Marcellus Drilling News

Ascent Resources | Energy Companies

Ascent Resources Offers to Trade IOUs Due 2021 with IOUs Due 2021
January 25, 2016January 25, 2016

Last week Ascent Resources, which is formerly American Energy (Aubrey McClendon’s company), targeting the Utica Shale, launched a note swap. Ascent is offering to exchange 3.50% Convertible Subordinated Notes due 2021 with two sets of new notes, another 3.50% Convertible Subordinated Notes due 2021 and incremental junior secured loans due 2019. We have no clue what it all means–perhaps a sharp MDN reader can elucidate for us? What it looks like to us is some sort of shell game, and in such games the dealer always comes out the winner. Note the phrase in the announcement below: “The New Convertible Notes are not and will not be listed on any securities exchange”…
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Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Statewide WV | Virginia | West Virginia

US Forest Service Blocks Atlantic Coast Pipeline in National Forests
January 25, 2016January 25, 2016

Cow Knob Salamander

In the end it was the cow nobs and red spruce that have slowed down Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project from West Virginia through Virginia and into North Carolina. Specifically, the U.S. Forest Service (USFS) has refused to grant Dominion a special permit to cross teeny tiny sections of the Monongahela and George Washington national forests in West Virginia and Virginia. Why? Because of concerns about cow knob salamanders, northern flying squirrels and red spruce trees. Just last November MDN told you that Dominion and ACP were bending backwards, forwards and sideways to avoid running through cow nob salamander territory (see Dominion Files Pipeline Route Change to Avoid Salamanders, Swamp). Apparently the USFS doesn’t think Dominion’s plan is good enough. It’s now back to the drawing board to see where, in those regions, ACP can safely be run to avoid radical environmentalist demands. Of course the answer is “no where” as they are always unreasonable about these things. There is no “how can we work this out to your satisfaction” when it comes to nut cases. The antis simply demand, like petulant children, that you not do it at all. Which is just what the other side is now saying about ACP…
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Ohio | Statewide OH

OH Landowners, Politicians, Businesses Want Drilling in Wayne NF
January 25, 2016January 25, 2016

As we reported a couple of weeks ago, there has been some progress on finally allowing drilling in the Wayne National Forest (WNF) in Ohio (see Small Progress with Drilling in Ohio’s Wayne National Forest). WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. The federal government has delayed drilling in WNF for nearly 10 years, and is finally moving. Like a glacier, but at least there’s movement. Landowners and others in that region are keeping up the pressure. Last week a group called Landowners for Energy Access and Safe Exploration (LEASE) issued a press release to detail just how much support there is (it’s a lot) to get moving with drilling in WNF…
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Industrywide Issues | Pipelines | Regulation

FERC Takes it Time with 5 Marcellus/Utica Pipeline Projects
January 25, 2016January 25, 2016

“Your wait time is 12-18 months, please hold.” That’s what the Federal Energy Regulatory Commission (FERC) is telling midstream companies anxious to build new pipelines in the Marcellus/Utica. Five major pipeline systems representing $15 billion of investment are currently on hold while FERC runs through it’s sloooooow process of approval. FERC’s response/excuse is that it takes 12-18 months, period. Like it or lump it. The five pipelines now on hold in the southwest PA/eastern OH/WV area include: Atlantic Coast Pipeline, Rover Pipeline, Nexus Pipeline, Leach Express Pipeline and the Mountain Valley Pipeline. Rover filed its application with FERC last February, so they’re not even a full year into the process yet. The others filed later. Although industry groups are trying to pressure FERC (via publicity) FERC isn’t moved by calls to speed up the process…
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Industrywide Issues | Ohio | Regulation | Statewide OH

Real Property Bill in OH Legislature has Big Implications for O&G
January 25, 2016January 25, 2016

A bill in the Ohio Senate, SB 257 (copy below), would have a “substantial effect” on determining whether or not you have a good title in a real property transaction. Which may sound rather boring, like watching paint dry. Except in this case, the changes to the real property law may have a profound impact on oil and gas interests in Ohio–impacting mineral rights that are part of a property. The changes being proposed under SB 257 expand the scope of what kinds of “defects” in a title that can be “cured,” and reduces the amount of time a title can be contested from 21 years down to 4 years…
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Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

OSU Prof “Optimistic” that OH Ethane Cracker Will Get Built
January 25, 2016January 25, 2016

There’s not much new news to report on any of the three ethane cracker plants announced as being thought-about for the Marcellus/Utica. Those three are Shell’s project planned for Beaver County, PA, Odebrecht’s project announced for Wood County, WV, and PTT Global’s project announced for Belmont County, OH. Both the Shell and PTT projects appear to still have a pulse. WV’s does not. Hey, just keeping it real. One professor at Ohio State University says he is an “optimist” regarding the PTT project, for a number of reasons. When an OSU prof is optimistic, it gives us reason to be optimistic too! Here’s the reason our OSU prof believes the PTT Global ethane cracker will get built…
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Air Quality | Industrywide Issues | Regulation

Obama’s Interior Dept. Sneaks in New Rule to Limit Methane
January 25, 2016January 25, 2016

Once again our Dictator in Chief, Barack Hussein Obama, is acting like a tinpot despot ruling a Middle Eastern country, not like the President of the United States. Last Friday, lost amid the Friday afternoon document dump and news about the blizzard in DC, Obama’s Dept. of Interior posted a new rule (i.e. should be a law, but they’re doing another end-run around Congress) that will make it all but impossible for oil and gas drillers to drill on federal lands. The new 298-page rule requires companies to use expensive equipment to capture every last molecule of methane, the stuff these companies already capture so they can sell it, to prevent any “fugitive” methane from escaping into the atmosphere where it contributes to mythical global warming. Obama has also hiked the price drillers will pay to drill on federal lands. The aim is, of course, to shut down drilling on all federal lands…
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About MDN | Calendar

Calendar of Events for Jan 25 – Apr 24 (90 Days)
January 25, 2016January 25, 2016

Below are upcoming events for the next three months (90 days). To see the full list of future events, visit this page: //marcellusdrilling.com/calendar/.

NOTE: To have an item included, please email it to: calendar@marcellusdrilling.com.
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Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Jan 25, 2016
January 25, 2016January 25, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus drillers’ stock price goes up; fracking lawsuit in NY; more opposition to New England pipeline; FERC losing its last Republican commissioner; post mortem on the low price of oil; Saudi Arabia in the fight of its life; Japan importing less LNG first time in 6 years; and more!
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Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Southwestern Energy | Statewide PA | Statewide WV | West Virginia

Southwestern Energy Cuts Workforce 44%, 200 Marcellus Jobs Gone
January 22, 2016January 22, 2016

We have some very sad news to share today. Yesterday Southwestern Energy Company, one of the largest drillers in the Marcellus/Utica and the third largest independent natural gas driller in the U.S., announced it will lay off 1,100 people and pause its drilling program. That 1,100 is out of 2,500 employees–or 44% of the company. It was just a few weeks ago that Southwestern got a new CEO, Bill Way (see Southwestern Energy Gets New CEO – What’s Ahead for 2016?). We mused at the time: “When there’s a change in leadership, it has the potential to impact company strategy. So we’re always interested when changes of this type come along. The question now is, what’s ahead for 2016 with Bill Way at the helm?” Indeed. We can see what kind of changes Mr. Way is bringing. In October 2014 Southwestern announced a deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Then in December 2014, Southwestern bought 46,700 net acres of leases in northeastern PA from WPX for $300 million (see First Shoe Drops: WPX Sells 1/2 Marcellus Assets to Southwestern). Southwestern holds about 755,000 acres total in the Marcellus/Utica region. When everyone else was slowing down, Southwestern was doubling down on their drilling program (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). It seems that the wind has finally gone out of Southwestern’s sails. The company did not post an official press release on their website, so we’ve pieced together coverage from a number of sources to try and give you a complete picture of what they said yesterday…
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Anti-Drilling/Fossil Fuel | Crime | Dauphin County | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

7 Antis Arrested at Final PA Pipeline Task Force Meeting
January 22, 2016January 22, 2016

Yesterday we reported on the very last Pennsylvania Pipeline Infrastructure Task Force meeting, held in Harrisburg on Wednesday (see PA Pipeline Task Force Wraps Up – Did We Worry for Nothing?). Once again anti-fossil fuelers disrupted the meeting, which is nothing new. Last October a group of 20 or so antis showed up and behaved badly (see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”). At Wednesday’s final Task Force meeting, seven protesters behaved badly enough that they got themselves arrested. To their credit, the Democrat-run PBS StateImpact Pennsylvania is the only “media” outlet that covered the news of the arrests…
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Industrywide Issues | Statewide WV | Taxation | West Virginia

WV Gov. Tomblin Proposes to LOWER Oil & Gas Severance Tax
January 22, 2016January 22, 2016

Ohio Gov. John “foreigner hunter” Kasich has been hellbent on raising Ohio’s oil and gas severance tax–for years. As recently as last June Kasich predicted his 6.5% proposed severance tax would get adopted (see Kasich Predicts Severance Tax Deal Will Happen, Others Say No). Last fall OH Republicans continued to flirt with the idea (see Ohio Legislators Continue Dalliance with Kasich Severance Tax). The state still has not raised it, even though Kasich has lobbied hard for over three years. Pennsylvania, on the other hand, continues to consider converting their better impact fee for a less better severance tax. Republicans there are getting weak-kneed too (see Some PA Republicans Beginning to Cave on Severance Tax). It seems the severance tax is like the mythical siren song attempting to lure states onto the rocks of less drilling. But hold on to your hat. In contrast to OH and PA, there’s one state, and one governor, who’s not falling for higher severance taxes. PA Democrats trot out West Virginia as their shining example of how severance taxes don’t chase drillers away–to bolster their argument that PA should adopt a severance tax. Guess what? WV figured out high severance taxes DO chase drillers away, and WV’s Democrat governor, Earl Ray Tomblin, is proposing the state LOWER its oil and gas severance tax in 2016! It’s a devastating blow to PA Gov. Tom Wolf and his obsessive-compulsive insistence on a severance tax…
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Beck Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH | XTO

OH Supreme Court Upholds Victory for Beck Energy in Lease Case
January 22, 2016January 26, 2016

A major victory for oil and gas drillers in Ohio was just handed down by the Ohio Supreme Court. You may recall MDN brought you the news in October 2014 that the Seventh District Court of Appeals in Ohio overturned a lower court ruling in the case of Hupp v. Beck Energy Corp (see Major OH Court Victory for Beck Energy & XTO in Lease Case). Brief background: three landowners filed suit claiming that their leases with Beck Energy Corp. were void and should be terminated because Beck never drilled wells on their property and that a provision allowing Beck to pay a nominal delay fee was against public policy. The lower court agreed and granted summary judgment. The court then granted class certification to the lawsuit brought by the three landowners–meaning between 600-700 landowners would also be able to invalidate their leases. On appeal to the Seventh District Court, the case was overturned and decided in favor of Beck Energy (and XTO Energy who had purchased the leases from Beck). It was appealed again, to the OH Supreme Court, and the high court has sided with Beck/XTO…
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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Some Give Up, Others Continue to Oppose WV Forced Pooling Law
January 22, 2016January 22, 2016

The fight for a forced pooling law in West Virginia continues. Some who have opposed such a law in the past are now changing position and attempting to get as favorable terms as possible. They’re throwing in the towel. Others are still hoping to stop the bill, for a fifth time. So far the forced pooling bill has not been introduced, even though the WV legislature began its 60-day session last Wednesday, Jan. 13…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

MA Town Plans to Raise Taxes to Oppose 1 Mile of NED Pipeline
January 22, 2016January 22, 2016

Part of the Kinder Morgan expansion of the Tennessee Gas Pipeline in New England, called Northeast Energy Direct (NED) is due to go through the Town of Warwick, MA. Warwick sits on the Massachusetts/New Hampshire border. Town leaders are opposed to the pipeline running through their town. In order to fight it, the town has opened a voluntary fund that residents can contribute to, to help with legal fees. Apparently the town “fathers” (and “mothers”) don’t have much hope anyone is going to contribute, because they want to allocate money from the town–and raise residents’ taxes in order to do it. Some Warwich residents aren’t thrilled with the prospect, since they’re already taxed up to the eyeballs. Here’s the kicker: Only about one mile of pipeline will traverse the Town of Warwick. They want to soak taxpayers to oppose a project that’s one mile of pipeline. Really? Are they really that radicalized against fossil fuels?…
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Energy Services | Seventy Seven Energy

Seventy Seven Energy’s Stock Threatened with Delisting from NYSE
January 22, 2016January 22, 2016

Last week we told you that Seventy Seven Energy, the former Chesapeake Oilfield Operating division of Chesapeake, spun off into its own company on July 1, 2014, had hired a “turnaround” company to help it, well, turnaround…financially (see Seventy Seven Energy Hires Turnaround Expert, Hopes to Stay Afloat). Perhaps we now know why. Yesterday Seventy Seven notified the world that the New York Stock Exchange has sent them a warning that their stock has fallen below minimum standards for continued listing on the exchange–unless they turn it around, fast. We’re not sure whether or not that will happen. Last week when we told you the company had hired a turnaround expert, their stock was trading at 60 cents per share. As of end of trading yesterday, that number was 48 cents per share. Last week the company’s market capitalization (how much the company is worth on paper) was $45.4 million. As of yesterday, the company’s marketcap was $21.13 million…
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