Marcellus Drilling News

Ascent Resources | Belmont County | Energy Companies | Energy Services | Industrywide Issues | Jefferson County (OH) | MarkWest Energy | Ohio | Pipelines | Utica Shale

MarkWest to Build $1B OH Utica Dry Gas Gathering System for Ascent
August 13, 2015August 13, 2015

Although it seems there is no end of bad news in drilling company financials right now, here’s a spot of good news: MarkWest Energy, the premier midstream/pipeline company in the Marcellus/Utica (selling itself to Marathon Petroleum), has just announced they are investing $1 billion over the next three years to install a new gathering pipeline system in eastern Ohio–particularly in Belmont and Jefferson counties–mostly for Ascent Resources. Ascent, backed by major investor EMG, was once Aubrey McClendon’s subsidiary company called American Energy Appalachia Holdings that has since broken free of McClendon and American Energy Partners and is now its own 100% standalone company. The MarkWest/Ascent deal is to build a 250-mile pipeline system in the Utica dry gas region that will gather more than 2 billion cubic feet per day (Bcf/d) of natural gas not only from Ascent, but also from other producers in the area. Here’s the details from MarkWest…
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Anti-Drilling/Fossil Fuel | Crime | Industrywide Issues | Pennsylvania | Statewide PA

AG Kathleen Kane’s Defense: Dirty Old Men are Out to Get Me!
August 13, 2015August 13, 2015

On Monday MDN told you that Kathleen Kane, Pennsylvania’s anti-drilling Attorney General, had been arrested and fingerprinted on a felony charge of perjury, plus various misdemeanor charges (see PA’s Anti-Drilling AG Kathleen Kane Arrested, Fingerprinted). We told you the charges against Kane have nothing to do with the Marcellus industry that she so zealously persecutes, but we’ll be darned if the Marcellus, in a roundabout way, hasn’t crept into this ongoing saga. Yesterday Kane held a press conference where she a) avoided responding to or commenting on the very serious charges against her, and b) instead claimed people are out to get her because of a case her office prosecuted last year in which she found, in going over old emails from before she took office, that some state employees swapped pornographic emails using government computers. That case that led to the resignation of a state Supreme Court judge and also the resignation of then-Secretary of the Dept. of Environmental Protection Chris Abruzzo (see PA DEP Sec. Chris Abruzzo Resigns Following Porn Email Scandal). Abruzzo was liked by the Marcellus industry. Kane’s performance yesterday was, frankly, sad and somewhat bizarre. It appears the pressure is causing her to self-destruct right before our eyes. Her “defense” was not a denial that she leaked privileged information to a reporter in an act of revenge against a subordinate (something a grand jury indicted her for)–but that dirty old men are mad that she snooped through their emails, and now they’re out to get her. Kane’s solution? Release the “filthy” emails to distract everyone from her own crimes…
Read More “AG Kathleen Kane’s Defense: Dirty Old Men are Out to Get Me!”
Eclipse Resources | Energy Companies

Eclipse Resources 2Q15: Revenue Up, Bleeding Less than Last Year
August 13, 2015August 13, 2015

Eclipse Resources, a smaller but important Utica/Marcellus driller based in State College, PA (but mostly drilling in eastern Ohio) released an operational but not financial update at the end of July (see Eclipse Resources Releases Operations but not Financial Update). We noted at the time that typically the operations update is the “good news” and the financial update would likely be the “bad news.” Eclipse released their financial update yesterday and hey, contrary to other companies, the news is pretty good. Let’s get the bad news out of the way first: Yes, they lost money in second quarter 2015–$42.0 million. But the net loss was much less than 2Q14 when it was $112.6 million. The good news? Revenue was up 181% to $73.4 million (amidst a price collapse over the past year), net production was up 374% to 198.6 million cubic feet equivalent per day (MMcfe/d), and Eclipse increased their estimates of production for 2015 by another 5% over last year…
Read More “Eclipse Resources 2Q15: Revenue Up, Bleeding Less than Last Year”
Energy Companies | EXCO Resources

EXCO Resources #1 Stockholder and his “Distressing” Investment
August 13, 2015August 13, 2015

EXCO Resources, a sizable independent driller with operations in several shale plays including the Marcellus Shale, is a company in trouble. The price of EXCO’s stock has dropped 96% during the last 5 years, 71% since the beginning of this year, and 86% during the last 12 months. EXCO appeared on David Fessler’s “Death List” of oil and gas companies earlier this year (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In April, EXCO experienced a major shake-up and saw the installation of new leadership managing the company and new members on the board of directors (see Bluescape Pulls Strings Installs New CEO, COO at EXCO Resources). The numbers for second quarter weren’t so hot (see EXCO 2Q15: Marcellus Production Down 23%; Net Income Down 1,991%), and the New York Stock Exchange has put the company on notice their stock is about to be de-listed (see More Trouble for EXCO Resources – NYSE Threatens to De-List Stock). We ran across an interesting reference to who owns the most stock in EXCO. Turns out the #1 stockholder is Wilbur L. Ross, Jr., founder of private equity firm WL Ross & Co.–someone known for investing in “distressed” companies. How much EXCO stock does Ross own and how much value has that stock lost for Ross?…
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Energy Companies | Hilcorp Energy | Industrywide Issues | Lawrence County | Pennsylvania | Pipelines

Hilcorp Enclosing PA Compressor Station to Please the Neighbors
August 13, 2015August 13, 2015

Hilcorp Energy is doing the right thing in Lawrence County, PA. Back in June, MDN told you the story of residents living near a compressor station owned by Hilcorp in Mahoning Township, Lawrence County (see Tackling a Tough Issue: Compressor Stations Near Populated Areas). Residents living near the compressor station said the noise level is intolerable. It took a few months, but Hilcorp has agreed to build a new structure around the compressor station lined with special noise-deadening blankets that should take care of the problem. Kudos to Hilcorp for doing the right thing for the neighbors on Baird Road…
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Energy Services | Industrywide Issues | Litigation | NEXUS Pipeline | Ohio | Regulation | Summit County

Summit County, OH Judge Denies NEXUS Request to Survey Properties
August 13, 2015August 13, 2015

Last week NEXUS Pipeline filed court cases against landowners in Summit County to force them to allow NEXUS surveyors access to their property (see NEXUS Pipeline Files Lawsuits for Survey Access in Summit County). The City of Green and other municipalities have stirred up so much resentment against NEXUS that the pipeline company is forced to send armed security guards out with their surveyors, fearing for their safety (see NEXUS Pipeline Sends Armed Guards with Surveyors to Protect Them). Although NEXUS needs access to survey so they can complete their application with the Federal Energy Regulatory Commission, a Summit County judge yesterday denied the request by NEXUS, setting up a court battle in October…
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Electrical Generation | Industrywide Issues | Research

Moody’s: NatGas Will Trump Coal & Nuclear in PJM Electric Auction
August 13, 2015August 13, 2015

Increasingly the natural gas and electricity markets are becoming bosom buddies. Why? Because natural gas is displacing coal and even nuclear power as the preferred fuel to power electric generating plants. This is a profound change happening right now–important for you to understand as it will play a key role in new markets for Marcellus/Utica Shale gas now and into the future. Lesson #1: PJM Interconnection is a regional transmission organization (RTO) coordinating the movement of wholesale electricity in all or parts of 13 states and the District of Columbia (essentially Appalachia). PJM’s electric transmission grid covers all or parts of: Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. Electricity moving through those areas is coordinated by PJM–meaning new electric generating plants that get built, or existing plants that get upgraded/converted to burn other fuel sources, must go through a PJM approval process. From time to time PJM conducts capacity auctions to increase the amount of, and reliability of, electric supply for the grid. PJM is currently conducting such an auction, and according to a new research report from Moody’s Investors Service, coal and nuclear electric generating plants will likely lose out to natural gas-fired electric plants thanks to the low price of Marcellus Shale gas…
Read More “Moody’s: NatGas Will Trump Coal & Nuclear in PJM Electric Auction”
Electrical Generation | Industrywide Issues | Research

NatGas Gensets Market Worth $147B Over Next 10 Years
August 13, 2015August 13, 2015

Just when you think you’ve heard all of the various markets where natural gas is used, markets that will sop up the huge increase in supply we have, you hear of a new one. At least, it’s new to us. On MDN you’ve read many times about electric generating plants that burn natural gas to generate electricity (see our list of stories here). There is another, similar, market called natural gas gensets, or generator sets. Essentially gensets are smaller electric generating “plants”, from 15 kilowatts to 20 megawatts in size, used by homes, businesses and utility companies. Many times gensets are used as backup and standby generators (think backup generator at your local hospital where power interruption is literally a life or death situation). Navigant Research has just published a report that estimates the market for natural gas gensets will expand to $147 billion (yes, billion) over the next ten years. Looks like big backup generators are going natgas!…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Aug 13, 2015
August 13, 2015August 13, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
Read More “Marcellus & Utica Shale Story Links: Thu, Aug 13, 2015”
American Energy Partners | Ascent Resources | EMG | Energy Companies | Energy Services | Industrywide Issues | Litigation

Ascent Resources/EMG Sues Aubrey McClendon’s Law Firm for Fraud
August 12, 2015August 12, 2015

Everybody’s suing everybody. That about sums up the mess created (sadly) by none other than Aubrey McClendon. The subsidiary businesses that were once part of McClendon’s new company, American Energy Partners (AEP), continue to run away from Aubrey as fast as they can. On Monday, Ascent Resources, once called American Energy Appalachia Holdings but separated from the AEP mothership in June (see Big McClendon News: Sells 35K Utica Acres, Creates New Company), sued the law firm representing Aubrey in the “stolen data” case brought by Chesapeake Energy. Yes it’s complicated and it’s a mess. We’ll attempt to sort this all out so it’s understandable…
Read More “Ascent Resources/EMG Sues Aubrey McClendon’s Law Firm for Fraud”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Pike County | Research | Wayne County

William Penn/Delaware Riverkeeper $320K “Study” Slams Fracking
August 12, 2015August 12, 2015

If you’re a Big Green group, like THE Delaware Riverkeeper, you have millions of dollars to a) launch lawsuits against the natural gas industry, and b) buy yourself research studies that support your twisted viewpoints. It is the latter that happened yesterday. CNA, a not-for-profit organization once called the Center for Naval Analyses, sells itself to the highest bidder (the oldest profession in the world). Most recently they sold themselves to THE Delaware Riverkeeper (we certainly hope they used protection). CNA and THE Delaware Riverkeeper held a press briefing yesterday to release a “study” by CNA titled “The Potential Environmental Impacts of Fracking in the Delaware River Basin” (full copy below). What did the “researchers” at CNA, which is based in Arlington, VA just outside the DC orbit, find? If the moratorium is lifted and shale drilling is allowed in the Delaware River Basin–essentially Wayne and Pike counties in Pennsylvania–CNA says it will lead to “land cover disturbance” in “core forest areas”, extreme water withdrawals from poor little creeks and streams, nasty wastewater polluting everything, erosion everywhere, multiple compressor stations and untold ill health impacts for 75,000 people who live close to all of this mess. See what $320,444 (the actual cost of this study) can buy you? We hope it felt good for Riverkeeper…
Read More “William Penn/Delaware Riverkeeper $320K “Study” Slams Fracking”
Commodity Price | Energy Companies | EV Energy Partners | Industrywide Issues

EVEP’s John Walker: NatGas Demand & Prices Heading Higher in 2016
August 12, 2015August 12, 2015

EV Energy Partners (EVEP) is a master limited partnership, or MLP, which distributes profits to “unit holders” instead of plowing profits into more projects. They like to invest in mature, already drilled wells and pipeline companies–things that act like an annuity throwing off profit with very little risk. Over the years EVEP amassed a huge amount of acreage in Ohio–before the Utica was known–mostly for conventional (vertical only) wells. That acreage is held by production and can also be drilled for unconventional/Utica Shale wells. Since 2009 EVEP has been trying to sell some/most of their Utica acreage. Seems like every year we hear “this is the year” from EVEP. Will 2015 be that year? Possibly. EVEP Chairman John Walker, in wide-ranging remarks during a quarterly earnings analyst conference call on Monday hints that new deals are coming, both third party and “drop down” deals where they sell things to themselves on paper. Most interesting to MDN were Walker’s remarks that he believes demand for natural gas will begin to really take off in 2016, and along with it, prices will go higher (more demand than supply)…
Read More “EVEP’s John Walker: NatGas Demand & Prices Heading Higher in 2016”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Statewide PA

PennEast Pipeline Launches Public Relations Counteroffensive
August 12, 2015August 12, 2015

PennEast Pipeline, the $1 billion, 114-mile, 36-inch diameter pipeline that will deliver 1 billion cubic feet of natural gas per day from the Marcellus gas fields of northeastern Pennsylvania (in Luzerne County) to southeastern PA and New Jersey (terminating in Mercer County, NJ), continues to fight for its life. Lies are constantly spread in mainstream media about PennEast by Big Green groups like THE Delaware Riverkeeper and nutty Sierra Clubbers, and their smaller siblings including Stop the PennEast Pipeline and Berks Gas Truth. As we previously reported, one or more antis have crossed the line into criminal behavior (see FBI Investigates Death Threats Against PennEast Pipeline Workers). So PennEast continues to fight the lies and smears with its own public relations efforts, including a meeting with the editorial board of the reliably anti-drilling Wilkes-Barre Citizens’ Voice and the following article/letter issued yesterday by PennEast Chairman Peter Terranova…
Read More “PennEast Pipeline Launches Public Relations Counteroffensive”
Industrywide Issues | Research

August EIA DPR: NatGas Production Declines in All 7 Shale Plays
August 12, 2015August 12, 2015

The great slowdown in natural gas production continues in the United States. On Monday the U.S. Energy Information Administration (EIA) issued the latest monthly Drilling Productivity Report (DPR), predicting shale oil and gas production by shale play for the seven major commercially active plays in the U.S. For the first time since the EIA began issuing the DPR all seven plays show a month over month decrease in the amount of natural gas being produced. Last month the Utica Shale play stood alone as the only play that increased natgas volumes month over month (see July EIA DPR – Utica Stands Alone with Higher Natgas Production). This month, even the Utica has gone negative–dropping 3 million cubic feet per day (MMcf/d) in production over the previous month…
Read More “August EIA DPR: NatGas Production Declines in All 7 Shale Plays”
Electrical Generation | Industrywide Issues | Lancaster County | Pennsylvania

Lancaster Coal Burning Electric Plant Adding Marcellus NatGas
August 12, 2015August 12, 2015

We often hear about, and report on, new electric generating plants being built that will use Marcellus (or Utica) Shale gas. Panda Power, Invenergy and others are building plants around Pennsylvania to take advantage of cheap, abundant and clean-burning Marcellus Shale gas. What you don’t hear often, but is equally as important, are existing coal plants converting to burn natural gas. The “much-maligned” Brunner Island coal-fired power plant on the edge of Lancaster County, PA is one such plant. Brunner Island will keep its coal burning operation at the plant–for now. They are, however, spending $100 million to add natural gas burners to help drive the plant’s three electric generators. This is an accelerating trend with electric generating plants across the country, particularly in the northeast…
Read More “Lancaster Coal Burning Electric Plant Adding Marcellus NatGas”
Energy Services | Huntingdon County (PA) | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics | Washington County

Sunoco Files Eminent Domain Cases in PA Courts for Mariner East 2
August 12, 2015August 12, 2015

Two days ago MDN told you that Sunoco Logistics Partners had settled, out of court, cases in Harrison and Jefferson counties (Ohio) that will allow the company to build a pair of new pipelines called Mariner East 2 through the area (see Sunoco Settles Case with OH Landowners to Allow Mariner East 2). As we said at the time, Sunoco still faces stiff opposition in other places–particularly in Pennsylvania where the bulk of the pipeline will be built. And sure enough, a new article has popped up about Sunoco LP taking landowners in Washington and Huntingdon counties (PA) to court using eminent domain to gain access to their properties. The problem is, the issue of whether or not Mariner East is a public utility with the right to invoke eminent domain is still an unsettled issue and likely headed to the PA Supreme Court…
Read More “Sunoco Files Eminent Domain Cases in PA Courts for Mariner East 2”