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    Stone Energy 2015: $1.1 Billion Loss, Quit Drilling in Marcellus

    Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale. Last year they quit drilling in the northeast and actually shut-in part of their production due to low prices (see Stone Energy 3Q15: Shut Down 110 Mmcfe/d of Marcellus Production). However, Stone does have around 75,000 acres of leases–so they’re an important player in our neck of the woods. So we keep tabs on them. In December Stone said they would spend 3-5% of their $200 million budget in 2016 in the Marcellus/Utica–about enough to drill one well. Which led to our conclusion they’re in maintenance-only mode for this year. And no wonder why. Yesterday Stone released their fourth quarter and full year 2015 operating and financial results, and it’s not a pretty picture. In 2014 Stone lost $190 million for the year. In 2015, they lost a huge $1.1 billion for the year. You can’t rack up losses like that for long. Here’s yesterday’s update from Stone Energy…
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    Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B

    Yesterday we told you that EQT had decided to float a new round of stock–up to 7.5 million shares–hoping to raise a good chunk of cash, $437 million (see EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M). Seems EQT isn’t the only driller taking that approach. Yesterday Cabot Oil & Gas announced their own plan to issue a new round of common stock. This one is a doozy. Cabot originally announced they’re floating 38 million new shares of common stock, with an option to issue another 5.7 million shares to the banks underwriting the offering. That’s a total of 43.7 million shares that may get sold. A short time later Cabot issued a second press release saying they’ve “upsized” the offering–to 44 million shares and an option for another 6.6 million shares for the underwriters. A total of 50.6 million shares. How much is Cabot asking per share? $20/share–which works out to be a staggering $1 billion! Supersize Me baby!…
    Read More “Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B”

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    Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M

    Rice Energy has sold an 8.5% ownership stake in Rice Midstream to EIG Global Energy Partners for $375 million. Rice plans to use the money to help fund its 2016 pipeline expansion program in the Marcellus/Utica. EIG is also on the hook for another $125 million investment in the next 18 months if Rice chooses to exercise it. Here’s the details for how Rice Midstream is dealing with the downturn in the market…
    Read More “Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M”

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    The Marcellus Landman Leaveth

    The person who negotiates leases for drilling and pipelines (and for other oil and gas related transactions) is called a landman–regardless of whether the person doing the negotiating is a man or a woman. Landmen play an important part in the shale business–including here in the Marcellus/Utica. Sometimes they’re reviled as being “high pressure”–as in “sign this lease now while I’m here, I won’t come back, this is your one and only chance.” We don’t like landmen like that. But there are those who do the job and do it well–and we cherish them. They don’t use high pressure tactics, they wait for you to run your lease by a lawyer (as you ALWAYS should). They come back. They keep at it. They’re the best kinds. Thing is, landmen in the Marcellus/Utica are now a dying breed. They’re changing jobs. Why? Because there’s so little leasing going on these days. A recent article highlights the situation of what we call the Landman Leaveth…
    Read More “The Marcellus Landman Leaveth”

  • Marcellus & Utica Shale Story Links: Tue, Feb 23, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Managing mineral rights another option for landowners; NGI’s REX Tracker updated; PA rig count bottoms out; natgas flowing to Sabine Pass LNG export plant; Obama’s oil fee disaster; Bernie Sanders’ frack ban disaster; IEA predicts price spike coming; how U.S. shale will bounce back; Baker Hughes-Halliburton deal 50/50 at best; questions continue to dog Williams re Chesapeake bankruptcy; the energy industry’s “day of reckoning”; and more!
    Read More “Marcellus & Utica Shale Story Links: Tue, Feb 23, 2016”

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    MarkWest’s Mobley Processing Plant Spills Hazardous Oil into Creek

    There’s been an accidental release of a hazardous chemical at the MarkWest Energy cryogenic processing plant in Mobley (Wetzel County), WV. The spill was discovered Saturday morning by MarkWest workers. MarkWest’s Mobley plant separates natural gas from natural gas liquids (NGLs). The NGLs are sent on for further separation into their component parts at a fractionation facility. The fluid in question is DOWTHERM™ MX Heat Transfer Fluid, a chemical used as as a heat transfer fluid meant for closed-loop systems. An estimated 3,000 gallons of the fluid spilled, some of it reaching the North Fork of Fishing Creek and some of that entered the water intake for the community of Pine Grove, WV. The fluid was contained at the water plant and did not get into the public’s water supply–but just to be absolutely safe, some 360 households connected to the public water supply were cautioned to not drink or bathe in the water until further notice. MarkWest is providing bottled water to residents. Here’s what’s known so far…
    Read More “MarkWest’s Mobley Processing Plant Spills Hazardous Oil into Creek”

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    Cabot O&G 2015: $114M Loss, Drilled 142 Wells, Production Up 13%

    We consider Cabot Oil & Gas one of the bellwether Marcellus drillers that provides a good measuring stick for where the industry is heading. Last Friday Cabot released their fourth quarter and full year 2015 financial results. What did it show? In 2014 Cabot made $104 million after expenses. In 2015, the company lost $114 million after expenses. But that’s not the whole story. Cabot has been disciplined in their spending. If you look at net income or loss for the fourth quarter, in 2014 Cabot lost $222 million–but in 4Q15 they lost $111 million. That is, they’re getting better at reigning in costs. And Cabot is already a low-cost leader. The big battle they faced in 2015 and continue to face is lack of pipeline takeaway capacity. NY Gov. Andrew Cuomo is punitively withholding approval of stream crossing permits for the Constitution Pipeline and that is damaging Cabot (we think they have a good case for a lawsuit). Because Cabot must sell most of their gas locally, they get bottom of the barrel prices. In 2015 they averaged a price of $2.15 per thousand cubic feet (Mcf) for the gas they sold. Hence, they began to shut-in some of their wells and vastly slowed down drilling. In 2014 Cabot drilled 200 wells. In 2015, that number slide to 142 wells. Even with shut-in wells and less drilling, Cabot still managed to grow production by 13% in 2015 over 2014. Here’s Friday’s Cabot update…
    Read More “Cabot O&G 2015: $114M Loss, Drilled 142 Wells, Production Up 13%”

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    Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot

    Dimock, PA is the story that just doesn’t die. We thought the story of methane migration into nearby water wells in a small area of Dimock, PA (from Cabot Oil & Gas wells) had long since been put to bed. There were 14 families along the Carter Road area that reportedly experienced turbidity in their water from methane migrating from drilling operations nearby. The state Dept. of Environmental Protection investigated in 2010 and declared Cabot guilty and imposed some pretty stiff fines and requirements, including a requirement to install permanent water treatment systems at each home and even an offer to each of the families to pay twice what their property was worth at the time (see PA DEP Takes Aggressive Action Against Cabot Oil & Gas over Dimock Township Methane Contamination). We won’t recount all of the twists and turns we documented over the years, including research that showed Cabot wasn’t responsible for the methane migration. All of the properties either sold to Cabot or got their water systems repaired–except for two holdout families who are riding the horse of hope that they can sue Cabot for big money and retire millionaires. Of course the only people making money on the lawsuit are their lawyers–but that doesn’t seem to bother them. The final two holdouts in Dimock get their day in court beginning today. Except their lawyers sleazily tried to sneak in a bunch of “evidence” at the last minute–and the judge has ruled they can’t use it. In fact, the judge called the move a “sad and shocking spectacle.” No one can predict the court’s outcome for sure, but given what’s happened so far, it’s pretty easy to predict that Cabot will win this one and then the final chapter will be written in the long, sordid tale of how anti-drillers tried to demagogue the Dimock situation–and lost…
    Read More “Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot”

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    Residents of NEPA Village Want Marcellus Leasing & Drilling

    We’ve written in the past that in most cases villages and cities don’t participate in leases and being drilled under not because of any inherent danger (the drilling happens a mile or more down, through solid rock), but because of practical reasons. It’s far easier in time and effort and expense to lease the property of two or three farmers/landowners who own hundreds of acres than it is to lease tiny quarter-acre or less parcels you find in a village or city. One drilling unit is sometimes one or two landowners (maybe a half dozen at most), whereas a drilling unit of one square mile (640 acres) in the village may involve hundreds of landowners. Those hundreds all need to read and sign a lease, and their deeds need to be research to be sure it’s a clear deed and the person signing actually owns the mineral rights. It’s a daunting task. But some communities are up for the challenge. In some communities, like New Milford, PA (in Susquehanna County, about 20 miles from MDN headquarters), the village (in this case called a borough) some residents WANT to sign a lease and get drilled under. The borough held a meeting last week to discuss the possibility…
    Read More “Residents of NEPA Village Want Marcellus Leasing & Drilling”

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    Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else

    Starting this week the sugar maples along the path of the Constitution Pipeline will come down. MDN previously told you about the Holleran family in New Milford, PA who make maple syrup by tapping the trees on their five acres of land (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). While it’s unfortunate that Williams, the builder of the pipeline, could not find an alternate route (they did try), and unfortunate that media reports say up to 80% of their maple trees (~200) will need to be cut, we’re not sympathetic. The Hollerans have steadfastly refused any kind of offer from Williams to compensate them, instead aligning themselves with some of the most radical of radical anti-drillers in a publicity quest to pressure Williams to stop. It didn’t work and now a federal judge is telling the family if they prevent the trees from coming down, starting today, they’re going to the clink…
    Read More “Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else”

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    EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M

    Last Friday EQT, one of the largest Marcellus and Utica Shale drillers, announced they are floating 6.5 million shares of new common stock, and a potential extra 975,000 shares for the underwriter, Goldman Sachs, for a total of nearly 7.5 million shares. Not long after announcing the stock offering, they made a second announcement of the price–$58.50 per share. If EQT sells all 7,475,000 shares of stock for $58.50 per share, it will net the company $437 million in cash. What will they do with it? It will be used for “general corporate purposes” and potentially to pay down some debt. Here’s the twin announcements from Friday…
    Read More “EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M”

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    FERC Says Rover Pipeline as Planned Negatively Impacts Environment

    In December 2014 Energy Transfer Partners filed their draft Resource Reports of environmental survey data with the Federal Energy Regulatory Commission (FERC) for the ET Rover pipeline (see ET Rover Pipeline’s 800-Mile Journey Begins with FERC Filing). Rover is an 800-mile, $4.4 billion pipeline that will connect Pennsylvania, West Virginia and Ohio, crossing pretty much the entire state of Ohio heading northwest before entering Michigan and eventually taking a dog-leg into Ontario. In February of 2015, exactly a year ago, ET filed a full application with FERC. Last week FERC responded with a Draft Environmental Impact Statement (DEIS)–and the news was not so good for Rover. FERC found “adverse and significant” impacts from the project as planned and delivered to ET nearly 25 pages of recommendations that ET will need to fix before they get an approval. Is this a fatal blow to Rover? Or just a speed bump? Time will tell…
    Read More “FERC Says Rover Pipeline as Planned Negatively Impacts Environment”

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    2 Bills Favorable to Drillers Advance in WV Senate – SB 508 & 565

    Two bills that favor the drilling industry in West Virginia have recently advanced in the WV Senate. One of the bills we previously told you about–Senate Bill (SB) 508, a bill that would stop endless, frivolous lawsuits from being filed against drillers (see WV Senate Bill Stops Frivolous Nuisance Lawsuits Against Drillers). The other bill is new for us, SB 565, a bill that “would allow oil and gas drillers to begin building well pads and access roads prior to getting a well work permit approved by the state Department of Environmental Protection.” SB 508 passed the Senate Judiciary Committee last week, and SB 565 was passed in the Senate Energy Committee. They are both on their way and likely to pass the full Senate and House…
    Read More “2 Bills Favorable to Drillers Advance in WV Senate – SB 508 & 565”

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    John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?

    One of the most left-wing partisans in Harrisburg, serving in the Tom Wolf Administration, is calling it quits. John Hanger, whom we once considered a reasonable man but who later proved he is not, is Wolf’s Secretary of Policy and Planning. Hanger has been one of the most shrill voices in Harrisburg in demanding a Marcellus-killing severance tax. Wolf is making a second ill-fated run at a severance tax and by all accounts Hanger was pushing it hard. And then he up and quit. Why? He says it’s because his wife and daughter live in Massachusetts (where she is vice-provost for faculty affairs at the University of Massachusetts Medical School.) To his credit, John has been married for 36 years to the same woman (she must be a saint!). However, we think he’s leaving for a different reason…
    Read More “John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?”

  • Marcellus & Utica Shale Story Links: Mon, Feb 22, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NGI updates Rex Tracker for REX pipeline expansion; drillers may exit PA after all; Haynesville gets competitive with Marcellus; natgas replaces coal on U Kentucky campus; 2016 oil & natgas production & storage forecasts; dominoes toppling in shale; researchers’ own data contradicts conclusions on fracking & methane emissions; Clean Power Plan won’t survive legal challenges; is Russian money behind some fractivists; and more!
    Read More “Marcellus & Utica Shale Story Links: Mon, Feb 22, 2016”

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    US Well Services Lays Off Nearly 50 in Jane Lew, WV

    cutting jobsU.S. Well Services, headquartered in Houston, TX but with a sizable office in Jane Lew, WV, is an oilfield services company providing hydraulic fracturing services in unconventional oil and natural gas basins–including the Marcellus and Utica Shale. According to their website, U.S. Well Services operates both diesel and electric fracking fleets. On Wednesday, with no warning, they laid off most of their workers in the Jane Lew office–just under 50 people, meaning the company was not required to give advance notice under the WARN Act. Here’s what happened on Wednesday, what U.S. Well Services calls an “unfortunate reduction”…
    Read More “US Well Services Lays Off Nearly 50 in Jane Lew, WV”