Marcellus Drilling News

Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Gov. Tomblin Signs Severance Tax Cut into Law
March 1, 2016March 1, 2016

You may recall our amazement two weeks ago when we reported that West Virginia was on the cusp of passing a bill that will lower the state’s oil/natural gas and coal severance taxes (see WV Senate Passes Bill to Eliminate Part of State Severance Tax). In 2005 when now Gov. Earl Ray Tomblin was then President of the WV Senate, he presided over slapping a new/extra severance tax on oil, gas and coal–for the express purpose of paying down the state’s old workers’ compensation debts. At the time Tomblin promised when the debt was paid off, the tax would end. And by gaw he actually did it. Yesterday Tomblin signed the bill into law. A politician who keeps his word. Rarer than hen’s teeth…
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Energy Companies | EV Energy Partners

EV Energy Partners: No New Utica Wells in 2016, in Survival Mode
March 1, 2016March 1, 2016

EV Energy Partners, an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Utica Shale play, released their fourth quarter and full year 2015 update yesterday. Company mucky mucks also held an earnings phone call with analysts. What did we learn? EV has no plans to drill new Utica wells in 2016. The company is on an austerity budget–only spending to complete 10 already-drilled wells in the Texas Barnett Shale. EV will spend between $10-$18 million on exploration and production in 2016. You read that right, $10-$18 million, NOT $100-$180 million. In other words, essentially nothing. According to EV’s Chairman, John Walker, “Needless to say we all should be running our companies today for survival.” Indeed. Below is yesterday’s EV Energy update, along with a portion of the analyst phone call transcript…
Read More “EV Energy Partners: No New Utica Wells in 2016, in Survival Mode”
Energy Services | Industrywide Issues | M3 Midstream | Momentum | Pipelines | Statewide WV | West Virginia | WGL Holdings

M3’s Stonewall Gathering System in WV Gets New Investor/Partner
March 1, 2016March 1, 2016

In April 2015 MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time, plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans came to fruition and the Stonewall Gathering System was built and now gathers 1 billion cubic feet of Marcellus Shale gas per day (see Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec). The project now has a new investor/co-owner. WGL Midstream announced yesterday that it has exercised an option to invest $89 million in the Stonewall Gas Gathering System, representing a 35% ownership stake…
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CONSOL Energy | Energy Companies

CONSOL Sells Coal Mine for $420M; Transforming into Gas Driller
March 1, 2016March 1, 2016

Calling it “another significant event in the execution of CONSOL Energy’s strategy,” CONSOL Energy CEO Nick DeIuliis announced yesterday the company has sold another of its coal mines–this one in southwestern Virginia–for $420 million. The reason? CONSOL continues on its mission to convert from being one of the largest coal companies in the North America to becoming one of the preeminent “pure play” natural gas drillers in the Marcellus/Utica. That’s the goal–and this sale helps propel them toward that goal…
Read More “CONSOL Sells Coal Mine for $420M; Transforming into Gas Driller”
Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

Getting Serious: Ohio Ethane Cracker Gets its Own Website
March 1, 2016March 1, 2016

A brief mention, because it’s noteworthy. PTT Global is the Thailand-based chemical company floating a plan to build a multi-billion dollar ethane cracker plant in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Since the announcement last April, PTT has taken a number of steps toward making the Belmont ethane cracker a reality. They are in the midst of spending $100 million on engineering plans for the plant (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). Paris, France-based Technip was also hired to design and build the furnaces and other key components of the cracker (see French Co. Gets Contract for Key Components in Belmont Cracker). It may seem minor in comparison, but PTT has just launched a new website dedicated to the cracker plant project…
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Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Sad Anniversary – New York State Fracking Moratorium
March 1, 2016March 1, 2016

A very brief note to observe something we noticed while working away this morning on stories of interest. We noticed on the sidebar of MDN that the fracking moratorium in New York State has been in place for 7 years, 7 months, 7 days and 7 hours. A somber anniversary. We grieve for our once great state–the Empire State.
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Mar 1, 2016
March 1, 2016March 1, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: REX Pipeline gets FERC OK for more East-West capacity; Big Green groups fund Little Green group in OH; oil & gas optimism in the Ohio Valley; DEP wants wi-fi; Noble Energy gives up some of its Southpointe office space; shale health registry in SWPA; Maine gov wants NED pipeline asap; FL Dems stall pro-fracking bill; $3 gas…someday; torn between two fossil fuels, feelin’ like a fool; what really controls the price of oil?; and more!
Read More “Marcellus & Utica Shale Story Links: Tue, Mar 1, 2016”
Accidents | Antero Resources | Doddridge County | Energy Companies | Industrywide Issues | West Virginia

Antero Resources Well Pad Fire in Doddridge County, WV
February 29, 2016February 29, 2016

There was a small fire at an Antero Resources well pad in Doddridge County, WV last Thursday. Antero immediately shut down the four producing natural gas wells and contacted local first responders who put the fire out. The important news is that (a) nobody was hurt, (b) the environment was not harmed, and (c) the wells are secure and there is no danger. What happened is this: When natural gas comes out of the borehole, more than just methane comes out. Along with methane comes other hydrocarbons and water. There is a separating unit on the pad to strip out the water and some of the other substances from the methane. That unit failed, allowing some methane to escape which then caught fire. The good new is that safety precautions worked and the fire did not spread. Below are the details…
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Accidents | Energy Services | Industrywide Issues | MarkWest Energy | West Virginia | Wetzel County

Update on MarkWest WV Plant Hazardous Chemical Spill in Creek
February 29, 2016February 29, 2016

Last week MDN told you about an accident at a MarkWest Energy processing plant in Mobley (Wetzel County), WV in which approximately 3,000 gallons of a heat transfer fluid used at the plant leaked into a nearby creek, causing a shut-down of the water plant serving the nearby community of Pine Grove (see MarkWest’s Mobley Processing Plant Spills Hazardous Oil into Creek). The “rest of the story” is this: Three days after the spill the drinking water ban was lifted and everything is fine. The spill was contained, the water supply was fully protected and no one was ever in danger…
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Energy Companies | Southwestern Energy

Southwestern Cuts 2016 Spending 80%, Idles Marcellus Rigs (for Now)
February 29, 2016February 29, 2016

As we highlighted last Friday, Southwestern Energy reported a large paper loss of $4.6 billion for 2015, but also reported an increase in production of 27% over 2014 (see Southwestern Energy 2015: Record Production, Big Paper Loss). As part of the quarterly dog and pony show, Southwestern (like every other driller) hosted an analyst phone call to accompany the release of their numbers. As sometimes happens, further details came out on the phone call that weren’t evident in the official update. For example, in 2016 Southwestern currently does not plan to drill any new wells in the Marcellus/Utica. They have “idled” all of their drilling rigs. Southwestern CEO Bill Way said he specifically used the word idled because they are waiting to restart them when/if prices pick up again. The current plan is to complete 20-30 wells in the northeast, in the southwest and northeast Marcellus–and then wait and see what happens with prices…
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Eclipse Resources | Energy Companies

NYSE Threatens to De-list Eclipse Resources’ Stock – Price Too Low
February 29, 2016February 29, 2016

A number of companies involved working the Marcellus/Utica have received notices from the New York Stock Exchange warning those companies that the average trading price for their stock had fallen below minimum standards and is in danger of being de-listed from the exchange: Seventy Seven Energy (see Seventy Seven Energy’s Stock Threatened with Delisting from NYSE); EXCO Resources (see More Trouble for EXCO Resources – NYSE Threatens to De-List Stock); Atlas Energy (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing); and Halcon Resources (see Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate). Two companies actually were de-listed by the NYSE: Nuverra Environmental (see Nuverra Environmental Delisted from NYSE, Now a Penny Stock) and Magnum Hunter Resources (see Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter). You can add another name to the list of companies being threatened with de-listing: Marcellus/Utica pure play driller Eclipse Resources. CEO Ben Hulburt explains why Eclipse’s stock price trading at under $1 doesn’t reflect true value of the company…
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Industrywide Issues | Regulation | Wastewater

Antis React to Coast Guard Barge Announcement as Bad Thing – Huh?
February 29, 2016February 29, 2016

Last week MDN brought you the sad news that the U.S. Coast Guard has caved to political pressure from The White House to withdraw a plan that would allow frack wastewater to be barged (see Coast Guard Caves to Political Pressure, No Wastewater Barging). The lame excuse used by the USCG is that they will approve such barge shipments on a “case by case” basis. Since they haven’t approved a single case, it means there will be no barging–not any time soon, if ever. Barge operators agree and said the decision by the USCG “effectively blocks” future barging of frack wastewater. So it was with some surprise when we spotted a press release from a group of anti-drilling zealots from the Ohio River Valley complaining about the USCG decision. Apparently they read the decision and concluded the USCG intends to move forward with allowing barge shipments. As usual, they’re wrong…
Read More “Antis React to Coast Guard Barge Announcement as Bad Thing – Huh?”
Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Dimock Trial Update: Plaintiffs’ Expert Witness Exposed as Fracktivist
February 29, 2016February 29, 2016

The hits just keep rollin’ in from the Dimock “Cabot polluted my water” trial being held in Scranton, PA. It’s more like a comedy show than a trial. We wonder if the plantiffs will sue their own attorney for gross incompetence when it’s all done. Here’s the latest from last Thursday/Friday. The plantiffs’ attorney put an “expert witness” on the stand, Paul Rubin. Cabot’s lawyers proceeded to shred his testimony to pieces and show him as an anti-drilling activist with an agenda. Read MDN friend Tom Shepstone’s summary below–it’s prime. Also late last week the plantiffs’ attorney, for the second time admitted in open court, stated that the trial is not about frack fluid getting into well water–but rather about methane migration. For years people like Josh Fox of Gasland fame have falsely claimed frack fluids were the source of contamination in Dimock. That old lie is, once and for all, now exposed. Not even the plantiffs make that claim. We’d say this trial has served a useful purpose: to expose the anti-fossil fuel agenda and its peddlers as being truth-challenged…
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Ethane | Industrywide Issues | Processing Plants

Experts Say: If You Build One NE Cracker, More Will Come
February 29, 2016February 29, 2016

Elected officials, business leaders, labor union reps and people from several colleges gathered last week in Wheeling, WV to discuss the profound impact even one ethane cracker plant will have in the region. According to several who spoke, if the region lands even one cracker plant, it will have the effect of attracting others. There has been talk of four potential cracker plants in the Marcellus/Utica–three “world class scale” crackers and one smaller one. One expert speaking said he believes the region can comfortably handle up to six! Here was the excited cracker chatter from last week’s meeting…
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CNG/LNG | Commodity Price | Exporting | Industrywide Issues

LNG Exports to the Rescue in Northeast? Not So Fast
February 29, 2016February 29, 2016

The answer to low prices for natural gas in the Marcellus/Utica is more demand. More demand comes either from new sources using natgas within the region–like building power plants–or sending the gas out of the region. Sending it out involves pipelines, mostly. One of the great hopes for drillers and midstream companies has been the prospect of exporting our natural gas to other countries via LNG (liquefied natural gas). Dominion is right now building the Cove Point liquefaction facility in Maryland with the prospect of bringing it online in 2017. All of the LNG Dominion can produce at Cove Point will go to two countries: Japan and India (see Dominion’s Cove Point LNG Facility Achieves Important Milestones). More northeast gas will head to Japan via the Gulf Coast (see Marcellus/Utica Gas Going to Japan: TGP Signs 20-Year Export Deal). But here’s the thing: Japan is bringing their nuclear power back online, and they’re bringing a lot of solar sources online–meaning they don’t need as much natgas as they used to. In December we told you that LNG for delivery to northeast Asia (Japan and Korea) would average $7.397 per million British thermal units (MMBtu) for January delivery (see Platts Says LNG Heading to Japan & Korea Fetching $7.40/Mcf). Looking to March, LNG for delivery to Asia is down to $5.339/MMBtu–the lowest monthly price since September 2009. And there’s no indication it will go higher any time soon. Our point? LNG exports are not a panacea. Yes, Europe is somewhat interested (and that’s good). But world LNG supplies far outstrip demand at this time…
Read More “LNG Exports to the Rescue in Northeast? Not So Fast”
Commodity Price | Crude Oil | Industrywide Issues

US Shale Industry Puts OPEC on Notice: We’ll Drill at $40/Barrel
February 29, 2016February 29, 2016

We don’t often write or highlight stories about oil and OPEC. However, there is a connection between the price of oil and the price of natural gas–and there is a connection between OPEC and the price of oil. For more than a generation OPEC has been able to, pretty much single handedly, control the price for a barrel of oil. If OPEC wants the price to go up, they scale back production. Prices to go down–start pumping more. Then God blessed America one more time and gave us the shale revolution. At $100 per barrel, drillers are willing to pump all day long. OPEC (essentially Saudi Arabia) stepped in with a strategy of pumping more to drive the price into the basement in an effort to bankrupt U.S. shale drillers–thereby giving them back their monopoly. Nice people those Saudis. Such great friends to the U.S. (NOT) When prices hit below $30 per barrel, many companies (most) stopped drilling here at home. They can’t make any money on those prices–in fact they lose money. The received wisdom is that you can’t make money pumping shale oil below $70/barrel. But the thing about Americans and American ingenuity is that we tinker and create and experiment. And now we’ve figured out how to make money when the price is low. How low? The shale industry is now sticking its finger in OPEC’s eye and saying that $40 is the new $70 when it comes to the price at which they’re willing to fire up the drilling rigs. So take that OPEC…
Read More “US Shale Industry Puts OPEC on Notice: We’ll Drill at $40/Barrel”