Marcellus Drilling News

Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA AG’s Lawsuit Derails Demchak/Chesapeake Royalty Settlement
January 4, 2016January 4, 2016

In March 2015 MDN reported on the “Demchak” royalty case in which a group of Pennsylvania landowners had agreed to a settlement with Chesapeake over Chessy’s alleged shorting of royalty payments (see Chesapeake’s PA Royalty Settlement Affects Some, Not All Landowners). As we reported at the time, “several thousand” landowners sharing two-thirds of the $11 million settlement (the other one-third going to the lawyers) didn’t seem all that great a deal to us. But we’re not PA landowners with a dog in this fight. Toward the end of last year the issue got heated again as landowners (many landowners) were faced with a decision of whether or not to opt out of the settlement (see Packed Meeting in Towanda Discusses Chesapeake Royalty Settlement). Then along came PA Attorney General Kathleen Kane, herself under indictment for felony crimes, with her own lawsuit against Chesapeake over the royalty issue (see PA Atty General Sues Chesapeake Energy, Williams for Royalty Fraud). It seems Kane’s lawsuit has now put the brakes on the Demchak settlement that was supposed to have taken place in early February. That plan is now delayed…
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Atlas Energy | Energy Companies

Atlas Energy Luck Run Out? NYSE Threatens Company with De-Listing
January 4, 2016January 4, 2016

Atlas Energy, a once-major driller in the Marcellus Shale, sold much of their Marcellus operations to Chevron in 2011 (see India’s RIL Loses Bidding War for Atlas Energy – $4.3 Billion Deal with Chevron Goes Forward). The Cohen family that runs the company is interesting and colorful. They bought into the company in the 1990s and happened to be in the right place at the right time, just prior to the discovery of the Marcellus (see The Unconventional Rise & Sale of Atlas Energy). In October 2014, the Cohens did it again. Talk about perfect timing! The Cohens sold more of what was left–for a truly astonishing $7.7 billion–to Targa Resources Partners, just prior to the crash of natgas prices (see Atlas Energy/Pipeline Sells Itself (Again) – for $7.7 BILLION!). What’s left now? With respect to the Marcellus, we don’t think there’s much left. But Atlas still does own operating interests in Marcellus wells. It looks like maybe the Cohen family’s good luck may have run out. The New York Stock Exchange has issued Atlas a notice that unless it’s stock price and market capitalization goes up, the NYSE will de-list the company from the exchange…
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Energy Services | Enterprise Products Partners | Ethane | Industrywide Issues | Pipelines

Marcellus/Utica Ethane can Now Hitch a Ride to LA via Aegis Pipe
January 4, 2016January 4, 2016

Last week Enterprise Products Partners reported completing the remaining portion of the Aegis ethane pipeline that runs from Lake Charles, Louisiana to Napoleonville, Louisiana. Aegis is now online and flowing ethane. And that’s good for the Marcellus/Utica. Wait….what? Why is an ethane pipeline built in LA good for the northeast? Because that pipeline will almost certainly be flowing ethane from the Marcellus/Utica. Here’s the connection…
Read More “Marcellus/Utica Ethane can Now Hitch a Ride to LA via Aegis Pipe”
Energy Companies | EnerVest | Industrywide Issues | Jobs | M&A | Range Resources Corp | Statewide VA | Virginia

Range Res. Completes Sale of VA Assets to EnerVest, 55 Lose Jobs
January 4, 2016January 4, 2016

In November MDN reported that Range Resources would sell 3,500 operated wells and approximately 460,000 net acres in the Nora/Haysi combined fields located in southwestern Virginia for $876 million to an unnamed buyer (see Range Sells Coal Bed Methane Wells in VA, Focusing on Marcellus). The stated reason for the sale is to pay down debt and use the money for more Marcellus drilling. The deal is done and dusted. The final price turned out to be $865 million, $11 million less than announced. Although Range has remained tight-lipped about who the buyer was, EnerVest admitted they are the buyer. At the time Range first announced the impending sale, they issued a WARN notice that up to 158 people would lose their jobs when the sale was completed (see 158 Range Resources Employees in SW VA May Lose Jobs by Dec 30). The sale was completed on Dec. 30, but fortunately not all 158 jobs were axed. “Only” 55 jobs were axed while 103 people were extended offers to work for EnerVest. Of course the 55 people who lost their jobs had a sucky Christmas…
Read More “Range Res. Completes Sale of VA Assets to EnerVest, 55 Lose Jobs”
Energy Services | Industrywide Issues | Litigation | New York | Regulation | Statewide NY | Williams

Time for Williams/FERC to Sue NY & End Constitution Pipe Delays
January 4, 2016January 4, 2016

In October of last year MDN added our name to the effort to pressure Gov. Andrew Cuomo to let his Dept. of Environmental Conservation (DEC) move forward with granting water-crossing permits for the much-needed Constitution Pipeline (see Time to Force NY DEC to Issue Permit for Constitution Pipeline). The corrupt Andrew Cuomo is up to his old tricks–delay and eventually deny. The time has now come to force the issue. A DEC official has admitted his agency is on the precipice. If they don’t issue the permit for the Constitution, New York is in danger of a federal takeover in granting such permits (see DEC Official Says NY in Danger of FERC Taking Over Pipeline Permits). We say that time has now come. It’s time for the Federal Energy Regulatory Commission to use its power to override New York and issue the permit and forever sideline Cuomo’s corrupt administration from playing a role in such issues. It’s also time for Williams to man-up and ue New York and go negative against “the Empire State.” That is the theme and MDN friend Tom Shepstone’s latest excellent article (from Natural Gas Now), which we’re re-posting here on MDN. We’ve seen this movie before with fracking. Cuomo intends to deny this pipeline and now is the time to fight it for all it’s worth, using every legal means possible to move forward with building the Constitution…
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Industrywide Issues | Ohio | Regulation | Statewide OH | Taxation

OOGA’s 2015 Year in Review: No Hike in OH Severance Tax in 2016
January 4, 2016January 4, 2016

David Hill, president of the Ohio Oil and Gas Association (OOGA), provides an enlightening “year in review” for 2015. As part of his summary of the issues facing the oil and gas industry in the Buckeye State, he offers this with respect to an impending increase in the severance tax: “I am pleased to report that it looks like we won’t have to discuss the severance tax for the next year or so.” Good news indeed for drillers in Ohio in 2016. As Hill says, the price of oil and natural gas have collapsed–oil because of a worldwide oversupply, and natural gas (in the northeast) because of lack of pipelines. Among the issues Hill tackles is the so-called Community Bill of Rights movement, unitization laws, and more. It’s a good read…
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Chesapeake Energy | Energy Companies

Should Chesapeake CEO Doug Lawler Start Looking for a New Job?
January 4, 2016January 4, 2016

MDN has not been very complimentary of the tenure of Doug Lawler in taking over as CEO of Chesapeake Energy. Corporate raider Carl Ichan tossed Chesapeake’s co-founder and CEO for it’s entire existence (until Lawler) of Aubrey McClendon. We know, McClendon is no boy scout and certainly had his faults, but we find it sick and disgusting when an investor who holds approximately 8% of the outstanding shares in a company can eject its founder, appoint his own “tool” and embark on massive layoffs as a way of making himself money. Legal? Perhaps. Moral? Never. So we found a portion of an article on The Motley Fool interesting–an article about three CEOs in “the hot seat.” The article quotes Lawler as saying Icahn hired him to deliver on the bottom line–higher stock share price. Over the past year Chesapeake’s stock has decreased in value by 80%. Perhaps it’s time for old Doug to polish up his resume?. Doug may soon know what it feels like to get a pink slip–like the ones he’s handed out, about 2,000 times over the past couple of years…
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Energy Companies | Gulfport Energy | Rice Energy

Eagle Asset Mgmt Sells Gulfport Energy, Buys Rice Energy Stock
January 4, 2016January 4, 2016

Eagle Asset Management is a privately owned investment manager. The firm pools and invests $31 billion from high net worth individuals, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, corporations, and state or municipal government entities. One of the areas that Eagle invests in is the oil and gas industry. We always find it interesting how people with big money to invest decide where to invest (essentially place bets on). According to the latest paperwork filed with the Securities and Exchange Commission, during the third quarter of 2015 Eagle Asset decreased their investment in one Marcellus/Utica driller, Gulfport Energy, while increasing their investment in another Marcellus/Utica driller, Rice Energy…
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Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Jan 4, 2016
January 4, 2016January 4, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: 3 new natgas pipes go online in November; Morningstar downgrades CONSOL credit rating; NY towns get foamy; green eggs and renewable scam; Latta asks for pipeline details; pipelines converge in Lebanon County; Kinder blasts MA AG; VA DEQ grants OK to Columbia pipe; and more!
Read More “Marcellus & Utica Shale Story Links: Mon, Jan 4, 2016”
Energy Companies | Pennsylvania | Tioga County (PA) | Travis Peak Resources

The 411 on New Driller Firing Up Rig in Tioga County, PA
December 30, 2015December 30, 2015

Looks like there’s a new driller in the Marcellus/Utica. MDN received a tip from an industry insider to let us know that Travis Peak Resources, an Austin, TX-based exploration and production company (E&P, or “driller”), is firing up a rig to begin drilling in Tioga County, PA. Who’s Travis Peak? And are they targeting the Marcellus, or the Utica? We don’t have 100% definitive answers for you, but we do have some informed speculation…
Read More “The 411 on New Driller Firing Up Rig in Tioga County, PA”
Ohio | Statewide OH | Utica Shale

OOGA Tells Ohio to “Sit Tight” – 2016 Won’t be Pretty
December 30, 2015December 30, 2015

We get a rather sobering assessment of the Utica Shale industry in Ohio from Shawn Bennett, executive vice president of the Ohio Oil & Gas Association (OOGA). Shawn tosses around phrases like “survival mode” and “significant turmoil” and “perfect storm” when talking about the Utica and what’s ahead in 2016. His advice? Ohio needs to “sit tight” and wait (and pray) for energy prices to rise. Here is what Shawn recently had to say about drilling prospects in Ohio for 2016…
Read More “OOGA Tells Ohio to “Sit Tight” – 2016 Won’t be Pretty”
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Snyder Brothers | Statewide PA | Taxation

Impact “Fee” or Impact “Tax”? It Matters in this (Court) Case
December 30, 2015December 30, 2015

Is the money collected from drillers in Pennsylvania for wells a fee, or a tax? Under the Act 13 law passed in 2012, it’s called an impact fee. We’ve long made the case that it’s part fee, part tax (see our story from 2012: PA’s New Tax on Drilling (er Sorry, Impact Fee)). Our definition, which we think makes eminent sense, is that a fee is money collected to reimburse the government for a service used. You drill a well in a community, you run big trucks over rural roads–those roads get damaged and it takes money to repair them. Or if there’s an accident because of the increase in traffic and fire/police are called out more frequently–there’s a cost associated. Local towns meeting to review and debate requests related to new wells? Takes precious time, and money. The impact fee, as originally intended, would compensate local municipalities for out-of-pocket expenses they incur when drilling comes to town. But then greedy politicians who like money to flow through their stick fingers got involved and in order to “sell” the impact fee in Harrisburg, compromises were made. In the end, 60% of the money collected from the impact “fee” stays local–to reimburse towns and counties for out-of-pocket expenses. The other 40% goes into the Harrisburg black hole and disappears into the fingers of local and state politicians who don’t incur any expense from drilling. So we call that 40% portion a tax–an obscene one at that. Why does it matter whether it’s considered a tax or a fee? Because of a Commonwealth Court case in which a driller maintains it’s a tax and the company doesn’t owe it if it’s considered a tax…
Read More “Impact “Fee” or Impact “Tax”? It Matters in this (Court) Case”
Energy Companies | EQT Corp | Industrywide Issues | Litigation | Pennsylvania | Regulation | Tioga County (PA)

PA Supreme Court Gives EQT “Procedural Victory” in $4.5M Fine Case
December 30, 2015December 30, 2015

Over a year ago the Pennsylvania Dept. of Environmental Protection (DEP) fined PA driller EQT $4.53 million for a leaky wastewater impoundment in Tioga County, PA (see PA DEP Levies Biggest Fine Ever, $4.5M Against EQT). While EQT is not saying there wasn’t a problem with leaks at the site, they are saying the way the DEP is calculating the fine is unreasonable and arbitrary. In fact, EQT says the DEP levied the fine and took EQT to court because a few weeks prior EQT has sued the DEP. Seems to be a tit for tat thing going on. There is, more than a year later, a development in the case. EQT appealed the fine and the case to PA Supreme Court and the high court has just handed EQT a “procedural victory” by saying EQT has a point about the manner in which the DEP is calculating the fine. The Supreme Court has sent the case back to a lower court for follow up work…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions
December 30, 2015December 30, 2015

Two weeks ago MDN brought you the sad news that Marcellus/Utica driller Magnum Hunter Resources (MHR) has filed for Chapter 11 bankruptcy protection (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). A few days after filing, MHR reported (see below) that the courts have already approved all “first day” motions related to the bankruptcy. The upshot is this: the courts have approved MHR’s plans that allow the company to continue to make payroll, pay royalty payments to landowners, and continue to work on getting a $200 million bridge loan to keep it all going. Here’s the details…
Read More “Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions”
Coterra Energy (Cabot O&G) | Energy Companies | Exxon Mobil | Industrywide Issues | Research

Morningstar Outlook/Predictions for Oil & Gas in 2016 & Beyond
December 30, 2015December 30, 2015

Morningstar, Inc. is one of, if not THE leading providers of independent investment research in North America, Europe, Australia, and Asia. Morningstar’s analysts keep a close eye on many different sectors, including the energy sector. Yesterday Morningstar published its Quarter-End Insights for the oil and gas sector, which include not only a look back at what happened, but predicts what they see coming in 2016 and beyond. Among Morningstar’s predictions: “Long-term” prices for oil will hit $70 per barrel for Brent crude and $64 per barrel for WTI. Near-term oil prices? They “could be ugly.” Morningstar recommends three specific E&Ps in which to invest. Two of them operate in the Marcellus…
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Chesapeake Energy | Energy Companies

Chesapeake Energy Races to Exchange Notes Before the Ball Drops
December 30, 2015December 30, 2015

The news for Chesapeake Energy continues to be downright dismal. And no, we’re not happy to say as much. We believe Carl Icahn deserves to lose every penny (and more) that he invested in the company in return for the mass firings he instigated through his chosen tool Doug Lawler. However, there are still a lot of good people who work at Chessy–and a lot of landowners who depend on Chesapeake drilling on and under their property (that is, when they pay fair royalties). It is in no one’s best interests to see Chesapeake file for bankruptcy. Yet increasingly, that’s the scenario being whispered (see Chesapeake Energy Faces Bankruptcy if Noteholders Don’t Cooperate). Chesapeake faces a deadline tomorrow with noteholders. If they don’t successfully seal the deal and get a majority of those noteholders to exchange their existing notes for new notes–let’s just say the alternative is not pretty…
Read More “Chesapeake Energy Races to Exchange Notes Before the Ball Drops”