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    Cheniere’s Sabine Pass LNG Export Plant Delayed

    Corporate raider Carl Ichan isn’t have a good week. His tinkering at Chesapeake Energy hasn’t turned out so well. The company’s stock is hitting new lows. Yesterday Chesapeake’s stock closed at $3.27 per share, down from the mid-$20s just a year ago. Ichan, you may recall, fired Chespeake’s co-founder, Aubrey McClendon–so he has no one to blame but himself. Icahn recently did the same thing at Cheniere Energy–a company building an LNG export facility in Louisiana. Ichan fired Cheniere CEO Charif Souki in December (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Since then, things have gone downhill at Cheniere. The first shipment of LNG from the facility was supposed to happen this month, January 2016. The latest statement from Cheniere says it will be more like late February or even March before the first LNG shipment sets sail. Completing expanded capacity (extra “trains”) at the Louisiana facility is also behind schedule…
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    Shell Shareholders Vote in Favor of BG Buyout/Merger

    Shareholders in Shell just voted to cut 10,000 jobs. Well, not exactly. Shell’s shareholders voted yesterday to approve Shell’s plan to buy BG Group in a $69.7 billion megamerger. As we explained in April 2015 when the deal was first announced, this is a deal about LNG (see LNG Love Story: Shell Makes Play to Buy BG in $69.7B Megamerger). Why the snarky remark about voting to cut 10,000 jobs? Because last week that’s what Shell said they would do once the merger is approved. They plan to ax 10,000 jobs in Shell and at BG (see Shell to Cut 10,000 Jobs After Buying BG; Exiting Shale Drilling). One down, one to go. BG shareholders vote on the merger today. If they vote “yes” as is expected, the merger will be complete on Feb. 15. Expect the pink slips to appear in the mailbox starting Feb. 16. Happy Valentine’s Day…
    Read More “Shell Shareholders Vote in Favor of BG Buyout/Merger”

  • Marcellus & Utica Shale Story Links: Thu, Jan 28, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: MarkWest & Marathon consider opening butane refinery; things getting worse before better in Appalachia drilling; Marcellus producers looking for new markets; CNG garbage truck explodes in NJ; is the end in sight for natgas slide?; EPA tries to fiddle in FERC’s business; rosy future for natgas; and more!
    Read More “Marcellus & Utica Shale Story Links: Thu, Jan 28, 2016”

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    Hess Drilling 5 More Utica Wells 1Q16 Then Stopping

    stop signHess Corporation released their 2016 capital and exploration budget yesterday. Last October Hess said they would spend $2.9-$3.1 billion during 2016. Throw that out the door. They’ve now dropped the capex budget to $2.4 billion, which is 40% less than they spent in 2015. Hess has maintained an active drilling program in the Ohio Utica Shale. What part of that $2.4 billion do you suppose they plan to spend in the Utica this year? The number is $45 million, which will be spent on drilling five new wells and bringing a total of 14 wells online–all in the first quarter. After that? They’re releasing the single rig they now have under contract. So Hess is spending 1.9% of their budget on the Utica for 2016…
    Read More “Hess Drilling 5 More Utica Wells 1Q16 Then Stopping”

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    Canadian Antis Turn Criminal in Quest to Stop Fossil Fuels

    When radical environmentalists use lock cutters to break into an oil pipeline pumping station and turn the values–off or on or anything but what they are supposed to be–that’s a serious crime. It’s not cute. It’s not funny. It’s not “a statement”. It’s a hate crime–hatred of fossil fuels, which is driving some enviros criminally insane. And it’s happening in Canada where lunatic anti-fossil fuelers are attempting to disrupt, on a regular basis, the free flow of crude oil by pipeline throughout the country. We hope these criminals are caught and thrown in jail–for a long time…
    Read More “Canadian Antis Turn Criminal in Quest to Stop Fossil Fuels”

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    Judge Stops WV County from Enforcing Injection Well Ban, For Now

    The second step has been taken in overturning an illegal ban on wastewater injection wells in Fayette County, WV. You may recall we told you two weeks ago that three Democrat county commissioners voted to ban injection wells (see WV County Officially Bans Injection Wells; Children Brainwashed). There are two injection well operators in Fayette County: Danny Webb Construction and EQT. The day after the vote EQT sued to overturn the new ban (see EQT Sues WV County that Banned Injection Wells, Seeks Injunction). On Tuesday, Jan. 19, U.S. District Court Judge John T. Copenhaver Jr. granted an injunction preventing the county from enforcing the ban at least until a Feb. 11 hearing. As part of his reasoning, Judge Copenhaver said EQT “is likely to succeed” in their lawsuit to overturn the ban…
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    FERC Investigates 3 Northeast Pipelines for Overcharging

    The Federal Energy Regulatory Commission (FERC) has launched five investigations into four pipelines, three of which operate in the northeast, to determine whether or not those pipelines have been “substantially” overcharging their customers with the excuse of “we have to recover our costs.” Although you might think the free market would govern what pipelines charge, pipelines, like other utilities, don’t operate in a totally free market. You can’t just up and leave one pipeline and take your gas to another. The government grants permission to operate, and the government keeps an eye on the rates charged–just like they do with your local gas and electric company. In the case of interstate pipelines, the government agency monitoring how much they charge is FERC. Apparently someone complained and FERC is now on the case. The three pipelines in the northeast under investigation are: Empire Pipeline, Iroquois Gas Transmission System and Columbia Gulf Transmission…
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    Drilling Slowdown – What to Do With Excess Produced Water?

    Ever hear of something called a crossover point in oil and gas drilling? No, we hadn’t either. When shale drilling is going full tilt, it uses, and produces, a lot of water. We’ve talked about this before. When you frack and force water down a hole, you get about 20% of it back (the rest dissipates into the rock layer a mile or more below ground). Millions of gallons. You also get, over time, something called “produced water,” or water that already existed in the depths that over time will come to the surface along with the oil and gas you’re extracting. In Pennsylvania most flowback (from fracking) and produced water (or brine) is recycled and reused to drill more holes. But eventually you drill so many holes and get so much brine or produced water out of the ground, you will begin to exceed the level that drillers can re-use it. That is, you “crossover” the point at which you produce more water from previously drilled holes than you can now use. Just last year predictions for the Marcellus were that it would be 5-9 years before crossover of water production. With the radical reduction in drilling in 2016, it may be this year we hit crossover. What do you do with all of that extra wastewater?…
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    New Report Says O&G Industry Repeating Mistakes from Last Downturn

    According to a new report published Monday by DNV GL, a Norway-based technical advisory firm for the oil and gas industry, a majority of oil and gas professionals believe the industry is repeating the mistakes they made during the last serious downturn in the industry. Namely, companies are laying off too many workers and cutting budgets too much. The report is titled “A New Reality: the outlook for the oil and gas industry in 2016” (grab a copy below). According to DNV GL Vice President Graham Bennett, “The operators can weather the low oil price storm for some time, but the supply chain will suffer far more, and there is a risk of a permanent loss of capacity in the supply chain if low prices persist.” Rather than being too quick to cut bodies and budgets, survey respondents believe now is the time to cut complexity, increase collaboration and work on standardization…
    Read More “New Report Says O&G Industry Repeating Mistakes from Last Downturn”

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    ExxonMobil: Fossil Fuels Will Produce 80% of World Energy Thru 2040

    Understanding the global energy picture is helpful so we know where the shale energy piece “fits” in that picture. Each year ExxonMobil prepares an annual energy outlook. On Monday they released the 2016 ExxonMobil Outlook for Energy: A View to 2040 report (full copy embedded below). Some interesting tidbits from the report: “In 2040, oil and natural gas are expected to make up nearly 60 percent of global supplies, while nuclear and renewables will be approaching 25 percent. Oil will provide one third of the world’s energy in 2040, remaining the No. 1 source of fuel, and natural gas will move into second place.” Perhaps most astonishing (for wacko environmentalists) is this: Fossil fules–oil, natural gas and coal– will continue to meet almost 80 percent of the world’s energy needs through 2040. It is intellectual suicide to pretend so-called renewables will be able to shoulder the energy burden in our lifetime. Ain’t gonna happen. We live in a world powered by fossil energy–and THERE’S NOTHING WRONG WITH IT…
    Read More “ExxonMobil: Fossil Fuels Will Produce 80% of World Energy Thru 2040”

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    API & GPA Say PHMSA Regs for Liquids Pipelines Not Necessary

    Last October the Dept. of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice of proposed rulemaking for new regulations governing hazardous liquid pipelines. It appears to be another case of aggressive action by the Obamadroids, bent on hassling the fossil fuel industry by requiring unnecessary regulations that don’t really improve safety. They just cost more money and take more time. The new rules will require safety inspections after “extreme” weather events and natural disasters–just to be sure there aren’t any leaks. Stepped up inspections would be required even if no problems are found–just to be sure no problems are found. The new regs also require all hazardous liquids pipelines to be piggable–something not physically possible with some pipelines. The list goes on. Recently both the American Petroleum Institute (API) and the Gas Processors Association (GPA) weighed in on the proposed new regulations. Needless to say they’re not impressed…
    Read More “API & GPA Say PHMSA Regs for Liquids Pipelines Not Necessary”

  • Cool New Tool for Landowners to Estimate Shale Royalties

    MDN noticed a cool new tool recently released by the great folks at GoMarcellusShale.com. The new tool is called ShaleCast (www.shalecast.com) and it provides free estimates of future royalties, production, and much more. There is no cost to use the service but it does require that you register (give your name, etc.). We haven’t used it ourselves because we don’t have any drilled wells or even the prospect of a drilled well–alas we live in the People’s Republic of New York with a malevolent dictator by the name of Andy Cuomo. But many MDN readers live in PA, OH and WV and may be able to benefit from using this cool new tool. Here’s a screen shot to help you understand what it can tell you about a well on or near your property…
    Read More “Cool New Tool for Landowners to Estimate Shale Royalties”

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    Oilfield Serv. Co. Keane Group Buys Trican Well Service for $247M

    Keane Group is a Texas-based oilfield services company that provides fracking, wireline and top-hole air drilling services to oil and gas companies in the Marcellus/Utica as well as several other major basins. Keane announced yesterday they are buying out Canadian-based Trican Well Service for $247 million. The expansion will, according to Keane, triple its fracking capacity and give it access to proprietary technology. Cool, we love shiny new objects! Here’s the Keane announcement they are buying Trican…
    Read More “Oilfield Serv. Co. Keane Group Buys Trican Well Service for $247M”

  • Marcellus & Utica Shale Story Links: Wed, Jan 27, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: PA pipeline task force still generating heat; teapot refineries going under; time to limit crude imports?; Supreme Court upholds energy conservation program; Halliburton/BH merger 50/50; the five stages of oil price grief; distress in the shale oil patch; and more!
    Read More “Marcellus & Utica Shale Story Links: Wed, Jan 27, 2016”

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    Cuomo Needs to “Snap on a Pair” and Approve the Constitution Pipe

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    Constitution Pipeline Meeting in Afton – click picture for larger version

    “What do we want? Pipeline! When do we want it? Now!” It was a raucous crowd who gathered last Saturday in the tiny village of Afton, New York to show support for the Williams Constitution Pipeline project. The River Club in Afton was jammed with people–by our estimation some 250-300 people. The meeting was organized and hosted by the Joint Landowners Coalition of New York (JLCNY). The JLCNY’s attorney, Scott Kurkoski (from Levene Gouldin & Thompson LLP) began the meeting with a full-throated yell: “New York Can’t Wait!” That simple sentence summed up the focus of the rally. The Constitution Pipeline is fully permitted by the Federal Energy Regulatory Commission (FERC). The only thing holding up construction of the pipeline is a stream-crossing permit from New York State. The tail is wagging the dog. Speaker after speaker (politicians, business people, labor reps) outlined the reasons why New York State can no longer wait for Gov. Cuomo to continue his waffling on this project. The frustration with Cuomo and the DEC was palpable in the audience. Whenever Cuomo’s name was mentioned there were cat calls and boos. Perhaps the best line of the day, from all of the speeches, was uttered by Assemblyman Clifford Crouch. Cliff mentioned he had called the Dept. of Environmental Conservation (DEC) just a few days prior to ask about the status of the permits. Without saying so, the DEC rep indicated the delay is not due to the agency itself. The implication was clear: Cuomo is holding it up. Crouch then said this: “We need to contact Snap-on Tools and get the governor a pair to snap on!” The crowd roared. They loved it!…
    Read More “Cuomo Needs to “Snap on a Pair” and Approve the Constitution Pipe”

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    Halliburton’s Ugly 4Q15: Fired Another 4,000, Lost $28M

    Oilfield services giant Halliburton, with major operations in the Marcellus/Utica, released their fourth quarter and full year 2015 update yesterday. It wasn’t pretty. For the last three months of 2014, Halliburton made $901 million in net income. For the last three months of 2015, that number went to minus $28 million. There are a number of reasons for the big swing. The price of oil (and gas) tanked in 2015, and with it, drillers laid down rigs operated by Halliburton. Top line revenue–how much revenue came in–tanked in 4Q15. In 4Q14 Halliburton’s total revenue was $8.77 billion, and in 4Q15 the number was $5.08 billion. Add in higher impairment costs (a permanent devaluing of a company’s assets on paper), costs related to laying off another 4,000 workers in 4Q15, costs related to buying Baker Hughes, etc., and the numbers for Halliburton are ugly. Total revenue for full year 2015 was $23.6 billion, a decrease of $9.2 billion, or 28%, from 2014. Reported operating loss for 2015 was $165 million, compared to reported operating income of $5.1 billion for 2014. Even so, Halliburton’s president Jeff Miller puts a happy face on and says the company is doing better than its peers…
    Read More “Halliburton’s Ugly 4Q15: Fired Another 4,000, Lost $28M”