Marcellus Drilling News

Chevron | Energy Companies

Chevron 4Q15: First Quarterly Loss in 13 Years, Scaling Back 2016
February 1, 2016February 1, 2016

Chevron, one of the country’s largest oil and gas companies (with a sizable drilling operation in the Marcellus/Utica) issued its fourth quarter and full year 2015 update last Friday. It was not good news. Chevron lost money in 4Q15–their first quarterly loss in 13 years. The reason? Upstream (or drilling) got “crushed” due to low commodity prices for oil and gas. The news has created jitters on Wall Street. This week three more majors are due to release their updates: ExxonMobil, BP and Shell. Investors are worried they may show losses too. In their Upstream division, Chevron lost $1.9 billion in 4Q15 over 4Q14, and they lost $4 billion for the entire year, after making $3.3 billion in 2014. Chevron is a BIG company, so don’t fret. They still made money company-wide. Although Chevron lost $588 million in 4Q15 (company-wide), they made $4.6 billion of net income for full year 2015…
Read More “Chevron 4Q15: First Quarterly Loss in 13 Years, Scaling Back 2016”
Commodity Price | Energy Companies | Industrywide Issues | Stone Energy

IHS Says Hedging Woes Ahead for E&Ps in 2016 & 2017
February 1, 2016February 1, 2016

A new study from oil and gas powerhouse research firm IHS says there’s problems ahead for U.S. drillers because of hedging. Hedging is a complicated trading activity that reduces risk. In plain English, drillers lock in prices for the gas they will sell in the future–several months or even years in advance–today. On the up-side they get a lot more money for their gas. One of the masters of hedging in the Marcellus/Utica is Antero Resources (see Antero Resources 4Q15 Update: NatGas Sales Averaged $4.40/Mcf). On the down side, you’re not able to lock in prices that earn you a profit. That’s the situation facing drillers as hedges in 2016 and 2017 “roll off” and companies are negotiating new contracts that just aren’t all that great. According to IHS’ “Comparative Peer Group Analysis of North American E&Ps” (unfortunately we don’t have a full copy) in 2016 will see a decline in hedging, and 2017 will be even worse…
Read More “IHS Says Hedging Woes Ahead for E&Ps in 2016 & 2017”
About MDN | Calendar

Calendar of Events for Feb 1 – Apr 30 (90 Days)
February 1, 2016February 1, 2016

Below are upcoming events for the next three months (90 days). To see the full list of future events, visit this page: //marcellusdrilling.com/calendar/.

NOTE: To have an item included, please email it to: calendar@marcellusdrilling.com.
Read More “Calendar of Events for Feb 1 – Apr 30 (90 Days)”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Feb 1, 2016
February 1, 2016February 1, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH groups & officials lobby for drilling in Wayne Natl Forest; latest Duke shale study comes up short; the collapse of shale gas production has begun; a look at the LNG market; the “great divide” between crude & natgas prices; Chesapeake’s next move; Halcon Resources may not survive; why the Paris climate agreement will fail; and more!
Read More “Marcellus & Utica Shale Story Links: Mon, Feb 1, 2016”
Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

New Effort to Pass HB 1391 Minimum Royalty Bill in PA
January 29, 2016January 29, 2016

Garth Everett

Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). House Bill (HB) 1391 is was introduced by State Rep. Garth Everett, Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hopes the Marcellus industry will not oppose it this time around. The issue of guaranteeing minimum royalties is one of those rare issues that has divided the drilling industry and landowners. Everett said he hasn’t (until now) pushed the bill because of the budget stalemate, but now that the budget impasse is mostly over, he’s going to make a renewed effort to get HB 1391 passed…
Read More “New Effort to Pass HB 1391 Minimum Royalty Bill in PA”
Baker Hughes | Energy Services

Baker Hughes 4Q & Full 2015 Update: Blood Everywhere
January 29, 2016January 29, 2016

Yesterday oilfield services giant Baker Hughes (with a big presence in the Marcellus/Utica) released fourth quarter and full year 2015 results. There’s blood everywhere. Revenue for the year was $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014, a 36% drop. Of course, average rig counts dropped 34% in 2015, so it’s no wonder revenues tanked–the service Baker Hughes provides was more than one-third less in demand. Looking at 4Q15 only, revenue for the quarter was $3.4 billion, down $3.2 billion (or 49%) compared to the fourth quarter of 2014. Ouch, there goes another arterial wound with blood pumping out on the floor. The good news, if there is any, is that the company kept expenses in check. According to Baker Hughes CEO Martin Craighead, “Despite this challenging environment, we generated $1.2 billion of free cash flow during the year, after more than $446 million of restructuring payments. This achievement was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on initiatives to improve working capital.” As for the Halliburton shotgun wedding, Craighead said, “With regard to the merger, I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.” What’s ahead for 2016? “Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016. At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers’ challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.” Eeks, another bleeder. Below are select portions of yesterday’s bloody update…
Read More “Baker Hughes 4Q & Full 2015 Update: Blood Everywhere”
Industrywide Issues | Pipelines | Research

5 New Pipelines Now Give Northeast Drillers Access to New Markets
January 29, 2016January 29, 2016

Our favorite government agency, the U.S. Energy Information Administration, continues to pump out the hits. Yesterday we highlighted a story from the EIA about the price of natural gas in the Marcellus/Utica gradually rising because new pipelines have provided new markets for northeast drillers (see EIA: New Pipelines Continue to Boost Marcellus/Utica Gas Prices). Today we bring you another great EIA story. This one does a deep dive into five pipelines that have come online in late 2015/early 2016 and that are now providing drillers with access to new markets that pay more for gas than they can get here at home…
Read More “5 New Pipelines Now Give Northeast Drillers Access to New Markets”
CNG/LNG | Energy Companies | Industrywide Issues | M&A | Shell

It’s a Deal – BG Shareholders Approve Shell Buyout
January 29, 2016January 29, 2016

In the end, it wasn’t even close. Some 99.5% of BG Group’s shareholders voted to approve the sale/merger of the company with Shell at a meeting yesterday. Earlier this week 83% of Shell’s shareholders voted to approve the merger (see Shell Shareholders Vote in Favor of BG Buyout/Merger). As we’ve said from the beginning, this is an LNG love story–Shell wanted BG for its natural gas market share. The Shell/BG merger will create the world’s dominant LNG company, by far. The buyout/merger is, for Shell, it’s largest-ever acquisition. Just how big is this deal? The Shell/BG merger is the largest oil and gas deal since Exxon bought Mobil in 1999. The merger will be consummated on February 15. As we’ve previously noted, Shell plans to lay off 10,000 people across both companies once the merger is complete. Happy Valentine’s Day…
Read More “It’s a Deal – BG Shareholders Approve Shell Buyout”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Pipelines | Regulation

Southern NJ NatGas Pipeline Approved by State BPU
January 29, 2016January 29, 2016

In January 2014 MDN brought you the very sad news that through bullying and intimidation, radical environmentalists from the New Jersey Sierra Club and the League of [Liberal Democrat] Women Voters had pressured the New Jersey Pinelands Commission into rejecting a plan for a 22-mile natural gas pipeline that would power an electric generating plant–replacing coal that powers the plant now–and also bring natural gas to residential homes in beautiful Cape May County, NJ (see Sierra Club, LWV Chooses Coal over NatGas in South Jersey). These so-called environmentalists would rather have the residents of South Jersey breath dirty air rather than clean air that comes from natural gas powering a local electric plant. We’re happy to report that a different pipeline, a $130 million, 30-mile natural gas pipeline just north of where the rejected pipeline would have run, has been approved by the NJ Board of Public Utilities (BPU). It is a major defeat of the Sierra Clubbers and their ilk. So of course, the Clubbers are suing…
Read More “Southern NJ NatGas Pipeline Approved by State BPU”
Anti-Drilling/Fossil Fuel | Beaver County | Industrywide Issues | Pennsylvania

Beaver, PA Anti-Frackers Want County to Ban Marcellus Drilling
January 29, 2016January 29, 2016

Last night a couple of anti-fossil fuel residents in Beaver County, PA addressed the new Beaver County Commissioners board at their first meeting of 2016. Both are from the Beaver County Marcellus Shale Awareness Committee, a group formed in 2010 to oppose Marcellus Shale drilling in the county. The two want the commissioners to ban fracking in the county. One of the two, with a receding hairline, gray hair and a ponytail (a sure sign he was once a 60s hippie), calls himself a Reverend and claims a bunch of liberal churches–even the pope!–are against fracking. The Rev doesn’t care much for Shell’s plan to build an ethane cracker in the county either. His alternative? Stick a bunch of solar panels on that site. Yes, we literally fell out of our chair laughing…
Read More “Beaver, PA Anti-Frackers Want County to Ban Marcellus Drilling”
Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Statewide PA

MSC’s Dave Spigelmyer Says Rough Few Years Ahead for Marcellus
January 29, 2016January 29, 2016

David Spigelmyer, who once headed up Chesapeake Energy’s efforts in the Marcellus Shale region, is and has been head of the Marcellus Shale Coalition for the past couple of years. Great guy. Smart guy. Dave published an op-ed in the Pittsburgh Post Gazette in today’s issue. It’s titled, “Shale hits a rough patch: But natural gas remains a boon to Pennsylvania.” The sobering news, according to Dave, is that the price northeast drillers (drillers everywhere) are getting for their gas will remain low in 2016 and 2017 “and perhaps longer.” Businesses are “in survival mode” and and the slowdown in drilling is being felt by “tens of thousands of men and women” who work for this marvelous industry. The statistics, according to Dave, are “numbing.” Sobering words. But we have to face the reality and not look away and pretend otherwise. But, according to Dave, there is hope and we will get through it. Here’s a portion of his no-rose-colored-glasses op-ed…
Read More “MSC’s Dave Spigelmyer Says Rough Few Years Ahead for Marcellus”
Energy Companies | Halcon Resources

Halcon Resources Suspends Dividend Payments for Preferred Stock
January 29, 2016January 29, 2016

Halcon Resources is a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play and currently doesn’t drill in any of that acreage. Halcon is one of the one of eight Marcellus/Utica companies on David Fessler’s “Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In November 2013 Halcon’s colorful CEO, Floyd Wilson, said he wouldn’t drill any more, ahem, crappy wells in the Utica (see Halcon CEO Says No More S***** Wells in Northern OH Utica). On an analyst call in early 2015 Wilson quipped “What’s the Utica?” in response to a question from an analyst (see Halcon CEO Floyd Wilson: “What’s the Utica?”). In August 2015 the New York Stock Exchange sent a letter threatening to de-list the stock (see Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate). A company must maintain at least a $1/share price in order to continue trading on the NYSE. Yesterday Halcon’s common stock traded at 43.3 cents/share. Oops. So it will be no surprise that Halcon, like several other northeast drillers, has decided to suspend paying dividends on their preferred stock…
Read More “Halcon Resources Suspends Dividend Payments for Preferred Stock”
Industrywide Issues | Jobs | Pennsylvania | Statewide PA

Corbett Official Destroys Hanger’s Claims of Low Marcellus Jobs
January 29, 2016January 29, 2016

Earlier this week MDN brought you the reckless and baseless allegations by John Hanger that former PA Gov. Tom Corbett had “cooked the books” when it came to how many jobs the Marcellus industry has created (see John Hanger Says Gov. Corbett “Cooked the Books” re Marcellus Jobs). Perhaps it’s totally unrelated, but we’d like to point out that Hanger, when he ran for governor in the primary, campaigned on a platform of legalizing marijuana in the Keystone State (see Pass One Last Joint for John Hanger). Anywho… Dennis Roddy used to work for Corbett as a speech writer. Roddy knows the jobs issue very well and was personally involved with the Corbett administration’s efforts to accurately account for the economic benefits the Marcellus industry was (and is) creating in the state. Roddy recently published a rebuttal to Hanger that completely destroys Hanger’s claims of inflated jobs figures…
Read More “Corbett Official Destroys Hanger’s Claims of Low Marcellus Jobs”
Energy Companies | EQT Corp

Kudos: EQT Foundation Hands Out $5.5 Million in 2015
January 29, 2016January 29, 2016

EQT, like many other Marcellus drillers, runs a foundation that hands out large sums of money to worthy non-profit organizations. Yesterday EQT announced that their EQT Foundation handed out a total of $5.5 million in 2015. Below is a list of organizations that received EQT donations during the second half of 2015…
Read More “Kudos: EQT Foundation Hands Out $5.5 Million in 2015”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jan 29, 2016
January 29, 2016January 29, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Andrew Cuomo, NY’s gutless governor; PA royalties from state forests down 52%; big public meeting re gas-fired power plant in SWPA; Florida LNG export plant on the way?; can America’s shale success be replicated in other countries?; saving the MLP sector; Russia cozying up with OPEC; Iran’s plans to export natgas to Europe; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Jan 29, 2016”
Anti-Drilling/Fossil Fuel | Crestwood Midstream | Crime | Energy Services | Industrywide Issues | New York | NGLs | Schuyler County

Criminals Arrested Blocking Crestwood Seneca Lake Facility
January 28, 2016January 28, 2016

We Are Seneca Lake criminals being carted off in a paddy wagon

When someone organizes and repeatedly shuts down a legal, functioning business with so-called “civil disobedience,” it’s not civil and it’s not an act of disobedience–it’s a crime. If you show up with a bunch of nutters to block the entrance to a facility once and the cameras are there to record it–you’ve made your point. Anti fossil-fuel radicals opposed to creating an underground propane storage facility in a depleted salt mine along the shore of Seneca Lake (in upstate New York) have recently stepped up their so-called civil disobedience at the facility–staging weekly blockades at the site three weeks in a row. One of those instances was on Martin Luther King, Jr. Day, when Sandra Steingraber, so-called scholar in residence at Ithaca College (where she’s paid to agitate and never teaches a class) invoked the name of Dr. King attempting to tie the great civil rights struggle with anti-fossil fuel nuttery. It’s offensive. Below is a rundown, with the names of the latest criminals who have colluded to try and shut down a legal business, Crestwood Midstream, from operating the facility they own at Seneca Lake…
Read More “Criminals Arrested Blocking Crestwood Seneca Lake Facility”