Marcellus Drilling News

Carrizo Oil & Gas | Energy Companies

Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast
February 24, 2016February 24, 2016

Carrizo Oil & Gas, a Houston-based driller, issued their fourth quarter and full year 2015 financial and operational update on Monday. Carrizo actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15, and according to Monday’s update, they won’t be drilling here in 2016. Not only that, they have curtained (shut-in) some of their Marcellus/Utica production, and they may shut-in even more in the coming months, if prices don’t recover. According to Carrizo’s financials, the company made $226 million in 2014. But in 2015 the company lost $1.2 billion. Here’s a portion of Monday’s update, which says they plan to focus on the Eagle Ford for the time being…
Read More “Carrizo O&G 2015: Loses $1.2B, Stops Drilling in Northeast”
Crestwood Midstream | Energy Services

Crestwood 2015: $2.3B Paper Loss, Marcellus Pipeline Volumes Up
February 24, 2016February 24, 2016

Houston, TX-based Crestwood Midstream, which these days calls itself Crestwood Equity Partners, operates midstream businesses in multiple shale resource plays across the United States, including the Marcellus. Crestwood is engaged in gathering, processing, treating, compression, storage and transportation of natural gas, among many other activities. Crestwood owns the facility along the shore of Seneca Lake in New York where they want to convert a depleted underground salt cavern into a propane storage facility–something that protesters frequently get arrested for opposing (see Criminals Arrested Blocking Crestwood Seneca Lake Facility). Yesterday Crestwood issued their fourth quarter and full year 2015 update. The distressing news is that Crestwood lost $2.3 billion for the year. But let’s put that in context. Almost all of it was a paper loss. Of the $2.3 billion lost, $821 million was for depreciation of assets, and $1.4 billion was “goodwill impairment”–meaning the overall perception of the company’s value took a hit. In 2014 Crestwood lost just $10 million. We suspect the true money-out-of-pocket loss for Crestwood in 2015 was closer to $100 million, not nearly as bad as it seems at first. Below is a portion of the update, including a couple of Marcellus pipeline updates from the company…
Read More “Crestwood 2015: $2.3B Paper Loss, Marcellus Pipeline Volumes Up”
Energy Companies | PDC Energy

PDC Energy 2015: $68M Loss, Production Up 65% Y/Y
February 24, 2016February 24, 2016

PDC Energy, a driller in the Wattenberg Field in Colorado and the Utica in Ohio, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). In December the company announced they would restart Utica drilling in 2016 with plans to drill five wells (see PDC Energy to Restart OH Drilling in 2016, Drilling 5 Utica Wells). On Monday PDC released their fourth quarter and full year 2015 financial and operating results. PDC grew production in 2015, substantially, over 2014 (up 65%). Although the company lost money in 2015, as most drillers did, it wasn’t all that much compared to others. In 2014 PDC made $155 million in profit. In 2015, they lost $68 million. With others losing over $1 billion, $68 million is a comparative drop in the bucket. We spot no mention of when they will restart Utica drilling. Here’s the update from PDC…
Read More “PDC Energy 2015: $68M Loss, Production Up 65% Y/Y”
Allegheny County | Pennsylvania

Maryland Law Firm Specializing in Bankruptcy Opens in Pittsburgh
February 24, 2016February 24, 2016

This isn’t one of those “glad to see you moving in” stories. One of Maryland’s largest law firms, Whiteford, Taylor & Preston LLP, is opening a new branch office in Pittsburgh. The law firm has plans to hire five to ten lawyers to staff it–a pretty sizable operation given all of the paralegals and other support staff it will require. Why aren’t we rolling out the red carpet? Because Whiteford, Taylor & Preston is a top bankruptcy/restructuring firm, and they’re opening an office in Pittsburgh specifically to serve energy companies that need such services…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Feb 24, 2016
February 24, 2016February 24, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: NYC considers banning all frack byproducts; OH has 1,236 producing Utica wells; OH sees 96% increase in o&g jobs; Range Resources cited for “dozens of violations”; propane exports up at Philly port; shale drilling in the Ohio Valley; Sixth Circuit retains WOTUS rule case; John Hess says don’t lose sight of long term; E&P bankruptcies may mean trouble for the midstream; OPEC seeks “unity” with U.S. shale drillers; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Feb 24, 2016”
Atlas Energy | Energy Companies | Industrywide Issues | Jobs

Atlas Energy – Rumored Layoff of 30+ People in PA
February 23, 2016February 24, 2016

UPDATE Feb. 24: MDN posted a follow-up, with more insight/rumor, from a fourth source. See the end of the article.

For a week now MDN has been hearing rumors that Atlas Energy was about to, or already has, laid off a number of workers. Atlas, you may recall, once seemed to be the golden child–everything they touched turned to gold. They sold much of their Marcellus operation in 2011 to Chevron for $4.3 billion, and later sold another batch of Marcellus assets to Targa Resources for a staggering $7.7 billion. They still have some operations in the Marcellus, but recently the New York Stock Exchange threatened the company with de-listing their stock (see Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing). In January the company announced an IPO in which they hope to raise $1 billion (see Atlas Energy Subsidiary Threatened with NYSE De-Listing, IPO?!). One week ago we got a tip from an MDN subscriber that there were rumors of a layoff…
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Chief Oil & Gas | Energy Companies | Gastar Exploration | Marshall County | Tug Hill Operating | West Virginia | Wetzel County

Gastar Leaving Marcellus/Utica, Sells Assets to Tug Hill for $80M
February 23, 2016February 23, 2016

Gastar Exploration is throwing in the towel in the Marcellus/Utica. Gastar is selling its Marcellus/Utica assets–mainly located in Marshall and Wetzel counties in West Virginia, to Tug Hill for $80 million. Gastar has seen the light and that light is in becoming a “pure play” company focused solely on the Oklahoma STACK Play. Why sell what they admit are “high-quality”? Because they can’t get enough money for their gas in the northeast–and they can’t get enough money because there aren’t enough pipelines to move the gas to other markets. So they’re throwing in the towel and calling it quits. In addition to the sad news that they’re leaving the Marcellus, Gastar also delivered the bad news that their proved reserves went down 45% in 2015 due to lower commodity prices…
Read More “Gastar Leaving Marcellus/Utica, Sells Assets to Tug Hill for $80M”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget
February 23, 2016February 23, 2016

What happens when anti-drilling lib Dems, like PA Gov. Tom Wolf, get their way? Revenues dry up and the lib Dems have to raid other sources to make up for it. And that’s just what’s happening with the Pennsylvania Department of Conservation and Natural Resources (DCNR). Tom and the Dems made a big deal about not leasing nor allowing any more drilling on or under PA state lands. In fact, one of the first things Wolf did upon taking office in early 2015 was to slap a moratorium on any new state land drilling (see PA Gov Wolf Signs Exec Order to Ban Drilling Under State Land). What followed? No more lease payments for the DCNR, and royalties have fallen dramatically on land previously leased and drilled on/under. Now the DCNR faces a budget shortfall of $51 million–because of no new leases courtesy of Wolf. Wolf’s solution? Steal $61.3 million from the “general fund” to prop up DCNR. Typical…
Read More “PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget”
Energy Services | Industrywide Issues | Pipelines | Spectra Energy | Tennessee Gas Pipeline | Transco

Marcellus/Utica Gas May Head to GA & FL via Alabama Pipeline
February 23, 2016February 23, 2016

Marcellus and Utica Shale gas will get access to an important new market, but not until 2019. Northeast gas will be able to service the very populous southeastern states of Georgia and Florida in about three years’ time with the construction of two new pipelines. The first pipeline is called the Sabal Trail, a 516-mile pipeline from Alabama through Georgia and then through much of Florida. Sabal Trail is a Spectra Energy, NextEra Energy and Duke Energy joint venture with Spectra taking the lead. Two weeks ago, after a 2 1/2 year-long process, the Federal Energy Regulatory Commission (FERC) approved the Sabal Trail project. But how would northeast gas get to Alabama? Good question! That’s where a shorter intrastate (Alabama only) pipeline project comes into play. Yesterday American Midstream Partners announced an “open season” to elicit shippers to sign up for capacity on a 45-mile extension of the Magnolia Intrastate pipeline. If built, the Magnolia expansion would connect Kinder Morgan’s Tennessee Natural Gas Pipeline’s 500 Line, which brings gas from north to southwest, with Williams’ Transco pipeline. Transco has a number of branches in the south, including a connection to the Sabal Trail when it gets built (see the map below). The Magnolia expansion, if built, will not be in service until 2019…
Read More “Marcellus/Utica Gas May Head to GA & FL via Alabama Pipeline”
Accidents | Energy Companies | Industrywide Issues | JKLM Energy | Pennsylvania | Potter County

DEP Gives All Clear for JKLM-Contaminated Water Wells in PA
February 23, 2016February 23, 2016

Last September MDN told you about an accidental spill (or rather migration) of soap into a local water aquifer in Coudersport, PA (see JKLM Energy Accident Contaminates 5 PA Water Wells with Soap). JKLM Energy was trying to free a drill bit stuck in the hole about 570 feet down. The soap they used migrated into a local water aquifer and contaminated five nearby private water wells with very low levels of soap. Not long after the PA Dept. of Environmental Protection (DEP) issued a Notice of Violation to JKLM (see PA DEP Issues Notice of Violation to JKLM Energy for Spilled Soap). Throughout the “crisis”, if you can call it that, JKLM communicated constantly with local residents to get them what they need, and share full information. Since last October we’d not heard anything about the situation until yesterday when the DEP issued a press release saying two of the wells are now cleared to be used again. Apparently the other three wells belong to the hospital (on whose land JKLM was drilling) and the hospital switched to municipal water so they’re in no hurry to begin re-using those wells again–if ever…
Read More “DEP Gives All Clear for JKLM-Contaminated Water Wells in PA”
Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Dimock Plantiffs Warned by Judge to Keep Their Yaps Shut
February 23, 2016February 23, 2016

Borrowing an old Washington, DC inside joke about Chuck Schumer, the most dangerous place in Scranton, PA is standing between Dimock resident Scott Ely and a television camera. As we told you yesterday, two Dimock families finally made it to their day in court to accuse Cabot Oil & Gas of contaminating their water supplies (see Dimock Trial Starts Today – 2 Families Try to Shake Down Cabot). What was the first thing Scott Ely, one of the landowners, did? On a lunch break, Ely and the other plantiffs headed straight for the reporters to attempt to influence the jury pool with a storyline of being bullied by a big, mean corporation. After lunch, the judge warned the plaintiffs’ attorney that the plaintiffs were not to run their yaps outside of the courtroom…
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Energy Companies | Stone Energy

Stone Energy 2015: $1.1 Billion Loss, Quit Drilling in Marcellus
February 23, 2016February 24, 2016

Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale. Last year they quit drilling in the northeast and actually shut-in part of their production due to low prices (see Stone Energy 3Q15: Shut Down 110 Mmcfe/d of Marcellus Production). However, Stone does have around 75,000 acres of leases–so they’re an important player in our neck of the woods. So we keep tabs on them. In December Stone said they would spend 3-5% of their $200 million budget in 2016 in the Marcellus/Utica–about enough to drill one well. Which led to our conclusion they’re in maintenance-only mode for this year. And no wonder why. Yesterday Stone released their fourth quarter and full year 2015 operating and financial results, and it’s not a pretty picture. In 2014 Stone lost $190 million for the year. In 2015, they lost a huge $1.1 billion for the year. You can’t rack up losses like that for long. Here’s yesterday’s update from Stone Energy…
Read More “Stone Energy 2015: $1.1 Billion Loss, Quit Drilling in Marcellus”
Coterra Energy (Cabot O&G) | Energy Companies

Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B
February 23, 2016February 23, 2016

Yesterday we told you that EQT had decided to float a new round of stock–up to 7.5 million shares–hoping to raise a good chunk of cash, $437 million (see EQT Floats ~7.5M New Shares of Stock, Hopes to Raise $437M). Seems EQT isn’t the only driller taking that approach. Yesterday Cabot Oil & Gas announced their own plan to issue a new round of common stock. This one is a doozy. Cabot originally announced they’re floating 38 million new shares of common stock, with an option to issue another 5.7 million shares to the banks underwriting the offering. That’s a total of 43.7 million shares that may get sold. A short time later Cabot issued a second press release saying they’ve “upsized” the offering–to 44 million shares and an option for another 6.6 million shares for the underwriters. A total of 50.6 million shares. How much is Cabot asking per share? $20/share–which works out to be a staggering $1 billion! Supersize Me baby!…
Read More “Supersize Me: Cabot Floats 50.7M Shares of Stock to Raise $1B”
Energy Companies | Energy Services | Rice Energy | Rice Midstream

Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M
February 23, 2016February 23, 2016

Rice Energy has sold an 8.5% ownership stake in Rice Midstream to EIG Global Energy Partners for $375 million. Rice plans to use the money to help fund its 2016 pipeline expansion program in the Marcellus/Utica. EIG is also on the hook for another $125 million investment in the next 18 months if Rice chooses to exercise it. Here’s the details for how Rice Midstream is dealing with the downturn in the market…
Read More “Rice Sells 8.5% Ownership of Rice Midstream to EIG for $375M”
Lease & Royalty Payments | Pennsylvania | Statewide PA

The Marcellus Landman Leaveth
February 23, 2016February 23, 2016

The person who negotiates leases for drilling and pipelines (and for other oil and gas related transactions) is called a landman–regardless of whether the person doing the negotiating is a man or a woman. Landmen play an important part in the shale business–including here in the Marcellus/Utica. Sometimes they’re reviled as being “high pressure”–as in “sign this lease now while I’m here, I won’t come back, this is your one and only chance.” We don’t like landmen like that. But there are those who do the job and do it well–and we cherish them. They don’t use high pressure tactics, they wait for you to run your lease by a lawyer (as you ALWAYS should). They come back. They keep at it. They’re the best kinds. Thing is, landmen in the Marcellus/Utica are now a dying breed. They’re changing jobs. Why? Because there’s so little leasing going on these days. A recent article highlights the situation of what we call the Landman Leaveth…
Read More “The Marcellus Landman Leaveth”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Feb 23, 2016
February 23, 2016February 23, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Managing mineral rights another option for landowners; NGI’s REX Tracker updated; PA rig count bottoms out; natgas flowing to Sabine Pass LNG export plant; Obama’s oil fee disaster; Bernie Sanders’ frack ban disaster; IEA predicts price spike coming; how U.S. shale will bounce back; Baker Hughes-Halliburton deal 50/50 at best; questions continue to dog Williams re Chesapeake bankruptcy; the energy industry’s “day of reckoning”; and more!
Read More “Marcellus & Utica Shale Story Links: Tue, Feb 23, 2016”