Marcellus Drilling News

CONSOL Energy | Energy Companies

Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others
December 3, 2015December 3, 2015

We’re not above admitting when we’ve been wrong. Last July MDN shared a rumor–and stressed it was a rumor–that CONSOL Energy was in talks to sell it’s CNX Gas division to Noble Energy (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A few days later we modified that rumor to say that Noble Energy would take over the joint venture acreage the two have together (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Neither of those things ended up happening–at least not yet. However, CONSOL’s largest single investor, corporate raider Mason Hawkins (who in league with corporate raider Carl Ichan have been screwing with Chesapeake Energy) told CONSOL to separate their coal business from the natural gas business, which they’ve begun to do (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Parent company CONSOL’s stock is traded as CNX. A new coal division (for investors) was created, CNX Coal (CNXC), although some (much?) of the coal assets are still part of the CNX entity. CONSOL’s midstream/pipeline business, called CONE Midstream (a jv with Noble Energy) is traded as CNNX. Yes, it’s all a mish mash. We mention all of this as background to an article by a trader commenting on CONSOL’s CNX stock which has literally crashed over the past year–down more than 80% in value. The trader calls the CNX stock a “widow maker”–meaning if you have the chops and can stick it out, there may be money to be had by investing in CNX stock. But, it’s a huge gamble, and not for the feint of heart, according to this trader…
Read More “Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others”
Columbia Pipeline Group | Energy Services

Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M
December 3, 2015December 3, 2015

Yesterday MDN told you that Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, announced a stock offering of 51 million shares (see Columbia Pipeline Group Floats 51M Shares of New Stock). We speculated if they got the then-current price of $19.03 per share, they’d haul in close to $1 billion in new revenue. Of course stock offerings like this almost never receive the existing/going price. We also said if they got $15 a share, that would net them $756 million. We now know, a day later, what they’re aiming for: $17.50 per share, which will bring in $892.5 million…
Read More “Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M”
Energy Services | GE Oil & Gas | Industrywide Issues | Orion Drilling | Supply Chain

GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs
December 3, 2015December 3, 2015

You may not think that computer software would have much to do with drilling holes in the ground and extracting natural gas and oil. But you would be wrong. If you ever visit a drilling rig and are fortunate enough to make a visit to “the dog house,” which is the equivalent of a jetliner cockpit where the rig is controlled by high-powered computers (and software), you’ll quickly understand how high-tech drilling has become. But it’s not just controlling a rig where computers are used in the oil and gas business–they’re used throughout the business. In fact there is software that, well, monitors other software. GE (nee General Electric) has a software offering that monitors drilling rigs and other equipment at drill sites. At least that’s how we understand it. GE issued a press release yesterday to tout the fact that GDS (Global Drilling Support) International is using GE’s “Equipment Insight” solution at rigs in both the Marcellus and Utica Shale in a six-month pilot program to squeeze ever more efficiency from the drilling process…
Read More “GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Dec 3, 2015
December 3, 2015December 3, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Youngstown anti-frack vote recount shows antis still losers; PA budget impasse continues; VA antis call for tough drilling rules; 150 canceled big oil projects; $3.4 trillion in fossil fuel divestment; last shoe drops for Hi-Crush; the party is over for oil; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Dec 3, 2015”
Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy Investors/Unitholders Approve Merger with Marathon
December 2, 2015December 2, 2015

At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
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Allegheny County | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Shell

Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX
December 2, 2015December 2, 2015

Shell is closing its Pittsburgh-area office and moving “most of” the 180 workers who worked there to its U.S. HQ in Houston, Texas–so says a Shell spokesperson. A few workers may remain and redeploy to various field offices that Shell intends to keep open–including a field office in Tioga County, PA where they have an active drilling program. Shell drilled just eight wells in PA this year, compared to 17 last year and 31 the year before that. Notice a pattern? Perhaps most importantly Shell stresses the office closure has nothing to do with the work on a proposed ethane cracker plant in Beaver County…
Read More “Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX”
Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban
December 2, 2015December 2, 2015

An interesting update on what is now ancient history in New York State with regard to Andrew Cuomo and his ban on fracking. According to secretly recorded wiretaps of conversations of the son of former NY Senate Majority Leader Dean Skelos, a Cuomo official made the rounds to several prominent Senate Republicans to ask if there would be any “blowback” when (not if) Cuomo lifted a ban on fracking. If true, the revelation is a bombshell–that Cuomo had intended to lift the moratorium but changed his mind at the last minute. The problem with the recorded conversations is that Skelos’ son Adam, in talking with three different lobbyists, attributes the conversation to different Cuomo Administration sources. That is, he changes his story, making his story less credible. Both father Dean and son Adam Skelos are on trial in Manhattan for corruption. Dean tried to help his son get work with sweetheart deals–something that happens every day in New York with both Republicans and Democrats. We’re not excusing corruption–just pointing out the context and circumstances…
Read More “Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban”
Industrywide Issues | Research

Reuters Says Marcellus “Finally Succumbs” to Production Downturn
December 2, 2015December 2, 2015

The Reuters news service is, somewhat gleefully, reporting that America’s biggest gas field–the Mighty Marcellus–“finally succumbs to downturn.” The article in which they announce this “fact” breathlessly reports preliminary (i.e. not yet solid, as in draft) figures from DrillingInfo are at odds with projections from the U.S. Energy Information Administration (EIA). According to Reuters, the EIA’s numbers are too rosy, showing a year-over-year decrease in Marcellus production won’t happen until 2019. DrillingInfo, according to Reuters, indicates a year-over-year decline will come next year, in 2016. Who’s right?…
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Energy Services | Industrywide Issues | Kinder Morgan | Pipelines

Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout
December 2, 2015December 2, 2015

On Monday the largest pipeline company in the United States, Kinder Morgan, and their partner Brookfield Infrastructure Partners, announced a deal to buy out a third partner in the Natural Gas Pipeline Company of America (NGPL). When the deal is done, both Kinder Morgan and Brookfield will each own 50% of NGPL, although Kinder is the pipeline operator. NGPL, in case you haven’t heard of it, is a huge interstate pipeline system located in the Midwest and southwest. (See a copy of Kinder Morgan’s pipeline systems map below. The dark green lines represent NGPL.) So why is the NGPL buyout in the Midwest/southwest a Marcellus/Utica story? Because NGPL is currently building an expansion in the Chicago area, appropriately called the Chicago Market Expansion Project. That expansion will carry gas coming into the NGPL pipeline where it intersects with the Rockies Express (REX) pipeline in in Moultrie County, Illinois northward into the Chicago area. REX recently reversed its flow and now carries Marcellus/Utica gas to Moultrie—meaning more Marcellus/Utica gas will be flowing to the Chicago area starting in 2016 when the Expansion Project is put into service (see 1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1). A little over two months ago Kinder Morgan announced they would reverse the flow for part of NGPL and begin sending northeast gas south, to the Gulf Coast (see Marcellus/Utica Gas Heading to TX LNG Export Plant…in 2018), meaning gas arriving at Moultrie will not only go north, it eventually will go south too. So the NGPL purchase is very much about the Marcellus/Utica…
Read More “Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout”
Columbia Pipeline Group | Energy Services

Columbia Pipeline Group Floats 51M Shares of New Stock
December 2, 2015December 2, 2015

Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, was spun out into its own company in July from parent NiSource (see NiSource/Columbia Pipeline Divorce is Final). The new company has made a number of investments in major projects, including $1.2 billion worth of investments in pipelines for the northeast in 2015 (see Columbia Pipeline 2Q15: Investing $1.2B in NE Projects This Year). With prices plummeting and investments increasing, how does a company like Columbia get more money to keep operating and expanding? One way is to sell debt (bonds and IOUs). Another way, the preferred way in our book, is to sell equity, or stocks. Right on cue Columbia announced yesterday they are floating 51 million shares of new stock in an effort raise money. The company doesn’t say how much they want to raise, but if you do some simple math and multiply this morning’s share price of $19.03 by 51 million you get a whopping $970.5 million–nearly $1 billion! They likely won’t get a full $19.03 per share, but hey, if even if they only get $15 per share that’s still $765M big ones. Here’s the announcement offering new stock in Columbia Pipeline…
Read More “Columbia Pipeline Group Floats 51M Shares of New Stock”
Energy Companies | PDC Energy

PDC Energy’s CFO Gysle Shellum Sells $297K Worth of Co Stock
December 2, 2015December 2, 2015

PDC Energy is primarily focused on drilling new shale wells in Colorado’s Wattenberg Field. However, they do have a small operation in the Ohio Utica Shale as well. At last check-in PDC was contemplating whether or not to restart their paused Utica drilling program (see PDC May Un-pause OH Utica Shale Drilling Earlier than Expected). We believe they have reactivated their Utica program based on the fact they received permits to drill four wells from May through August 2015, according to the latest volume of the 2015 Marcellus and Utica Shale Databook. Today we told you in a related story that Toby Rice, President & COO of Rice Energy, recently purchased $100,000 worth of his own company’s stock. PDC Energy’s Chief Financial Officer, Gysle Shellum, has just sold $297,000 worth of his company’s stock…
Read More “PDC Energy’s CFO Gysle Shellum Sells $297K Worth of Co Stock”
Energy Companies | Rice Energy

Rice Energy President Toby Rice Buys $100K Worth of Co Stock
December 2, 2015December 2, 2015

From time to time (not all of the time) when we notice a drilling or midstream company executive buying or selling company stock–called insider buying or insider selling–we bring you that news. We always take it as a good sign when those responsible for a company–either senior management or the board of directors–buys stock in the company they manage. For us, it’s evidence of confidence in the direction of the company. “Eating your own dog food.” Such is the case with one of our favorite Marcellus/Utica drillers–Rice Energy. Rice is a young company led by three young brothers–Dan (CEO), Toby (President & COO) and Derek (EVP). Toby has just purchased 7,500 shares of Rice Energy for $99,750…
Read More “Rice Energy President Toby Rice Buys $100K Worth of Co Stock”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Dec 2, 2015
December 2, 2015December 2, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: it’s getting brutal out there; Oberlin, OH hires attorney to oppose NEXUS pipeline; Cabot O&G – a 2018 story; the shale gas revolution ain’t over yet; converting to propane; National Grid lowers gas prices; wacko Bernie Sanders opposes NED pipeline; Schlumberger axing more jobs; Chesapeake’s Doug Lawler blames Aubrey McClendon for his own failures; and more!
Read More “Marcellus & Utica Shale Story Links: Wed, Dec 2, 2015”
Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Decision-time for Landowners in Demchak/Chesapeake Royalty Case
December 1, 2015December 1, 2015

Is the long, sordid affair over Chesapeake Energy screwing Pennsylvania landowners out of royalties finally near an end? Chesapeake and some landowners, part of the “Demchak” class action lawsuit–certainly want you to think so. A year ago MDN told you about a settlement between “several thousand” Pennsylvania landowners and Chesapeake over the royalty issue–Chessy deducting post-production payments by pipeline companies in what some call a scam that leaves landowners signed with Chesapeake receiving royalty checks that are pennies on the dollar compared to what they should receive. The new settlement for those “several thousand” would be 2/3 of $11 million, after the lawyers get their 1/3 cut (see Chesapeake & PA Landowners Settle Royalty Lawsuit…Again). Many PA landowners who are leased with Chesapeake now face a decision–and doing nothing is not an option. The lawyers and the court are about to close the door on what is called the Demchak class action lawsuit. PA landowners with a “market enhancement clause” in their lease should have already received a form letter announcing that unless they opt out of the settlement, they will be included. Below we have an excellent outline of what your options are according to the PA National Association of Royalty Owners (NARO), along with the opinion of one Bradford County landowner who is less than thrilled with the Demchak settlement…
Read More “Decision-time for Landowners in Demchak/Chesapeake Royalty Case”
Antero Resources | Coterra Energy (Cabot O&G) | Eclipse Resources | Energy Companies | Industrywide Issues | Noble Energy | Research | Rice Energy

DUC DUC Goose! The Growing Backlog of Uncompleted Shale Wells
December 1, 2015December 1, 2015

Ever hear of a DUC? No, we didn’t forget the “K” on the end of DUC. It stands for Drilled but UnCompleted (DUC) wells. Completing a well means taking the final step of fracking the well and hooking it up to production. Lately there’s been a lot of talk about DUCs–a large inventory of wells drilled (holes in the ground) not yet completed. Completing a well takes a lot of sand, water and money. There’s little incentive to complete wells when commodity prices for oil and gas are so low. In some cases drillers will drill the borehole and not complete a well as a way of holding their acreage before a lease expires. In other cases, they’d love to finish the job–but the price they will get is too darned low, so they put completion on hold. Sometimes a driller has contracted for a rig and crew to operate it–instead of canceling and owing that money anyway, they go ahead and drill. How many DUCs are there in general, and in the Marcellus/Utica specifically? The honest answer is, no one knows for sure. But smart analysts can make some pretty good guesses, based on company reports and their own industry knowledge. Below we bring you the latest we can find on DUCs–specifically how many DUCs there are in the Marcellus/Utica…
Read More “DUC DUC Goose! The Growing Backlog of Uncompleted Shale Wells”
Anti-Drilling/Fossil Fuel | Commodity Price | Industrywide Issues | Pipelines

Shale Gas Faces Double Trouble: Low Prices & Pipeline Opposition
December 1, 2015December 1, 2015

According to the Institute for Energy Economics and Financial Analysis (IEEFA), the natural gas industry faces a double “new normal” that hobbles the industry: (1) low prices for natural gas for the foreseeable future, and (2) public opposition to pipeline expansion, especially in New England. Here’s what IEEFA’s executive director, Sandy Buchanan, says about this double threat to our beloved industry…
Read More “Shale Gas Faces Double Trouble: Low Prices & Pipeline Opposition”