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    CONSOL Energy Slashes 2016 Drilling Budget 50% from Previous Plan

    There’s just no ignoring the fact that most (many? all?) Marcellus/Utica drillers are pulling in their horns for 2016 and, as things stand right now, will drill far less this year than they did last. Take CONSOL Energy as an example. Yesterday CONSOL issued a revised 2016 capital budget and operational forecast (full copy below). CONSOL has decided to spend even less on drilling in 2016 than previously announced. CONSOL spent $1.3 billion on drilling in 2014, $1 billion last year, and was planning “$400-$500 million” this year. Now? That number has crumbled to $205-$325 million. You don’t drill many wells with $200 million. CONSOL’s update says the company plans to spend $110-$210 million on drilling and completing wells, with an emphasis on completing already-drilled wells. Of note and interest is the increasing number of Utica wells that are in the CONSOL portfolio. Even though CONSOL will drill and complete far fewer wells than previous years, they still expect production to increase by 15%…
    Read More “CONSOL Energy Slashes 2016 Drilling Budget 50% from Previous Plan”

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    NY Town Barred from Selling Water to Shell for PA Fracking

    In March 2012, the village board in Painted Post (Steuben County), NY voted to sell water to Shell for use in fracking operations across the border in Pennsylvania. The Susquehanna River Basin Commission (SRBC) gave its blessing to Painted Post to sell up to 1 million gallons of water day. But the decision didn’t sit well with power-hungry anti-drillers. The nutters from the radical Sierra Club sued to stop the deal in June 2012 (see Sierra Club Sues to Stop Water Sales in Steuben County, NY). A lower court ruled in favor of the radicals and struck down the deal. On appeal, a corrupt state appellate court has upheld the lower court’s ruling. Shell will have to find water from another source–not that they’re drilling any wells right now anyway…
    Read More “NY Town Barred from Selling Water to Shell for PA Fracking”

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    Corporate Raider Mason Hawkins Now Owns 23.1% of CONSOL Energy

    Mason HawkinsThere’s little doubt about who now is, or soon will be, calling the shots at CONSOL Energy: corporate raider Mason Hawkins. Hawkins, along with corporate raider buddy Carl Icahn, is responsible for firing Aubrey McClendon from the company he co-founded (Chesapeake Energy) and further firing some 2,000 or more Chesapeake employees–all in a bid to put more money in his pocket. Hawkins and Icahn control Chesapeake by owning a combined 20% or so of the company’s outstanding shares of stock. In February 2015, MDN shared the disturbing news that Hawkins and his Southeastern Asset Management had amassed 14% of CONSOL’s outstanding shares of stock (see Corporate Raider Mason Hawkins Holds 14% of CONSOL Energy Stock). By July that number ballooned to 21% and Hawkins was throwing his weight (and money) around (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Now? We spotted a notice that Southeastern Asset Management’s stake in CONSOL has grown to 23.1% of the company’s outstanding shares. Which means Hawkins can have his way with the company…
    Read More “Corporate Raider Mason Hawkins Now Owns 23.1% of CONSOL Energy”

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    Southwestern Energy Gets New CEO – What’s Ahead for 2016?

    Southwestern Energy CEO Steve Mueller is stepping down (or is it up) from his position as CEO. Mueller will remain on the board of directors as non-executive chairman. In his place, Southwestern’s current president, Bill Way, will take on the added title and responsibility of CEO. Southwestern is one of the biggest, and most important, drillers in the Marcellus/Utica. When there’s a change in leadership, it has the potential to impact company strategy. So we’re always interested when changes of this type come along. It was just two years ago that Steve Mueller stepped down as president but retained his title of CEO and was appointed to succeed the outgoing chairman of the board (see Southwestern Energy’s Board Changes, Marcellus Plans for 2014). The company has been on a mission to expand its Marcellus/Utica footprint ever since. In October 2014 Southwestern announced a deal to buy 413,000 Marcellus/Utica acres from Chesapeake Energy, most of it in West Virginia, along with 435 drilled wells in a deal costing the company $5.375 billion (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Then in December 2014, Southwestern bought 46,700 net acres of leases and 63 operating Marcellus Shale wells in northeastern PA from WPX for $300 million (see First Shoe Drops: WPX Sells 1/2 Marcellus Assets to Southwestern). When everyone else was slowing down, Southwestern was doubling down on their drilling program (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). The question now is, what’s ahead for 2016 with Bill Way at the helm?…
    Read More “Southwestern Energy Gets New CEO – What’s Ahead for 2016?”

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    NH New State Motto: “Live as Slaves then Die” – Plans to Nix Pipe

    The official motto for the State of New Hampshire used to be “Live Free or Die.” Sometime over the past 200+ years it changed. These days the new motto in New Hampshire is, “Live as Slaves then Die.” How else do you explain why NH leaders (Republicans!) have introduced a blizzard of bills that would essentially outlaw a simple natural gas pipeline from being added to the ground–in a state where thousands of miles of pipelines are already buried in the ground? Why are they all of a sudden allergic to the safest form of transportation in existence? The only explanation we can find is, they want to be slaves to Big Green and forsake modern conveniences like electricity and automobiles…
    Read More “NH New State Motto: “Live as Slaves then Die” – Plans to Nix Pipe”

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    Big Stock Trades for Rice Energy, Summit Midstream

    Periodically we catch you up on major cases of insider buying or selling–when upper management and/or board members either buy stock in the company they run, or sell it. We also periodically report on major shareholders either buying or selling. Earlier this week we told you that Eagle Asset Management had sold some of its Gulfport Energy stock and beefed up its Rice Energy portfolio (see Eagle Asset Mgmt Sells Gulfport Energy, Buys Rice Energy Stock). Today we report that Jennison Associates (investment firm) recently sold 369,662 shares of Rice Energy. After all, somebody like Jennison has to sell if companies like Eagle Asset buy, right? In addition, we’re reporting that a board member of Summit Midstream (company with sizable pipeline assets in the Marcellus/Utica) recently bought a whopping $5.6 million worth of company stock. Now there’s a vote a confidence!…
    Read More “Big Stock Trades for Rice Energy, Summit Midstream”

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    Columbia Gas Gets “Intelligent” Pipelines from GE/Accenture

    Who knew that pipelines could actually be “intelligent”? We sure didn’t. GE and Accenture have just announced that Columbia Pipeline Group (CPG) is the first company to deploy their “Intelligent Pipeline Solution”–a breakthrough software solution that helps pipeline operators make informed decisions about pipeline safety and integrity. Columbia Pipeline Group has deployed the GE/Accenture Intelligence Pipeline Solution on 15,000 miles of interstate pipelines–much of that flowing Marcellus and Utica Shale gas. The software monitors pipeline threats, improves risk management and provides “situational awareness” in near real-time…
    Read More “Columbia Gas Gets “Intelligent” Pipelines from GE/Accenture”

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    Ashtabula GTL Plant Builder Velocys Gets New CEO

    MDN Update: Velocys’ former CEO, Roy Lipski, contacted MDN to express concern that our reference to an earlier story about his departure (the way we present it) is misleading and harmful. We apologize. Roy points out that although he left the company, there was, after an investigation, no finding of any wrongdoing. 

    UK-based Velocys is the company building the Ashtabula, OH Gas-to-Liquids (GTL) plant to convert natural gas into other hydrocarbons like diesel fuel and even gasoline. In July 2015, Velocys suspended its CEO, Roy Lipski, for potential misconduct (see Velocys GTL Company Suspends CEO for Possible Serious Misconduct). Velocys said at the time there was no financial misconduct involved (which makes you wonder just what did happen), and a month later, in August, Lipski left the company for good. It’s taken a while, but Velocys has finally located a new CEO. Yesterday they announced the appointment of David Pummell as the next CEO…
    Read More “Ashtabula GTL Plant Builder Velocys Gets New CEO”

  • Marcellus & Utica Shale Story Links: Thu, Jan 7, 2016

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Marcellus drillers’ stock dives in 2015; Move over Bakken, Marcellus/Utica is taking your place; confused state of Maryland; New York’s jobs-free renewable plan; WV state land leased sees no drilling so far; Florida OKs natgas power plant in Okeechobee; natgas demand this winter; and more!
    Read More “Marcellus & Utica Shale Story Links: Thu, Jan 7, 2016”

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    PA DEP Fines Kinder Morgan $745K for Spills in Philly

    pay fines here signEDITOR’S NOTE: It’s interesting what a negative story can produce. The DEP posted a back-dated press release on their site after MDN released this story pointing out they had not informed anyone but StateImpact. We can assure you the release was not there until we pointed out its absence. You can read the back-dated press release here.

    Is the Democrat-controlled PBS outlet StateImpact Pennsylvania now the official stenographer for PennFuture Secretary of the PA Dept. of Environmental Protection (DEP), John Quigley? That’s the thought we had when reading a StateImpact story that the DEP has fined Kinder Morgan $745,000 for leaks at two Philadelphia-area storage facilities owned by Kinder. In every case we can recall, going back more than six years of writing the MDN blog site, whenever the DEP fines a driller or midstream company (Kinder is the latter), the DEP issues an official public press release on their own website. Not this time. Apparently the only “news” outlet to receive notification of the fine has been StateImpact because we’ve searched high and low and nobody else is (so far) carrying the news. Why did the DEP not post the news on their own website as they always have in the past? Why did only certain (perhaps just one) news outlets get this particular press release? Hence our observation that perhaps StateImpact is the new official stenographer for the PennFuture DEP. Here’s what the Dems at StateImpact say about the Kinder fine…
    Read More “PA DEP Fines Kinder Morgan $745K for Spills in Philly”

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    Some PA Republicans Beginning to Cave on Severance Tax

    Kudos to Pennsylvania Republicans for hanging tough and pushing back against the bullying of PA Gov. Tom Wolf with respect to a Marcellus-killing severance tax. However, the battle for a severance tax may have taken its toll. At least one, perhaps more, Republicans are going squishy now that the fight is over for the 2015/2016 budget. State Rep. Jim Christiana, a Republican (RINO) from Beaver County (where Shell may build an ethane cracker plant) says he will propose new legislation that creates a 3% severance tax. His tax plan includes abolishing the existing impact fee, which is the equivalent of a severance tax, and using some of the 3% tax revenue to replace the impact fee. Christiana says, “many Republicans support the concept of a severance tax, but simply reject the governor’s punitive approach.” He also says Republicans “have lost the public relations battle in explaining that the impact fee is a severance tax.” In other words Christiana has lost his nerve. Christiana is a major disappointment and, possibly, an harbinger that PA Republicans may cave and pass a severance tax after successfully fending one off this year…
    Read More “Some PA Republicans Beginning to Cave on Severance Tax”

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    Ouch: Patterson-UTI Rig Count Drops Another 10% in December

    As we do every month, MDN tracks how many rigs oilfield services company Patterson-UTI Energy reports operating–as a proxy for when/if the drop in rig counts for the Marcellus/Utica will turn around. Patterson operates a number of rigs in the northeast, as well as other areas of the continental United States (and Canada). Patterson’s November rig count number went down, but only by one, which led us to speculate that perhaps we had finally turned the corner on falling rig counts (see Patterson-UTI Rig Count Hits New Low in November). Alas, we were wrong–in a big way. Patterson released their December rig count numbers yesterday and their U.S. rig count dropped from 91 in November to 82 in December–down 10% in a single month. For months and months Patterson has operated four rigs in Canada. In December the Canadian rig count went to one. It seems like there’s no end of bad news when it comes to domestic shale drilling…
    Read More “Ouch: Patterson-UTI Rig Count Drops Another 10% in December”

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    2015 NatGas Prices Traded at Lowest Level Since 1999

    Anecdotally we know that the price of natural gas in the U.S. as bought and sold along hundreds of locations on major pipelines was low in 2015. At least it seemed low. Story after story told us it was low. The price of gas as traded at the Henry Hub delivery point in southern Louisiana is used as a proxy for “the price” of natgas nationally–and it was low. But what does the actual data tell us? According to our favorite government agency, the U.S. Energy Information Administration (EIA), the data confirms what everyone already “felt” was the case: the price of natgas in 2015 traded at its lowest level since 1999. Here’s the proof…
    Read More “2015 NatGas Prices Traded at Lowest Level Since 1999”

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    Explaining the Rift Between Saudi Arabia & Iran; Impact on Oil

    Daniel Markind
    Daniel Markind, Esq.

    You may have noticed a flare-up of tensions in the Middle East between Saudi Arabia and Iran. The “crisis” as it’s being called by news organizations like CNN has quickly escalated with other Arab countries taking sides–most of them siding with Saudi Arabia. The flare-up initially caused an uptick in the price of oil based on fears there may be oil disruptions in the region–but those fears quickly died down and along with it, the price died down too. What is this conflict all about? And how might it affect the price of oil (and gas) in 2016? MDN reader Daniel Markind, an attorney and partner in the Philadelphia law firm Weir and Partners, provides us with an excellent summary/overview of what this conflict is about…
    Read More “Explaining the Rift Between Saudi Arabia & Iran; Impact on Oil”

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    2 New NatGas Electric Turbines Planned Near Richmond, VA

    An electric generating operator with an existing facility near Kings Dominion amusement park (about 20 miles from Richmond, VA) has filed a plan with the Virginia State Corporation Commission seeking permission to build two new smaller natural gas-fired electric generating turbines at the existing facility in Hanover County, VA. The two turbines would create up to 340 megawatts of electricity and would be used only during peak electric demand times–when demand rises due to really cold or really hot weather. Doswell Energy Center already operates four combined cycle natural gas units (producing up to 665 megawatts of electricity) and one other turbine (generating 171 megawatts) at the site. The two new turbines would be built at the same location. There’s little doubt that Marcellus/Utica Shale gas will feed the new turbines, if built. Hanover County officials are on board with the plan…
    Read More “2 New NatGas Electric Turbines Planned Near Richmond, VA”

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    IHS Study: M&A Deals Plunged in 2015, So Did Shale Investment

    No doubt about it, 2015 was a tough year in the shale energy industry. With shale energy, investment happens when drillers decide to drill holes in the ground. Without a hole, money doesn’t get spent. And when money isn’t being spent on drilling, other businesses along the supply chain begin to see their revenue dry up. Global consulting and research firm IHS, or Information Handling Service, has just published the “IHS Energy Global Upstream M & A Review.” As part of their promotion of the new study (must be a customer to score a copy), IHS released a detailed summary of their findings. One finding in particular stood out to MDN: In 2014 unconventional/shale drillers spent $75 billion on upstream (exploration & production) activities. In 2015 that number plunged to less than $30 billion–a 60% drop. That statistic more than any illustrates what happened to the oil and gas industry in 2015. Here’s more great insights from IHS on what happened in 2015…
    Read More “IHS Study: M&A Deals Plunged in 2015, So Did Shale Investment”