) to convert the debt into equity. Magnum Hunter Resources did it to their shareholders (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). A number of other companies with operations in the Marcellus/Utica are also trying it, including Warren Resources, Halcon Resources, Penn Virginia and Ultra Petroleum. A couple of others are on the cusp of doing it: Stone Energy and EXCO Resources. SSE announced yesterday they have all of their ducks in a row with debt holders and they have officially filed for their “pre-packaged” bankruptcy…
Read More “Seventy Seven Energy Officially Files for Prepackaged Bankruptcy”
Baker Hughes | Energy Services | Industrywide Issues | Research

May 2016 Rig Counts Continue to Slide in US, Marcellus/Utica
June 8, 2016June 8, 2016

Baker Hughes released their monthly rig count, for May, yesterday. While the worldwide rig count went up by 9, it continued to crash here at home in the U.S. May’s rig count in the U.S. was down another 7% (in one month), from April’s count. Sadly the trend was the same in the northeast. While PA’s count averaged the same month over month–16 active rigs–both OH and WV slid, with 10 rigs operating in each state. Overall the Marcellus/Utica rig count was down by 3 in the past month…
Read More “May 2016 Rig Counts Continue to Slide in US, Marcellus/Utica”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Tulsa Mayor, 3 Former Williams CEOs Blast ETE Merger Deal
June 8, 2016June 8, 2016

Last week three former CEOs of the Williams Companies sent a letter to Williams shareholders outlining their reasons for voting against the proposed merger with Energy Transfer Equity (copy of the letter embedded below). The CEOs urge all shareholders to “strongly consider” voting against the deal. The CEOs say the deal would give Williams shareholders a permanent second class status. The mayor of Tulsa, Oklahoma–where Williams is headquartered–is also voicing his opposition to the proposed merger. Mayor Dewey Bartlett Jr. said in his own letter that the merger has no “economic merit” and would be “tragic” for both the city shareholders. MDN told you yesterday we’re dubious the deal will actually happen, based on all of the legal posturing we see (see ETE & Williams Engage in More Posturing Before June 24 Deadline). Will the letter from the CEOs and Tulsa mayor have any effect on the deal?…
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Crime | Industrywide Issues | Litigation | Mahoning County | Ohio | Wastewater

Jailed Ben Lupo Sued Again over OH Wastewater Dumping
June 8, 2016June 8, 2016

An update on the notorious case of illegal frack wastewater dumping near Youngstown, OH that happened in 2012 and 2013. Ben Lupo, previous owner of D&L Energy and its associated company Hardrock Excavating, directed employees to dump frack wastwater hauled by Hardrock into a drain that emptied into a stream that emptied into the Mahoning River near Youngstown, OH (see Youngstown Business Dumped >200K Gal of Untreated Wastewater). It was later discovered that from September 2012 to end of January 2013, Lupo was responsible for dumping at least 30 loads of frack wastewater literally down the drain and into the river. After an investigation and charges, in August 2014 Lupo plead guilty and was sentenced to 23 months in prison and a $25,000 fine (see Final Chapter for Youngstown Illegal Wastewater Dumper: Prison & Fine). The company itself plead guilty and was fined $100,000 in May 2015 (see Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K). That should have been the end of the story. But now this: Ohio Attorney General Mike DeWine has filed a civil lawsuit against Ben Lupo, two of his companies and three of his employees–for more than $25,000…
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Electrical Generation | Energy Services | Industrywide Issues | Pennsylvania | Statewide PA | Talen Energy

Talen Energy Converting Moutour, PA Plant to Burn Coal AND NatGas
June 8, 2016June 8, 2016

It was just two days ago MDN told you about a Pennsylvania-based electric power generating company–Talen Energy–getting bought out by an investment company (see Investment Firm Buying Talen Energy – PA Electric Generating Co). We have more Talen news. The company just announced that one of its coal-burning electric generating plants, located in Montour County, PA, will get an upgrade to burn natural gas in addition to burning coal. The Montour Power Plant went online in 1972/73 and generates 1,504 megawatts of electricity. The $70 million upgrade planned by Talen (requiring a 15-mile pipeline) will continue to produce the same amount of electricity, but will give the plant the option to power it with either natgas or coal, depending on which is cheaper. More yummy, clean-burning Marcellus Shale gas on the way!…
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