Marcellus Drilling News

American Energy Partners | Energy Companies

McClendon’s Biggest Backer Backed Away the Day Before Car Crash
March 21, 2016March 21, 2016

Details continue to drib and drab out related following the death of Aubrey McClendon on March 2nd (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). We previously told you that one of Aubrey’s biggest backers, Energy & Minerals Group (EMG), was about to hang Aubrey out to dry (see More Info Comes to Light About McClendon’s Last Days/Last Moments). We now have more details about EMG’s abandonment of McClendon the day before his death. We also have a comment from an analyst who says McClendon’s company, American Energy Partners, will likely declare bankruptcy within a year. They just aren’t producing enough cash to pay all of the debts…
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Industrywide Issues | Jobs | Regulation

DOL Continues to Harass NE Drilling Industry for “Back Wages”
March 21, 2016March 21, 2016

The Obama Dept. of Labor’s (DOL) harassment of oil and gas-related companies, particularly in the Marcellus/Utica region, goes back years. The DOL’s favorite tactic is to use the full force of the federal government to accuse companies of shorting employees out of wages for overtime (see Feds Slap Appalachian Oilfield Svcs with $129,802 for Back Wages; DOL Action: Several Marcellus Drillers Pay $4.5M in Back Wages; Labor Dept. Unfairly Targets Marcellus Industry in SWPA & WV; and Halliburton Pays $18M in Back Wages, Some Going to PA Workers). The DOL continues their long campaign of harassment. Last week the DOL issued a press release stating they’ve turned up more instances of back wages due in four companies, two of which have major operations in the Marcellus/Utica region: Frank’s International and Stream-Flo USA…
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Energy Companies | Southwestern Energy

Southwestern Energy Pays Preferred Stock Dividends w/Common Stock
March 21, 2016March 21, 2016

Northeast drilling companies like Southwestern Energy are using creative strategies to stay afloat until oil and gas prices increase again. One of the tactics has been to lay off thousands of workers (see Southwestern Energy Cuts Workforce 44%, 200 Marcellus Jobs Gone). Another strategy is to cut spending and suspend drilling altogether (see Southwestern Cuts 2016 Spending 80%, Idles Marcellus Rigs (for Now)). Yet another is to borrow new money to pay off previously borrowed money (see Southwestern Energy Borrows $750M to Pay Off Other Borrowed Money). Southwestern continues with the creative financing with a tactic we’ve not seen before among northeast drillers: Pay dividends for one class of stock (preferred) by giving dividend-holders shares in another class of stock (common)…
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Atlas Energy | Energy Companies

Atlas Energy “Penny Stocks” Begin Trading Today on OTCQX
March 21, 2016March 21, 2016

MDN previously told you that the Philadelphia-based Atlas Energy, which sold off the majority of its Marcellus assets in two different tranches for $12 billion, has fallen on hard times–at least its stock price has. The New York Stock Exchange told the company in December that its stock was in danger of being de-listed from the mighty NYSE (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing). On Friday the company seems to have capitulated and given up on trying to boost the stock price to above $1 per share (the minimum required to be listed on the NYSE). Atlas said that regardless of what happens with the NYSE, as of today, March 21, company shares will begin trading on the Over the Counter stock exchange, called OTCQX. That is, Atlas shares have become penny stocks…
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Energy Companies | Ultra Petroleum

Ultra Petroleum Threatened with NYSE De-listing
March 21, 2016March 21, 2016

It’s been a while since we’ve written anything about Ultra Petroleum. Ultra is an independent exploration and production (E&P) company focused on drilling in the Green River Basin of Wyoming–in the Pinedale and Jonah Fields. In addition, Ultra is currently drilling for oil in the Uinta Basin/Three Rivers area in Utah. However, our interest in Ultra is because they maintain a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres. They aren’t currently drilling on their acreage, but if prices change, they likely will. The news we bring you about Ultra is news we’ve brought you about other companies, like Atlas Energy (see today’s story on Atlas). And that news is that the New York Stock Exchange has threatened Ultra with de-listing its stock if the price is not boosted to over $1 per share…
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Energy Companies | Warren Resources

Warren Resources 2015: Lost $620M, Most of it a Paper Loss
March 21, 2016March 21, 2016

As MDN pointed out in February, Warren Resources is on the cusp of bankruptcy (see Warren Resources: Potential Bankruptcy, No Drilling in 2016). They are a small driller–at least in the Marcellus–having drilled two Marcellus wells last year. Earlier this month we brought you the news that the NASDAQ Stock Exchange is threatening to stop trading the company’s stock (see Pretty in Pink? Warren Resources Put on Notice for Stock Delisting). Last week Warren issued its fourth quarter and full year 2015 update. It’s fairly short and to the point: last year Warren lost $620 million. Most of that loss was a paper loss–$578M for impairments. Unlike other drillers, Warren doesn’t include a copy of their financial spreadsheets with their announcement. They make you go fishing on the Securities and Exchange Commission website to find their financial information. It appears they’re making it intentionally difficult to easily obtain the information…
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Energy Companies | Rice Energy

New Board Member for Rice Midstream + Bobby Vagt Flashback
March 21, 2016March 21, 2016

Rice Midstream, the pipeline subsidiary of drilling company Rice Energy, has just added a new board member–Stephanie C. Hildebrandt. Ms. Hildebrandt is a lawyer with international law firm Norton Rose Fulbright US LLP. Normally such an announcement is not something we highlight here on MDN–except we noticed a comment by Rice Midstream’s (and Rice Energy’s) chairman about the appointment. And seeing the name of Rice Midstream’s chairman–Bobby Vagt–reminded us once again of how Bobby is getting the last laugh over Teresa Heinz Kerry…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation

Canadian Company Fights Back Against Green Bully Greenpeace
March 21, 2016March 21, 2016

One of the favorite ways Big Green groups bully companies and municipalities is by using lawsuits against them. We see it all the time in the oil and gas industry. Example: THE Delaware Riverkeeper and Clean Air Council–both based in the Philadelphia area–filed a lawsuit against the Town of Middlesex in Butler County, PA (see ACLU Bullies Threaten Butler County Landowners over Martian Lawsuit). Butler County is on the opposite side of the state from where Riverkeeper and the Clean Air Council are supposed to be operating. Such is how they work. Another favorite tactic is to launch smear campaigns against the industry. One of the most radical Big Green groups is Greenpeace. They’re famous for smear campaigns–full of lies. They tried to run such a campaign against a Canadian forestry company–and the company fought back, in court. And now the court will make Greenpeace open up their records for close scrutiny. Cockroaches like Greenpeace can’t stand the light of day shining into their activities. They’re worried. And that got us to thinking. Why northeast drillers and midstream companies use the example of this forestry company as their model to fire back at THE Delaware Riverkeeper, Catskill Mountainkeeper, Food & Water Watch, and a plethora of other odious groups? Let’s force them to open up their books and expose them for the colluding frauds they are…
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Chesapeake Energy | Energy Companies

More on Chesapeake’s Possible (Rare) 1.5 Lien Debt Exchange
March 21, 2016March 21, 2016

Last week MDN told you about a creative way Chesapeake Energy may try to refinance some of its massive debts–by using a 1.5 lien debt exchange (see Chesapeake Considers Unusual 1.5 Lien Debt Exchange). Thanks to MDN’s right arm–Chris Acker–we spotted more details about this infrequently used method to refinance outstanding debt. What we learn from a Reuters story is that only six other companies have tried this route over the past few years. About 40 companies tried and failed to execute a 1.5 lien debt exchange last year. One-third of those 40 are expected to file for bankruptcy this year. Which is kind of an ominous indicator when it comes to Chesapeake. In fact, successfully executing a 1.5 lien is, for some credit rating agencies, considered a form of default in and of itself. We hasten to add that Chesapeake has not yet made any kind of announcement that they intend to execute a 1.5 lien debt exchange. The news is being reported by reputable sources they’re considering it–but no decisions have (yet) been made…
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Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Mar 21, 2016
March 21, 2016March 21, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: US Steel lays off workers in Ohio, related to O&G; fractivists bamboozle the public; rig declines continue, but pace slows; utilities pumping billions into natgas infrastructure; Chesapeake’s fake rally; Saudis won’t let oil price rise about $40/barrel; Iraq exports natgas for first time in history; and more!
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Columbia Pipeline Group | Energy Services | Industrywide Issues | M&A | Pipelines | TC Energy/TransCanada

Rumor Comes True: TransCanada Buying Columbia Pipeline for C$13B
March 18, 2016March 21, 2016

That was pretty fast. One week ago MDN told you that the rumor mill was working overtime about a potential buyout of Columbia Pipeline Group, a major Marcellus/Utica midstream company, by TransCanada, of Keystone XL Pipeline fame (see TransCanada Makes Play to Buy Columbia Pipeline for $10B). The number bandied about was $10 billion to buy Columbia. Neither Columbia nor TransCanada would confirm the rumors. But yesterday, TransCanada announced they’ve reached a deal with Columbia, to buy them for $13 billion (Canadian dollars, which is ~$10 billion US). It gives TransCanada a set at the midstream table since increasingly natural gas is flowing from the U.S. to Canada–after years of it being primarily the other way around. One of the primary selling points, according to TransCanada, is Columbia’s Marcellus/Utica assets. Here’s the Columbia/TransCanada announcement…
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Industrywide Issues | Ohio | Research | Statewide OH | Utica Shale

OOGA’s DeBrosse Report: 2015 Utica Continues to Wow
March 18, 2016March 18, 2016

Each year the 3,200-member Ohio Oil and Gas Association (OOGA) issue the DeBrosse Memorial Report (full copy below). The report is a high level look at where (and how much) drilling there has been in the state–and what they’re finding (methane, oil, NGLs). The latest report, recounting 2015, was released yesterday at the OOGA Annual Winter Meeting in Columbus. Once again it was a record-breaking year for Ohio–and the Utica Shale is the reason why…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation

FERC Approves Pipeline to Move More Marcellus/Utica Gas to Chicago
March 18, 2016March 18, 2016

In October 2014 Kinder Morgan ran an open season with an eye on expanding the Natural Gas Pipeline Company of America (NGPL) system in the Chicago area (see Kinder Morgan Plans Chicago Pipeline Expansion for Marcellus/Utica). The expanded NGPL system, called the Chicago Market Expansion Project, will bring new volumes of Marcellus and Utica Shale gas, heading west on the reversed Rockies Express Pipeline, to over 100 interconnects with Chicago-area local distribution companies, direct-connect power plants, industrial end users, interstate pipelines, and NGPL’s storage and highly liquid pooling points. Kinder originally thought they would beef up capacity by an extra 450,000 dekatherms per day. Somewhere along the way the project was scaled back to 238,000 Dth/d. The good news is that the Federal Energy Regulatory Commission (FERC) has just approved the project, which is on track to be completed by the end of this year. The expansion provides an important new market for Marcellus/Utica gas…
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Industrywide Issues | Pipelines | Regulation | Research

FERC Report: Northeast Pipeline Shortage Won’t Resolve Until 2019
March 18, 2016March 18, 2016

The Federal Energy Regulatory Commission (FERC) yesterday released its 2015 State of the Markets Report (see full copy below). Among the findings in FERC’s view of the marketplace: Most places across the country have seen a bump up in pipelines over the past 10 years, relieving constrained natural gas transportation. Except for the Marcellus/Utica region. In our neck of the woods lack of pipelines continues to mean a surplus–high inventories and low prices. Is there any hope in sight? Yes, IF the pipelines get approved and built, FERC says by 2019 our gas should be hitting new markets with a resulting boost to the price. Also interesting is FERC’s reluctance to embrace and endorse the prediction made by the U.S. Energy Information Administration just last week that in 2016 natural gas will surpass coal as the #1 source fuel to generate electricity in the U.S. (see NatGas is Killing Coal in Electric Generation Market – 2015 is Proof). FERC very definitely backed away from that prediction in their report. Hmmm…
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Allegheny County | Electrical Generation | Industrywide Issues | Pennsylvania

Invenergy Gets Pushback on Proposed Natgas Power Plant in SWPA
March 18, 2016March 18, 2016

Invenergy is in the process of building a $500 million Marcellus gas-fired electric plant in Jessup (Lackawanna County), PA–near Scranton, PA in the northeastern part of the state (see PA DEP Approves Jessup, PA Marcellus Gas Electric Plant). When built, the 1,480 megawatt plant will be the largest natgas-fired electric plant in the state. In January Invenergy announced they want to build a second natgas-fired electric plant–in southwestern PA (see Invenergy Eyes SWPA for Second Marcellus-Powered Electric Plant). The second plant would be much smaller, at 550 megawatts, and would be built on a brownfield site near Pittsburgh. Even though the site where Invenergy wants to build is a former landfill where fly ash was dumped, making it unusable for just about any other purpose, a group of local residents would prefer to keep it a dump rather than convert it to a beneficial use like generating electricity…
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CNG/LNG | Energy Companies | Exporting | Industrywide Issues | Repsol

Repsol’s Eastern Canadian LNG Export Plant “On Hold”
March 18, 2016March 18, 2016

In early 2015 Spanish oil giant Repsol accelerated plans to build an LNG export terminal on the coast of Saint John, Newfoundland (see Repsol Accelerates Plan for Canadian LNG Exports Fed by Marcellus). The Canaport LNG project, as it’s called, is one of five potential projects we identified in eastern Canada back in August 2014 that will potentially export Marcellus/Utica gas (see List of LNG Export Projects for Marcellus/Utica Shale Gas). Last fall the Canaport project received approval from the Canadian National Energy Board to proceed (see 3rd Eastern Canada LNG Export Plant Receives Approval). However, LNG World News is reporting they’ve received an email confirmation from Repsol that the company is slamming on the brakes with respect to the Canaport LNG export project…
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