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    Magnum Hunter Refinances Again, Dodges a Bullet…Just Barely

    Magnum Hunter Resources (MHR) issued an interesting press release yesterday to notify investors that they dodged a bullet–for the moment–by refinancing certain loans and getting a new $60 million loan which will let them make their $29 million bond payment on Nov. 15 (see Magnum Hunter’s Latest Woes: More Investor Unrest, $29M Payment Due). The statement also said in light of “ongoing discussions regarding its capital structure” they won’t issue a press release on third quarter financials, and they won’t hold a conference call with investors. Not a good sign. One analyst we read rhetorically asks, Does this mean they avoid bankruptcy? “The short answer is NO,” was his reply. He maintains “working on capital structure” means they are headed for a prepackaged bankruptcy. The only question is, when will it happen? Here’s the latest MHR statement in what (sadly) feels like a death watch…
    Read More “Magnum Hunter Refinances Again, Dodges a Bullet…Just Barely”

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    Rice Energy 3Q15: $59M Profit, $750M LOC, Selling Gas Outside NE

    Rice Energy, a very young but important pure play driller in the Marcellus/Utica, released its third quarter update yesterday. Bucking the trend of other northeast drillers, Rice earned $119 million in profit before interest, taxes and all that jazz (called EBITDAX), and they earned $59 million after all that jazz. In the black. No paper loss. It’s all good. One of the secrets to Rice’s success is that they’re selling their gas for an average of $0.38 higher per Mcf than others because of deals with the REX and Texas Eastern pipelines that carry Rice’s gas to markets outside of Appalachia. Production was 609 million cubic feet equivalent per day (Mmcfe/d) in 3Q15. The company reports expanding their line of credit at the bank to $750 million and transferring ownership (called a “drop down”) of their water services business from Rice Energy the driller to Rice Midstream the subsidiary, netting Rice Energy a nifty $200 million on paper. In essence they transferred money from one pocket to another. Here’s the full update from one of our favorite Marcellus/Utica drillers…
    Read More “Rice Energy 3Q15: $59M Profit, $750M LOC, Selling Gas Outside NE”

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    Gastar 3Q15: Production Up but Still Shopping Marcellus/Utica

    Yesterday Gastar Exploration, with active drilling programs in the Marcellus/Utica and in the Midcontinent region, issued their third quarter 2015 financial and operational update. What do we glean from it? The company lost $191.8 million for the quarter–but almost all of it was a paper loss and not actual money out the door (from writedowns). As we’ve previously noted (see Gastar Puts All Marcellus/Utica Assets (Leases/Wells) Up for Sale), Gastar continues to shop their Marcellus/Utica assets and said as much in this update. Net production in the northeast rose in 3Q15–8,000 barrels of oil equivalent per day, or Boe/d in 3Q15 vs 5,300 Boe/d in 3Q14. They didn’t drill a single new well in 3Q15 nor will they drill any in 4Q15 and for the foreseeable future. They’re trying to sell it…
    Read More “Gastar 3Q15: Production Up but Still Shopping Marcellus/Utica”

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    Carrizo O&G 3Q15: No New Drilling in the Utica/Marcellus

    Carrizo Oil & Gas, a Houston-based driller, issued their third quarter 2015 financial and operational update on Wednesday. Carrizo actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Utica Shale in Ohio, the Niobrara Formation in Colorado, and the Marcellus Shale in Pennsylvania. Carrizo reports losing $708.8 million in 3Q15, but like other drillers, it was a paper loss–a requirement to reevaluate and write down the value of their holdings based on low oil and gas prices. According to the update, Carrizo didn’t drill or complete any new wells in the Utica or Marcellus during 3Q15, nor do they plan to any time soon. They’re concentrating their time and effort in oil plays like the Eagle Ford. Below are select portions of yesterday’s update applicable to the Utica/Marcellus…
    Read More “Carrizo O&G 3Q15: No New Drilling in the Utica/Marcellus”

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    Spectra Energy 3Q15: Pipeline Project Updates, $20B+ in Development

    On Wednesday, Spectra Energy, a large midstream (pipeline) company released its third quarter 2015 update. The interesting part for us is an update on their various pipeline projects in the northeast–projects that will haul Marcellus and Utica Shale gas out of the region to other markets. It’s noteworthy that Spectra Energy made $243 million in 3Q15, down just a hair from 3Q14’s $254 million. Also noteworthy: the first segment of Spectra’s OPEN project (Ohio Pipeline Energy Work) was placed into service six weeks early. Here’s selected sections from Spectra’s 3Q15 update…
    Read More “Spectra Energy 3Q15: Pipeline Project Updates, $20B+ in Development”

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    NFG Update: Seneca Paper Loss, Production Shut-in; New Pipes Done

    National Fuel Gas Company, parent of driller Seneca Resources and also an important midstream (pipeline) company, issued their quarter update yesterday. We always have to explain this. NFG counts their quarters different. Everyone else counts July through September as a calendar year third quarter. For NFG, it was their fourth quarter fiscal year. The company had a big $188 million loss for their 4Q15, vs a $57 million gain in 4Q14. However, like many others, NFG’s was a “paper loss” and not an actual money-out-the-pocket loss. The decrease is largely due to a $241 million writedown of the value of Seneca’s oil and natural gas reserves. Other news: Seneca’s production was down in 4Q15 because they decided to voluntarily shut-in 13 billion cubic feet (Bcf) of production they otherwise could have sold–due to the low price of natural gas they receive in the Marcellus. Seneca’s proved reserves (available to drill) went up 27% for fiscal year 2015. On the pipeline front, as of Nov. 1 NFG put the Westside Expansion & Modernization and Tuscarora Lateral projects into service, and they’re close to completing the Northern Access 2015 expansion project, a joint project with Tennessee Gas Pipeline’s Niagara Expansion. Here’s the full update with plenty of interesting news for the Marcellus/Utica…
    Read More “NFG Update: Seneca Paper Loss, Production Shut-in; New Pipes Done”

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    Williams/Atlantic Sunrise Pipeline Award $375K in Local Grants

    MDN brings you updates on pipeline companies that spread around money with very worthy organizations in an attempt to show them they “care” (and to encourage adoption of their pipeline). We previously told you that Williams and their Atlantic Sunrise pipeline project had doled out $2.5 million to 17 conservation organizations in June (see More Pipeline Payola: Williams Doles Out $2.5M in PA Grants). What we had missed was prior to that, the Atlantic Sunrise project had issued $350,000 in grants to 49 first responders and other organizations back in April (list below). What made us go looking was news that Williams made a second round of grants, this time $375,000 to 43 organizations, just this week. Here’s the list of who got what from Williams and the Atlantic Sunrise pipeline project…
    Read More “Williams/Atlantic Sunrise Pipeline Award $375K in Local Grants”

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    Patterson-UTI Rig Counts Continue to Slide in October

    Since March MDN has been watching the active number of rigs operated by Patterson-UTI Energy as a proxy for whether or not we’ve “turned the corner” on falling rig counts in the Marcellus/Utica. Patterson is a major drilling contractor with operations in the Marcellus/Utica region. Month after the month it’s the same story: Patterson is operating less rigs in the U.S. than it was the month before. The numbers are now out for October. What do they show? We’ve hit a new low. Here’s a recap of the numbers rigs Patterson was operating in the U.S. over the past eight months: March – 142; April – 131; May – 122; June – 112; July – 111 (seemed like it was turning the corner! but it wasn’t); August – 106; September – 99; and now in October – 92. Kerplunk…
    Read More “Patterson-UTI Rig Counts Continue to Slide in October”

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    Southwestern Energy’s Stock Sees Spike Up in Short Selling

    From time to time MDN notices and highlights “short selling” stories. What’s short selling? In essence, it’s when traders borrow and sell a stock so they can turn around and buy it back at a lower price, returning it to the party they “borrowed” it from, making a tidy profit. It is a trader betting that a stock’s price will go down and not up (see our explanation here: “Short Selling” – An Important Signal for Marcellus-Related Companies). On average, short selling of stocks for all companies in all industries is typically 5-6% of trading volume. Recently, oil and gas stocks, as an industry, have seen an average of 12% short selling of their stocks. When a company’s stock sees a spike in short selling, it’s a signal that “the market” believes that stock price is heading lower, which can mean trouble for the company. Southwestern Energy is the latest Marcellus/Utica driller to see a spike up in short selling of its stock. How much?…
    Read More “Southwestern Energy’s Stock Sees Spike Up in Short Selling”

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    PA Gov. Wolf Lectures Dem Reporter: Yes I Can Govern, I Can I Can!

    Several weeks ago MDN highlighted a story that the stubborn, obstinate, in-over-his-head Pennsylvania Gov. Tom Wolf can’t govern. That was the title of an article running in Philadelphia Magazine: “No, Tom Wolf Can’t Govern Pennsylvania” (see our story PA Budget/Severance Tax Talks Resume Today – Without Gov. Wolf). Wolf refuses to compromise on a nosebleed shale severance tax, which has held up the state budget since the end of June. The man can’t compromise, and frankly, he can’t govern either. The Philly Magazine article had it right. Like a petulant child, first a Wolf spokesman and then Wolf himself phoned up that reporter to tell him to get his Democrat head screwed on straight and to quit telling the truth…
    Read More “PA Gov. Wolf Lectures Dem Reporter: Yes I Can Govern, I Can I Can!”

  • Marcellus & Utica Shale Story Links: Fri, Nov 6, 2015

    The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: management change at National Fuel Gas Co.; gas industry continues to push Philly as energy hub; natgas prices tick up; diesel’s low price stealing truck sales from natgas; what will a warm winter mean for gas prices?; and more!
    Read More “Marcellus & Utica Shale Story Links: Fri, Nov 6, 2015”

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    2 Anti-Drilling Dems Soundly Defeated in Mars School District Vote

    My Favorite MartianTwo anti-drilling parents who are agitating to strip away private property rights from their neighbors in Middlesex Township, PA–Amy Nassif and Patrice Tomcik–were soundly defeated in their run for the Mars School District board of education. MDN told you back in June that three Martians tried to get on the ballot, but only two made it (see Anti-Drilling Martians Running for School Board in November). The two Democrats who made it, Nassif and Tomcik, are part of an anti-drilling cabal attempting to stop the legally permitted Rex Energy from drilling several gas wells some 3/4 of a mile from the school on the false premise that by doing so they will endanger the kiddies. The other voters in the Mars School District have said “Enough!” with a very loud voice. It’s obvious there’s overwhelming support to move ahead with drilling. Unfortunately the matter is currently tied up in court (see Landowner Lawsuit Against Martians NOT Dismissed After All). Here’s the good news story that the Martian Democrats were soundly defeated in Tuesday’s election…
    Read More “2 Anti-Drilling Dems Soundly Defeated in Mars School District Vote”

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    4 Antis Opposing NY LPG Storage Facility Lose Big in Local Election

    Today’s lead story on MDN is about the defeat of two anti-drilling Martians in Tuesday’s election–but this story is a close second in importance. Since 2010 a debate has ragged in Schuyler County, NY over whether or not to allow then-Inergy, now-Crestwood Midstream, to convert a depleted salt cavern along the shore of Seneca Lake into underground storage for LPG–liquefied petroleum gas (i.e. propane). We’ve covered the story extensively on MDN over the years. The current status is that an administrative law judge is reviewing the plan, but ultimately the head of the state’s Dept. of Environmental Conservation (DEC) will grant a final decision on whether or not to allow the plan to move forward. Unfortunately the DEC is mired in politics–controlled by Gov. Andrew Cuomo who is in turned influenced by his lunatic left wingnuts. Over the years some of those wingnuts like Sandra Steingraber, so-called “scholar in residence” at Ithaca College (paid to do nothing but trot around lying about fracking), and Josh Fox of Gasland fame have protested and gotten themselves arrested at the facility during publicity stunts. Antis need a forum to vent and they can’t get themselves arrested every day (that gets old), so they turned to the local town board (Town of Reading) where the LPG plant would be located. Board meeting after board meeting they bleated and blatted about the facility–to the point the board has forbidden any more discussion of the issue. So the antis mounted a challenge to the local town supervisor, two town board seats and the town clerk. In Tuesday’s election, all four antis running for those seats went down to a HUGE defeat. Wasn’t even close. Which is noteworthy, and heartening, that in our beloved overtaxed, over-regulated, over-liberal New York State there are still clear-headed people who see through the lies and smears of the antis. Here’s the story of their defeat, and why Reading is so important in this debate…
    Read More “4 Antis Opposing NY LPG Storage Facility Lose Big in Local Election”

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    Former MarkWest Energy CEO Urges Vote Against Marathon Buyout

    What’s this? All is not butterflies, unicorns and kisses in the Marathon Petroleum takeover of MarkWest Energy. It was only a little over three months ago that MarkWest announced it was selling itself to Marathon (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). Since that time both companies have been in a hurry to get the deal done. Last week Marathon told investors the deal will be done by the end of this year (see Marathon 3Q15: Closing on MarkWest Merger “Later this Year”). And just last Friday MarkWest told unitholder (equivalent of stockholders) to hurry up and vote (see MarkWest Tells Unitholders Time to Sign Proxy for Marathon Sale). However, one of the biggest single shareholder in MarkWest, the co-founder of the company and former CEO, John Fox, is telling MarkWest in an open letter that they’re nuts for selling…
    Read More “Former MarkWest Energy CEO Urges Vote Against Marathon Buyout”

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    MarkWest 3Q15: $49M Profit, Expansions Continue, Buyout on Track

    MarkWest Energy, which is selling itself to Marathon Petroleum (a move opposed by it’s co-founder, see today’s related story) issued their third quarter 2015 financial and operational update yesterday. On the financial side the company made quite a bit less money in 3Q15 than it did in 3Q14–$49.2 million vs $86 million–but the fact remains it made money. It didn’t lose money as so many other companies in the Marcellus/Utica region did during 3Q15. That’s a big success in our book! On the operational side, MarkWest started up the Sherwood IV processing plant in Doddridge County, WV during the last three months. There’s more expansion coming to the Sherwood facility later this year. MarkWest also signed a huge deal with Ascent Resources (formerly American Energy, Aubrey McClendon’s company) to build a dry gas gathering pipeline system on 100,000 acres of Utica Shale land in Belmont and Jefferson counties in Ohio. And yes, they also mention the Marathon buyout deal too…
    Read More “MarkWest 3Q15: $49M Profit, Expansions Continue, Buyout on Track”

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    NEPA State Senator Introduces Bill to Regulate Rural Pipelines

    A northeastern Pennsylvania State Senator, Lisa Baker, has introduced Senate Bill (SB) 1044 that would regulate thousands of miles of gathering pipelines (and compressor stations) that are currently not regulated in PA. The bill, introduced on Oct. 26 and co-sponsored by three other Republicans and two Democrats, is colloquially called the Rural Pennsylvania Pipeline Safety Act. The bill gives the Pennsylvania Public Utility Commission (PUC) the power to regulate rural pipeline operators. The Gas Processors Association is watching it closely and says they will be a part of its development going forward. Below we have a brief overview of the bill, along with a full copy as filed on Oct. 26…
    Read More “NEPA State Senator Introduces Bill to Regulate Rural Pipelines”