Marcellus Drilling News

Dauphin County | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA DEP Sec. Quigley Defends DEP, Criticizes Patriot-News Series
October 30, 2015October 30, 2015

Wow. We didn’t think it possible. The PennFuture Secretary of the Pennsylvania Dept. of Environmental Protection (DEP), John Quigley himself, is sticking up for the honor and reputation of his agency. Last week the Democrat-run Harrisburg Patriot-News ran an attack series against shale energy. We told you about it by reprinting Tom Shepstone’s excellent critique (see Harrisburg Newspaper’s Attack Series on Marcellus Exposed). Tom followed it up with another excellent article with a clip of the vapid lead author’s Twitter feed showing her outright bias against not only shale in general, but against the DEP in particular (see Natural Gas Now, PennLive Shale Series: “Erin” Go Bragh?). Quigley had fully cooperated with the Patriot-News and lead series author Candy Woodall, and now feels betrayed and stabbed in the back (welcome to the club John). So Quigley wrote a response to the profoundly biased attack series–and wonder of wonders, the Democrat Patriot-News actually published his response! Here it is…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed”
October 30, 2015October 30, 2015

About 20 hippie retreads showed up in Harrisburg, PA on Wednesday to protest outside of the Dept. of Environmental Protection (DEP) regional office in Harrisburg to protest the fourth meeting of Gov. Tom Wolf’s Pipeline Infrastructure Taskforce. In May Gov. Wolf announced he was forming a taskforce to study and make recommendations on how the state can better work with (i.e. control) where local gathering pipelines are installed (see Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force). DEP Secretary John Quigley packed the task force with 42 members, most of them government employees (beholden to Wolf/Quigley for their jobs) as well as some from the “environmental” community and a few from the pipeline industry (see PA Gov Wolf Packs Pipeline Task Force with His Own Minions). The gang of 42 was meeting for the fourth time in an effort to complete a draft report by mid-November. Some of the best and brightest gathered outside, including THE Delaware Riverkeeper, Maya van Rossum, to protest. Quigley called the assembled antis “badly misinformed”…
Read More “PA DEP Sec. Quigley Calls Pipeline Protesters “Badly Misinformed””
Energy Companies | EXCO Resources

EXCO’s Top Mgmt Talks About Shutting in Production in Marcellus
October 30, 2015October 30, 2015

Earlier this week MDN brought you EXCO Resources’ third quarter update, with the news that they have a “strategic plan” to turn things around at the troubled company (see EXCO Resources 3Q15: $42M Loss, Plan to Turn Things Around). EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells. However, with natgas prices in the northeast the lowest in the country, EXCO is not drilling any new Marcellus wells save one appraisal well earlier this year. On Wednesday EXCO’s top management hosted a quarterly earnings call with analysts. We went fishing through the call transcript to find references to the Marcellus/Utica–to see if there was anything new in their thinking about the northeast. Here’s what we found…
Read More “EXCO’s Top Mgmt Talks About Shutting in Production in Marcellus”
Belmont County | Energy Services | Ethane | Industrywide Issues | Ohio | Processing Plants | PTT Global

French Co. Gets Contract for Key Components in Belmont Cracker
October 30, 2015October 30, 2015

Another piece of the puzzle slides into place with respect to the $5.7 billion ethane cracker project in Belmont County, OH planned by Thailand-based PTT Chemical and financial partner Marubeni Corp. from Japan (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). The quickly got serious when PTT’s CEO Supattanapong Punmeechaow visited the proposed site last month to announce they are spending the first $100 million on engineering work for the cracker plant over the next 9-12 months with two companies–Bechtel Enterprises and Fluor Corporation (see PTT Announces 2 Contractors Working on Belmont Cracker Plant). The project is truly taking on an international flavor. A third company has stepped forward to say they’ve now been contracted to design and build the furnaces and other key components of the cracker. That company is the Paris, France-based Technip. Below is their announcement with details about what, exactly, they will provide for the project…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Research

Anti Groups Try to Convince EPA They Got it Wrong with Water Study
October 30, 2015October 30, 2015

Hoping to get one more squeeze and a few more drops of juice out of news that’s now years old, the odious Earthworks and equally odious Food & Water Watch organized a protest rally in Washington, D.C. on Wednesday and trotted out the same old tired, lying anti-drillers from Dimock, PA, Pavillion, WY and Parker County, TX to “demand” that the federal Environmental Protection Agency (EPA) simply dump the findings of their four-year study that concluded fracking doesn’t pollute water supplies (see EPA Draft Report Says Fracking Doesn’t Pollute Groundwater Supplies). Anti-fossil fuel organizations like Earthworks and FWW about had a conniption fit when the EPA announced that after turning over every stone, pebble and spec of sand, they couldn’t find proof that fracking contaminates groundwater supplies. So the only thing they could do was to condemn the EPA. But therein lies the problem–because the EPA colludes with these same groups on sue-and-settle court cases all the time. They’re friends. They’re buddies. So falling out with the EPA leads to being conflicted. The planets are not properly aligned. How to resolve it? Convince the EPA with protests and pressure that they were wrong. They did it wrong. They ignored some of their own research and reseachers and came to the wrong conclusion. “Just admit you were wrong and everything will be OK. We’ll forgive you.” That’s what the “rally” was about on Wednesday in DC…
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Energy Services | Industrywide Issues | M&A | Marathon Petroleum | MarkWest Energy

Marathon 3Q15: Closing on MarkWest Merger “Later this Year”
October 30, 2015October 30, 2015

Below is the third quarter 2015 update from Marathon Petroleum Corporation (MPC). Headquartered in Findlay, OH, MPC is the nation’s fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Increasingly the oil that MPC refines comes from the Marcellus/Utica. You may recall that MPC is in the process of buying MarkWest Energy for $20 billion, arguably *the* premier midstream company operating in the Marcellus/Utica region (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). In their 3Q15 update, MPC says they hope to close on the MarkWest buyout “later this year.” That’s the primary reason to bring you MPC’s update. The secondary reason to bring you the update is because MPC owns the Speedway convenience store chain spanning 22 states. Speedway (at least some of them) used to be called Hess. MPC purchased the Hess gas stations/convenience stores from Hess last year this time for $2.8 billion (see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Has your local Hess station been renamed to Speedway yet? Ours have in upstate New York…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Oct 30, 2015
October 30, 2015October 30, 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’s outlook dimming with low gas price; EQT’s stock drop; 50 cranes arriving to build Cove Point LNG terminal; PA DEP feels pinch from lack of budget; surplus gas equals low prices this winter; Halcon keeps $850M line of credit; companies trading big offshore projects for smaller onshore shale projects; Shell scaling back in North America; fracking causes firewood prices to spike is ‘nonsense’; and more!
Read More “Marcellus & Utica Shale Story Links: Fri, Oct 30, 2015”
Chesapeake Energy | Commodity Price | Crude Oil | Energy Companies | Industrywide Issues

Chesapeake’s Doug Lawler Talks About ‘Frightening’ NatGas Prices
October 29, 2015October 29, 2015

Doug “the ax” Lawler, CEO of Chesapeake Energy, was the keynote speaker on Tuesday at the Louisiana Gulf Coast Oil Exposition (LAGCOE). Lawler became CEO after corporate raiders Mason Hawkins and Carl Icahn, the two biggest investors in Chesapeake, forced Aubrey McClendon out–out of the company he co-founded. That’s what happens when you take other people’s money. You lose control. Lawler embarked on massive layoffs and selling everything but the kitchen sink. How’s it worked out? Lawler claims the company now has $1.5 billion in cash, giving them some breathing room. Lawler had some very interesting comments at LAGCOE on the price of natural gas–where he sees it going over the next five years, and at what price his company (and other companies) can’t make money. Lawler also talked about the price of oil, oil production and Saudi Arabia’s rather bizarre behavior with respect to oil production…
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Electrical Generation | Energy Services | Industrywide Issues | Panda Power Funds | Pennsylvania | Snyder County

Update on Panda Power’s Huge Marcellus-Powered PA Electric Plant
October 29, 2015October 29, 2015

Panda Power’s Rendering of New Hummel Plant – click image for larger version

In February MDN told you that Panda Power Funds, a private equity firm located in Dallas, TX already committed to building two 829-megawatt electric generating plants in Pennsylvania, was partnering with Sunbury Generation to build a whopping 1,000-megawatt plant on the site of a recently retired coal-fired plant near Shamokin Dam in Snyder County, PA (see Panda Power Building 3rd Marcellus-Fired Electric Plant in PA). It is, by all accounts, one of the largest coal-to-gas conversion projects in the country. Yesterday Panda released more details about the project. It will actually be 1,124 megawatts. Panda has contracted with Bechtel and Siemens Energy to build the plant, which, when up and running, will provide enough electricity to power 1 million homes. Here’s the latest on Panda’s “Hummel Station” project that will be fed by Marcellus Shale gas, including the tech being used to build it…
Read More “Update on Panda Power’s Huge Marcellus-Powered PA Electric Plant”
Coterra Energy (Cabot O&G) | Energy Companies | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Susquehanna County | UGI Energy Services | Wyoming County (PA)

UGI Completes Auburn Loop Pipeline in NEPA, Benefits Cabot O&G
October 29, 2015October 29, 2015

Way back in May 2014 MDN told you that UGI Energy Services, a subsidiary of UGI (a utility company in northeast PA) would build two new pipelines in northeast PA for $80 million that will allow them to transport cheap, abundant, locally extracted natural gas from Cabot Oil & Gas in Susquehanna County to residents in the greater Scranton/Wilkes-Barre area (see UGI Energy Building 2 New Pipelines in NEPA for Cabot O&G). One of those two projects was completed last November (see UGI Turns on New Pipeline for Cabot in NEPA). Earlier this week UGI completed the second project, called the Auburn Loop–9 miles of new pipeline that parallels existing pipeline and, along with compressor upgrades, allows UGI to pump an additional 270 million cubic feet per day (Mmcf/d) of Marcellus Shale gas from Susquehanna County, PA to the Scranton area…
Read More “UGI Completes Auburn Loop Pipeline in NEPA, Benefits Cabot O&G”
Energy Companies | Range Resources Corp

Range Resources 3Q15: Marcellus Prod Up 27%, but $301M Net Loss
October 29, 2015October 29, 2015

Range Resources, the driller that started it all in the Marcellus when they drilled the very first Marcellus Shale well in 2004, released their third quarter 2015 update yesterday. There is a LOT in this very readable and informative update. For example: Marcellus production volumes averaged 1.3 billion cubic feet equivalent per day (Bcfe/d) in 3Q15, an increase of 27% over 3Q14. During the quarter Range brought online their second Utica well drilled in Washington County, PA–the Claysville Sportsman’s Unit 9H. By all accounts Range expects it will be even more productive than the first Utica well they drilled (also in Washington County). A third Utica well is being drilled now and will be completed in early 2016. Range drilled a total of 25 wells in 3Q15, and brought 31 wells online. They are on target to spend $870 million on drilling in 2015–most of it in the Marcellus/Utica. Range reports the Mariner East 1 pipeline will be, according to Sunoco Logistics, fully operational by the end of the year–with ethane beginning to flow “within the next month.” Costs are down and Range gets more than many others for the gas and NGLs they sell. But amidst all of the good news, you can’t miss the fact that they lost $301 million in 3Q15…
Read More “Range Resources 3Q15: Marcellus Prod Up 27%, but $301M Net Loss”
Energy Companies | Range Resources Corp

Range Resources Oct 2015 Investor Slide Presentation, Our Favs
October 29, 2015October 29, 2015

Along with releasing their third quarter update yesterday, Range Resources also released an updated investor PowerPoint presentation. There’s a lot of interesting slides in the deck, and we didn’t want it to get lost with the other Range news in their update, so we’re bringing you this second, separate post. Below we have the presentation embedded, along with a listing of our favorite slides and brief description of what they show/why the slides are notable…
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Antero Resources | Energy Companies

Antero Resources 3Q15: Bucks the Trend, $237M in the Black!
October 29, 2015October 29, 2015

Antero Resources, perhaps the largest driller completely focused on the Marcellus/Utica (by acreage), is also one of the few drillers that separates their operational updates from financial updates. Two weeks ago Antero published their third quarter 2015 operational update–the “good news” if you will (see Antero 3Q15 Operational Update: Production Up 39%, Gets $3.99/Mcf). There was, justifiably, plenty to crow about in their operational update. With yesterday’s financial update, this is normally where you might expect to the see “the bad news.” So far every driller we’ve covered lost money in 3Q15. But not, it seems, Antero! They made money in 3Q15. If we’re reading the financials correctly, it looks to us like Antero’s net revenue was $237 million in 3Q15. While net revenue is down slightly from 3Q14, Antero stayed in the black, which is no small feat. How did they do it? Some of it may be accounting maneuvers–selling their water business to their midstream subsidiary for $794 million. However, it appears Antero’s ace in the hole was their ability to hedge and get more money for their gas than others (an average of $3.99/Mcf). Antero’s production increased dramatically in 3Q15 over the previous year–up 39%. And they got more money for their gas. And they didn’t spend as much money in 3Q15, scaling back on their drilling budget. Combine it all together and it’s big news indeed that Antero did well financially in 3Q15. Perhaps the only dark cloud (a seriously dark cloud) is that the company continues to swim in debt. Antero’s debt increased from $4 billion to $4.5 billion in 3Q15 (the company’s stock is only worth $5.7 billion)…
Read More “Antero Resources 3Q15: Bucks the Trend, $237M in the Black!”
Antero Resources | Energy Companies

Antero Resources Nov 2015 Investor Slide Presentation, Our Favs
October 29, 2015October 29, 2015

Along with releasing their third quarter financial update yesterday, Antero Resources also released an updated investor PowerPoint presentation. There’s a lot of interesting slides in the deck, and we didn’t want it to get lost with the other (big) Antero news in their update, so we’re bringing you this second, separate post. Below we have the presentation embedded, along with a listing of our favorite slides and brief description of what they show/why the slides are notable…
Read More “Antero Resources Nov 2015 Investor Slide Presentation, Our Favs”
Energy Services | Williams

Williams Partners 3Q15: Revenue Up 21%, but Paper Loss of $194M
October 29, 2015October 29, 2015

Williams Partners issued their third quarter 2015 earnings and operating update yesterday. Williams, you may recall, is in the process of being taken over (bought out, merged, whatever you want to call it) by Energy Transfer Equity, the same company that owns Sunoco Logistics and Regency Energy (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Perhaps one reason Williams decided to accept ETE’s offer is that although revenue was up $193 million (21%) in 3Q15 over 3Q14, the company lost $194 million in 3Q15, vs making $233 million in 3Q14. To be fair, the “loss” was a paper loss–mostly due to accounting machinations whereby the value of some assets was lowered. Below are some of the financials, and much of the narrative, which includes a great deal about the Marcellus/Utica were Williams has a huge presence…
Read More “Williams Partners 3Q15: Revenue Up 21%, but Paper Loss of $194M”
Energy Services | Seventy Seven Energy

Seventy Seven Energy 3Q15: Still Losing Money, But Not as Much
October 29, 2015October 29, 2015

Seventy Seven Energy (SSE), an oilfield services company with major operations in the northeast, is the old Chesapeake Oilfield Operating division of Chesapeake–spun off into its own company on July 1, 2014 (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). Every quarter we bring you SSE’s financial and operational update, and every quarter seems like the news gets worse. In 1Q15 SSE lost $37.6 million. Last quarter they lost $74.7 million. What about 3Q15? They lost again–$48.5 million. To be fair, they lost less money than they did last quarter, so there’s that. But the reason they lost less is because revenues are down 28% from 2Q15. They just aren’t drilling as much. Less work. Was there any good news? Not much, but perhaps this…
Read More “Seventy Seven Energy 3Q15: Still Losing Money, But Not as Much”