Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate
Halcon Resources, with with some 140,000 net acres in the Ohio Utica Shale, said in January they would not do any Utica drilling in 2015 (see Halcon Resources: Slashes Drilling Budget 50%, No Utica for 2015). In February on an analyst call, Halcon’s colorful CEO, Floyd Wilson, responded to a question from one of the analysts asking about the company’s Utica program by responding with a wisecrack (see Halcon CEO Floyd Wilson: “What’s the Utica?”). Halcon guessed wrong about the Utica and leased acreage in the northern part of the play where production is not as great. Also in February, Halcon appeared on David Fessler’s oil and gas company “death list” of companies that a debt ratio of 4 times or higher earnings (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Halcon issued a press release yesterday to say: (a) they’ve refinanced $1.02 billion worth of outstanding IOUs with a third lien, forced to pay 13% interest on notes that previously had interest rates ranging from 8.875% to 9.75%; and (b) Halcon has been put on notice by the New York Stock Exchange that because the company’s stock has slipped below $1 per share, they are in danger of being de-listed by the exchange. That is, Halcon’s stock will have to trade on the Pink Sheets as a penny stock unless they can, in the next few months, get the average per share price above $1 again…
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A potentially troubling development in Penn Township (Westmoreland County), PA. Apex Energy had a permit from the PA Dept. of Environmental Protection to drill a Marcellus Shale well in Penn Twp. An anti-drilling group called Protect PT filed a lawsuit against the town for allowing the well to be drilled with first requiring a full environmental impact statement (EIS)–something that drives up the cost of drilling a well. The town caved to pressure and withdrew permission to drill, so Apex also sued the town. A deal has been worked out. Apex will have to pay for and conduct an EIS, and then they will be allowed to drill. Other towns populated with anti-drillers are catching wind of it and eyeing it as a potential way to slow or stop drilling in their towns…
Welcome to Friday. It’s time for a brief tutorial on “short selling” or “going short” in the stock market. Even if you don’t participate in the stock market, you need to pay attention if you work for a Marcellus driller or other publicly traded company that sells to or is part of the industry. You also need to pay attention if you are leased with a Marcellus driller. A company’s stock price is key to the value of the company–something called its market capitalization. The more a company is worth (the more “market cap” it has) the more it can borrow when it needs to for things like drilling new wells. A bigger market cap also means a company can borrow money at a lower interest rate (more collateral/value, less risk). Let’s take a look at the recent market gyrations and how those gyrations have encouraged something called short selling of Marcellus-related stocks…
A hilarious “Boo! Scared Ya” report has just been issued by the brainiacs at Penn State that says Pennsylvanians are all going to fry by 2050 because of mythical man-made global warming. Never mind these are the same people who have made the same predictions going back 25 years (average temps haven’t gone up now for 18 years and counting). Never mind these are the same people who can’t predict the weather next week, let alone 35 years from now. We’re just supposed to believe them because they have letters after their names, supposedly indicating they’re smart. One person has fallen for this erroneous garbage: the PennFuture Secretary of the Dept. of Environmental Protection, John Quigley. Unfortunately Quigley has the power to make drillers’ lives miserable by enacting draconian regulations to control their activities because he believes in the fairy tale of global warming. That not only makes him stupid, it makes him dangerous…
In May, MDN told you the maddening news that the federal Environmental Protection Agency had, once again, illegally grabbed power not granted to them under the Constitution by redefining what are “waters of the United States” (see 
The idiotic governor of Hawaii, David Ige, recently signed legislation that will bankrupt his state down the road. Ige, with an irrational hatred of fossil fuels, including clean-burning natural gas, signed a bill in June that requires the state to use electricity derived 100% from so-called renewable sources by 2045–just 30 short years from now. This week Ige said that does not include the use of natural gas. Good luck with that. Germany is trying to transition to 100% renewable electricity and their electric rates are through the roof, stifling business and driving companies out of the country because they can’t afford to operate there. That’s the future for Hawaii. In particular Ige dissed LNG this week saying that even though it’s cheap and getting cheaper, “it is a fossil fuel.” There you have it. Fossil fuel prejudice on full display. We once coined the phrase “fracking derangement syndrome” or FDS for anti-drillers in the northeast. Seems to fit Gov. Ige too. Here’s the thing: the pen Ige used to sign the bill into law was made from and with the use of fossil fuels (plastics). His clothes? Made from plastic fibers, i.e. fossil fuels. The shoes on his feet? Partially made out of fossil fuels, and the energy used to make them came from fossil fuels. Same for the chair he sat in, the desk he used, the cameras snapping his picture, the car he drove to work, the materials used to build the governor’s mansion…all done with fossil fuels. It is IRRATIONAL to hate and restrict the use of fossil fuels because of an idiotic belief in man-made global warming. When will people like Gov. Ige wake up? His dangerous and twisted belief has just sentenced Hawaii to become little more than a third world country economically. Hopefully a future governor will reverse course…
A coalition of Big Green environmental groups, with seemingly endless piles of cash to launch frivolous lawsuits, are launching another “sue and settle” lawsuit against the federal Environmental Protection Agency (EPA). The usual suspects are involved: Environmental Integrity Project, Natural Resources Defense Council, Earthworks, Responsible Drilling Alliance, San Juan Citizens Alliance, West Virginia Surface Owners’ Rights Organization, and the Center for Health, Environment and Justice. The Big Green groups are attempting to force the EPA to end the legal practice of wastewater disposal via injection wells, and drill cuttings disposal in landfills–largely in the Marcellus/Utica area. After all, much of the production of natural gas is in the northeast in the Marcellus/Utica, and the aim of these nutters is to end all fossil fuel production in the United States. So like a drive-by assassin, they load their litigation weapons and shoot, repeatedly, at our region. Enough. When will our side shoot back? When will we launch lawsuit after lawsuit against these groups and de-fund them using their own methods against them?…
Natural gas production in the mighty Marcellus Shale has dipped over the past several months–for the first time ever. As MDN has previously reported, the U.S. Energy Information Administration’s (EIA) Drilling Production Report (DPR) in June was the first time the EIA predicted Marcellus production would fall, from June to July, from 16,522 million cubic feet per day (MMcf/d) to 16,494 MMcf/d (see 
Finally we know. In June Magnum Hunter Resources (MHR), majority owner of subsidiary pipeline company Eureka Hunter, said it was negotiating to sell all of its ownership of Eureka Hunter to an unnamed buyer for $600-$700 million (see 
Our favorite government agency, the U.S. Energy Information Administration (EIA), has just published an article in their Today in Energy online publication recapping what the August Drilling Productivity Report (DPR) showed: cumulative natural gas production from the country’s largest seven commercially active shale plays will decrease in September for the first time since the EIA began producing the DPR. As we already highlighted two weeks ago, the August DPR, which predicts production volumes for September, shows a decrease in production across all seven major shale plays, which includes both the Marcellus and the Utica (see 
It’s bad enough when anti-fossil fuel zealots gang up, like a pack of hyenas, to try and defeat a much-needed pipeline like Dominion’s Atlantic Coast Pipeline (see 
The Ben Franklin Shale Gas Innovation & Commercialization Center (SGICC), affiliated with the Pennsylvania Department of Community and Economic with a mission to accelerate technology breakthroughs related to shale gas in PA, has just released an updated report on shale wastewater treatment and disposal in PA. The report, titled “Shale Gas Development – Summary of Shale Gas Wastewater Treatment and Disposal In Pennsylvania 2014” (full copy below) finds that drillers in PA produced about 1.8 billion gallons of gas and oil wastewater in 2014–a figure largely unchanged since 2011. The study also finds the shale industry in PA is recycling 91% of the wastewater it produces. Interestingly, the updated report shows “produced water” (or brine, naturally occurring water from the depths) volumes far exceeded volumes for “frac fluid” (or the fluid originally pumped into the well when drilling and fracking). That’s a reversal from the data evaluated in 2011 when frac fluid represented the bulk of the wastewater stream…
A pipeline upgrade project in western Pennsylvania is making excellent progress. In February 2014 National Fuel Gas Company (NFG) filed an application with the Federal Energy Regulatory Commission (FERC) for the Line N West Side Expansion and Modernization Project in Washington, Allegheny, Beaver, Venango and Mercer Counties, PA. The project calls for building some 23 miles of new pipeline next to an existing NFG pipeline in Washington and Beaver counties, along with compressor station and other upgrades along other portions of the existing Line N pipeline. NFG previously signed Range Resources and NFG’s own subsidiary, Seneca Resources, as customers for an increase in capacity to flow an additional 175,000 decatherms per day, Dth/d (175 million cubic feet per day, MMcf/d). The extra capacity allows Range and Seneca to move of the Marcellus Shale gas they produce in western PA to market. Although construction is still underway, NFG has asked FERC to begin partial service now, two months ahead of schedule…
LogicFree Mahoning Valley (aka FrackFree Mahoning Valley) doesn’t like to bother with piddly things like, oh, the law. Who follows that? The law is only a useful tool when it favors their twisted viewpoint. When it doesn’t? Ignore it. Over the past several years FrackFree Mahoning Valley and their supporters have duped enough E! Entertainment viewers in Youngstown, OH to sign a petition putting a so-called home rule measure up for a vote four times (see 
In April MDN reported on a successful open season (time when new customers sign up) for the Michigan/Ohio Pipeline Expansion Project–a pipeline expansion project that will deliver “refined petroleum products” (things like gasoline, kerosene and heating oil) from Woodhaven and Detroit, Michigan, and from Toledo and Lima, Ohio, to destination points in both Ohio and Western Pennsylvania (see