Marcellus Drilling News

Centre County | Eclipse Resources | Energy Companies | Pennsylvania

Marcellus/Utica Driller Eclipse Resources Looking for a Buyer
November 11, 2015November 11, 2015

One by one the dominoes are falling–companies in the Marcellus/Utica that just can’t hang on any longer are selling themselves. It was only last December that Eclipse Resources, an exploration and production company focused solely on the Marcellus and Utica Shale region, announced it had raised $440 million in a “private placement” of 62.5 million shares of common stock (see Eclipse Resources Gets $440M from New Stock, Trims 2015 Capex 20%). Eclipse drills almost exclusively in the Ohio Utica Shale, even though it’s headquartered in State College, PA. In June, Eclipse went shopping for an additional $550 million pile of cash by offering IOUs (see Eclipse Lowers IOU Offering Expectations – by $100M). Now comes word the company is using Morgan Stanley to shop itself to potential buyers. No word on the asking price or whether or not there’s been any bids…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Nov 11, 2015
November 11, 2015November 12, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Magnum Hunter teetering on the brink; LNG imports or pipelines better for NYC?; PA budget deal may not be done after all; people are the first to go in down o&g market; fracking killed the Keystone pipeline, but is saving the planet; Sierra Club admits fracking lowers CO2; Halliburton issues bunch of IOUs to buy Baker Hughes; first LNG containership transits Panama Canal; and more!
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Anti-Drilling/Fossil Fuel | Indiana County | Industrywide Issues | Litigation | Pennsylvania | Regulation | Wastewater

Grant Twp, PA Reorganizes to Avoid a Court-Ordered Injection Well
November 11, 2015November 11, 2015

In October MDN told you about Grant Township in Indiana County, PA. The town had attempted to illegally block a permitted injection well from being drilled and used inside the town’s boundaries. The town folk have been whipped into an irrational frenzy by the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF). As usual, the CELDF-promoted so-called Community Bill of Rights failed in court, costing Grant Township taxpayers big bucks to defend (see Fed Judge Overturns Grant Twp, PA Ban on Injection Wells). People without jobs (like those infesting CELDF) have lots of time to be creative–so here’s the latest. They talked enough town folk into passing another/new plan on the November. The town voted to convert itself from being a PA Second Class Township form of organization to being PA Home Rule Charter form of organization–in an attempt to do an end-run around the judge’s ruling last month. Will it work? Probably not, but here we go again–another delay for Pennsylvania General Energy and their plan to drill an injection well. You know the old saying? Justice delayed is justice denied. When will the courts step in and stop this madness?…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources

MHR’s GreenHunter Schedules 3Q15 Conference Call Next Week
November 11, 2015November 11, 2015

Here’s something pretty innocuous, at least at first glance, but something we find interesting nonetheless. Yesterday GreenHunter Resources announced it will hold an operating results conference call next Monday, Nov. 16. There’s certainly not much that appears to be interesting about that. We see dozens (hundreds?) of such announcements each quarter. So what, about this one, caught our attention?…
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Centre County | Energy Companies | Lawrence County | Pennsylvania | Rex Energy | Utica Shale

Rex Energy 3Q15: $95M Paper Loss, 1st Utica Well Online, Prod Up 15%
November 11, 2015November 11, 2015

Rex Energy and Eclipse Resources are really like two peas in a pod. The people who founded Eclipse, which is shopping itself (see today’s companion story), are former Rex Energy people. Both companies are pure play, concentrating on the Marcellus/Utica, and both companies are headquartered in State College, PA. On Monday Rex Energy issued its third quarter 2015 update. The company lost nearly $95 million for 3Q15–but the entire thing was a paper loss, writedowns for the value of their assets because the price of natural gas took a nosedive. Production for the company was up 15% in 3Q15 over the same period a year earlier. Some of the biggest news we spot in the update is that Rex has been able to squeeze the costs all the way down to $5.2 million per Marcellus well they drill. Also big news: Rex put into production their very first Utica Shale well, drilled in Lawrence County, PA. Here’s the particulars…
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Energy Companies | Warren Resources

Warren Res. 3Q15: $190M Paper Loss, Completes 2 Upper Marcellus Wells
November 11, 2015November 11, 2015

Warren Resources, a small, independent exploration and production company with an ongoing drilling programs in California, Wyoming, and in the northeast Pennsylvania Marcellus Shale, issued their third quarter 2015 update and held an analyst call earlier this week. The company experienced a $189.5 million loss for the quarter, most of that being a paper loss due to writing down the value of assets (the pattern we’ve seen with almost every other Marcellus/Utica driller in 3Q15). Warren only spent $3.8 million in the Marcellus in 3Q15–to finish two drilled “Upper Marcellus” wells (see Warren Resources Releases Details on 2 “Upper” Marcellus Wells). Below are select portions of both the 3Q15 press release update and from the analyst conference call transcript…
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Energy Services | Equitrans/EQT Midstream

EQT Midstream Floats 5.7M Units, Hopes to Get $406M
November 11, 2015November 11, 2015

EQT Midstream, the fully-owned subsidiary of Marcellus (now mostly Utica) driller EQT, floated 5,650,000 common units (think shares of stock) yesterday. The company expects get around $406 million for the units. The details…
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Electrical Generation | Industrywide Issues | Luzerne County | Pennsylvania

Gemma Power Gets Contract to Build Moxie Freedom Electric Plant
November 11, 2015September 12, 2016

Over a year ago MDN broke the news that Moxie Energy was in the hunt to begin a third new Marcellus gas-powered electric plant project in Pennsylvania (see Moxie Energy in Hunt for Third Marcellus-Powered Electric Plant?). Indeed, our suspicions were borne out and Moxie pursued a project to build a plant in Luzerne County. Moxie is calling it the Freedom project and in November they received approval from Salem Township to proceed (see Moxie’s NEPA Marcellus-Powered Electric Plant Gets 1st Approval). In September Moxie received the all-important approval–permission from the PA Dept. of Environmental Protection (see Moxie’s NEPA Marcellus-Powered Electric Plant Gets DEP Approval). We were convinced that like the previous two such projects, Moxie Liberty and Moxie Patriot were sold to Panda Power Funds, the company that is right now building them. However, a press release was just issued by Gemma Power Systems that says Gemma has been selected by Moxie to build the $800 million project. Here’s the details from Gemma on what technology they will use to build the 1,000-megawatt plant near Scranton…
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Commodity Price | Industrywide Issues | Research

EIA Report Predicts NatGas Will Average $2.59/MMBtu This Winter
November 11, 2015November 11, 2015

Our favorite government agency, the U.S. Energy Information Administration (EIA), publishes mountains of data and reports and analysis each day/week/month/year. So much if we did nothing but brought you only stuff published by EIA it would fill our daily reports! We always struggle with how much to share from the EIA. We bring you the monthly DPR (Drilling Productivity Report) because it details EIA’s predictions about what the seven major U.S. shale plays will produce in both oil and gas in the coming month (see the latest one published yesterday, EIA November DPR: Marcellus Production Down Again, Utica Increases). A report also just released is the monthly Short-Term Energy Outlook, a report that looks at the recent history of oil, natural gas, coal, renewables, etc., and predicts what will happen in the coming months/up to one year out. Below we’ve pulled and display the “Highlights” section along with the full section for natural gas. We also include a copy of the full report. It’s important to have the entire context in which natural gas (and oil) exists. We don’t live in a vacuum. The price and abundance (or scarcity) of other forms of energy influence the price and availability of natural gas and oil. Less coal coming? Likely means more natgas. More solar and wind capacity coming online? Likely means less natural gas. The energy market is fascinating and complex and shale energy is but one piece of a very large puzzle. This report helps us wrap our brains around it…
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Commodity Price | Crude Oil | Industrywide Issues | Research

IEA World Energy Outlook Predicts $80 Oil by 2020
November 11, 2015November 11, 2015

Each year the International Energy Agency (IEA) issues a special World Energy Outlook report. The 2015 edition has just been published. This newest report examines the critical role of price for crude oil in “rebalancing” supply and demand. The authors note the process of rebalancing (getting to higher prices) is rarely a smooth adjustment. Indeed! In the central scenario of this year’s report, a tightening oil balance leads to a price around $80 per barrel by 2020–just five short years away (hang in there small independents!). The report also examines the conditions under which prices could stay lower for much longer, an all-to-real possibility. Below is a press release about the report and a copy of the Executive Summary for the report. Sadly they don’t release the full report for free–it will cost you €120 (~$129) for the PDF version, and €150 (~$161) for a paper copy…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Huge Victory for PA Republicans – NO Severance Tax in Budget Deal!
November 10, 2015November 10, 2015

It appears the fat lady is getting ready to sing with respect to no severance tax in Pennsylvania–at least for this year. The Republicans have won–kudos to them for hanging tough against the unreasonable Marcellus severance tax proposed by a neophyte governor attempting to pay off a political debt to teachers’ unions. There will be no new severance tax this year. Wolf has found another way to pay off the teachers–he’s going to siphon slot machine money for a big boost in education funding. The teachers’ unions don’t care–money is green and spends the same whether it comes from shale or slots. While a final deal is not yet done (let’s not count our chickens just yet), it does appear the outline of a budget deal, now more than five months late, is in place and moving toward passage in the next few weeks. Here’s the details…
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Industrywide Issues | Pennsylvania | Regulation | Statewide PA

Environmental “Justice” for Some, Not for All, Courtesy PA DEP
November 10, 2015November 10, 2015

If you live in Pennsylvania and you live in a community where at least 20% of the people are below the poverty line, or if the community is composed of at least 30% minorities, you now have an important new weapon to oppose shale drilling, courtesy the PennFuture Secretary of the Dept. of Environmental Protection (DEP), John Quigley. Apparently the laws and regulations on the books that apply to everyone else are not good enough for po’ folk or black folk and you need extra special laws and regulations not available to others–so Quigley has “reactivated” the Office of Environmental Justice at the DEP to give you a voice that apparently you had lost. You may recall Quigley recently began talking about “establishing” such a department–only to embarrassingly learn his agency already has such a department (see Quigley Faux Pas: DEP Already has Office of Environmental Justice). With the help of mainstream media, Quigley pivoted to cover his faux pas (see Quigley Changes Story, “Reactivating” Enviro Justice Office at DEP). “Environmental Justice” is now officially reactivated at the DEP, complete with a new hire, an African-American lawyer from (yes) Philadelphia, violating the current state ban on new hiring until a budget is in place. Oh, and if you’re not poor or a minority (i.e. you’re working class or white collar)? No special favoritism for you. You get ordinary/regular environmental “justice”…
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Industrywide Issues | Research

EIA November DPR: Marcellus Production Down Again, Utica Increases
November 10, 2015November 11, 2015

Yesterday our favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite government report, the Drilling Productivity Report (DPR). The November report predicts what production will show in the month of December for both oil and natural gas from the seven biggest commercial shale plays in the U.S. The numbers EIA predicts shows natural gas production dropping once again–down another 100 million cubic feet per day (Mmcf/d) across all the plays combined. However, as with last month, the Utica Shale and Permian Basin are the exceptions–both predict an increase in natgas production for the month of December. Several major drillers have changed focus in the northeast from the Marcellus to the Utica (EQT and CONSOL Energy come to mind), which may help explain some of those numbers. The Permian is an oil play and doesn’t produce much natural gas–but since natgas comes out of the hole along with oil, and since oil drilling in the Permian is picking up lately–that explains why there’s an increase in “associated gas” for that play. Gas production in the mighty Marcellus continues to drop. It’s the biggest gas producer, so perhaps that’s why it’s dropping the most–down 215 Mmcf/d last month, and predicted to be down average 229 Mmcf/d in December…
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Utica Shale

Will the Utica Shale Bump Off the Mighty Marcellus?
November 10, 2015November 10, 2015

As we’ve been writing now for the past few months, the Utica Shale play is beginning to turn the heads of big, established Marcellus producers (see CONSOL Energy: Utica Drilling May Soon Replace Marcellus Drilling and EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016). There’s beginning to be more talk about the Utica one day surpassing the Marcellus. Is that even possible? How could it happen? Indeed it is possible, but there’s a lot of “ifs” with the theory that the Utica may soon bump off old man Marcellus…
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Utica Shale

Monster Dry Gas Utica Wells Changing the Picture in the NE
November 10, 2015November 10, 2015

While Marcellus natural gas production will slide again for the third month in a row according to the latest EIA Drilling Productivity Report, Utica natural gas production continues to climb (see today’s companion story). One important note: Utica production, while climbing month after month, is still just a fraction of Marcellus production (about 20% of Marcellus production). According to another story we highlight today, the Utica may challenge the Marcellus as reigning champ of natgas production. Will/can the Utica actually produce as much or more natural gas as the Marcellus some day? It’s not out of the realm of possibility. How can that be? It all has to do with monster dry gas Utica wells…
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Crime | Industrywide Issues | Lycoming County | Pennsylvania

Canadian Mounties Visit Marcellus to Learn About Greens Who Go Bad
November 10, 2015November 10, 2015

There is a segment of the radical environmental movement that resorts to violence. That is indisputable as we’ve seen it–in the Marcellus/Utica. To be fair, violence by antis doesn’t happen often. We would say most of the anti movement is non-violent (although a fair number do tend toward criminality with “non-violent” protests). But there are those among radical greens who cross the line and engage in acts of violence and terror, sometimes aimed at people who work in the industry (see FBI Investigates Death Threats Against PennEast Pipeline Workers and Domestic Eco-Terrorism: Worker Shot at Rural WV Oil Well Site). Anti-drillers in Canada (or anywhere in the world, for that matter) are no different than anti-drillers in the United States. Some of them turn violent. For that reason, Royal Canadian Mounted Police (the Mounties) visited Williamsport, PA in June 2014 to learn more about how their American cousins deal with greens who go bad. Apparently this story–that the Mounties came here to learn about dealing with green crazies–is just now coming to light…
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