Marcellus Drilling News

Energy Companies | EXCO Resources

EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting
March 2, 2016March 2, 2016

EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point. The company filed its fourth quarter and full year 2015 financial and operational update yesterday. In picking through the report, we find that EXCO didn’t drill a single new well in the Marcellus in 2015, and has no plans to do so in 2016. Instead, the company is concentrating their meager $103 million 2016 budget on drilling new wells in North Louisiana and East Texas. According to EXCO they get their highest rate of return (35%) in that area. Buried (and we mean buried) in the report is the news that the New York Stock Exchange has threatened the company with delisting its stock (share price is averaging under $1). The company’s proposed “fix” for the low stock price is a reverse split, combining 10 shares of existing stock into one share of new stock. Zooming out to focus on the company’s financial health, EXCO shows a $1.2 billion loss for 2015–but as with other companies, most of it was a paper loss due to impairments or write-downs of the value for its assets, rather than out-of-pocket money loss. Here’s selected portions of yesterday’s update…
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Industrywide Issues | Jobs | Pennsylvania | Regulation | Statewide PA

PA Gov. Wolf Refuses to Let DEP Hire People–When Money is There
March 2, 2016March 2, 2016

Yesterday Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was grilled by PA lawmakers as to why his department continues to be understaffed–when there’s money earmarked to hire new people. Quigley’s roundabout answer? His boss, Gov. Tom Wolf, won’t let him hire anyone new, using the excuse that last year’s budget is not finalized. The radically partisan Wolf continues to use the budget as a political weapon against Republicans. But here’s the thing–the money to hire new DEP personnel is already there, raised from fees assessed on drillers or transferred from the federal government. The money required for hiring many of the new people for the DEP isn’t part of the general fund. Yet Wolf won’t let Quigley hire, sleazily trying to spin it as a “Republicans won’t pass the budget” excuse. Shame on Wolf for lying about what he’s doing. Quigley was on the hot seat yesterday, and Republican legislators didn’t hold back, telling Quigley to quit whining and to start owning his own mess…
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Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Spectra Energy | Statewide NY

Gov. Cuomo Asks FERC to Halt Algonquin Pipeline Near Nuke Plant
March 2, 2016March 28, 2016

Spectra Energy’s Algonquin Incremental Market (AIM) pipeline project is an $876 million expansion of the existing Algonquin pipeline system that will carry 342 million cubic feet of natural gas per day to New England states that badly need the gas. On March 3, 2015 the Federal Energy Regulatory Commission (FERC) issued their final approval for the project, allowing it to go forward. Construction began last year and continues now, with a target in-service date later this year. That is, until New York Gov. Andrew Cuomo stepped in. Cuomo sent a letter on Monday to FERC (copy below) asking FERC to stop construction of AIM because the proposed pipeline path takes it right next to a “troubled” nuclear power plant along the shoreline of the Hudson River. Cuomo says he’s concerned about the drilling that will take place, being so close to a plant that has ongoing issues. Will Cuomo once again stop a natural gas pipeline from being built? Cuomo refuses to allow the state Dept. of Environmental Conservation issue stream crossing permits for the FERC-approved Constitution pipeline, and now he’s trying to screw a second pipeline from being built. If you ask us, this is getting out of hand…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Dimock Trial: Cornell Prof Tony Ingraffea Exposed as Fractivist
March 2, 2016March 2, 2016

MDN has written, forever, about fractivist professor from Cornell University Tony Ingraffea. We still recall the first time we heard “Tony the Tiger” in person nearly six years ago (see Cornell Hydraulic Fracturing Expert Headlines First Meeting of New York Residents Against Drilling (NYRAD) in Vestal, NY). We said this at the time: Dr. Ingraffea is an accomplished speaker. He is equal parts comedian and expert, and he knows how to “work a crowd.” Indeed. He has since retired from Cornell but has created a cottage industry for himself in bashing natural gas and shale energy. The dunderheaded lawyer representing the two families suing Cabot Oil & Gas for contaminating their water in Dimock, PA called Tony the Tiger to the witness stand, as an “expert witness.” At first he wowed the crowd and the jury. We told you, he’s a good speaker. He also claimed, under oath, he’s not a protester or fractivist (an outright lie–perjury in our opinion). Cabot’s lawyers proceeded to shred his credibility under cross examination. Turns out Tony has never been involved with drilling or fracking a single well. Ever. The only thing he does is sit his rear-end in front of a computer and make pretty pie charts and “analyze” data. Oh, and he attends anti-fracking rallies too–as he admitted under oath to the Cabot lawyer. So much for the “expert” witness who claims he’s just a scientist and not a radical anti-driller…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Statewide NY

NY Lawmakers Want State Pension Fund to Divest from Fossil Fuels
March 2, 2016March 2, 2016

It looks like students at the University of Pittsburgh aren’t the only the only ones who are devoid of intelligence (see Pitt Brats “Demand” Endowment Divest from < 1% Fossil Investments). You can now add a group of Democrat lawmakers in New York State’s Senate and Assembly to the list of fools. Some two dozen Democrat lawmakers want State Comptroller Thomas DiNapoli (radical Democrat), the sole trustee in charge of investing the state’s public workers pension fund (worth $178.3 billion), to sell any investments the fund has in companies that engage in extracting fossil fuels. Why? Because they believe in the fairy tale that burning fossil fuels causes Mother Earth, whom they worship, to heat up. Never mind global warming isn’t actually happening and hasn’t been happening for nearly 20 years (see Inconvenient Global Warming Fact: Avg Temp Hasn’t Risen in 18 Yrs)–it’s what you can make people believe that counts…
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Energy Companies | Energy Services | EQT Corp | Industrywide Issues | Pipelines | Regulation | Statewide WV | West Virginia

Bill Allowing Surveyors Private Property Access Fails in WV Senate
March 2, 2016March 2, 2016

In June 2014 EQT and NextEra US Gas Assets formed a joint venture to build a 330-mile pipeline from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA to deliver abundant, cheap Marcellus and Utica Shale gas to markets throughout the southeast (see EQT Announces New Marcellus/Utica Pipeline to Southeastern US). The project is called Mountain Valley Pipeline (MVP). A number of West Virginia landowners objected to MVP and would not let surveyors on their property, so MVP (i.e. EQT and NextEra) threatened to sue the landowners claiming eminent domain laws to enter their properties (see WV Landowners Say They’re Bullied by Mountain Valley Pipeline). A month later they did sue (see Mountain Valley Pipeline Sues 103 WV Landowners for Survey Access). But it takes a long time to sue individual landowners in hundreds of cases. So somebody talked to somebody and a bill was introduced in the WV Senate this year, Senate Bill (SB) 596–which would allow surveyors to enter private properties to do survey work as long as a notice was sent by certified mail ahead of time. No doubt the bill was in response to the ongoing, thorny issue of surveying for MVP. The bill passed out of committee with a split vote. But the bill was voted down by the full Senate…
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Energy Companies | Shell

Shell Giving Up on Shale? Merges Unconventional with Conventional
March 2, 2016March 2, 2016

Just last November supermajor Royal Dutch Shell announced they were restructuring their upstream (drilling) units into two divisions: conventional and unconventional/shale (see Shell Restructures Upstream into Conventional/Unconventional Units). Then last week Shell announced they’ve scrapped the plan and will continue to treat all of upstream as one division within the company. What happened? Is this a signal that Shell is giving up on shale?…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Mar 2, 2016
March 2, 2016March 2, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: The ethane-heavy northeast; pipeline will be good for MA; Duke gets OK to build gas-powered electric plants; shale companies turn to Big Data to crunch drilling data; America’s amazing shale revolution is not over yet; record dry natgas production of 27 Tcf; Chesapeake still alive–barely; Exxon floats bonds to buy up distressed drillers; and more!
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Crime | Energy Services | Fairmount Santrol | Industrywide Issues | Kentucky | Landfills

Marcellus/Utica Frack Waste Illegally Dumped in Kentucky Landfill
March 1, 2016March 1, 2016

Seems to us like folks in Kentucky swing more to the liberal side of the isle when it comes to opposing natural gas drilling and pipelines. Just our observation over time. We think they overreact to anything related to fracking and gas drilling. However, in this case, we don’t think they’re overreacting. It appears that 47 dumpsters full of concentrated frack waste from OH, PA and WV was illegally dumped in a Kentucky landfill in Estill County, KY. They were buried between last July and November, near as anyone can tell. And the landfill sits across the road from a school. Normal frack waste has extremely low (usually no) kind of radioactivity. But when drill cuttings are further processed and concentrated, as was the case with this series of loads, the naturally occurring radiation present can become more concentrated. There’s no indication of a problem at the landfill…no indication that it’s leaking radioactivity into the water table, etc. Radiation levels are being monitored and do not show anything above normal background levels. But still, somebody somewhere should have known this was happening. Local residents have a right to be up in arms over not being told…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Forced Pooling Bill Headed for 5th Defeat in 6 Years
March 1, 2016March 1, 2016

Although the drilling industry in West Virginia had high hopes that “this was the year” a forced pooling bill would be passed–the latest attempt has once again gone down in flames. Each year the WV legislature meets for a 60-day period at the beginning of the year. Tomorrow (Wednesday) is the 50th day and the last day for a bill to advance out of the house of origin if it’s to be considered by the full legislature–what is known as “crossover day.” House Bill (HB) 4426 is this year’s forced pooling bill, introduced on Feb. 5 (see WV Forced Pooling Bill HB 4426 Introduced – Debate Rages). HB 4426 has until tomorrow to be reported out of committee. It’s not going to happen, meaning it cannot, under the rules of the legislature, be considered for a full vote. The West Virginia Oil and Natural Gas Association sounds rather pessimistic about trying again in the future…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA Landowners Ask Judge to Intervene in Chesapeake Royalty Case
March 1, 2016March 1, 2016

In March 2015 MDN reported on the “Demchak” royalty case in which a group of Pennsylvania landowners had agreed to a settlement with Chesapeake over Chessy’s alleged shorting of royalty payments (see Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners). As we reported at the time, “several thousand” landowners (we now know the number is 9,000 landowners) would share two-thirds of the $11 million settlement (the other one-third going to the lawyers), which doesn’t seem all that great a deal to us. Toward the end of last year the issue got heated again as many landowners were faced with a decision of whether or not to opt out of the settlement (see Packed Meeting in Towanda Discusses Chesapeake Royalty Settlement). Then the whole thing came to a screeching half with a new lawsuit by PA Attorney General Kathleen Kane. Her lawsuit stopped the settlement from proceeding (see PA AG’s Lawsuit Derails Demchak/Chesapeake Royalty Settlement). Afraid that Chesapeake will file for bankruptcy protection (not related to this case), landowners in the Demchak case are asking a federal judge to appoint a mediator and finish the deal–so at least they will get pennies on the dollar instead of nothing at all…
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Energy Services | Industrywide Issues | Litigation | Pipelines | Williams

Antis Lose Court Decision to Stop Constitution Pipe Construction
March 1, 2016March 1, 2016

Some of the worst of the worst radicalized environmental groups–Catskill Mountainkeeper, Sierra Club, Riverkeeper, Delaware-Otsego Audubon Society and Clean Air Council–had filed a request in U.S. District Court for the 2nd Circuit to stop Williams from “all activities” related to constructing the Constitution Pipeline. The Constitution, you may recall, is a 125-mile pipeline that will deliver natural gas from Susquehanna County, PA to Schoharie County, NY, connecting with two interstate pipelines that will carry that gas to points along the Eastern seaboard. Recently Williams won the right from the federal government to begin clearing trees in Pennsylvania (see FERC OKs Tree-Cutting for Constitution Pipeline – in PA). Tree-clearing permission seems to have tipped the antis over into a state of near-delirium. They filed a request to stop all Constitution construction activity–and the 2nd Circuit has denied their request. It’s not exactly “game over” for the radicals–but it’s the fourth quarter and their down by double digits with no hope of winning. Which of course delights us to no end…
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Industrywide Issues | Pipelines | Property Value | Research

New Report Finds Property Values Not Affected by Pipelines
March 1, 2016March 1, 2016

Can we finally lay to rest the old canard that putting a pipeline across someone’s property lowers that property’s value–or makes it impossible to get a mortgage? Those lies have circulated for years. A new study commissioned by The INGAA Foundation finds, “The presence of an underground natural gas transmission pipeline does not affect the sales prices or value of residential properties.” The study, titled “Pipeline Impact to Property Value and Property Insurability” (full copy below), looked at suburban areas outside of Cincinnati, OH, a rural neighborhood in Clinton, NJ, a master-planned residential community in Prince William County, VA, a small town subdivision in Dallastown, PA, and a suburban area near Jackson, MS. In each and every area the study found “no negative impact on price, and no correlation between price and proximity to pipeline easement.” Case closed…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Gov. Tomblin Signs Severance Tax Cut into Law
March 1, 2016March 1, 2016

You may recall our amazement two weeks ago when we reported that West Virginia was on the cusp of passing a bill that will lower the state’s oil/natural gas and coal severance taxes (see WV Senate Passes Bill to Eliminate Part of State Severance Tax). In 2005 when now Gov. Earl Ray Tomblin was then President of the WV Senate, he presided over slapping a new/extra severance tax on oil, gas and coal–for the express purpose of paying down the state’s old workers’ compensation debts. At the time Tomblin promised when the debt was paid off, the tax would end. And by gaw he actually did it. Yesterday Tomblin signed the bill into law. A politician who keeps his word. Rarer than hen’s teeth…
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Energy Companies | EV Energy Partners

EV Energy Partners: No New Utica Wells in 2016, in Survival Mode
March 1, 2016March 1, 2016

EV Energy Partners, an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Utica Shale play, released their fourth quarter and full year 2015 update yesterday. Company mucky mucks also held an earnings phone call with analysts. What did we learn? EV has no plans to drill new Utica wells in 2016. The company is on an austerity budget–only spending to complete 10 already-drilled wells in the Texas Barnett Shale. EV will spend between $10-$18 million on exploration and production in 2016. You read that right, $10-$18 million, NOT $100-$180 million. In other words, essentially nothing. According to EV’s Chairman, John Walker, “Needless to say we all should be running our companies today for survival.” Indeed. Below is yesterday’s EV Energy update, along with a portion of the analyst phone call transcript…
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Energy Services | Industrywide Issues | M3 Midstream | Momentum | Pipelines | Statewide WV | West Virginia | WGL Holdings

M3’s Stonewall Gathering System in WV Gets New Investor/Partner
March 1, 2016March 1, 2016

In April 2015 MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time, plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans came to fruition and the Stonewall Gathering System was built and now gathers 1 billion cubic feet of Marcellus Shale gas per day (see Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec). The project now has a new investor/co-owner. WGL Midstream announced yesterday that it has exercised an option to invest $89 million in the Stonewall Gas Gathering System, representing a 35% ownership stake…
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