Marcellus Drilling News

Crude Oil | Guest Post | Industrywide Issues

Explaining the Rift Between Saudi Arabia & Iran; Impact on Oil
January 6, 2016January 6, 2016

Daniel Markind, Esq.

You may have noticed a flare-up of tensions in the Middle East between Saudi Arabia and Iran. The “crisis” as it’s being called by news organizations like CNN has quickly escalated with other Arab countries taking sides–most of them siding with Saudi Arabia. The flare-up initially caused an uptick in the price of oil based on fears there may be oil disruptions in the region–but those fears quickly died down and along with it, the price died down too. What is this conflict all about? And how might it affect the price of oil (and gas) in 2016? MDN reader Daniel Markind, an attorney and partner in the Philadelphia law firm Weir and Partners, provides us with an excellent summary/overview of what this conflict is about…
Read More “Explaining the Rift Between Saudi Arabia & Iran; Impact on Oil”
Electrical Generation | Industrywide Issues | Statewide VA | Virginia

2 New NatGas Electric Turbines Planned Near Richmond, VA
January 6, 2016January 6, 2016

An electric generating operator with an existing facility near Kings Dominion amusement park (about 20 miles from Richmond, VA) has filed a plan with the Virginia State Corporation Commission seeking permission to build two new smaller natural gas-fired electric generating turbines at the existing facility in Hanover County, VA. The two turbines would create up to 340 megawatts of electricity and would be used only during peak electric demand times–when demand rises due to really cold or really hot weather. Doswell Energy Center already operates four combined cycle natural gas units (producing up to 665 megawatts of electricity) and one other turbine (generating 171 megawatts) at the site. The two new turbines would be built at the same location. There’s little doubt that Marcellus/Utica Shale gas will feed the new turbines, if built. Hanover County officials are on board with the plan…
Read More “2 New NatGas Electric Turbines Planned Near Richmond, VA”
Industrywide Issues | M&A | Research

IHS Study: M&A Deals Plunged in 2015, So Did Shale Investment
January 6, 2016January 6, 2016

No doubt about it, 2015 was a tough year in the shale energy industry. With shale energy, investment happens when drillers decide to drill holes in the ground. Without a hole, money doesn’t get spent. And when money isn’t being spent on drilling, other businesses along the supply chain begin to see their revenue dry up. Global consulting and research firm IHS, or Information Handling Service, has just published the “IHS Energy Global Upstream M & A Review.” As part of their promotion of the new study (must be a customer to score a copy), IHS released a detailed summary of their findings. One finding in particular stood out to MDN: In 2014 unconventional/shale drillers spent $75 billion on upstream (exploration & production) activities. In 2015 that number plunged to less than $30 billion–a 60% drop. That statistic more than any illustrates what happened to the oil and gas industry in 2015. Here’s more great insights from IHS on what happened in 2015…
Read More “IHS Study: M&A Deals Plunged in 2015, So Did Shale Investment”
Anti-Drilling/Fossil Fuel | Cuyahoga County | Industrywide Issues | Litigation | Ohio | Regulation

Antis Celebrate OH Appeals Court Hearing with Street Dramatization
January 6, 2016January 6, 2016

Note: Somewhere along the way MDN received incorrect information and previously said the case was being heard by the Ohio Supreme Court. It is not. It is being heard by the 8th District Court of Appeals. Our error!

It may be impolite to say so, but those who oppose fossil fuels, and therefore oppose drilling, and pipelines, and anything/everything to do with fossil fuels, are just plain nuts. They prove it, repeatedly, with their words and their actions. Take the group which purportedly represents a coalition of groups and individuals in Ohio called the Ohio Community Rights Network (OHCRN). Today the 8th District Court of Appeals will hear arguments in a case where one Ohio community, Broadview Heights, illegally tried to pass a so-called Community Bill of Rights that bans fracking. That measure got tossed by lower courts (see OH Antis Handed Crushing Defeat in Broadview Hghts Home Rule Case). But that hasn’t stopped the green faithful from appealing and appealing and appealing. They finally got their day before the high court–so what do they do? They issue a press release calling oil and gas drillers, and the State of Ohio, Goliath, and of course they cast themselves and the wacko citizens of Broadview Heights who passed the frack ban as David. Further, to commemorate this “historic event,” the crazies from OHCRN will present a “street dramatization” at 11:30 am today to illustrate the David vs. Goliath nature of the case…
Read More “Antis Celebrate OH Appeals Court Hearing with Street Dramatization”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Tennessee Gas Pipeline

FERC Extends New England Pipeline Comment Period by 1 Week
January 6, 2016January 6, 2016

The comment period during which those in favor of, or more likely, those opposed to, the Tennessee Gas Pipeline Northeast Energy Direct (NED) project was supposed to end today, Jan. 6. But the Federal Energy Regulatory Commission (FERC) has extended the comment period for one more week because a glitch with FERC’s online commenting system–a glitch that prevented people from filing comments from Dec. 24-27 and Dec. 31-Jan. 3. Oops. To compensate FERC is extending the window. It also gives antis more time to sleazily file as intervenors (see Intervenor Contagion Catching on with Radical Green Groups in NE). Here’s the poop scoop…
Read More “FERC Extends New England Pipeline Comment Period by 1 Week”
Economic Impact | Greene County (PA) | Industrywide Issues | Pennsylvania | Washington County

SWPA Local Leaders Forecast 2016, What’s Ahead for Marcellus?
January 6, 2016January 6, 2016

We’ve brought you a number of opinions and perspectives on what lies ahead for 2016 with respect to our beloved shale energy industry. But it’s one thing for investors and politicians and commentators to pontificate. What about leaders in local communities, like the leaders of one of the most-drilled places in the Marcellus: southwestern Pennsylvania? What do local economic leaders see coming along in 2016? We think getting the opinion of some locals provides much-needed balance…
Read More “SWPA Local Leaders Forecast 2016, What’s Ahead for Marcellus?”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Jan 6, 2016
January 6, 2016January 6, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NY town bans frack waste; crude oil by rail slows down; Ohio’s Utica permits for last week – 0; expert analyzes prospects for Halliburton-Baker Huges deal; Raymond James says oilfield services in for a roller coaster ride in 2016; Josh Fox and his delusions of grandeur; Middle East tensions and the price of oil; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Jan 6, 2016”
Eclipse Resources | Energy Companies

Eclipse Resources Drilling 1 Well in 2016, Restricting Production
January 5, 2016January 5, 2016

Eclipse Resources issued their fourth quarter 2015 operational update yesterday, along with publishing an updated investor’s PowerPoint. We have both below. Eclipse is a smaller but important Marcellus/Utica driller with its headquarters in State College, PA–although they do almost all of their drilling in Ohio’s Utica Shale. In November word leaked out that Eclipse is shopping the company (see Marcellus/Utica Driller Eclipse Resources Looking for a Buyer). There was no overt or implied reference to that in yesterday’s update. What the update did say, however, is that save a single well they plan to drill in the first quarter of this year, Eclipse is not planning to do any more drilling until the price of natgas increases. They also said that although previously drilled wells going online have the potential to boost Eclipse’s production in 2016, they plan to reign in the flow rates to keep them at 2015 levels–again, until the price of natgas goes up. Nobody is predicting an increase in natgas prices any time soon (at least not in 2016), but it appears Eclipse is buckling in for a long ride through low-price valley…
Read More “Eclipse Resources Drilling 1 Well in 2016, Restricting Production”
Antero Resources | Commodity Price | Energy Companies | Industrywide Issues

How Antero Resources Converted an Ugly Duckling into a SWAN
January 5, 2016January 5, 2016

Antero Resources is perhaps the largest driller completely focused on the Marcellus/Utica (by acreage). They are certainly one of the most important drillers in the northeast. And bucking the trend of almost all of their competitors, they somehow manage to operate in the black (see Antero Resources 3Q15: Bucks the Trend, $237M in the Black!). What’s Antero’s secret to making money in arguably the worst time for our industry in a generation? In a word, it’s hedging. Somehow Antero crafts financial deals a year or more in advance to sell whatever gas they produce for prices much higher than others–at prices that mean the company continues to make a profit. Most energy companies these days are keeping the people who run those companies, AND their investors, up at night. A company like Antero comes as close to any as a SWAN–a “Sleep Well At Night” energy company. An interesting article on the Seeking Alpha website gives us background and clues as to how Antero has been able to convert itself from an ugly duckling into a SWAN…
Read More “How Antero Resources Converted an Ugly Duckling into a SWAN”
Berks County | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Sunoco Logistics

How to Successfully Negotiate a Pipeline Easement & How Not To
January 5, 2016January 5, 2016

This is the story of two landowners in Berks County, PA whose property Sunoco Logistics needs to cross/use for the Mariner 2 set of pipelines. One landowner, on whose property Sunoco not only wants to install the pipeline but also wants to install a big valve in his front yard, successfully negotiated with Sunoco and got his price. The other landowner, who owns a dog park where Sunoco wants to put a pipeline, hasn’t negotiated and is trying to stop the pipeline from coming through his property. Guess which landowner will be the biggest loser? Here’s the story of how to craft a pipeline deal, and how not to, if you are a landowner faced with the threat of eminent domain…
Read More “How to Successfully Negotiate a Pipeline Easement & How Not To”
Anti-Drilling/Fossil Fuel | Energy Services | Fulton County | Industrywide Issues | Kinder Morgan | Medina County | NEXUS Pipeline | Ohio | Pipelines | Regulation | Tennessee Gas Pipeline

Intervenor Contagion Catching on with Radical Green Groups in NE
January 5, 2016January 5, 2016

Like a contagion moving through the small-but-dedicated anti-fossil fuel movement in the northeast, the strategy of filing as an “intervenor” in pipeline permitting is catching on. MDN first alerted you to this sleazy tactic being used by THE Delaware Riverkeeper back in October 2015 (see Delaware Riverkeeper Scams FERC in Review of PennEast Pipeline). In short, the Federal Energy Regulatory Commission (FERC) has a process known as a motion to intervene. Individuals, towns and organizations with a vested, *legitimate* interest can file to “intervene” in a pipeline project application, which gives them special standing to receive updates from FERC and to ensure their views are fully considered by FERC. THE Delaware Riverkeeper and others began registering everyone–including their own children–as “intervenors” which essentially overloads FERC’s system and greatly slows down the permitting process (ses FERC Confirms “Intervenors” Slowing Down Pipeline Approvals). It is an abuse of the system–but then anti groups are no strangers to violating the rules, or laws. They revel in “catch me if you can” behavior. Intervenor abuse is catching in Massachusetts where radical greens are trying the same tactic to slow down approvals for the Tennessee Gas Pipeline’s Northeast Energy Direct (NED) project. Radical greens in Ohio are also using the tactic to try and slow down approvals for the NEXUS pipeline there. The intervenor contagion has now spread from PA to MA to OH, with no end in sight…
Read More “Intervenor Contagion Catching on with Radical Green Groups in NE”
Electrical Generation | Energy Services | FirstEnergy | Greene County (PA) | Industrywide Issues | Pennsylvania

Greene County, PA Electric Plant May Reopen Using Marcellus Gas
January 5, 2016January 5, 2016

Ohio-based utility FirstEnergy Corp. shuttered a huge coal-powered electric plant in Greene County, PA in 2013–a move that surprised many. FirstEnergy is making plans to reopen the 1,700 megawatt plant–but this time it will not only burn coal, but yummy, cheap, clean-burning Marcellus Shale gas too…
Read More “Greene County, PA Electric Plant May Reopen Using Marcellus Gas”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Mass. Green Radicals Plan 3-Day, 34-Mile Pipeline Walk-a-Thon
January 5, 2016January 5, 2016

About 20 radical green protesters in Massachusetts who oppose a pipeline in the ground because it will flow a fossil fuel–natural gas–are planning a 3-day, 34-mile walk-a-thon along a small portion of the pipeline’s pathway. And it’s big news for newspapers in that part of the country. Go figure. We suppose when you get a bunch of kooks and crackpots together it may sell a few more newspapers than reporting on the happenings at the local town board meeting (snore). So why not? The Greenfield, MA Recorder is reporting that monks from the Leverett Peace Pagoda (local Buddhist shrine) will lead a 3-day walk to oppose the Tennessee Gas Pipeline Northeast Energy Direct (NED) project that would deliver abundant, cheap, clean-burning Marcellus Shale gas to New England, ultimately leading to not only lower natgas prices but lower electricity prices. New England pays four times the rate for their electric that other parts of the country pay. Apparently the protesters want to keep it that way permanently. The monks and other green radicals planning the walk will do so in the name of the great Martin Luther King, because (they claim) King was a green radical like they are…
Read More “Mass. Green Radicals Plan 3-Day, 34-Mile Pipeline Walk-a-Thon”
Industrywide Issues | Pennsylvania | Public Opinion | Statewide PA | Taxation

57% of Pennsylvania’s CPAs Favor a Marcellus Tax – Surprised?
January 5, 2016January 5, 2016

Each year the Pennsylvania Institute of Certified Public Accountants (PICPA) conducts a poll of its membership. Last year PA accounts answered the question “How should PA close the state budget gap?” by indicating the state should privatize liquor sales – 69%, by instituting a Marcellus Shale severance tax – 67%, and by legalizing pot smoking – 27% (see PA Accountants Love Marcellus Severance Tax (and Smoking Pot)). This year’s PICPA poll results have just been published. Perhaps it was our criticism and poking fun at the absurdity of the question last year–but this year the question changed. This is the question they asked this year of PA accountants: “Pennsylvania faces a structural budget deficit estimated at nearly $2 billion. Which of the following should the state use to close the deficit?” The #1 preferred solution for PA’s accountants? A Marcellus Shale severance tax–57% favor it. As we said last year, does anyone else find it suspicious that the people who would have to manage and file reams of tax forms on a severance tax (generating lots of billable hours) are in favor of such a tax? Can anyone say, conflict of interest? Why do we care a wit about what CPAs think about taxes and budget deficits? They’re the ones who helped create it!…
Read More “57% of Pennsylvania’s CPAs Favor a Marcellus Tax – Surprised?”
Industrywide Issues | Public Opinion | Research

Industry Navel Gazing – Survey, Opinions of What’s Ahead in 2016
January 5, 2016January 5, 2016

MDN spotted a couple of “what’s coming in 2016” reports. One report shares conclusions from a survey of 100 oil and gas company CFOs (Chief Financial Officers, or “the money guys”) conducted in September/November last year. What do industry money people say is coming in 2016? Read it below. The second report was just issued by Moody’s Investors Service. Several Moody’s analysts offer their predictions about what lies ahead for the oil and gas industry this year. We call these kinds of reports “industry naval gazing” as they tend to be focused on our specific piece of the energy industry (oil and gas) to the exclusion of the complex world that exists outside of our own industry. Still, such reports have their place and can often shed light on what may lay ahead on the road we will all travel on the way to 2017…
Read More “Industry Navel Gazing – Survey, Opinions of What’s Ahead in 2016”
Energy Services | Enterprise Products Partners

Enterprise Prod. Raises $100M via Unit Sale, Plans Another $200M
January 5, 2016January 5, 2016

Enterprise Products Partners is a big (really big) midstream/pipeline company. Enterprise built and operates the 1,230-mile ATEX (Appalachia-to-Texas Express) ethane pipeline runs from four fractionation plants in the Marcellus/Utica Shale region all the way to Mount Belvieu, TX. As we noted in an article yesterday, Enterprise has just completed and brought online a new pipeline that will potentially flow some of that Marcellus/Utica ethane all the way to Louisiana (see Marcellus/Utica Ethane can Now Hitch a Ride to LA via Aegis Pipe). As all companies in our sector attempt to not only expand, but simply survive, they use different methods. In some cases they sell debt in the form of IOUs (i.e. notes) or bonds, and in other cases they sell pieces of the company, typically stocks. Or in the case of master limited partnerships (MLPs), they sell “units” which are the equivalent of stocks. Enterprise is an MLP and has just sold $100 million worth of units with plans to sell another $200 million worth of units in the first quarter of this year, for a total of $300 million in cold, hard cash they can put to work in the company…
Read More “Enterprise Prod. Raises $100M via Unit Sale, Plans Another $200M”