Marcellus Drilling News

New York | Statewide NY

Rumor: NY Gov. Andrew Cuomo Will Be Indicted Jan 2 for Corruption
December 3, 2015December 3, 2015

New York State, when it comes to our elected officials, is a corrupt as it gets. U.S. Attorney Preet Bharara has been on a mission to clean up corruption in the Empire State. Bharara is making a name for himself like another former U.S. Attorney–Rudy Giuliani. Bharara has been extremely successful so far: Both former Assembly Speaker Sheldon Silver (Democrat) and former Senate Deputy Majority Leader Tom Libous (Republican) have been convicted of corruption and removed from office. Currently the former Senate Majority Leader, Dean Skelos, is on trial in federal court in Manhattan and almost certainly will be convicted as well (see our story from yesterday, Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban). NY State’s politics has always been known as “three men in a room” because the Governor, Assembly Speaker and Senate Majority Leader are the power brokers who cut deals that then get adopted. With two of the three men in the room either convicted (or about to be convicted) as corrupt felons, it makes you wonder about the third man–Gov. Andrew Cuomo. Another bombshell revelation: sources are telling the Buffalo Chronicle (a blog site) what has long been rumored–that Preet Bharara will go after Andrew Cuomo next. In fact, three (!) sources have told the Chronicle that Bharara will file an indictment against Cuomo on Jan. 2, 2016. So what does this have to do with shale drilling?…
Read More “Rumor: NY Gov. Andrew Cuomo Will Be Indicted Jan 2 for Corruption”
Anti-Drilling/Fossil Fuel | Athens County | Industrywide Issues | Ohio | Wastewater

Water Well Testing Near OH Injection Wells Comes Back Negative
December 3, 2015December 3, 2015

Athens County, OH is infested with liberal Democrats who irrationally hate fossil fuels. Let’s just get the facts out there on the table, shall we? The ninny nannies in Athens finally (after years of agitation) browbeat their neighbors into voting for a frack ban last year (see 3 of 4 Frack Ban Ballot Measures in Ohio Fail – Athens Exception). Whatever. Athens County hosts eight wastewater injection wells and that drives the crazies every crazier. They’re doing their damnedest to get all eight shut down, and to deny a permit for a ninth well (see Athens County Asks Gov Kasich & ODNR to Stop New Injection Wells). One of their strategies is to prove that the existing wastewater injection wells are causing pollution of nearby water wells and groundwater supplies. So a study was done, testing nine different water wells for the presence of volatile organic compounds–a signal that wastewater is leaking into the wells. Guess what they found? Nothing. Nada. Zip. Zero. The injection wells are not contaminating groundwater and water well sources. What do the crazies want? More testing! More more more more more. They want to test until they find something–or rig the tests so something gets found…
Read More “Water Well Testing Near OH Injection Wells Comes Back Negative”
Industrywide Issues | Pipelines | Research

Top 20 NatGas Pipelines in 2015 – Ranked by Traded Volume
December 3, 2015December 3, 2015

The amazing thing about this wonderful industry we’re in–the fossil fuel energy industry–is that you learn something new every day. Like there’s a service called the Capacity Center (CapacityCenter.com) that tracks flows of physical natural gas in every interstate pipeline in the U.S. Each year (for the eighth year running) the Capacity Center issues a report detailing the Top 20 Traders (buyers and sellers) of natural gas along those pipelines, and the Top 20 Pipelines by volume of natural gas flowing through the pipeline. We’re intrigued–particularly by the Top 20 pipelines, because a number of them operate in the Marcellus/Utica region. Below is the full Capacity Center Top 20 Capacity Traders & Top 20 Pipelines Report for 2015. If you’re like us, you’ll dig it too…
Read More “Top 20 NatGas Pipelines in 2015 – Ranked by Traded Volume”
Electrical Generation | Energy Services | Industrywide Issues | Luzerne County | Pennsylvania | UGI Energy Services

NEPA Electric Plant Converted from Coal to NatGas a Huge Success
December 3, 2015December 3, 2015

As MDN has previously chronicled, Chicago-based Invenergy hopes to build what will be the largest (to date) electric generating plant in the state of Pennsylvania powered by natural gas. Invenergy hopes to build the 1300-megawatt plant in the borough of Jessup (Lackawanna County), near Scranton. But there’s been quite a bit of opposition, most of it from anti-fossil fuelers (see our Jessup power plant stories here). The folks in Jessup might want to cast their eyes on another project not far away, in Luzerne County, where a former coal-fired power plant was recently converted to burn natural gas. That plant, owned and operated by UGI, reduced sulfur dioxide emissions by 99%, and reduced nitrogen oxide emissions by 95%. That is, natgas-fired electric plants are one of the lowest polluting ways to generate electricity–and far more reliable than alternatives like solar and wind…
Read More “NEPA Electric Plant Converted from Coal to NatGas a Huge Success”
CONSOL Energy | Energy Companies

Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others
December 3, 2015December 3, 2015

We’re not above admitting when we’ve been wrong. Last July MDN shared a rumor–and stressed it was a rumor–that CONSOL Energy was in talks to sell it’s CNX Gas division to Noble Energy (see Rumors Circulate that CONSOL May Sell Itself to Noble Energy). A few days later we modified that rumor to say that Noble Energy would take over the joint venture acreage the two have together (see CONSOL Energy/Noble Energy Rumors Continue to Swirl). Neither of those things ended up happening–at least not yet. However, CONSOL’s largest single investor, corporate raider Mason Hawkins (who in league with corporate raider Carl Ichan have been screwing with Chesapeake Energy) told CONSOL to separate their coal business from the natural gas business, which they’ve begun to do (see CONSOL’s #1 Stockholder Says Spin Off CNX Gas…or Sell It). Parent company CONSOL’s stock is traded as CNX. A new coal division (for investors) was created, CNX Coal (CNXC), although some (much?) of the coal assets are still part of the CNX entity. CONSOL’s midstream/pipeline business, called CONE Midstream (a jv with Noble Energy) is traded as CNNX. Yes, it’s all a mish mash. We mention all of this as background to an article by a trader commenting on CONSOL’s CNX stock which has literally crashed over the past year–down more than 80% in value. The trader calls the CNX stock a “widow maker”–meaning if you have the chops and can stick it out, there may be money to be had by investing in CNX stock. But, it’s a huge gamble, and not for the feint of heart, according to this trader…
Read More “Trader Calls CONSOL Stock “Widow Maker” – Profits Some, Not Others”
Columbia Pipeline Group | Energy Services

Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M
December 3, 2015December 3, 2015

Yesterday MDN told you that Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, announced a stock offering of 51 million shares (see Columbia Pipeline Group Floats 51M Shares of New Stock). We speculated if they got the then-current price of $19.03 per share, they’d haul in close to $1 billion in new revenue. Of course stock offerings like this almost never receive the existing/going price. We also said if they got $15 a share, that would net them $756 million. We now know, a day later, what they’re aiming for: $17.50 per share, which will bring in $892.5 million…
Read More “Columbia Pipeline’s 51M Share/Stock Offering Aims to Raise $892.5M”
Energy Services | GE Oil & Gas | Industrywide Issues | Orion Drilling | Supply Chain

GDS Intl Adopts GE Software to Increase Efficiency, Reduce Costs
December 3, 2015December 3, 2015

You may not think that computer software would have much to do with drilling holes in the ground and extracting natural gas and oil. But you would be wrong. If you ever visit a drilling rig and are fortunate enough to make a visit to “the dog house,” which is the equivalent of a jetliner cockpit where the rig is controlled by high-powered computers (and software), you’ll quickly understand how high-tech drilling has become. But it’s not just controlling a rig where computers are used in the oil and gas business–they’re used throughout the business. In fact there is software that, well, monitors other software. GE (nee General Electric) has a software offering that monitors drilling rigs and other equipment at drill sites. At least that’s how we understand it. GE issued a press release yesterday to tout the fact that GDS (Global Drilling Support) International is using GE’s “Equipment Insight” solution at rigs in both the Marcellus and Utica Shale in a six-month pilot program to squeeze ever more efficiency from the drilling process…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Dec 3, 2015
December 3, 2015December 3, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Youngstown anti-frack vote recount shows antis still losers; PA budget impasse continues; VA antis call for tough drilling rules; 150 canceled big oil projects; $3.4 trillion in fossil fuel divestment; last shoe drops for Hi-Crush; the party is over for oil; and more!
Read More “Marcellus & Utica Shale Story Links: Thu, Dec 3, 2015”
Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

MarkWest Energy Investors/Unitholders Approve Merger with Marathon
December 2, 2015December 2, 2015

At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
Read More “MarkWest Energy Investors/Unitholders Approve Merger with Marathon”
Allegheny County | Energy Companies | Industrywide Issues | Jobs | Pennsylvania | Shell

Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX
December 2, 2015December 2, 2015

Shell is closing its Pittsburgh-area office and moving “most of” the 180 workers who worked there to its U.S. HQ in Houston, Texas–so says a Shell spokesperson. A few workers may remain and redeploy to various field offices that Shell intends to keep open–including a field office in Tioga County, PA where they have an active drilling program. Shell drilled just eight wells in PA this year, compared to 17 last year and 31 the year before that. Notice a pattern? Perhaps most importantly Shell stresses the office closure has nothing to do with the work on a proposed ethane cracker plant in Beaver County…
Read More “Shell Closing Pittsburgh Office, Moving 180 People to Houston, TX”
Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban
December 2, 2015December 2, 2015

An interesting update on what is now ancient history in New York State with regard to Andrew Cuomo and his ban on fracking. According to secretly recorded wiretaps of conversations of the son of former NY Senate Majority Leader Dean Skelos, a Cuomo official made the rounds to several prominent Senate Republicans to ask if there would be any “blowback” when (not if) Cuomo lifted a ban on fracking. If true, the revelation is a bombshell–that Cuomo had intended to lift the moratorium but changed his mind at the last minute. The problem with the recorded conversations is that Skelos’ son Adam, in talking with three different lobbyists, attributes the conversation to different Cuomo Administration sources. That is, he changes his story, making his story less credible. Both father Dean and son Adam Skelos are on trial in Manhattan for corruption. Dean tried to help his son get work with sweetheart deals–something that happens every day in New York with both Republicans and Democrats. We’re not excusing corruption–just pointing out the context and circumstances…
Read More “Bombshell Revelation: Cuomo was on Cusp of Lifting Frack Ban”
Industrywide Issues | Research

Reuters Says Marcellus “Finally Succumbs” to Production Downturn
December 2, 2015December 2, 2015

The Reuters news service is, somewhat gleefully, reporting that America’s biggest gas field–the Mighty Marcellus–“finally succumbs to downturn.” The article in which they announce this “fact” breathlessly reports preliminary (i.e. not yet solid, as in draft) figures from DrillingInfo are at odds with projections from the U.S. Energy Information Administration (EIA). According to Reuters, the EIA’s numbers are too rosy, showing a year-over-year decrease in Marcellus production won’t happen until 2019. DrillingInfo, according to Reuters, indicates a year-over-year decline will come next year, in 2016. Who’s right?…
Read More “Reuters Says Marcellus “Finally Succumbs” to Production Downturn”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines

Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout
December 2, 2015December 2, 2015

On Monday the largest pipeline company in the United States, Kinder Morgan, and their partner Brookfield Infrastructure Partners, announced a deal to buy out a third partner in the Natural Gas Pipeline Company of America (NGPL). When the deal is done, both Kinder Morgan and Brookfield will each own 50% of NGPL, although Kinder is the pipeline operator. NGPL, in case you haven’t heard of it, is a huge interstate pipeline system located in the Midwest and southwest. (See a copy of Kinder Morgan’s pipeline systems map below. The dark green lines represent NGPL.) So why is the NGPL buyout in the Midwest/southwest a Marcellus/Utica story? Because NGPL is currently building an expansion in the Chicago area, appropriately called the Chicago Market Expansion Project. That expansion will carry gas coming into the NGPL pipeline where it intersects with the Rockies Express (REX) pipeline in in Moultrie County, Illinois northward into the Chicago area. REX recently reversed its flow and now carries Marcellus/Utica gas to Moultrie—meaning more Marcellus/Utica gas will be flowing to the Chicago area starting in 2016 when the Expansion Project is put into service (see 1.8 Bcf/d of Marcellus/Utica Gas Heads West on REX Starting Aug 1). A little over two months ago Kinder Morgan announced they would reverse the flow for part of NGPL and begin sending northeast gas south, to the Gulf Coast (see Marcellus/Utica Gas Heading to TX LNG Export Plant…in 2018), meaning gas arriving at Moultrie will not only go north, it eventually will go south too. So the NGPL purchase is very much about the Marcellus/Utica…
Read More “Kinder Morgan Steps Up Marcellus/Utica Investment with NGPL Buyout”
Columbia Pipeline Group | Energy Services

Columbia Pipeline Group Floats 51M Shares of New Stock
December 2, 2015December 2, 2015

Columbia Pipeline Group, a major player in the Marcellus/Utica midstream, was spun out into its own company in July from parent NiSource (see NiSource/Columbia Pipeline Divorce is Final). The new company has made a number of investments in major projects, including $1.2 billion worth of investments in pipelines for the northeast in 2015 (see Columbia Pipeline 2Q15: Investing $1.2B in NE Projects This Year). With prices plummeting and investments increasing, how does a company like Columbia get more money to keep operating and expanding? One way is to sell debt (bonds and IOUs). Another way, the preferred way in our book, is to sell equity, or stocks. Right on cue Columbia announced yesterday they are floating 51 million shares of new stock in an effort raise money. The company doesn’t say how much they want to raise, but if you do some simple math and multiply this morning’s share price of $19.03 by 51 million you get a whopping $970.5 million–nearly $1 billion! They likely won’t get a full $19.03 per share, but hey, if even if they only get $15 per share that’s still $765M big ones. Here’s the announcement offering new stock in Columbia Pipeline…
Read More “Columbia Pipeline Group Floats 51M Shares of New Stock”
Energy Companies | PDC Energy

PDC Energy’s CFO Gysle Shellum Sells $297K Worth of Co Stock
December 2, 2015December 2, 2015

PDC Energy is primarily focused on drilling new shale wells in Colorado’s Wattenberg Field. However, they do have a small operation in the Ohio Utica Shale as well. At last check-in PDC was contemplating whether or not to restart their paused Utica drilling program (see PDC May Un-pause OH Utica Shale Drilling Earlier than Expected). We believe they have reactivated their Utica program based on the fact they received permits to drill four wells from May through August 2015, according to the latest volume of the 2015 Marcellus and Utica Shale Databook. Today we told you in a related story that Toby Rice, President & COO of Rice Energy, recently purchased $100,000 worth of his own company’s stock. PDC Energy’s Chief Financial Officer, Gysle Shellum, has just sold $297,000 worth of his company’s stock…
Read More “PDC Energy’s CFO Gysle Shellum Sells $297K Worth of Co Stock”
Energy Companies | Rice Energy

Rice Energy President Toby Rice Buys $100K Worth of Co Stock
December 2, 2015December 2, 2015

From time to time (not all of the time) when we notice a drilling or midstream company executive buying or selling company stock–called insider buying or insider selling–we bring you that news. We always take it as a good sign when those responsible for a company–either senior management or the board of directors–buys stock in the company they manage. For us, it’s evidence of confidence in the direction of the company. “Eating your own dog food.” Such is the case with one of our favorite Marcellus/Utica drillers–Rice Energy. Rice is a young company led by three young brothers–Dan (CEO), Toby (President & COO) and Derek (EVP). Toby has just purchased 7,500 shares of Rice Energy for $99,750…
Read More “Rice Energy President Toby Rice Buys $100K Worth of Co Stock”