Marcellus Drilling News

Crude Oil | Education | Industrywide Issues

Free Online Resource: “Oil 101” – Good Overview of O&G Industry
November 13, 2015November 13, 2015

EKT Interactive, an online training company, has previously published a free six-part series they call “Oil 101”–aimed at giving workers (and others) interested in the oil and gas industry a working knowledge of the industry. EKT will publish a new 10-part series in January. The curriculum is fast-paced and provides an overview of how things work, the special terminology for the industry (every industry has its own lingo), and an overall conceptual framework. How do all of these puzzle pieces fit together? Meanwhile, the six mini-courses they offer now that are part of Oil 101–which include sections on upstream, midstream and downstream–are available for free when you register on their website. We’ve done a quick scan and believe it’s a worthwhile resource–something you may want to check out (www.ektinteractive.com). Here’s the announcement about the free stuff they have now, and what they have planned for January…
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Air Quality | Industrywide Issues

Poo Lagoon: Turning Piles of Pig Poo into Green Money
November 13, 2015November 13, 2015

Remember the movie The Blue Lagoon from 1980? It starred Brooke Shields stranded on an island with somebody else (who remembers?, doesn’t matter). At that time it was every young man’s fantasy to grow up on a desert island with Brooke Shields! Since it’s Friday and we’re in a lighthearted mood, we thought we would bring you the story of the “poo lagoon”–as in pig poo. And no, we’re not making this up! Smithfield Foods, operator of nine humongous pig farms in northern Missouri (with 2 million pigs) stores all of the pig poo produced in 88 “poo lagoons” (their words, not ours) where it decomposes and throws methane into the atmosphere like nobody’s business. Methane escaping into the atmosphere drives global warmers into a near-catatonic state of worry that the methane escaping will cause Mother Earth to fry. So in an effort to lessen the angst of warmers, and to make a little coin on the side, Smithfield Foods is using a European technology to harness the methane coming from all of that crap to purify it (get rid of the bacon smell) and sell it…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Nov 13, 2015
November 13, 2015November 13, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: power plant development in the Marcellus/Utica; northeast drillers slowing down after Q3; OH has 1,635 drilled Utica wells; AG Kane sued in federal court; EPA hearings in Pittsburgh bring out the crazies; Quigley’s pipeline pipe dreams; CA solar farm burns natgas; and more!
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy
November 12, 2015November 12, 2015

Here’s one time when we wish we had been wrong. In October we warned you that Magnum Hunter Resources (MHR), a smaller but important driller in the Marcellus/Utica, was either heading for a sale or bankruptcy (see Magnum Hunter: Preparing to Sell, or Filing for Bankruptcy?). Looks like it’s the later. The company filed its required quarterly form 10-Q with the Securities and Exchange Commission earlier this week (full copy of the 10-Q below). In the filing we get this statement: “As of September 30, 2015, the Company had $6.5 million in cash and a working capital deficit of $1,037.2 million, and the Company continues to incur significant losses from continuing operations.” Eeeks. They only have $6.5M in the bank to keep the lights on and make payroll, and they owe over $1 billion. Then we get this: “…these factors raise substantial doubt about the Company’s ability to continue as a going concern.” Near the end of the report, they spell it out in black and white: “We may seek the protection of the United States Bankruptcy Court (the “Bankruptcy Court”), which may harm our business and place equity holders at significant risk of losing all of their interests in the Company.” Translation: We’re going bankrupt. In addition, earlier this week the New York Stock Exchange made good on its previous threat and has begun the process of de-listing MHR’s stock–which caused a selloff of the stock. The stock price hit 15 cents per share, so the NYSE halted trading. Never rains but it pours…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Marathon Increases Cash Dowry for MarkWest Buyout by 63%
November 12, 2015November 12, 2015

It was only four months ago that Marathon Petroleum (headquartered in Ohio, fourth largest refiner in the U.S.) announced a deal to buy MarkWest Energy, arguably the premier Marcellus/Utica midstream company (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). It certainly seemed like the two were on the way to consummating the marriage by the end of this year (see Marathon 3Q15: Closing on MarkWest Merger “Later this Year”). Last week MarkWest told unitholders (think shareholders) it’s time to sign your proxy statements allowing representatives to “vote yes” to the deal (see MarkWest Tells Unitholders Time to Sign Proxy for Marathon Sale). A few days later MarkWest co-founder and former CEO John Fox launched a publicity campaign to announce his strong opposition to the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). This week Marathon announced it is increasing its dowry–a one-time cash payment it will make to MarkWest unitholders–from $675 million to $1.075 billion. That $400 million increase pushes the deal value/offer to $15.1 billion. We don’t think it’s a coincidence that last week Fox came out with guns blazing against this deal and this week the dowry went up 63%…
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Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH

OH Supreme Court Sends Mixed Signal on “Home Rule” Issue
November 12, 2015November 12, 2015

Earlier this year the Ohio Supreme Court ruled in a very important court case that the “city” (of 5,000 people) of Monroe Falls could not layer on its own oil and gas regulations over top of state regulations, effectively preventing Beck Energy from drilling on a site in the city already properly permitted (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). It was assumed that case would provide precedence and settle the issue once and for all that towns can’t simply pass their own zoning regulations in an attempt to prevent oil and gas drilling. But it appears the mind of the Supremes is far from being settled. Beck Energy, following that case, pressed their advantage and asked the court for an order that directs Monroe Falls to not use zoning ordinances “to prohibit drilling for oil and gas in 99.06 percent of the city’s territory.” On Tuesday the Supreme Court dismissed the request without comment, leaving everyone to wonder what they really intend. It appears to not be a good sign for the drilling industry in Ohio…
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Eclipse Resources | Energy Companies

Eclipse Resources 3Q15: Production Up 163%, Net Loss $81M
November 12, 2015November 12, 2015

Eclipse Resources, an exploration and production company focused solely on the Marcellus and Utica Shale region headquartered in State College, PA but focusing on Utica drilling, released its third quarter earnings and operational update. It was also just yesterday we told you about the rumor that Eclipse is shopping itself (see Marcellus/Utica Driller Eclipse Resources Looking for a Buyer). What does the 3Q15 update show? Production averaged 225.2 million cubic feet equivalent per day (MMcfe/d), up 163% over 3Q14. Eclipse drilled 9 gross (4.8 net) wells, completed 15 gross (7.2 net) wells and turned 22 gross (6.4 net) wells to sales. Because of smart hedging, the company got $2.86 per thousand cubic feet (Mcf) in 3Q15–10 cents per Mcf more than what gas has been trading for at the Henry Hub. But even with pumping way more gas and getting favorable pricing, it still wasn’t enough to prevent an $81 million net loss for the quarter. Yes, some of that was a paper loss (depreciation/amortization stuff)–but not all of it. Some of it was actual money out of pocket loss. Here’s the update…
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Electrical Generation | Industrywide Issues | Lackawanna County | Pennsylvania

Shhh…Invenergy Plans Design Changes at Jessup Electric Plant
November 12, 2015November 12, 2015

As MDN has previously chronicled, Chicago-based Invenergy hopes to build what will be the largest (to date) electric generating plant in the state of Pennsylvania powered by natural gas (see Public Hearing on NEPA Proposed Marcellus-Powered Electric Plant). Invenergy hopes to build the 1300-megawatt plant (incorrectly listed as 1500 megawatts in the excerpt below) in the borough of Jessup (Lackawanna County), near Scranton. The company is making a change in the design of the plant to make it a tad bit quieter, which will make the neighbors happy…
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Anti-Drilling/Fossil Fuel | CNX Resources | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Regulation | Westmoreland County

3 Western PA Antis Weigh Appeal of Court Ruling in Zoning Case
November 12, 2015November 12, 2015

Three anti-drillers in Westmoreland County, PA are continuing their quest to deny their neighbors the right to allow natural gas drilling. You may recall one week ago we told you that a clear-thinking western PA county judge ruled that there are two sides to the Act 13 court case–local municipalities don’t always have to rule you *can’t* allow drilling in certain areas, sometimes the decision goes the other way *to* allow it (see PA County Court Rules Drilling OK in Ag/Residential District). In this particular case, three ladies–Dolores Frederick, Patricia Hagaman and Beverly Taylor–have their knickers in a twist that one of their neighbors, a farm owned by John and Anne Slike, wants to allow CNX Gas (i.e. CONSOL Energy) to drill on their property, some 1,200 feet away. The three ladies lost. But as with antis everywhere, the rule of law makes no difference. They (and their lawyer) are still agitating to try and prevent the Slikes from moving forward. They’re deciding whether or not to appeal the decision…
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Energy Companies | EXCO Resources

EXCO Stock Short Selling Goes Up; Board Member Buys 297K Shares
November 12, 2015November 12, 2015

EXCO Resources is an exploration and production company operating in East Texas/North Louisiana (the Haynesville Shale), South Texas (the Eagle Ford Shale), and in the Marcellus Shale region–in Pennsylvania and West Virginia. EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus, having drilled and now operating 124 horizontal Marcellus wells. They’re also a company facing stiff challenges. We’ve enumerated those challenges for more than a year (see our EXCO stories here). Recently there’s been an uptick in “short selling” of EXCO stock. What does that mean? In essence, it means an increasing number of investors believe the price of EXCO’s stock will head lower than it is right now (see our short selling tutorial, “Short Selling” – An Important Signal for Marcellus-Related Companies). Below is the news about an increase in EXCO stock short selling, with a preface to put it in context, so you know how to think about it. Also below is news that John Wilder, an EXCO board member, has just purchased 297,100 shares of EXCO stock for $314,926…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Nov 12, 2015
November 12, 2015November 12, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: the rise of Rice Energy; Rex shifts to holding acreage strategy; who’s behind pipeline opposition; OH sees $5.7B in new o&g spending since spring; fighting fractivism; EPA hearings on CPP in Pittsburgh today & tomorrow; WV town bans injection wells; pipeline bill debate in MA draws big crowd; and more!
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Allegheny County | Energy Companies | Noble Energy | Pennsylvania | Statewide PA

Noble Energy Axes Another 45 Marcellus Jobs, 180 Jobs Companywide
November 11, 2015November 11, 2015

Perhaps we now know why Noble Energy VP of exploration, Michael W. Putnam, sold a bunch of company stock last Thursday in what is called “insider selling” (see Noble Energy’s VP of Exploration Sells $224K of Company Stock). Yesterday the company announced it is cutting 45 jobs in the Marcellus Shale–and 180 jobs companywide. Ouch. MDN received the following tip from a subscriber yesterday late morning: “FYI, Noble Energy is in the midst of a possibly major layoff of their Canonsburg office today. 30-50% of the existing staff. This information came to me from friends who work there, one of whom was let go this morning. They knew about the pending layoff last week.” How many will be left working in the PA Marcellus, and how many employees will be left companywide? We have the numbers…
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Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

PA Gathering Pipeline Draft “Recommendations” from Wolf Task Force
November 11, 2015November 11, 2015

In May, Gov. Wolf announced the creation of a “Task Force on Pipeline Infrastructure Development” that will add an additional layer of interference by anti-drilling “environmental organizations” on where pipelines can and (preferably, from their viewpoint) can’t be laid (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). The Task Force was billed as an “unprecedented collaboration of stakeholders” from government, drillers, midstreamers, and anti-drillers (euphemistically referred to as environmentalists). Wolf and his Dept. of Environmental Protection (DEP) Secretary, John Quigley, appointed 48 members to the task force (see PA Gov Wolf Packs Pipeline Task Force with His Own Minions). The pipeline gang has now held four of six meetings (complete with opposition from Wolf’s kook left-wing fringe, see PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”), and some 12 working groups have (yes) done some work. Yesterday the Pipeline Infrastructure Task Force issued a draft report that they plan to officially submit to the governor and the legislature in February 2016. The (gulp) 335-page document contains 184 “recommendations.” Our concern is that recommendations have a way of becoming regulations in the hands of LibDems. Below is a copy of the full draft report along with the DEP press release announcing its release…
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Centre County | Eclipse Resources | Energy Companies | Pennsylvania

Marcellus/Utica Driller Eclipse Resources Looking for a Buyer
November 11, 2015November 11, 2015

One by one the dominoes are falling–companies in the Marcellus/Utica that just can’t hang on any longer are selling themselves. It was only last December that Eclipse Resources, an exploration and production company focused solely on the Marcellus and Utica Shale region, announced it had raised $440 million in a “private placement” of 62.5 million shares of common stock (see Eclipse Resources Gets $440M from New Stock, Trims 2015 Capex 20%). Eclipse drills almost exclusively in the Ohio Utica Shale, even though it’s headquartered in State College, PA. In June, Eclipse went shopping for an additional $550 million pile of cash by offering IOUs (see Eclipse Lowers IOU Offering Expectations – by $100M). Now comes word the company is using Morgan Stanley to shop itself to potential buyers. No word on the asking price or whether or not there’s been any bids…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Nov 11, 2015
November 11, 2015November 12, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Magnum Hunter teetering on the brink; LNG imports or pipelines better for NYC?; PA budget deal may not be done after all; people are the first to go in down o&g market; fracking killed the Keystone pipeline, but is saving the planet; Sierra Club admits fracking lowers CO2; Halliburton issues bunch of IOUs to buy Baker Hughes; first LNG containership transits Panama Canal; and more!
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Anti-Drilling/Fossil Fuel | Indiana County | Industrywide Issues | Litigation | Pennsylvania | Regulation | Wastewater

Grant Twp, PA Reorganizes to Avoid a Court-Ordered Injection Well
November 11, 2015November 11, 2015

In October MDN told you about Grant Township in Indiana County, PA. The town had attempted to illegally block a permitted injection well from being drilled and used inside the town’s boundaries. The town folk have been whipped into an irrational frenzy by the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF). As usual, the CELDF-promoted so-called Community Bill of Rights failed in court, costing Grant Township taxpayers big bucks to defend (see Fed Judge Overturns Grant Twp, PA Ban on Injection Wells). People without jobs (like those infesting CELDF) have lots of time to be creative–so here’s the latest. They talked enough town folk into passing another/new plan on the November. The town voted to convert itself from being a PA Second Class Township form of organization to being PA Home Rule Charter form of organization–in an attempt to do an end-run around the judge’s ruling last month. Will it work? Probably not, but here we go again–another delay for Pennsylvania General Energy and their plan to drill an injection well. You know the old saying? Justice delayed is justice denied. When will the courts step in and stop this madness?…
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