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    Guest Post: Dimock Plaintiff Exposed Under Cross Examination

    By Phelim McAleer

    The Ely family in Dimock, Pennsylvania is suing an oil and gas company alleging they contaminated their water well through fracking. Dimock has become a focal point for anti-fracking activists with many calling it “Ground zero” for pollution. Dimock and the Ely’s have been featured in national and international news reports and documentaries. Celebrities such as Mark Ruffalo, Yoko Ono, and Susan Sarandon have visited the tiny community to sympathize. But yesterday in the first day of the trial, facts started to emerge that show the truth is much different from the previously reported stories. Questioned under oath, Scott Ely’s claims look a lot less certain and he looks a lot less credible. Below are five facts that emerged during the first day that expose serious problems with Ely’s claims that his water was contaminated by fracking.
    Read More “Guest Post: Dimock Plaintiff Exposed Under Cross Examination”

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    Antero Resources Stands Above the Rest – Nets $941M in 2015

    There’s at least one driller that’s figured out how to continue making money in one of the worst down markets in two generations: Antero Resources. Antero released their “good news” operational update back in January (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). Earlier this month the company issued an update for 2016 that they will cut back spending by 23% (far less than others) with plans to drill 110 wells this year in the Marcellus/Utica (see Antero Resources 2016: Spending 23% Less, Drilling 110 Wells). We thought for sure when they finally got around to sharing their financial numbers it would be red as far as the eye can see. Nope! Yesterday Antero, one of the biggest and best drillers in the Marcellus/Utica, released their fourth quarter and full year 2015 financial update. And guess what? They made more money last year than the year before! Three years ago Antero lost $18.9 million. Two years ago, after expenses, Antero made $674 million. Last year, in 2015, Antero made, after expenses, $941 million. That’s nearly $1 billion in profit! Other drillers need to study Antero closely to see what they’re doing right…
    Read More “Antero Resources Stands Above the Rest – Nets $941M in 2015”

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    Rice Energy 2015: Lost $291M, Production Up 101%

    Rice Energy issued their fourth quarter and full year 2015 financial and operational update yesterday. The company stumbled in 4Q15, losing $281 million, which made last year’s total year loss $291 million (i.e. most of the loss came in 4Q15). That’s the bad news. The good news is that production was up 57% in 4Q15 over 4Q14 and production for the entire year was up 101% over 2014, an average of 552 million cubic feet equivalent per day (Mmcfe/d). Also good for Rice is the price they’ve been getting for their gas. They averaged $3.39/Mcf in 4Q15 and $3.19 for all of 2015. Proved reserves are up 30%. The company also released details for 2016 yesterday. Rice, which is a pure play driller focusing on the Marcellus and Utica Shale region, will spend 14% less this year than they did last year–which is far less of a cut than most drillers. Below are both the 2015 update and the 2016 forecast, with lots of details about their Marcellus and Utica programs…
    Read More “Rice Energy 2015: Lost $291M, Production Up 101%”

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    Cheniere Finally Ships First Sabine Pass LNG Export – to Brazil

    Seems like it’s been forever in coming, but finally (!) Cheniere Energy has shipped their first LNG tanker of exported shale gas from the Sabine Pass facility on the border of Texas and Louisiana. We don’t know if any of the gas liquefied at the facility was from the Marcellus/Utica, but we do know that at some point it will be, which is why we’re excited about this new market opening up. This first tanker full of LNG (liquefied natural gas) set sail for Brazil yesterday and will dock in a few days at the regasification terminal in All Saints’ Bay, Bahia…
    Read More “Cheniere Finally Ships First Sabine Pass LNG Export – to Brazil”

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    Marcellus Ethane Export Sets Sail “Within a Week” from Philly

    We’ve been predicting for some time, but the day is almost here when the first export shipment of Marcellus and Utica ethane will leave the Marcus Hook terminal in Philadelphia and head to Norway. Genscape, which monitors pipelines and trucks and ships and uses really cool technology to alert them of when these things are about to happen says the first ethane export from Philly will happen “within a week”…
    Read More “Marcellus Ethane Export Sets Sail “Within a Week” from Philly”

  • Marcellus & Utica Shale Story Links: Thu, Feb 25, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Time to release U of Cincinnati’s research; permits slow down in OH; oil apocalypse – Range Resources; DEP and well site restoration push; Cabot’s high standards; Shell Oil co president retiring; EIA says shale will rebound; Saudis declare war on shale; and more!
    Read More “Marcellus & Utica Shale Story Links: Thu, Feb 25, 2016”

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    Dimock Lawyers Admit Frack Fluid Didn’t Contaminate Well Water

    court-gavel.jpgYesterday saw opening arguments in the case of two Dimock, PA families who are suing Cabot Oil & Gas with a claim that Cabot’s drilling “contaminated” their well water supplies (see Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot). MDN friend and top film documentary maker Phelim McAleer–creator of the excellent FrackNation documentary–noticed a very important admission by the attorneys for the plaintiffs. In their opening arguments, the attorneys for the landowners admit that there is “no scientific proof” that fracking fluid ever reached or contaminated the plaintiffs’ water wells. We’ve known that and have trumpeted that for years. This case has always been about methane (natural gas itself) “migrating” through the ground into the water wells as a result of Cabot’s drilling program. That’s what is at issue: Did Cabot’s drilling cause methane migration? But the general public, because of propaganda films like Gasland and Gasland II, believe fracking chemicals had somehow seeped into the water wells in Dimock. Not true–and now it’s on the record for all, including Josh Fox, to see. The stunning admission by the landowners’ own lawyers that fracking fluid did not contaminate the wells in Dimock totally refutes false claims by Fox and Hollywood stars like Mark Ruffalo who have tried to use Dimock as a rallying cry…
    Read More “Dimock Lawyers Admit Frack Fluid Didn’t Contaminate Well Water”

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    Chesapeake Trades Future Royalties on 8,500 Wells for Lump Sum Now

    Haymaker Resources has just signed a deal with Chesapeake Energy to give Chessy $128 million in return for ownership of mineral and royalty interests in 8,500+ wells across 24 states and 324 counties, including wells in the Marcellus/Utica. The mineral/royalty interests Chesapeake is selling are considered “non-core” for the company. These are wells in which Chessy owns an interest, but they didn’t drill it and don’t manage it. They’re a partner in the well. What this deal means is that any royalties generated from those wells will now go to Haymaker instead of Chesapeake. Sort of like those deals we’ve highlighted in the past where a company pays a landowner a lump sum now and then receives all future royalty payments (see Company Targets OH Landowners – Buy Future Royalties for Cash Now). Think of it this way: You win the lottery, $1,000 a week for life. You’re 50 years old and think you’ll live another 30 years, at least. That would be $1.56 million total, IF you live that long. A company comes along and offers you $750,000, right now, in return for taking over the annuity of $1,000 per week (such companies do exist). That’s how we think of this deal. Chesapeake needs money now, to keep from going bankrupt, and they have these assets that bring in money, but in dribs and drabs and it’s not at the center of what they do. So they cash it in and get a chunk of money now instead of waiting for it later. Here’s the Haymaker announcement…
    Read More “Chesapeake Trades Future Royalties on 8,500 Wells for Lump Sum Now”

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    Shock: Judge May Allow Drillers to Cancel Gathering Pipeline Deals

    There is a situation brewing that has the potential to upend the midstream (pipelines & processing plants) market–here in the Marcellus/Utica and across the country. This is one of those complex issues that takes time to understand, but please stick with us. This is important. There are currently two court cases–one in New York and the other in Delaware–in which producers (i.e. drillers) who are in bankruptcy are arguing that they should be allowed to dissolve contracts they previously signed with pipeline gathering companies. In the New York case, the judge is signaling that she leans toward allowing the driller (Sabine Oil & Gas) to do just that. The pipeline company (Cheniere’s Nordheim Eagle Ford Gathering) spent $84 million building a gathering system for Sabine’s wells. Until now, midstream companies have taken solace that if a driller goes bankrupt, whoever buys the assets, if it comes to that, would also inherit the existing, long-term deal to use their pipelines. This case, if it goes against the midstream company, threatens to undo that. That’s sending shock waves through the midstream industry…
    Read More “Shock: Judge May Allow Drillers to Cancel Gathering Pipeline Deals”

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    THE Delaware Riverkeeper Hosts Class to Stop PennEast Pipeline

    THE Delaware Riverkeeper, Maya van Rossum, has staked much of her credibility on stopping the PennEast Pipeline. The PennEast, as you may recall, is a $1.2 billion, 114-mile, 36-inch diameter pipeline that will deliver approximately 1 billion cubic feet of natural gas per day from the Marcellus gas fields of northeastern PA to locations in southeastern PA and across the border to Trenton, NJ (see PennEast Pipeline Files Official Application with FERC, Antis Mad). It’s a pipeline, buried in the ground and after a few years no one even knows where it’s buried without calling 811. And yet van Rossum and her ilk vehemently (we’d say irrationally) oppose it for one reason: it flows a fossil fuel through it. And so she’s staked her own credibility, and the credibility of the organization she leads (with Big Green money backing it) by stopping the PennEast. One way she’s trying to slow it down is by registering children as “intervenors” with the Federal Energy Regulatory Commission (FERC), the organization charged with reviewing and approving the project (see Delaware Riverkeeper Scams FERC in Review of PennEast Pipeline). Her latest angle of attack? Conduct a 6-hour “workshop” to train people as “volunteer monitors” to “document natural features that would be in jeopardy” from the pipeline–whatever that means…
    Read More “THE Delaware Riverkeeper Hosts Class to Stop PennEast Pipeline”

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    Corporate Raider Carl Icahn Makes Cheniere, like Chesapeake, Worse

    It befuddles us why anyone thinks Carl Icahn is such a genius. He invests just enough money in a company to get his own people elected to the board of directors, and then the board fires the CEO and fires thousands of people working at the company in hopes of boosting the stock price by making the company appear to be profitable on paper so Icahn can turn around and sell his stake in the company at a profit. We call it disgusting and immoral. Wall Street investors call it just another day at the office (never looking the people in the eye they’re responsible for screwing out of a job). But with Icahn and his investments, they often don’t go as planned. Instead of the stock price going up after he fires the CEO and a bunch of people–the stock price goes down instead. Icahn makes companies worse than before he started his meddling. It happened with Chesapeake–now a whisker away from bankruptcy. Now it’s happening with Cheniere Energy, the LNG export company located along the Gulf Coast…
    Read More “Corporate Raider Carl Icahn Makes Cheniere, like Chesapeake, Worse”

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    Revenge: Fired Cheniere CEO Starts Competing LNG Company

    Martin_Houston_left_Charif_Souki_right_2016
    Martin Houston (left) and Charif Souki

    Several days ago Charif Souki, co-founder and former CEO of Cheniere Energy (forced out by Carl Icahn) announced he had resigned from the board of Cheniere. We now know why. Souki has formed a new LNG export company with former COO and executive director of BG Group, Martin Houston. Just like Aubrey McClendon started a new company to compete with Chesapeake (American Energy) after being forced out of Chesapeake Energy by Icahn, so too Souki has now formed a new company to compete with his old company. The new company is called Tellurian Investments and its mission is to offer “mid-scale natural gas liquefaction and export projects along the United States Gulf Coast.” No doubt those Gulf Coast export facilities will use at least some Marcellus/Utica shale gas to feed them. Here’s the details on Souki’s new “in your eye Carl Icahn” venture…
    Read More “Revenge: Fired Cheniere CEO Starts Competing LNG Company”

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    Former Devon Energy CEO Buys Himself a Place in Rubio Campaign

    With Jeb Bush out of the Republican presidential primary, the old-line Republican establishment has closed ranks behind Florida Senator Marco Rubio. Which is why we find him disgusting. We no longer vote for politicians that promise one thing and do another (ex: Bob Dole, John McCain, Mitt Romney, Mitch McConnell, Paul Ryan, Jeb Bush, John Kasich, Marco Rubio). That’s the definition of establishment. They view themselves as the ruling class–something we left behind 240 years ago when we formed this country to rid ourselves of such people. Those in the energy industry are not immune to the siren call of serving the establishment. The co-founder and former CEO of Devon Energy, Larry Nichols, has just become Rubio’s energy advisor in return for “hosting a fundraiser” for the Senator (translation: giving him big piles of money). We call that purchasing a seat at the table. Before you get too outraged, please know that this goes on ALL THE TIME in both parties. And has for years. MDN editor Jim Willis used to work in the Ronald Reagan White House, and we saw it there too. Big monied people donate, and when the candidate wins, those same people either get top posts in the administration, like Secretary of Energy, or they get cushy postings as an ambassador to some country like France, or Belize (in the tropics). We find it disheartening and distressing. But it is the way things are. Unless we change it. Below is the news about Nichols buying himself a place at the Rubio table…
    Read More “Former Devon Energy CEO Buys Himself a Place in Rubio Campaign”

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    Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast

    Carrizo Oil & Gas, a Houston-based driller, issued their fourth quarter and full year 2015 financial and operational update on Monday. Carrizo actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15, and according to Monday’s update, they won’t be drilling here in 2016. Not only that, they have curtained (shut-in) some of their Marcellus/Utica production, and they may shut-in even more in the coming months, if prices don’t recover. According to Carrizo’s financials, the company made $226 million in 2014. But in 2015 the company lost $1.2 billion. Here’s a portion of Monday’s update, which says they plan to focus on the Eagle Ford for the time being…
    Read More “Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast”

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    Crestwood 2015: $2.3B Paper Loss, Marcellus Pipeline Volumes Up

    Houston, TX-based Crestwood Midstream, which these days calls itself Crestwood Equity Partners, operates midstream businesses in multiple shale resource plays across the United States, including the Marcellus. Crestwood is engaged in gathering, processing, treating, compression, storage and transportation of natural gas, among many other activities. Crestwood owns the facility along the shore of Seneca Lake in New York where they want to convert a depleted underground salt cavern into a propane storage facility–something that protesters frequently get arrested for opposing (see Criminals Arrested Blocking Crestwood Seneca Lake Facility). Yesterday Crestwood issued their fourth quarter and full year 2015 update. The distressing news is that Crestwood lost $2.3 billion for the year. But let’s put that in context. Almost all of it was a paper loss. Of the $2.3 billion lost, $821 million was for depreciation of assets, and $1.4 billion was “goodwill impairment”–meaning the overall perception of the company’s value took a hit. In 2014 Crestwood lost just $10 million. We suspect the true money-out-of-pocket loss for Crestwood in 2015 was closer to $100 million, not nearly as bad as it seems at first. Below is a portion of the update, including a couple of Marcellus pipeline updates from the company…
    Read More “Crestwood 2015: $2.3B Paper Loss, Marcellus Pipeline Volumes Up”

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    PDC Energy 2015: $68M Loss, Production Up 65% Y/Y

    PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). In December the company announced they would restart Utica drilling in 2016 with plans to drill five wells (see PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells). On Monday PDC released their fourth quarter and full year 2015 financial and operating results. PDC grew production in 2015, substantially, over 2014 (up 65%). Although the company lost money in 2015, as most drillers did, it wasn’t all that much compared to others. In 2014 PDC made $155 million in profit. In 2015, they lost $68 million. With others losing over $1 billion, $68 million is a comparative drop in the bucket. We spot no mention of when they will restart Utica drilling. Here’s the update from PDC…
    Read More “PDC Energy 2015: $68M Loss, Production Up 65% Y/Y”