Marcellus Drilling News

Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

Battle Lines Drawn as WV Forced Pooling Bill Nears Introduction
December 28, 2015December 28, 2015

As MDN told you in mid-November, West Virginia legislators will revisit the topic, and likely vote on the issue of, forced pooling in the 60-day legislative session that will begin in early January (see WV Forced Pooling Bill Coming Around Again in 2016). The battle lines–in the Republican party–are already being drawn in a contentious issue that has been brought before the WV legislature in five of the last six years…
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Commodity Price | Industrywide Issues | Pennsylvania | Statewide PA

Why Do Marcellus Drillers Continue Drilling with Prices in the Basement?
December 28, 2015December 28, 2015

If a company that makes a product can no longer make that product at a profit, why would it keep making that product? Put another way, if Marcellus drillers can’t make money by selling natural gas for 75 cents per thousand cubic feet (and they can’t), why would they keep drilling new wells? And why would they keep pumping gas from existing wells? That’s the question asked–and answered–by an excellent Oil & Gas 360 article…
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Commodity Price | Industrywide Issues | Ohio | Pennsylvania | Statewide OH | Statewide PA | Statewide WV | West Virginia

2016: Fewer Rigs Operating, Less Gas Flowing in Marcellus/Utica
December 28, 2015December 28, 2015

This is the time of year when prognosticators come out of their prognostication holes to prognosticate about the rapidly-approaching New Year. Some of those predictions involve the Marcellus/Utica industry and what we may see coming our way in 2016. And what might we see? Most believe we’ll see cut-backs in drilling–most companies have announced such plans. However, one thing we won’t see is all drilling stop. As we highlight in a companion story today (see Why Do Marcellus Drillers Continue Drilling with Prices in the Basement?), drillers will keep drilling in the Marcellus in 2016. Perhaps not as much as they drilled in 2015–but make no mistake, the industry is not finished. So if they will continue to drill, even though prices are in the basement, where will they get the money to do so? That’s the focus of this particular piece of prognostication…
Read More “2016: Fewer Rigs Operating, Less Gas Flowing in Marcellus/Utica”
Beaver County | Belmont County | Energy Companies | Energy Services | Ethane | Industrywide Issues | Odebrecht | Ohio | Pennsylvania | Processing Plants | PTT Global | Shell | West Virginia | Wood County

Will 2016 be the Year *Somebody* Commits to Building a Cracker?
December 28, 2015December 28, 2015

Will somebody, somewhere PLEASE build the northeast an ethane cracker plant? Pretty please? We noticed a couple of stories that indicate 2016 is THE year that at least one company will likely pull the trigger on an FID–a Final Investment Decision to build an ethane cracker. But which company is likely to do it? Shell? PTT Global? Odebrecht? Leaving Odebrecht’s Parkersburg, WV proposed cracker aside for the moment (a project where we barely detect a pulse), both the Shell plant, planned for Beaver County, PA, and the PTT Global plant, planned for Belmont County, OH, have seen impressive signs of activity in 2015. Which of those two will likely say “yes” in 2016?…
Read More “Will 2016 be the Year *Somebody* Commits to Building a Cracker?”
Crude Oil | Energy Services | Enterprise Products Partners | Exporting | Industrywide Issues

Enterprise Products First to Export Crude Post-Ban – Implications
December 28, 2015December 28, 2015

The very first shipment of crude oil from America’s shores to another country since the ban on crude exports was lifted two weeks ago in perhaps the worst national budget we’ve ever had (thanks to sell-out Republicans like House Speaker Paul Ryan), will happen the first week of January. Enterprise Products Partners, owner of the ATEX (Appalachia-to-Texas Express) natural gas liquids pipeline, will load 600,000 barrels of U.S. light sweet crude oil at the Enterprise Hydrocarbon Terminal (EHT) on the Houston Ship Channel and the ship will set sail in early January. How will oil exports affect the domestic (and international) oil industry?…
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Commodity Price | Crude Oil | Industrywide Issues | Research

OPEC’s 2015 World Oil Outlook Paints a Rosy Price Picture
December 28, 2015December 28, 2015

There is nobody on the planet who watches the oil market more closely than OPEC–the Organization of the Petroleum Exporting Countries. OPEC is made up largely of tinpot Middle Eastern dictatorships who keep their general populations pacified by sharing some of the riches from oil sales with them via socialist government programs. While the leaders of OPEC countries often lie to each other and lie to the world, one thing they typically don’t lie about is the oil industry, where it’s headed–and their own very vital role in it. Last week OPEC released its annual 2015 World Oil Outlook (WOO, full copy below), which outlines OPEC’s expectations for the global energy sector–in particular oil and gas–from now until 2040. One admission in the 2015 WOO: US oil production from shale plays will be “more robust” than OPEC had predicted as recently as last year. Another prediction in this year’s WOO: oil will hit $70 per barrel by 2020 (four short years from now) and climb to $95 per barrel by 2040 (15 short years from now). There are plenty of other interesting predictions and observations in this year’s WOO…
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About MDN | Calendar

Calendar of Events for Dec 28 – Mar 27 (90 Days)
December 28, 2015December 28, 2015

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, Dec 28, 2015
December 28, 2015December 29, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Attack of the fractivist clones; NY antis just say no to everything; Belmont County, OH the one to watch in 2016; FirstEnergy continues to prep cracker site; first responders often unprepared for derailments; still no budget in PA; ECA asks FERC to approve gas plant pipeline; Resnikoff, again?; oil companies’ strategy – hope; more challenges to Clean Power Plan; and more!
Read More “Marcellus & Utica Shale Story Links: Mon, Dec 28, 2015”
Commodity Price | Industrywide Issues

Price of Marcellus NatGas at Record Lows – $0.59/Mcf @ Dominion S
December 23, 2015December 23, 2015

The price that physical natural gas is selling for–in December (winter!) no less–is enough to make grown men cry. And it does. While natgas prices for gas trading at the Henry Hub delivery point in southern Louisiana sold for an average of $1.89/Mcf yesterday, the price for gas trading at Dominion South (in the Marcellus Shale) was just 59 cents per Mcf–an historic low. Weather certainly has a lot to do with that price–but so does an overabundance of supply and lack of pipelines to carry that supply to other markets…
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Carlyle Group | Energy Companies | Energy Services | Hilcorp Energy

Hilcorp Forms $1.24B JV with Carlyle to Shop for Shale Deals
December 23, 2015December 23, 2015

Smart. Everyone knows the best time to buy something, whether it’s stocks, real estate, fuel oil, whatever–is when the market is crashing and burning. Always buy in a “down” market and sell in an “up” market. Natural gas and oil selling at current historic lows qualifies as a down market. It’s about as down as it gets! So it figures those companies who have kept their debt levels low and managed themselves well are now in the catbird seat and can go shopping for bargain basement deals–while their competitors sit on the sidelines hoping to stay out of bankruptcy court. Marcellus/Utica driller Hilcorp is one of those well managed/smart companies. Hilcorp has just joined forces with energy investment firm Carlyle in a partnership to go shopping for deals…
Read More “Hilcorp Forms $1.24B JV with Carlyle to Shop for Shale Deals”
Energy Companies | Rice Energy

Rice Family Sells 5M Shares of Rice Energy Stock to Pay Off Debt
December 23, 2015December 23, 2015

Yesterday the Rice family offered up for sale up to 5 million shares of stock in Rice Energy–the first time that’s happened since the Rice’s founded the company in 2007. Rice Energy was founded by Dan Rice III and his boys Dan IV, Toby and Derek. In fact Dan III, who was the most successful mutual fund manager in the U.S. for 10 years, was unceremoniously dumped by his employer BlackRock because BlackRock screwed up by not telling investors Dan was bankrolling a new company (Rice Energy) while at the same time investing in other oil and gas companies that could be construed as competitors via his mutual fund transactions (see BlackRock’s Screw-up with Dan Rice & Rice Energy). Dan was completely up front and transparent and told his bosses at BlackRock what he was doing–it was his bosses who screwed up, and then fired Dan in a blame-shifting move. Dan has been laughing his way to the bank ever since. Rice Energy has been a huge success. Until the end of last year Rice Energy was a private company–the Rices held most all of the stock. They went public last year and began to take OPM–other people’s money (see Rice Energy IPO Soars, Brings in $84M More Than Expected). As part of the IPO process, the Rices took out a loan with Morgan Stanley. Yesterday’s sale of up to 5 million shares is most definitely NOT the Rices stepping back from their own company. It’s actually meant to defend the company from financial market gyrations, as the Rices explain below…
Read More “Rice Family Sells 5M Shares of Rice Energy Stock to Pay Off Debt”
Axiall | Energy Services | Ethane | Industrywide Issues | Processing Plants

Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?
December 23, 2015December 23, 2015

Two years ago Axiall Corporation, the former Georgia Gulf/PPG, announced a plan to build a $3 billion ethane cracker/petrochemical facility in Louisiana. The facility, as we noted at the time, will almost certainly use at least some ethane coming from the Marcellus/Utica region (see Axiall Announces New Cracker Plant for LA, Fed by NE Ethane). As we know only too well, making a “final investment decision” (FID) about whether or not to spend $3 billion of a company’s money (or more correctly go into debt and spend other people’s money), and take upward of 3-4 years to build a plant, is not something you just decide to do willy-nilly. It takes a looooooooooong time to get to that point. Shell announced a cracker for Pennsylvania back in 2012 and they still haven’t made an FID. It was certainly a good sign from Axiall when they announced a partnership with Lotte Chemical for their new Louisiana cracker project (see 4th World Class Marcellus/Utica Ethane Cracker…in Louisiana??). Lightening has struck! Last Friday Axiall and Lotte announced an FID has been reached and indeed they are moving forward. Horray! Of course it would be more exciting if that plant were located in PA, WV or OH rather than Lake Charles, LA (where they have enough crackers already). But we’ll take these victories when and where we can. The expected startup date is 2019…
Read More “Final Decision: Axiall Building Ethane Cracker in LA…NE Ethane?”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Taxation

PA Auditor General to Investigate “Lost” $30M Marcellus Impact Fee
December 23, 2015December 23, 2015

On Monday MDN told you about the case of bureaucratic incompetence in keeping track of reports that detail where and how much money is getting spent from the Pennsylvania Act 13 impact fee (see $30M in PA Act 13 Money Missing – Theft or Bureaucratic Cock-up?). Local municipalities say they’ve filed reports with the state Public Utility Commission (PUC), but the PUC can’t seem to locate those reports. Typical. But what’s this? We have a knight in shining armor riding to the rescue to figure out this financial potential malfeasance. Our hero is (ta da ta da, trumpet fanfare): State Auditor General Eugene DePasquale (Democrat). DePasquale, you may recall, is an anti-driller who targeted the Marcellus industry from the very first day he took office (see Newly Elected PA Auditor General Targets DEP First Day on Job). Most of DePasquale’s ire seems to be directed at the state Dept. of Environmental Protection (DEP). He conducted a very thorough anal exam of the agency, over a period of years, and issued a “report” critical of the agency for shortcomings that were already fixed by the time the report was issued (see Anti-Drilling PA Auditor General Criticizes DEP in “Report”). DePasquale would like nothing better than to find a new Marcellus scab (i.e. issue) and pick it until it bleeds in an effort to smear the industry. DePasquale is a bully if ever there was one. In particular he likes to target charter schools, trying to shut them down with audit after audit. Nice guy. It’s that “hero” who has ridden in on his black horse to conduct an “investigation” (more like an inquisition) of local towns and how they are spending his, er, um, the state’s money…
Read More “PA Auditor General to Investigate “Lost” $30M Marcellus Impact Fee”
Anti-Drilling/Fossil Fuel | Energy Services | Exporting | Industrywide Issues | NEXUS Pipeline | Ohio | Pipelines | Statewide OH

CORN Questions Canadian Decision to Buy American NatGas via NEXUS
December 23, 2015December 23, 2015

On Monday MDN told you that the Ontario Energy Board (OEB) has cleared the way for the Canadian portion of the NEXUS Gas Transmission pipeline by approving two 15-year contracts to use the pipeline to deliver natural gas to the Dawn Hub (see Canada Approves Marc/Utica NEXUS Pipeline to Dawn Hub in Ontario). A group of anti-fossil fuel radicals who call themselves CORN (Coalition to Reroute NEXUS) has popped up to manufacture a controversy where none exists. Apparently one or two staffers at the OEB offered a dissenting opinion (as is often the case) for why the two contracts for the NEXUS should not be granted. Somehow those internal documents were leaked to the CORNballs (our name for members of CORN) who are now attempting to claim the OEB ignored the recommendation of its own staff and approved the contracts when (according to CORN) it should not have. We wonder if the CORNballs know that an average 7 billion cubic feet of natural gas flows from Canada to the United States every day, and that an average 1.5 Bcf/d flows from the U.S. to Canada every day? Do they know that gas has been going back and forth across our border with Canada for decades? Why do they oppose this particular pathway of trade with Canada, which would strengthen ties with our friends to the north?…
Read More “CORN Questions Canadian Decision to Buy American NatGas via NEXUS”
Economic Impact | Industrywide Issues | Jobs | Ohio | Pennsylvania | Statewide OH | Statewide PA | Utica Shale

Turns Out “Foreigners” Working in OH are a Good Thing After All
December 23, 2015December 23, 2015

For years MDN has poked fun at RINO Ohio Gov. John Kasich for his jingoistic talk about not wanting “foreigners” in his state working at Utica drilling sites (see this story from three years ago – OH Gov. Kasich Continues Trash Talk Out-of-State Workers). Don’t tell Kasich, because he hates hearing this, but some are now saying that because Ohio has been employing “foreigners” from exotic places like Texas and Louisiana to work at Utica drilling sites, it has actually turned out to benefit the state. Why? Because in this downturn Ohio businesses are not as adversely affected. If all of those people now laid off had been Ohioans, the Ohio economy would have taken a much harder hit than it has. That’s one of the points in a Cleveland Plain Dealer article. Another point in the article is that because the Ohio Utica is much smaller and was just ramping up as the current price crash hit, when prices recover (and they will recover, eventually), Ohio will take off much faster than the big, old, decrepit Marcellus in Pennsylvania…
Read More “Turns Out “Foreigners” Working in OH are a Good Thing After All”
Ohio | Statewide OH

Really Cool Maps & Charts Detailing Utica Drilling in Ohio
December 23, 2015December 23, 2015

In reading a story in the Cleveland Plain Dealer about the prospects for the Utica to rebound when prices recover (see today’s companion story Turns Out “Foreigners” Working in OH are a Good Thing After All), we came across several charts and maps that are embedded in the article, and shareable. It’s a great series. First and foremost is a time-sequenced map that shows which counties received Utica permits, by year, and as you mouse over them, you can see how many permits each county received. A very cool app. Also included is a chart showing overall number of permits by year, a chart showing Ohio’s natgas production by year, and a chart showing Ohio’s oil production by year. Have a look below!…
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