Marcellus Drilling News

Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

War of Words: Battle to Sell MarkWest Energy to Marathon Heats Up
November 20, 2015November 20, 2015

The war of words continues in what increasingly appears to be a losing battle for MarkWest Energy to convince enough shareholders to vote in favor of a proposed sale to Marathon Petroleum. We told you two weeks ago that John Fox, former CEO of MarkWest Energy, came out strongly against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). Since that time Marathon has increased the amount of cash they’re willing to offer–twice–from an original $675 million to now $1.28 billion (see Marathon Ups Cash Offer for MarkWest 2nd Time – Deal in Trouble?). The original deal was worth around $20 billion when you include unit swaps and other considerations. Now the deal is worth around $15 billion due to unit prices plunging over the past few months. Two days ago MarkWest promoted the news that Institutional Shareholder Services (ISS), an “independent” proxy advisory firm, was recommending unitholders vote in favor of the deal. Yesterday John Fox issued his own rebuttal to ISS and continues to say this is “fundamentally a bad deal” and that ISS’ own report supports his arguments against the deal. It’s getting hot in the kitchen!…
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Energy Services | Energy Transfer Partners | Industrywide Issues | NEXUS Pipeline | Ohio | Pipelines | Research | Spectra Energy | Statewide OH

OH Grange Issues New Study, Supports NEXUS & Rover Pipelines
November 20, 2015November 20, 2015

The people who are most affected by pipelines being built across their property are farmers–that’s a fact. Farmers often have questions and concerns when a new pipeline project is proposed that will cross their land, rightfully so. They’re cautious, they’re careful, they have a vested interest in preserving their land. So it’s big news that the Ohio State Grange, part of the nation’s oldest national agricultural advocacy group, has endorsed both the Rover and NEXUS pipelines in the Buckeye State. Energy Transfer’s Rover is a big, $4.2 billion, 711-mile new pipeline project from the Midwest Hub near Defiance, OH to Livingston County, MI, connecting with the Vector pipeline. Spectra Energy’s NEXUS Gas Transmission pipeline project is a $2 billion pipeline that will carry Utica/Marcellus gas through OH, MI, and eventually connect to the Dawn Energy Hub in Canada. The Grange’s support of these two projects is a big deal. As part of their announcement, the Ohio Grange released a new report titled, “Natural Gas Pipeline Infrastructure and Its Impact on Michigan and Ohio Agriculture” (full copy below) which finds, among other things, that there is no SAFER way to transport natural gas than by underground pipeline…
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Energy Companies | Exxon Mobil | New York | Statewide NY

Former Fed Prosecutor Says NY AG Targeting Exxon “Tip of Iceberg”
November 20, 2015November 20, 2015

MDN is privileged to receive great insights from many sources. We currently have over 30,000 unique monthly readers. Sometimes those readers send us unsolicited comments and news worth sharing, like this time. John Marti, a former federal prosecutor and U.S. Attorney for the District of Minnesota (now a partner with the international law firm Dorsey and Whitney) sent us his insights into the investigation being run by New York’s Attorney General Eric Schneiderman. Schneiderman, you may recall, is conducting a witch trial in an attempt to shake down Exxon Mobil for billions over the company’s previous statements about mythical global warming (see NY AG Targets/Accuses ExxonMobil of Lying about ‘Climate Change’ and NY AG Schneiderman Launches the Climate Witch Trials). Schneiderman is attempting to criminalize First Amendment free speech. Marti has some sage advice for fossil fuel companies. He warns that Schneiderman’s action is “the tip of the iceberg”–with more companies likely to end up in the crosshairs…
Read More “Former Fed Prosecutor Says NY AG Targeting Exxon “Tip of Iceberg””
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lebanon County | Pennsylvania | Pipelines | Sunoco Logistics | Williams

Lebanon County Antis Want Public (Spectacle) Mtg or No Mtg at All
November 20, 2015November 20, 2015

The demands of anti-drillers in Lebanon County, PA are illustrative of their true motivations. Two different anti groups–Lebanon Pipeline Awareness and Concerned Citizens of Lebanon County–are demanding Lebanon County commissioners have an open public meeting with two pipeline companies. The two pipeline companies are Williams (Atlantic Sunrise Pipeline) and Sunoco Logistics Partners (Mariner East 1 & 2 pipelines). If the meeting is not open and public, so these nutters can pummel representatives of the companies in public and have it broadcast everywhere–they want no meeting at all. Williams and Sunoco had agreed to non-public meetings that INCLUDE members of these two groups–to answer their questions. But the pipeline companies, and the county commissioners, don’t want a circus. That means no cameras/media, and the meeting is not open so it can be packed by large numbers of antis. The companies are willing to sit down and talk like adults and answer questions and address concerns–like adults. But that’s not what Lebanon Pipeline Awareness nor Concerned Citizens of Lebanon County really want. They want to behave like petulant children throwing a temper tantrum for everyone to witness. Evidence: Instead of taking the private meeting, they (the antis) want no meeting at all…
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Ohio | Washington County (OH)

Overwhelming Support for Wayne Natl Forest Drilling @ BLM Mtg
November 20, 2015November 20, 2015

On Tuesday, the federal Bureau of Land Management (BLM) held a hearing on the possibility of allowing shale drilling in Wayne National Forest (WNF), the only national forest in Ohio with portions in Athens, Gallia, Hocking, Jackson, Monroe, Morgan, Noble, Lawrence, Perry, Scioto, Vinton, and Washington counties. WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. Some 250 landowners turned up at a hearing in Marietta (Washington County), OH to show their support for drilling in WNF…
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Energy Companies | Industrywide Issues | Noble Energy | Pipelines

Noble Energy Cancels Midstream IPO, Couldn’t Raise $237M
November 20, 2015November 20, 2015

That didn’t take long. Last week driller Noble Energy launched an initial public offering (IPO) for a new midstream subsidiary. They hoped to raise $237-$262 million by offering 12.5 million shares at $19-$21 per share (actually “units”). We didn’t bother reporting it at the time because the new midstream company would own and operate a pipeline system in the DJ (Denver-Julesburg) Basin in Colorado. However, what makes the IPO news now for the entire shale industry at large, including the Marcellus/Utica, is that the company has stumbled–pulling the IPO because of lack of interest/low offers for units, which may portend a similar fate for other midstream IPOs in other shale plays…
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Energy Companies | Halcon Resources

Halcon Resources Refinances More IOUs at High Interest Rate
November 20, 2015November 20, 2015

Halcon Resources, a company that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play and currently doesn’t drill in any of that acreage, is one of the eight Marcellus/Utica companies on David Fessler’s “Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In August, Halcon refinanced $1 billion worth of outstanding IOUs with a third lien, paying a 13% interest rate on debts that had been 8.875% to 9.75% (see Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate). Yesterday Halcon launched yet another offer–this time offering second liens for IOUs. The new interest rate offered is 12% for debts that previously had rates of 8.875% to 9.75%. We don’t pretend to understand high finance, but why would anyone, in these market conditions, purchase a second or third lien IOU? That means one or two other people are in line before you to collect money if the company defaults and can’t repay the IOUs, which seems like all too real a possibility…
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Industrywide Issues | Research

Real Climate Science Discussed in Paris on Dec 7 @ Heartland Conf
November 20, 2015November 20, 2015

You may or may not be aware that the Obama Administration is in league with foreign powers to attempt to strip away our national sovereignty (the right to rule ourselves) under the guise of global warming nonsense–that mankind is causing or about to cause Mother Earth to fry. The way liberal/socialist/communists are attempting to foist this great hoax on the world is at an event called the United Nations Conference of Parties (COP-21), taking place this year on December 7-8 in Paris. All of the biggest global warming hoaxers from around the world will assemble (and party) in an attempt to get the United States to sign a treaty giving up our national sovereignty–and when we do, we’re finished as an independent country. So why should these nutball hoaxers have all the fun? The Heartland Institute has decided to assemble leading climatologists and scientists on Dec. 7 in Paris to discuss some real climate science. Heartland is calling it the “Day of Examining the Data” and will make the “compelling case that an objective examination of the latest climate science shows humans are not causing a global warming crisis.” Love it! Of course mainstream media won’t report a bit of it–because mainstream media doesn’t cover real news any more, they simply report propaganda–what they want you to hear. We have the lowdown on who will present at Heartland’s event–the only real scientific conference being held in Paris on Dec. 7…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Nov 20, 2015
November 20, 2015November 20, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Skelos mad at Cuomo frack ban; Williams honored by women’s group; Ashtabula opposes injection wells; PA drillers already pay big taxes; MA academy opposes pipeline; investors line up for VT natgas plant; o&g layoffs hit 233,000; natgas storage hits historic high 4 Tcf; bond investors give up on Chesapeake; Energy Transfer – go big or go home; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Nov 20, 2015”
Economic Impact | Industrywide Issues | Jobs | Ohio | Research | Statewide OH | Supply Chain | Utica Shale

Important New CSU Study Reveals Shale Supply Chain Opportunities
November 19, 2015November 20, 2015

We are SUPER excited about a new study dated September 2015 but released just yesterday by economists and researchers at Cleveland State University (CSU). The study, broken into three parts, looks at economic development opportunities offered by Ohio’s Utica Shale. One of the three parts is titled, “Economics of Utica Shale in Ohio: Supply Chain Analysis.” We eagerly goggled it up and found that the authors use charts very similar to those developed by MDN and our own Supply Chain Tutorial (see Where Does YOUR Business Fit in the Marcellus/Utica Supply Chain? [FREE]). We have a copy of all three sections of the new CSU study (below). We *highly recommend* this study as worth your while to digest. Before we developed our own Supply Chain Tutorial we had not seen anyone mapping NAICS codes to each stage of the drilling and midstream process. The CSU study adopts MDN’s convention of mapping NAICS codes and goes well beyond our tutorial, which is why we’re so excited. If you work for a company that wants to see if there may be an opportunity to win business in the Marcellus/Utica industry, plan to spend some time with this study!…
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Energy Companies | Mountaineer Keystone

Shake-up at the Top of Marcellus Driller Mountaineer Keystone
November 19, 2015November 19, 2015

A little over a year ago, Mountaineer Keystone, a pure play Marcellus/Utica driller headquartered in Pittsburgh, bought out PDC Mountaineer for half a billion dollars, creating a company with 181,000 net acres totally focused on the northeast (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). Mountaineer Keystone got its start in 2010 when founder/CEO Rob Kozel formed the initial management team from former Texas Keystone people. In 2011 the company took a boatload of money from First Reserve, an energy investment firm. We don’t have the back story, but on Tuesday Mountaineer announced that Kozel is out as CEO and in his place the board has selected David Wood, the current Chairman of the Board at Mountaineer Keystone. Kozel will remain on the board in a “non-executive role.” As we said, we don’t know what happened, but it sure smacks to us of a palace coup–that Kozel was forced out of running the company he founded (we’ve seen it happen before, it ain’t pretty)…
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Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

Herding Cats: DEP Sec. Quigley Unhappy with Pipeline Task Force
November 19, 2015November 19, 2015

The thin-skinned Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), John Quigley, showed his irritation yesterday with his own hand-picked 48 members of the Pipeline Infrastructure Task Force (see PA Gov Wolf Packs Pipeline Task Force with His Own Minions). Last week Quigley released a 355-page draft report supposedly compiled by the Task Force that will govern how rural gathering pipelines will be regulated (see PA Gathering Pipeline Draft “Recommendations” from Wolf Task Force). However, it seems the Task Force may not have authored the document after all. It appears to us that Quigley wants Task Force members to rubber stamp *his* proposed recommendations (i.e. regulations). At yesterday’s meeting, some Task Force members took issue with portions of the draft document, which had Mr. Quigley in a grumpy mood. Adding to Quigley’s grumpy mood was THE Delaware Riverkeeper herself, Maya van Rossum, who had to be escorted out of the meeting by Capitol police…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Lancaster County | Litigation | Pennsylvania | Pipelines | Transco | Williams

Wrath of Kann: PA Anti’s Disorderly Conduct Conviction Overturned
November 19, 2015November 19, 2015

Kimberly Kann, a resident of Conestoga Township in Lancaster County, PA, decided she would break the rules at a town meeting this past April. The meeting was to discuss so-called home rule and the role it should play in the town with respect to regulating pipelines, like the planned Atlantic Coast Pipeline project from Williams. The ground rules for the meeting were simple: ASK QUESTIONS ONLY. Kann decided she would use it as a public forum to pontificate and rail against pipelines. She wouldn’t ask questions and was repeatedly warned–so when she wouldn’t shut up, they arrested her and threw her out of the meeting (see Wrath of Kann: Lancaster Anti-Driller Arrested/Ejected from Mtg). In July she was found guilty as charged (see Wrath of Kann: Lancaster Anti-Driller Guilty of Disorderly Conduct). Kann should have paid her $325 fine/court costs and ended it–but she kept fighting. It eventually would cost her $3,000 in legal fees, but Kann, like the character played by Ricardo Montalban in Star Trek II, has had the last laugh. In a hollow victory, Kann got her conviction overturned by a Lancaster County judge…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Tennessee Gas Pipeline

Coordinated Attack? MassPLAN Uses Riverkeeper Pipeline Delay Tactic
November 19, 2015November 19, 2015

In what appears to be a coordinated attack on new natural gas pipelines, the Massachusetts Pipe-Line Awareness Network (MassPLAN) is using the same delay tactic to slow down Kinder Morgan’s Northeast Energy Direct (NED) pipeline project running from Pennsylvania to Massachusetts as was pioneered by THE Delaware Riverkeeper to slow down the PennEast Pipeline project running from Pennsylvania to New Jersey. Last month MDN exposed Riverkeeper’s sleazy strategy of encouraging thousands to sign up as “intervenors” with the Federal Energy Regulatory Commission (FERC)–even running “intervenor training” to show them how to do it (see Delaware Riverkeeper Scams FERC in Review of PennEast Pipeline). MassPLAN is using a chapter from Riverkeeper and has asked FERC to extend the time allowed to sign up as intervenors, so they can jam pack as many crazies as possible onto the intervenor roster…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Lib Dems Don’t Like Paying High Education Tax Themselves
November 19, 2015November 19, 2015

Pennsylvania Democrats are unhappy with their governor. They were all jazzed and giddy at the thought of taxing Republicans (i.e. drilling companies) to raise mountains of money for Big Education (i.e. Democrat voters). In the end, Gov. Tom Wolf had to settle for taxing other Democrats because, as Senate Majority Leader Jake Corman says, the drilling industry is “on its back” and more taxes would shut it down. Lack of a Marcellus Shale tax makes PA Dems grumpy–because they themselves (and their voters) will now pay for Wolf’s rash promise to Big Education. Hey, how does that shoe feel when it’s on your own foot, Lib Dems?…
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Anti-Drilling/Fossil Fuel | Athens County | Industrywide Issues | Ohio | Trumbull County

OH ‘National Day of Action’ Against Fracking a Huge Flop
November 19, 2015November 19, 2015

Looks like Tuesday’s so-called National Day of Action against fracking was an even bigger bust than we thought it would be (see Here Comes Another “National Day of Action” Against Fracking). In Painesville (Lake County), OH we spot three protesters who put on a skit (creative folks, those radical environmentalist). In Weathersfield Township (Trumbull County), OH we spot five protesters. It was Athens County, OH however where the biggest concentration of nutters was to be found. Upward of 40 protesters gathered near a fracking site in the Torch/Coolville area. The Willis Family reunion had more people in attendance this past summer–but we didn’t spot any news cameras around to record the event. Perhaps if we had held anti-fracking signs we would have been featured on the evening news?…
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