Marcellus Drilling News

Energy Companies | Exxon Mobil

Exxon to Spend 25% Less in 2016, But Raises $12B to Go Shopping
March 3, 2016March 3, 2016

ExxonMobil, the largest U.S.-based energy company and largest producer of natural gas in the U.S., released an interesting press release yesterday. In it, they divulge their high-level plans for 2016. Among those plans, the company will spend $23 billion this year, which is 25% less than what they spent last year. Exxon will start up 10 new upstream projects in 2016 and 2017, which will add an additional 450,000 oil-equivalent barrels per day to their already huge production. Exxon CEO Rex Tillerson is quoted as saying, “We are advancing several Downstream and Chemical projects to increase feedstock flexibility, produce higher-value products and expand logistics capabilities to strengthen our competitive advantage in these businesses.” Our thought: Let’s hope one of those downstream projects getting advanced this year is the Monaca, PA ethane cracker. It’s also interesting what Exxon didn’t say in yesterday’s press release: They didn’t comment on the recent $12 billion in bonds they’ve floated so they can go shopping and pick off distressed competitors and/or their assets…
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Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Susquehanna County | Williams

Maple Trees Finally Come Down for Constitution Pipeline
March 3, 2016March 3, 2016

In the end, not even self-righteous Hollywood actor James Cromwell–who played Zefram Cochrane (mythical creator of the warp engine) in the 1996 movie Star Trek: First Contact (one of our favs)–could stop the chain saws in Susquehanna County, PA. We’ve been telling you about some holdout the anti-drilling Holleran family who didn’t want the much-needed Constitution Pipeline to cross their land (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). Cromwell and other antis heard about it and visited to add their shrill voices to the protest (see Actor James Cromwell Admits He’s Clueless, Fights Pipeline Anyway). The protesters tried to stop Williams from clearing trees on the property–and a judge got tired of that real quick (see Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else). The Hollerans finally obeyed the judge’s order and the trees are now down…
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Antero Resources | Energy Companies | Rice Energy

Which 2 Northeast Drillers Does Wall Street Love the Best?
March 3, 2016March 3, 2016

Wall Street is looking favorably on Marcellus/Utica drillers. Why? Because they’re cutting back spending–way back. On average the eight largest drillers in the northeast are scaling back spending in 2016 by 51%. Good for the number crunchers–bad for jobs and economic benefits for communities. Collectively their stock price is up about 3% since the beginning of the year, while the S&P Oil & Gas Exploration & Production ETF is down 19%. However, there are two northeast drillers who are scaling back a little, but not nearly as much as the others. These two drillers believe they can keep drilling, and pumping, profitably in 2016. Which ones are they?…
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Commodity Price | Industrywide Issues

Moody’s Oil & Gas Liquidity Stress Index Hits Worst-ever Level
March 3, 2016March 3, 2016

Ratings service Moody’s issued a flash update yesterday to let everyone know that their Oil & Gas Liquidity Stress Index, a measure of the liquidity health of oil and gas companies, hit a worst-ever high of 27.2%. Translation: there are a record number of energy companies stretched to the limit, ready to run dry in the cash department. If prices don’t turn around soon, some (many?) of these companies will go under…
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Electrical Generation | Industrywide Issues | Monroe County | Ohio

Old Ormet Site in Monroe, OH Shopped as Power Plant Location
March 3, 2016March 3, 2016

Going back a few years we’ve written about what used to be Monroe County, OH’s largest employer–the Ormet aluminum smelter plant–at one time employing 900 people. Ormet tried to get a price concession on electricity but couldn’t, so the plant closed (see Final Chapter of Ormet Plant Closing – Utica Could have Saved It). Niagara Worldwide bought the plant out of bankruptcy and renamed it Center Point Terminal. Early on they worked to convert part of it as a transloading facility for the shale industry (see Out with Old Ormet Plant, In with New Center Port Transload Facility). They also converted part of it into a barge facility (see New Ormet Aluminum Plant Owner Shops Barge Facility to Shalers). Niagara is now advertising the site as a perfect location for natural gas-fired power plants to locate at…
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Electrical Generation | Industrywide Issues | Research

The Critical Role of NatGas for New England’s Electric Generation
March 3, 2016March 3, 2016

Not that there was ever any doubt, but natural gas is critical to New England. Why? Because it is the #1 source for powering electric generation in the region. Coal plants and the region’s last nuclear plant are closing. The only thing that stave off rolling blackouts is natural gas. The New England regional power system (called ISO New England) has just released their 2016 Regional Electric Outlook (full copy below). Here’s what they have to say about the critical role of natgas in New England…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Mar 3, 2016
March 3, 2016March 3, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Ohio has 1,240 producing Utica wells; Gulfport gets 4 new Utica permits; REX pipeline temporarily shuts down in OH; PA job growth slows in 2015; the fight to stop Obama’s Clean Power Plan; natgas futures price hits 17-year low; Columbia J-School smear job on Exxon; and more!
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources

Another Sad Day: GreenHunter Resources Files for Bankruptcy
March 2, 2016March 2, 2016

In December we reported the sad news that Magnum Hunter Resources (MHR) finally had to file for Chapter 11 bankruptcy protection (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). MHR has a variety of subsidiary companies. One of those companies, Eureka Hunter (midstream/pipelines) has so far stayed out of bankruptcy court. But a sibling to Eureka Hunter, GreenHunter Resources (water and wastewater) has now succumbed. Yesterday GreenHunter issued a statement (below) that it and its myriad of (on paper) subsidiary companies have filed for “reorganization” under the Chapter 11 bankruptcy law. GreenHunter owns injection wells in both West Virginia and Ohio and was hoping to barge frack wastewater/brine to those wells as a cheap form of transportation. Last week the U.S. Coast Guard effectively put an end to that dream (see Coast Guard Caves to Political Pressure, No Wastewater Barging). Is it coincidence that GreenHunter has now filed for bankruptcy? Perhaps, but we’re suspicious. GreenHunter wouldn’t be the first company the Obama Administration has driven out of business…
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American Energy Partners | Chesapeake Energy | Energy Companies | Industrywide Issues | Litigation

Aubrey McClendon Indicted by DOJ for Conspiracy in Bid Rigging
March 2, 2016March 2, 2016

con·spir·a·cy – noun – a secret plan by a group to do something unlawful or harmful. Yesterday the U.S. Department of Justice indicted a single person–Aubrey K. McClendon, on a single count of conspiracy. He is alleged to have conspired to rig bids for oil and gas leases in Oklahoma, his home state, from 2007 to 2012. Do you see the obvious contradiction here? In order to have a conspiracy, you need more than one person. Yet the FBI and the DOJ have brought charges against only one person. It takes at least two people to have a conspiracy–so why has no one else been indicted? McClendon issued a statement (below) blasting the DOJ, pointing out he is the only person in 110 years to be prosecuted under the Sherman Act for bid rigging. What really hurts is that Chesapeake Energy, the company Aubrey co-founded, has been attempting to sell him out in return for not being prosecuted by the DOJ. Anyone else smell a rat in this whole thing?…
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Butler County | Carroll County | Energy Companies | Ohio | Pennsylvania | Rex Energy

Stayin’ Alive: Rex Energy $175M JV to Keep Drilling in PA & OH
March 2, 2016March 2, 2016

Rex Energy, a relatively small driller that drills almost exclusively in the Marcellus/Utica and with headquarters in State College, PA, has a new investor/partner. Drillers across the country and doing everything they can to stay in business with the bottom dropping out of prices they receive for what they produce. Rex is getting $175 million from investment firm Benefit Street Partners to help drill up to 58 new wells in Rex’s Moraine East area (Butler County, PA) and Warrior North area (Carroll County, OH). In return for investing, Benefit Street Partners will receive ownership of anywhere from 15% to 65% in the wells they help fund. Below are the details for how Rex is stayin’ alive…
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Energy Companies | EXCO Resources

EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting
March 2, 2016March 2, 2016

EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point. The company filed its fourth quarter and full year 2015 financial and operational update yesterday. In picking through the report, we find that EXCO didn’t drill a single new well in the Marcellus in 2015, and has no plans to do so in 2016. Instead, the company is concentrating their meager $103 million 2016 budget on drilling new wells in North Louisiana and East Texas. According to EXCO they get their highest rate of return (35%) in that area. Buried (and we mean buried) in the report is the news that the New York Stock Exchange has threatened the company with delisting its stock (share price is averaging under $1). The company’s proposed “fix” for the low stock price is a reverse split, combining 10 shares of existing stock into one share of new stock. Zooming out to focus on the company’s financial health, EXCO shows a $1.2 billion loss for 2015–but as with other companies, most of it was a paper loss due to impairments or write-downs of the value for its assets, rather than out-of-pocket money loss. Here’s selected portions of yesterday’s update…
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Industrywide Issues | Jobs | Pennsylvania | Regulation | Statewide PA

PA Gov. Wolf Refuses to Let DEP Hire People–When Money is There
March 2, 2016March 2, 2016

Yesterday Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was grilled by PA lawmakers as to why his department continues to be understaffed–when there’s money earmarked to hire new people. Quigley’s roundabout answer? His boss, Gov. Tom Wolf, won’t let him hire anyone new, using the excuse that last year’s budget is not finalized. The radically partisan Wolf continues to use the budget as a political weapon against Republicans. But here’s the thing–the money to hire new DEP personnel is already there, raised from fees assessed on drillers or transferred from the federal government. The money required for hiring many of the new people for the DEP isn’t part of the general fund. Yet Wolf won’t let Quigley hire, sleazily trying to spin it as a “Republicans won’t pass the budget” excuse. Shame on Wolf for lying about what he’s doing. Quigley was on the hot seat yesterday, and Republican legislators didn’t hold back, telling Quigley to quit whining and to start owning his own mess…
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Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Spectra Energy | Statewide NY

Gov. Cuomo Asks FERC to Halt Algonquin Pipeline Near Nuke Plant
March 2, 2016March 28, 2016

Spectra Energy’s Algonquin Incremental Market (AIM) pipeline project is an $876 million expansion of the existing Algonquin pipeline system that will carry 342 million cubic feet of natural gas per day to New England states that badly need the gas. On March 3, 2015 the Federal Energy Regulatory Commission (FERC) issued their final approval for the project, allowing it to go forward. Construction began last year and continues now, with a target in-service date later this year. That is, until New York Gov. Andrew Cuomo stepped in. Cuomo sent a letter on Monday to FERC (copy below) asking FERC to stop construction of AIM because the proposed pipeline path takes it right next to a “troubled” nuclear power plant along the shoreline of the Hudson River. Cuomo says he’s concerned about the drilling that will take place, being so close to a plant that has ongoing issues. Will Cuomo once again stop a natural gas pipeline from being built? Cuomo refuses to allow the state Dept. of Environmental Conservation issue stream crossing permits for the FERC-approved Constitution pipeline, and now he’s trying to screw a second pipeline from being built. If you ask us, this is getting out of hand…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Dimock Trial: Cornell Prof Tony Ingraffea Exposed as Fractivist
March 2, 2016March 2, 2016

MDN has written, forever, about fractivist professor from Cornell University Tony Ingraffea. We still recall the first time we heard “Tony the Tiger” in person nearly six years ago (see Cornell Hydraulic Fracturing Expert Headlines First Meeting of New York Residents Against Drilling (NYRAD) in Vestal, NY). We said this at the time: Dr. Ingraffea is an accomplished speaker. He is equal parts comedian and expert, and he knows how to “work a crowd.” Indeed. He has since retired from Cornell but has created a cottage industry for himself in bashing natural gas and shale energy. The dunderheaded lawyer representing the two families suing Cabot Oil & Gas for contaminating their water in Dimock, PA called Tony the Tiger to the witness stand, as an “expert witness.” At first he wowed the crowd and the jury. We told you, he’s a good speaker. He also claimed, under oath, he’s not a protester or fractivist (an outright lie–perjury in our opinion). Cabot’s lawyers proceeded to shred his credibility under cross examination. Turns out Tony has never been involved with drilling or fracking a single well. Ever. The only thing he does is sit his rear-end in front of a computer and make pretty pie charts and “analyze” data. Oh, and he attends anti-fracking rallies too–as he admitted under oath to the Cabot lawyer. So much for the “expert” witness who claims he’s just a scientist and not a radical anti-driller…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Statewide NY

NY Lawmakers Want State Pension Fund to Divest from Fossil Fuels
March 2, 2016March 2, 2016

It looks like students at the University of Pittsburgh aren’t the only the only ones who are devoid of intelligence (see Pitt Brats “Demand” Endowment Divest from < 1% Fossil Investments). You can now add a group of Democrat lawmakers in New York State’s Senate and Assembly to the list of fools. Some two dozen Democrat lawmakers want State Comptroller Thomas DiNapoli (radical Democrat), the sole trustee in charge of investing the state’s public workers pension fund (worth $178.3 billion), to sell any investments the fund has in companies that engage in extracting fossil fuels. Why? Because they believe in the fairy tale that burning fossil fuels causes Mother Earth, whom they worship, to heat up. Never mind global warming isn’t actually happening and hasn’t been happening for nearly 20 years (see Inconvenient Global Warming Fact: Avg Temp Hasn’t Risen in 18 Yrs)–it’s what you can make people believe that counts…
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Energy Companies | Energy Services | EQT Corp | Industrywide Issues | Pipelines | Regulation | Statewide WV | West Virginia

Bill Allowing Surveyors Private Property Access Fails in WV Senate
March 2, 2016March 2, 2016

In June 2014 EQT and NextEra US Gas Assets formed a joint venture to build a 330-mile pipeline from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA to deliver abundant, cheap Marcellus and Utica Shale gas to markets throughout the southeast (see EQT Announces New Marcellus/Utica Pipeline to Southeastern US). The project is called Mountain Valley Pipeline (MVP). A number of West Virginia landowners objected to MVP and would not let surveyors on their property, so MVP (i.e. EQT and NextEra) threatened to sue the landowners claiming eminent domain laws to enter their properties (see WV Landowners Say They’re Bullied by Mountain Valley Pipeline). A month later they did sue (see Mountain Valley Pipeline Sues 103 WV Landowners for Survey Access). But it takes a long time to sue individual landowners in hundreds of cases. So somebody talked to somebody and a bill was introduced in the WV Senate this year, Senate Bill (SB) 596–which would allow surveyors to enter private properties to do survey work as long as a notice was sent by certified mail ahead of time. No doubt the bill was in response to the ongoing, thorny issue of surveying for MVP. The bill passed out of committee with a split vote. But the bill was voted down by the full Senate…
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