Marcellus Drilling News

Economic Impact | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Shortages Begin: Tangible Result of No Pipelines in New England
January 8, 2016January 8, 2016

In December 2014 the Massachusetts-based utility Berkshire Gas Company announced the amount of natural gas they could purchase from the Tennessee Gas Pipeline (TGP) was at full capacity. There’s no additional gas supplies to buy–unless TGP builds their Northeast Energy Direct (NED) expansion project. So Berkshire was forced to tell new customers for natural gas in portions of Franklin County they won’t be able to tap into Berkshire’s line (see Guts: No New Pipeline in MA? Then No New Natgas for Utility Customers). In September, the Massachusetts Dept. of Public Utilities (DPU) approved long-term contracts for three utilities, including Berkshire Gas, to buy natural gas supplies from TGP’s NED pipeline when/if it gets built (see Mass. Approves Plan for Utilities to Buy Gas from New Pipeline). Anti-drilling nutters promptly sued to stop that plan (see Anti Group Sues to Stop Mass. Utilities from Buying Natural Gas). It’s now a year after Berkshire’s first announcement that some communities in Franklin County won’t get new natgas service. Berkshire has had to expand the prohibition area. They’re now turning down new businesses in neighboring Hampshire County, which is causing a stir. We’re not sure why antis don’t get it. No new gas, no new service. It’s pretty simple. Below is the story of a jilted Texas Roadhouse, who says they wouldn’t have purchased land and built had they known they couldn’t get natgas service. Translation: more businesses will stay away, or perhaps even leave, because they can’t get natgas due to the shortage…
Read More “Shortages Begin: Tangible Result of No Pipelines in New England”
Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Southwestern Energy | West Virginia

Southwestern Energy Renewing Leases in WV, PA
January 8, 2016January 8, 2016

Tick tock tick tock. Every day that passes brings landowners and drillers closer to the end of an initial five-year lease contract. In October 2014, Southwestern Energy purchased a humongous 413,000 acres of leases from Chesapeake Energy, most of that land in West Virginia (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Southwestern paid over $5 billion for the deal. That leased acreage came with an expiration–which is happening now, at least for some (most?) of the acreage. Every lease is different. Some leases allow the driller to pay the same (or a different) renewal payment to keep the lease going for another period of time, typically another five years. The $5 billion question is, what will Southwestern do? Everyone is scaling back right now. Companies just can’t afford to do much drilling. Will Southwestern opt to renew those leases that they paid big bucks for? It seems we have an answer to that question. A WV newspaper is reporting that Southwestern has begun extending leases in Ohio and Marshall counties…
Read More “Southwestern Energy Renewing Leases in WV, PA”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Statewide PA

Antis Wrong: No Link Between Fracking & Smallmouth Bass Decline
January 8, 2016January 8, 2016

Back in 2012 Congressman Camille “Bud” George, Democrat from Clearfield County, PA, opened his big mouth and tried to blame fracking for a problem with smallmouth bass in the Susquehanna River (see PA Dems Blame Marcellus Drilling for Smallmouth Bass Problem). Last May, the nutters from a group called “Occupy the Constitution Pipeline Route” repeated the same accusation, showing a picture of a diseased smallmouth with a huge tumor (see below). Thing is, none of it is true. Earlier this week the head of PA’s Dept. of Environmental Protection, John Quigley, and the head of PA’s Fish and Boat Commission, John Arway, both said the smallmouth bacterial disease issue is unrelated to fracking…
Read More “Antis Wrong: No Link Between Fracking & Smallmouth Bass Decline”
Ohio | Statewide OH | Utica Shale

Updated Map of Ohio Utica Permits/Wells for Jan 2016
January 8, 2016January 8, 2016

Every few months the Ohio Dept. of Natural Resources (ODNR) produces a map that shows where Utica permits have been issued, where Utica wells have drilled, and where drilled wells are now flowing natural gas (and oil and NGLs). We bring you a copy of this map from time to time. Below is the most recent version, issued on Jan. 4. Here’s a few MDN observations about this map…
Read More “Updated Map of Ohio Utica Permits/Wells for Jan 2016”
CNG/LNG | Exporting | Industrywide Issues | Pipelines | Processing Plants | Regulation

New LNG Facility Green Lighted in Canada, Would Use Marcellus Gas
January 8, 2016January 8, 2016

Another LNG export facility along the East Coast of Canada has just received a green light from the Canadian National Energy Board (NEB). To be honest, this one was not previously on our radar. The facility would be built and owned by Hiranandani Group of Mumbai, India. They’re using a subsidiary company called Atlantic Coast (or AC) LNG Inc. The plan is to build the facility in Nova Scotia and (mostly) use Marcellus/Utica gas imported from the United States via the Maritimes & Northeast Pipeline (M&NE). Currently the M&NE flows from north to south, from Canada to the U.S. There is serious talk of reversing the flow. In fact, at some points for brief periods the flow already gets reversed, during peak demand periods in Canada. The NEB has granted AC LNG a permit to import up to 2.3 billion cubic feet per day (Bcf/d) of U.S. natural gas. The permit also grants them the right to export up to 2 Bcf/d from the terminal, if built. Some of the particulars…
Read More “New LNG Facility Green Lighted in Canada, Would Use Marcellus Gas”
CNG/LNG | Energy Companies | Energy Services | Exporting | Industrywide Issues | Pipelines | Regulation | Repsol | Spectra Energy

Repsol Not Happy with Spectra’s Atlantic Bridge, Pipeline Reversal
January 8, 2016January 8, 2016

A number of Canadian LNG export facilities being planned for eastern Canada are dependent on obtaining cheap, abundant Marcellus and Utica Shale gas from the U.S. Today we highlight news of a new (to us) entrant into the LNG race, AC LNG (see our companion story). How will Marcellus and Utica Shale gas get to the northern reaches of Canada? Via the Maritimes & Northeast Pipeline LLP (M&NE), a pipeline that stretches from the Boston area all the way to the northern reaches of Nova Scotia. Historically the M&NE pipeline has brought natural gas south, from Canada to the U.S. One of the sources of the gas traveling south on the M&NE is the Canaport LNG facility in New Brunswick–which imports LNG and regassifies it and sends it out over the M&NE. Repsol, a huge Spanish oil company, is the owner of the Canaport facility. So it’s no surprise that Repsol is sounding the alarm and asking the question: What happens to the gas we send south if M&NE reverses its flow and begins sending gas north?…
Read More “Repsol Not Happy with Spectra’s Atlantic Bridge, Pipeline Reversal”
Economic Impact | Industrywide Issues | Jobs | Research

API 2016 State of American Energy Report
January 8, 2016January 8, 2016

Earlier this week the American Petroleum Institute (API) released its annual report, the State of American Energy (full copy below). Several themes are prominent in the report: shale energy’s creation of jobs, the economic growth we’ve experienced due to shale energy, and the fact we are now more secure than we’ve been in generations with respect to energy. We’re far less dependent on foreign oil than we were just a few years ago. That’s great news!…
Read More “API 2016 State of American Energy Report”
Energy Companies | Noble Energy

Noble Energy Refinances $1.4B of Notes, Gets “Flexibile”
January 8, 2016January 8, 2016

Noble Energy says it got a $1.4 billion bump up in its line of credit. That’s on top of a $4 billion line of credit. Noble is also offering to swap out old IOUs for new ones. All of these financial machinations mean the company now has “enhanced financial flexibility” according to their press release…
Read More “Noble Energy Refinances $1.4B of Notes, Gets “Flexibile””
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jan 8, 2016
January 8, 2016January 8, 2016

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: FERC defends Cove Point decision in court; time to ask FERC for Constitution Pipeline waiver; land deal near Shell cracker plant; pipelineophobia in PA; PIOGA continues court fight against DEP; TransCanada sue U.S. over jilted Keystone XL pipeline; shale drillers look to “slumbering” wells; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Jan 8, 2016”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Issues “Final” New Drilling Regulations; Industry Pushback
January 7, 2016January 7, 2016

John Quigley, the Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), yesterday released a finalized version of proposed new oil and gas drilling regulations, otherwise known as Chapters 78 and 78a. A copy was sent to the Environmental Quality Board (EQB) for their required review which is planned for Feb. 3. The entire set of revised/new regulations (copy below) will then get published in the Pennsylvania Register and become final. Both the Marcellus Shale Coalition (MSC), representing unconventional drillers, and the Pennsylvania Independent Oil & Gas Association (PIOGA), representing conventional drillers, have come out against the new regulations. The MSC says the new regulations will cost the industry $2 billion annually without a corresponding benefit for the environment or safety, and PIOGA minces no words when it says the four-year revision process “has been flawed to the point of being fraudulent”…
Read More “PA DEP Issues “Final” New Drilling Regulations; Industry Pushback”
Allegheny County | CNX Resources | CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale

CONSOL Pursues Drilling Test Utica Well at Pittsburgh Airport
January 7, 2016January 7, 2016

Sometimes when we’re wrong, we’re still right! Last June MDN reported that CONSOL Energy, currently in the process of drilling a series of Marcellus and Upper Devonian shale wells at the Pittsburgh International Airport, was mulling over the possibility of drilling a single test Utica well at the airport (see CONSOL Energy May Add More Utica Wells to Pitt. Airport Project). Our error was in reporting CONSOL had already received a permit to drill a Utica well–they had not. However, CONSOL has just received permission from local town officials to swap out one of the planned Marcellus wells with a Utica well…
Read More “CONSOL Pursues Drilling Test Utica Well at Pittsburgh Airport”
CNX Resources | CONSOL Energy | Energy Companies

CONSOL Energy Slashes 2016 Drilling Budget 50% from Previous Plan
January 7, 2016January 7, 2016

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”
Anti-Drilling/Fossil Fuel | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Shell | Steuben County

NY Town Barred from Selling Water to Shell for PA Fracking
January 7, 2016January 7, 2016

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”
CNX Resources | CONSOL Energy | Energy Companies

Corporate Raider Mason Hawkins Now Owns 23.1% of CONSOL Energy
January 7, 2016January 7, 2016

There’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”
Energy Companies | Southwestern Energy

Southwestern Energy Gets New CEO – What’s Ahead for 2016?
January 7, 2016January 7, 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?”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Regulation | Tennessee Gas Pipeline

NH New State Motto: “Live as Slaves then Die” – Plans to Nix Pipe
January 7, 2016January 7, 2016

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”