Marcellus Drilling News

Anadarko | Energy Companies | Lycoming County | Pennsylvania

Anadarko 2015: Loses $6.7B, Marcellus Drilling Almost Dried Up
February 3, 2016February 3, 2016

Anadarko Petroleum is a huge oil and gas company with drilling operations scattered all over the world–both onshore and offshore. One of those operations, teeny tiny for Anadarko, is in the Marcellus Shale in Lycoming County, PA. Some of their leases are for land in the Loyalsock State Forest where antis are attempting to stop Anadarko from drilling (see Antis Ask PA Gov Wolf to Stop New Drilling in Loyalsock Forest). Don’t worry, Anadarko can take a hint. What was once a very active drilling program in PA for Anadarko just a few years ago–with 30, 40, even 60 permits being issued for wells in any given four month period–has dried up to virtually nothing. For the last four months of 2015 Anadarko received 4 permits to drill in PA, according to the latest data from the Marcellus and Utica Shale Databook. On Monday Anadarko released their fourth quarter and full year 2015 results. The company posted a $1.25 billion loss for 4Q15 alone. The company lost $6.7 billion for the full year. Yikes! Grab the tourniquets before the company bleeds out! Anadarko announced spending for 2016 will be slashed 50% over 2015 spending levels…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Feb 3, 2016
February 3, 2016February 3, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Most prolific natgas region is in decline; big oil companies at risk of Moody’s downgrade; OH has drilled 1,673 Utica wells; crude by rail is slowing down; oil industry supports energy reform bill; Alberta cuts royalty tax to boost local drilling; BP’s disastrous 2015; and more!
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Coterra Energy (Cabot O&G) | Energy Companies | Pennsylvania | Susquehanna County

Cabot O&G 2015 Update; Cutting 2016 Drilling Budget 58%
February 2, 2016February 2, 2016

Cabot Oil & Gas, one of the premier drillers in the Marcellus Shale (operates totally within Susquehanna County, PA) released their fourth quarter and full year 2015 operational update this morning. The highlights: Cabot ended up spending $774 million on capital expenditures (mostly drilling) in 2015, down a bit from the previous estimate of $850 million. It’s down because they scaled back activity during 4Q15. They also had to write down the value for some of their non-core holdings by $73 million–what’s called an impairment charge. Looking ahead, Cabot plans to spend $615 million on capital expenditures (i.e. drilling) in 2016, which is down 58% from 2015. They will drill approximately 30 new wells, 25 of them in the Marcellus and 5 in the Texas Eagle Ford Shale. Here’s the update…
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Energy Companies | Warren Resources

Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking
February 2, 2016February 2, 2016

Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, announced yesterday they won’t (for now) make a $7.5 million in payments due on IOUs (i.e. notes) that are due to be made this month. Even though they claim to have enough money in the bank. Big red flag. Instead, Warren has hired investment bank Jeffries LLC to help the company with “potential restructuring of its balance sheet” and the company has “initiated restructuring discussions with representatives of the creditors under its first and second lien credit facilities.” Restructuring is a cheaper and (if you can swing it) better alternative than bankruptcy. The question is, will Warren’s restructuring be enough to keep the company out of bankruptcy proceedings? The terms of missing the payment allow a 30-day grace period before bad stuff begins to happen. The clock is ticking…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

2015 PA Impact Fee Goes Down for Drillers, Towns Get Less Too
February 2, 2016February 2, 2016

Pennsylvania’s impact fee–their version of a severance tax–was crafted and became law in February 2012 as part of the Act 13 law. Since that time the impact fee has generated $854 million in revenue, with 60% of that revenue going to the local municipalities (towns and counties) where drilling actually happens, and the other 40% going to the black hole of politicians’ sticky fingers in Harrisburg for pork barrel projects. The 40% portion is the shakedown required to get the law passed in the first place. Disgusting, we know. The impact fee itself is a somewhat complex calculation with the highest fee paid during the first year and going down from there (see below). The fees across all years are based on the average price of natural gas sold at the Henry Hub for the previous year. Because the price of natgas tanked in 2015, impact fees paid by drillers will be lower than in previous years when the average price was higher. PA drillers will save $5,000 per well drilled for the first year, $5,000 per well in the second year, and so on…
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Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | Kanawha County | Litigation | Statewide WV | West Virginia

More People Pile on Antero, Seek to Join Mass “Nuisance” Lawsuit
February 2, 2016February 2, 2016

Last September MDN told you about the troubling news that more than 200 residents in WV (likely those who don’t own the mineral rights under their land) began filing “scores” of “nuisance” lawsuits over the past couple of years against Antero Resources and Hall Drilling, in places like Doddridge County (see Scores of “Nuisance” Lawsuits Against WV Drillers Combined). The lawsuits claim excessive traffic, odors and noise from nearby drilling make it “impossible” for them to enjoy their homes. The troubling development was that all of these lawsuits (dozens? hundreds?) had been rolled up into one mega lawsuit that sits before the WV Mass Litigation Panel. In other words a class action lawsuit. Since then we’d not heard anything, until we read about two more such lawsuits filed in Kanawha County. The lawyers want to add the two to the existing mass litigation case…
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Dominion Energy | Energy Services | Industrywide Issues | M&A

Dominion Resources Makes Play for Western NatGas Company Questar
February 2, 2016February 2, 2016

In what is being called a “cheap” deal, midstream and local utility Dominion, with a major presence in the Marcellus/Utica region, has floated a takover offer to Questar Corporation, offering to buy the company for $4.4 billion. Questar is a Rockies-based integrated natural gas company operating through three principal subsidiaries: Questar Gas provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro develops and produces natural gas on behalf of Questar Gas; and Questar Pipeline operates interstate natural gas pipelines and storage facilities in the Western U.S. The deal is an attempt by Dominion to diversify out of the northeast/Mid-Atlantic region. It’s also a deal to bump up Dominion’s natural gas footprint, lessening the company’s reliance on electric power generation which is not growing. The reason this is MDN news is because…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Litigation | Ohio | Statewide OH

Federal Judge Tosses Anti Lawsuit Against MWCD re OH Lease Deals
February 2, 2016February 2, 2016

In some older news (but good news) that has until now escaped our notice, late last year a federal judge dismissed a lawsuit we first told you about in October 2013 (see Muskingum Watershed Taken to Court by Anti-Frackers (Yawn)). Lea Harper and her husband Steve filed a lawsuit challenging the right of the Muskingum Watershed Conservancy District to enter into lease agreements with drillers to allow shale drilling on Conservancy-owned land. The Harpers were assisted in this lawsuit by the radical and odious Food & Water Watch. Judge Sara Lioi of the U.S. District Court for the Northern District of Ohio found the lawsuit lacking in merit and tossed it. The Harpers and their Big Green backers have appealed the decision…
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Energy Services | Summit Midstream

Instead of Selling, ECP Increases Ownership of Summit Midstream
February 2, 2016February 2, 2016

In November MDN told you that the majority owner of Summit Midstream, private equity firm Energy Capital Partners (ECP) was looking to sell some or all of their units (i.e. shares) in the company (see Summit Midstream 3Q15: Current Owner ECP Looking to Sell). At the time ECP owned 43.8% of the company. Looks like that plan didn’t work out so well–at least so far. In a recent Securities and Exchange Commission filing, Summit reveals that ECP now owns 47.1% of the company…
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Industrywide Issues | Jobs | Public Opinion

Survey: O&G Workers Love the Industry, but Not Their Company
February 2, 2016February 2, 2016

We spotted some interesting survey results from a survey conducted by the UK-based recruiting firm Petroplan. The survey polled more than 1,500 oil and gas professionals asking them about their attitudes toward our beloved industry. Respondents came from 107 countries and territories worldwide. Over 60% of those surveyed said they would be “very” or “extremely” likely to recommend a career in the oil and gas industry to others. However, their commitment to the particular company they work for, i.e. “company loyalty,” is low. Some 56% said they’d change jobs “given the right circumstances.” Here’s a high level overview of the survey results…
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Energy Companies | Energy Services | Equinor/Statoil | GE Oil & Gas | Hydraulic Fracturing | Industrywide Issues

4 People Win GE/Statoil Contest to Reduce Water Used in Shale
February 2, 2016February 2, 2016

GE and Norwegian oil giant Statoil today announced four winners of their Open Innovation Challenge, a contest designed to use crowd sourcing to find solutions that reduce fresh water use in shale oil and gas production. There of the winners are in the United States, and one is from Australia. Each winner gets a cash prize of $25,000 with the promise of future funding for their technology. Here’s the cool new technologies that won this year’s contest…
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Commodity Price | Industrywide Issues

Will NatGas Price Drop to 20-Year Low in February? Quite Possibly
February 2, 2016February 2, 2016

A somewhat depressing article on MarketWatch says we are potentially heading for natural gas prices (at the Henry Hub) of $1.50 or lower. If the price hits those levels, it will be the lowest prices we’ve seen for natgas in the past 21 years. Even more ominous was a comment by oil and gas industry titan T. Boone Pickens. In a recent CNBC interview Boone said this: “I don’t think we’ll ever see $3 natural gas again.” Ouch. If that’s true, the question becomes, how can companies make a profit at these super low prices? Here’s more on what may lie ahead for natgas prices this month and this year…
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Columbia Pipeline Group | Energy Companies | Energy Services | Gastar Exploration

Gastar’s Mike McCown Retires; Peg Heeg Joins Columbia Pipeline Bd
February 2, 2016February 2, 2016

From time to time we mention people coming and going at various drilling and midstream companies. The reason we mention it is because when there are changes at the top of an organization, it has the potential to affect the future actions of that organization. We have two such moves to report. The first is that Mike McCown, senior vice president and chief operating officer for driller Gastar is retiring. We’ve quoted Mike a number of times over the years–he’s an important cog in the Gastar wheel. The second bit of news is that Peggy Heeg has joined the board of directors at midstream giant Columbia Pipeline. Peggy is an attorney and former general counsel at El Paso Corporation…
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Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Feb 2, 2016
February 2, 2016February 2, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus rig count lowest since 2010; why Marcellus may spell the end for Canadian natgas; Marcellus/Utica “overpiped”?; more proppant = more production in NE; FERC destroys opposition to Constitution Pipeline; BP cutting jobs; Harold Hamm says $60 oil this year; and more!
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CNX Resources | CONSOL Energy | Energy Companies | Utica Shale

CONSOL 4Q15: All About that Utica, ‘Bout that Utica, No Marcellus
February 1, 2016February 1, 2016

Last Friday CONSOL Energy released their fourth quarter 2015 update and we couldn’t stop the Meghan Trainor song “All About That Bass” from going through our heads, changing the word “bass” to Utica and “treble” to Marcellus. CONSOL was positively effusive about their Utica program and what it means for the future of the company. And well they should be (pun intended). In 4Q15 CONSOL drilled and brought online it’s most initially productive-ever Utica well, the GH 9 in Greene County, PA. The well’s initial flow was 61.9 million cubic feet per day per day (MMcf/d). That’s not as high as EQT’s record-breaker of 72.9 MMcf/d, also in Greene County (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!), but still, it’s amazing output for the CONSOL well. That amazing second well comes on the heels of CONSOL’s first PA Utica well, drilled in Westmoreland County in 3Q15, with an initial flow rate of 61.4 MMcf/d (see CONSOL 3Q15: Natgas Production Up 33%, Natgas Revenue Down $56M). Here’s what really caught our eye about Friday’s update and accompanying analyst conference call: In the Ohio Utica, the first well CONSOL drilled took 84 days and the drilling phase cost them $9 million. By the fifth well, the cost had gone down to $5 million. And they now believe they can get the cost of drilling a Utica well down to $4 million and do it in 23 days. Astonishing! (Note: that number is not the “all in” cost, which still is still more than $15 million per well.) So what about CONSOL’s Marcellus program?…
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Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | West Virginia | Wood County

A Crack of Light for the West Virginia Cracker?
February 1, 2016February 1, 2016

Speaking at an industry conference in Pittsburgh last week, West Virginia’s Dept. of Commerce Secretary, Keith Burdette, indicated there’s still a faint blip on the monitor that Odebrecht may yet decide to build an ethane cracker plant in Wood County, WV. According to Burdette, Odebrecht’s subsidiary Braskem will purchase more land for the cracker by the end of the first quarter. If the Odebrecht cracker project was as dead as a door nail (which it has appeared to be in recent months), it doesn’t seem like they would continue to spend money on it. Right? Burdette also said all three large cracker projects, Odebrecht, Shell’s project in PA, and PTT Global’s project in OH have indicated they are likely to push off a final investment decision (FID) until 2017. Bummer…
Read More “A Crack of Light for the West Virginia Cracker?”