Marcellus Drilling News

Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Feb 12, 2016
February 12, 2016February 12, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Why Marcellus production fell for 4th month in a row; tax revenues in Monroe County, OH up 340% thx to Utica Shale; UPS & Clean Energy expand deal; rigs would roaring back with $60 oil; utilities abandoning coal for natgas; Fed chief Yellen says oil bust good for U.S. economy; what does Aubrey McClendon see in Argentina?; and more!
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Belmont County | Energy Companies | Gulfport Energy | Industrywide Issues | Monroe County | Ohio | Pipelines | Rice Energy

Rice Energy, Gulfport Midstream Form Midstream JV in Eastern OH
February 11, 2016February 11, 2016

Rice Energy, a pure play driller in the Marcellus/Utica, and Gulfport Midstream, a subsidiary of Gulfport Energy (big driller in the Utica) have entered into a joint venture. The new jv is called Strike Force and the purpose is to connect to and gather natural gas from wells drilled in Belmont and Monroe counties in Ohio. That is, this is a new midstream business. Rice contributed $41 million, certain pipelines, facilities and rights of way in return for a 75% ownership of the jv. Gulfport contributed an existing gathering system in return for their 25%. Neither Rice nor Gulfport have made a public announcement about the new venture. We know of it via a Securities and Exchange Commission 8-K filing…
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Industrywide Issues | Litigation | North Carolina

Whatever Happened to Fracking in North Carolina?
February 11, 2016February 11, 2016

Last year North Carolina was ready to begin drilling in shale layers of the Triassic Basin, which is part of a broader area called the Deep River Basin. Everything was set to go. And then the lawsuits began. A NC judge issued a ruling that prohibited the Mining and Energy Commission (MEC) from issuing any permits until another case currently before the NC Supreme Court–questioning the legality of the appointment of several boards that manage state resources and the environment–plays out (see Judge Puts NC Fracking on Hold Pending Outcome of Lawsuit). That case was just resolved at the end of January. However, in the meantime, the NC Department of Environment and Natural Resources (DENR) didn’t let the lawsuit stop them from drilling a series of test holes in Stokes, Scotland, Hoke and Cumberland counties to see whether shale gas is present in those locations (see Lawsuit Won’t Stop NC Agency from Drilling Test Holes in Shale). The results are now in. Three of the four counties tested show there’s no measurable presence of Triassic shale and therefore not suitable for drilling…
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Economic Impact | Greene County (PA) | Industrywide Issues | Jobs | Pennsylvania | Washington County

More Evidence of the Slowdown in the Marcellus
February 11, 2016February 11, 2016

We won’t continue to beat the drum indefinitely that “it’s bad out there.” Everyone knows it. However, we did honestly and truthfully report when the Marcellus industry was on the upswing and it seemed like everything was coming up roses. So we will now honestly and truthfully report when our beloved industry is on the downswing. We don’t sugarcoat it here at MDN. The latest bit of “it’s bad out there” evidence comes from Greene County, PA and Hot Rod’s House of Bar-B-Que where it used to be you couldn’t get a seat at lunchtime, but now it’s “walk right in, sit right down”…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

More on Wolf’s New 6.5% Severance Tax – What Could of Been
February 11, 2016February 11, 2016

A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
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Air Quality | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Wolf Vows to Push Forward with Clean Power Plan in PA
February 11, 2016February 11, 2016

Are there any doubts remaining that Pennsylvania Gov. Tom Wolf is anti-fossil fuel? He’s trying to tax the Marcellus gas industry out of existence (see Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%). He’s now trying to regulate the coal industry in PA out of existence. Yesterday we brought you the great news that the U.S. Supreme Court has stayed the execution of coal by stopping–for now–implementation of President Obama’s draconian and misnamed Clean Power Plan (see Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan). That means a decision on whether or not the plan can proceed will come from the courts no earlier than 2017. So what does Tom Wolf say? PA is going to go ahead and put a bullet in the head of coal (and to some degree natural gas) by moving forward with its own implementation of the Clean Power Plan. Arrogance personified…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Ohio | Research | Statewide OH

Anti Groups Abruptly Cut Funding for OH Fracking Study
February 11, 2016February 11, 2016

Two days ago we told you about a three-year study conducted at the University of Cincinnati that looked at fracking and its potential affects on water wells in five Ohio counties. The research found no evidence that fracking had led to any kind of water well contamination (see Antis Not Happy with Results of OH Fracking Study They Funded). We now have a bit more to the story. The two anti groups that funded the research, the Deer Creek Foundation in St. Louis and the Alice Weston foundation from Cincinnati, abruptly stopped funding the study when they got the preliminary (and as yet, unpublished) results. The foundations thought they had bought and paid for a particular outcome, and when that didn’t happen, they withdrew their money and presumably will now support someone they can buy off. Here’s an update on this developing story from the Ohio Oil and Gas Association…
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Industrywide Issues | Research

Oil & Gas Investment in 2015 Down Average 35% – 2nd Largest Ever
February 11, 2016February 11, 2016

Another interesting article from our favorite government agency, the U.S. Energy Information Administration (EIA). We all know that drillers spent a lot less last year than the year before on drilling. How much, on average? According to new research by the EIA, mining and exploration investment (which includes oil and gas and coal) declined 35% in 2015, the second largest year-over-year decline since the U.S. Bureau of Economic Analysis (BEA) began reporting the series in 1948. Did you catch that? Last year investment in oil and gas decreased the second largest amount since the government has kept records on it. Wow. This year promises even more cuts. Here’s what the EIA says in their latest report…
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CNG/LNG | Industrywide Issues | M&A

Love’s Travel Stops Buys Trillium CNG, Expands CNG Network
February 11, 2016February 11, 2016

Loves, the big truck stop chain, has just purchased Trillium CNG. The purchase will add 37 public-access CNG locations to the Love’s network, bringing the number of Love’s-operated public CNG facilities to 65. Why is that an MDN story? For a few reasons. It shows the growth and importance of CNG (compressed natural gas) as a use in passenger vehicles and long-haul trucking. As demand grows for CNG, prices paid for natural gas will grow too. It’s an important developing market for natural gas. Also, there’s a Love’s and a Trillium CNG about three miles from where MDN editor Jim Willis lives. So this is a “local” story of interest for him! Here’s the good news of Love’s being in love with Trillium (along with a cool map)…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Feb 11, 2016
February 11, 2016February 11, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: OH antis gear up to protest injection well; oil & gas downturn not all bad; where Wolf is leading; court rules WV oil & gas lease not divisible; VA bills to stop pipeline going nowhere; natgas still on the ropes; why oil & gas is still a great industry to work for; and more!
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%
February 10, 2016February 10, 2016

Someone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself, he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present–blaming everyone but himself for the budget disaster of last year. Wolf is either bipolar (off his meds) or just plain nuts. How else can you explain that after not passing his first budget because he demanded a 5% severance tax on drilling (which was really closer to 15%, see Pittsburgh Economic Leader Says Wolf Severance Tax Really 15% Rate), in the worst oil and gas downturn in 30 years, he’s just proposed a second budget with a 6.5% severance tax? It’s sheer madness…
Read More “Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%”
Energy Companies | Warren Resources

Warren Resources: Potential Bankruptcy, No Drilling in 2016
February 10, 2016February 10, 2016

Last week MDN told you of a troubling sign at Warren Resources–the company had missed a $7.5 million payment on notes (IOUs) and the clock is now ticking (see Warren Resources Misses $7.5M Debt Payment, 30-Day Clock Ticking). Yesterday Warren released information on 2015 reserve and production figures. As part of that update, they say this: “If Warren cannot come to a workable agreement regarding an out-of-court restructuring, it will have to seek protection from its creditors through a bankruptcy proceeding in order to preserve and maximize value for its stakeholders” (emphasis added). In other words, if the people they owe money to don’t back off, the only choice left is to declare bankruptcy. Warren also said yesterday they won’t spend a penny on drilling in 2016…
Read More “Warren Resources: Potential Bankruptcy, No Drilling in 2016”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Shell

Shell Begins Hiring for Monaca, PA Ethane Cracker Plant
February 10, 2016February 10, 2016

Yesterday a sharp MDN reader called our attention to a job posting on LinkedIn. The posting, by Shell, seeks a “Technical Service Team Lead Polyethylene (Pittsburgh, PA).” When you read the job listing (below) it clearly states it the job is for their Monaca, PA ethane cracker plant complex. Now this is a single job posting–so far–although it’s for a very important position. Still, our point is this: You don’t spend millions building a new bridge over a highway as a new entrance to a piece of property (see Shell Begins Building Bridge to PA Cracker Plant Site), you don’t spend $80 million to clean up that site (see Shell Paying $80M to Clean Up PA Site for Ethane Cracker Plant), you don’t spend $69 million to move a water intake site and build a new water treatment site for the local town because the current water intake is on the site where you want to build (see Shell Paying $69M to Move Water Plant for Cracker Project), you don’t spend money to lease land to build two ethane pipelines to that site (see Exclusive: Shell Leasing Land for 2 Pipelines to PA Cracker Plant), and you don’t begin hiring people to work on/at the plant–unless you’re serious about building it…
Read More “Shell Begins Hiring for Monaca, PA Ethane Cracker Plant”
Air Quality | Industrywide Issues | Litigation | Regulation

Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan
February 10, 2016February 10, 2016

On January 26, 2016, 29 states and state agencies, including Ohio and West Virgina, filed an application with the U.S. Supreme Court seeking an immediate stay of President Obama’s EPA Clean Power Plan (see 29 States Ask Supreme Court to Stop Obama Clean Power Plan ASAP). A week before that a D.C. Circuit Court of Appeals denied such a stay, so the states had no alternative but to take their case all the way to the top. Yesterday, in a surprise decision, the High Court granted their request! That is, the U.S. Supreme Court stopped Obama’s draconian EPA regulations dead in their tracks. Now an extended and protracted court case will ensue. What it means is that CPP is dead for this year, and likely dead altogether…
Read More “Supreme Court Shocker – Justices Halt Obama’s Clean Power Plan”
Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia

EIA Feb DPR: Utica NatGas Output Continues to Increase
February 10, 2016February 10, 2016

Earlier this week our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report, the Drilling Productivity Report (DPR). The February 2016 report shows what the EIA predicts oil and natural gas production will be in March from the seven largest commercial shale plays in the U.S. What does the report (full copy below) show? Very broadly, it shows that the decline in natural gas production is picking up speed, while the decline in oil slowed (reversed, actually). In January’s report, the EIA said for February the combined output of natgas would decline by 405 million cubic feet per day (MMcf/d). In this report, forecasting March production, the EIA says the decline will go down another 451 MMcf/d over the February number. That is, the rate of decline is increasing. There’s only one shale play of the seven with an increase in natgas output from the previous month. Can you guess which one? That’s right–the Utica…
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Pennsylvania | Statewide PA

PA Rig Count Hits 9-Year Low Last Week
February 10, 2016February 10, 2016

Two days ago MDN briefed you on the latest rig counts–worldwide, U.S. and for the Marcellus/Utica (see Rig Counts for World, US & Marcellus/Utica Continue to Tumble). What we didn’t note in that article is last week Baker Hughes showed the number of active rigs in Pennsylvania had fallen to 19. Eeeks! That is the lowest number of active rigs working in PA since before the Marcellus Shale revolution got underway in 2007. How much lower will it go?…
Read More “PA Rig Count Hits 9-Year Low Last Week”