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    Magnum Hunter’s #1 Stockholder Continues to Divest

    Last month MDN told you about one of Magnum Hunter Resources’ (MHR) major investors dumping 6.3 million shares of MHR stock (see Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock). We have new information and a much better understanding about that investor–Relational Investors. Relational is the hedge fund for a “kinder, gentler” corporate raider by the name of Ralph Witworth. In June Witworth and Relational owned 27.5 million shares of MHR stock. Today? 17.7 million shares–a 36% reduction in the past month. According to reports, Relational is not done yet. Relational is on the way to divesting ALL of their MHR stock holdings. But that’s not as ominous as it sounds. The reason Relational is divesting all MHR stock is because they are divesting all of their holdings in all stocks. Witworth has health issues (throat cancer) and Relational is divesting so it can relaunch under new management and, presumably, re-buy stocks in many of the positions they previously held. Will that include a re-purchase of MHR stock? Who knows. One thing is for sure, as we noted in our previous story in June, Relational is taking a bath by selling MHR at these super low prices. Another observation: with this much MHR stock coming on the market, prices for the stock will likely remain low for the foreseeable future…
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    Help Wanted: Warren Resources Launches Search for New CEO

    Warren Resources is a small, independent exploration and production company headquartered in New York City. Warren has ongoing drilling programs in California, Wyoming, and in the Pennsylvania Marcellus Shale. Warren’s Marcellus program is very small–they previously announced they would drill and complete two Marcellus wells in 2015 (see New Entrant in the Marcellus: Warren Resources Drilling 2 Wells in 2015). However, Warren has faced some serious challenges. Last December Warren’s CEO and Chairman of the Board, Philip Epstein, suddenly quit (see CEO of Warren Resources Quits, Replaced by Citrus Energy CEO). Since Epstein’s departure, Citrus Energy CEO Lance Peterson (a Warren board member) has taken the reigns as interim CEO. Now that the company has successfully “navigated the critical liquidity and debt issues,” they’re ready to find a new, permanent CEO. The search has begun…
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    Manhattan Institute Says Now is Time to Ramp Up Shale Production

    The New York-based Manhattan Institute, a non-profit think tank with a mission “to develop and disseminate new ideas that foster greater economic choice and individual responsibility” has just released a new report titled, “Step on the Gas! How to Extend America’s Energy Advantage” (full copy embedded below). The 20-page report says now is the time for the U.S. to press its advantage in shale energy. The report’s writer, senior fellow at the Manhattan Institute, Oren Cass, points out the cyclical nature of commodity prices for oil and gas and says even though prices are down now–they won’t stay that way. In order to take full advantage of the shale boom, Cass suggests 11 reforms to help craft a smarter U.S. energy policy–one that will amplify the current boom and extend it far into the future. At the top of the hit parade: allow domestic producers to export oil and gas, and streamline the process to let it happen more quickly…
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    Governors Assoc. Issues Recommendations on Water Usage in Fracking

    The National Governors Association (NGA) issued a 16-page report last Thursday encouraging governors and their states to adopt policies that encourage a) the use of less drinking water for fracking, and b) the use of more recycling of flowback water in fracking. The report, titled “State Practices to Protect Drinking Water While Developing Shale Energy” (full copy below), is the result of a a 35-member panel that met in March. The panel included gubernatorial advisers, state and federal regulators, professors, environmentalists and representatives of the oil and gas industry. We’ve had a look over the recommendations and frankly, there’s really nothing new in them that isn’t already either being done or in the process of being done. In addition to the study, MDN includes below some perspective on just how much drinking water gets used for fracking versus water used for other purposes…
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    Ben Franklin SGICC Technology Showcase Deadline is Friday, July 17

    Listen up supply chain companies with cool/new technologies aimed at the shale oil and gas marketplace. Is your technology ready for a field test? Looking for companies to invest to get get your big idea to market? We have an opportunity for you. The Ben Franklin Shale Gas Innovation & Commercialization Center, the same great folks who bring you the annual Shale Innovation Contest (see Winners of $100K for 2015 Shale Gas Innovation Contest Announced), are sponsoring a Technology Showcase once again at this fall’s Shale Insight 2015 Conference. Up to 10 companies will get a chance to make an 8-minute pitch followed by a 2-minute Q&A with the audience. The Technology Showcase has been the successful launching pad for a number of products that are now a commercial success. Below are the details on how to enter. But hurry! You must have your application submitted by this Friday, July 17…
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    Ohio EPA Issues Final Permit for Ashtabula GTL Plant

    In March the Ohio Environmental Protection Agency issued a draft permit to Ashtabula Energy that will allow the company to build a gas-to-liquids (GTL) plant converting Utica Shale gas into other products like diesel fuel (see OH EPA Issues Draft Lake Erie Discharge Permit for Ashtabula GTL Plant). The permit will allow the plant to discharge wastewater into Lake Erie (essentially freshwater used for cooling in the plant). After holding two public meetings and further consideration, the Ohio EPA has issued a final permit to Ashtabula–a sign that the project will now move forward. Just one teeny tiny problem that we can see. Ashtabula was bought out by Velocys GTL, the manufacturer of the equipment that will be used in the plant. Just over a week ago Velocys suspended its CEO for “possible serious misconduct” (see Velocys GTL Company Suspends CEO for Possible Serious Misconduct). So what does that mean for the future of the Ashtabula GTL project?…
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    Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum

    bigger fish smaller fishWhile all eyes have been on the possible hostile takeover of midstream giant Williams by another midstream giant, Energy Transfer Equity (see Williams Continues to Resist ET Offer, Talks with Other Suitors), another midstream (i.e. pipeline company) merger was quietly being arranged that has rocked the midstream world. Yesterday MarkWest Energy, with major operations in the Marcellus/Utica–MDN would call it the premier midstream company in the northeast–announced it is selling itself to Marathon Petroleum Corp.’s midstream division MPLX, a master limited partnership or MLP. The “merger” (i.e. sale of MarkWest to Marathon) will create the fourth largest MLP in the United States–worth $21 billion in market capitalization. MarkWest is twice the size of MPLX, which makes this an interesting story and truly big news for the Marcellus/Utica…
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    CONSOL Energy Swings the Ax Again – New Round of Layoffs

    In April MDN was the first source to break the news that CONSOL Energy was laying off nearly 5% of its workforce, including 170 lost jobs in its CNX gas division (see CONSOL Energy Lays Off Workers in CNX Gas Division in WV/PA). Barley three months later and CONSOL has swung the ax again. We don’t know how many layoffs there have been (CONSOL won’t say), but according to the Pittsburgh Business Times, a new round of layoffs has begun…
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    4th World Class Marcellus/Utica Ethane Cracker…in Louisiana??

    According to the The Intelligencer/Wheeling News-Register, yet another new ethane cracker project is being planned that will be fed by Marcellus and Utica Shale ethane. Currently there is one serious proposal that increasingly seems like it will happen (Shell’s cracker plant in Beaver County, PA), one somewhat serious proposal (joint venture between Korean company PTT Global Chemical and Japanese financier Marubeni for a plant in Belmont County, OH), and one not-so-serious proposal (Brazilian company Odebrecht building a plant near Parkersburg, WV). This would be the fourth “world class” ethane cracker plant to be fed by Marcellus/Utica ethane–if it gets built. And where would it be built? Louisiana. Which doesn’t create jobs or improve the economy in the Marcellus/Utica region–hence our less-than-enthusiastic response to the news. Atlanta-based Axiall Corporation is partnering with Korean company Lotte Chemical Corporation to potentially build a new ethane cracker in the Lake Charles, LA area. Anticipated start-up would be the end of 2018, if the project goes forward…
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    July EIA DPR – Utica Stands Alone with Higher Natgas Production

    MDN’s favorite government agency, the U.S. Energy Information Administration, published the latest monthly Drilling Productivity Report (DPR) yesterday. Once again, like the June report, this latest report shows that over the next month natural gas production (and oil production) from the country’s seven largest shale plays will decrease. Last month was a milestone/first: Marcellus Shale production slipped (see A Sad First: EIA’s June DPR Reports Marcellus Production Slips). That trend continued and accelerated in the July report (which forecasts production over the next 30 days). Last month Marcellus production decreased by 28 million cubic feet per day (Mmcf/d). This month? It will decrease by 41 Mmcf/d. Natgas production from all seven shale plays together will take their deepest dive yet–down 260 Mmcf/d from the previous month. However, to put it in perspective, that’s down just 6/10ths of one percent, or 0.6%. It’s hardly a bloodbath. There is one bright spot with respect to natural gas production. Utica Shale natgas production was, once again, higher in this month’s report than in last month’s report. Natgas production in the Utica was up 42 Mmcf/d in June, and up 22 Mmcf/d in July. The Utica is newer and contains natural gas liquids, typically making it more profitable to drill than the Marcellus. Also, a number of new pipelines already in the works have continued to come online in the Utica. For those two reasons the little Utica continues to rock on while all of the other shale plays, including the mighty Marcellus, tapper off…
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    WV DEP Study Finds Drilling Cuttings in Landfills are Safe

    In 2014 the West Virginia legislature enacted a law that requires the WV Dept. of Environmental Protection (WVDEP) to conduct a study of the impact from disposing drill cuttings and drilling waste (leftover rock and dirt) from natural gas well sites in landfills. Anti-drillers spin tales of glowing in the dark from irradiation and horrible, cancer-causing, death-inducing chemicals leaking from landfills that accept drill cuttings and drilling waste. So members of the WVDEP and a number of outside researchers from several WV universities worked on this important research project that would, once and for all, evaluate the risk from landfills that accept drill cuttings. In early July the WVDEP released the completed study (full copy below). There have been a precious few media reports about the findings from this momentous research project. Why? Because the study “found little concern” regarding leachate associated with “drill cuttings that were placed in approved and permitted landfills, once that leachate was processed through a correctly operated treatment facility.” That is, there is no issue with accepting drill cuttings in WV landfills–contrary to the blathering of anti-drillers…
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    ET Rover Spending $85M with 7 OH Companies to Help Build Pipeline

    One of the arguments often used to incite opposition to pipelines is “all of the pain, none of the gain”–as in landowners and other members of the community must put up with pipeline construction for a short period of time, and then live with a pipeline in the ground for decades, without seeing any real benefit. Except that argument is patently not true. Take the ET Rover pipeline project, for example. ET Rover is a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers and will cost $3.7 billion to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. Some 570 of the 711 miles of ET Rover will run through the state of Ohio. How do Ohioans benefit? First, the pipeline will generate $91 million in tax revenues for local schools–in it’s first year (see For the Children: ET Rover Pipeline $91M in School Taxes 1st Year). Second, it will mean cheaper natural gas all along the pipeline’s route. Third, Energy Transfer, the company building Rover, is investing a staggering $3.7 billion to build it. Do you know the kind of economic ripples that makes throughout an economy? For example, ET just announced a list of seven Ohio companies they are set and ready to spend $85 million with to help build the pipeline. Below is a list of those companies and the products/services they will provide to ET Rover. A few million dollars here and a few million dollars there adds up to company expansions, new jobs, more tax revenue for local communities–the good times just keep on a rollin’ thanks to a pipeline that “doesn’t benefit anyone” except a vile, nasty fossil fuel company…
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    Vantage Energy Cuts $30M Deal to Expand Water Plant in Greene Co.

    An interesting story from southwestern Pennsylvania. Vantage Energy has signed a $30 million deal with the Southwestern Pennsylvania Water Authority (SPWA) in Greene County to expand the SPWA’s water plant. The expansion will allow the plant to increase water deliveries from 9.2 million gallons per day to 16.1 million gallons. The expansion will also mean new water pipelines will be run to areas not previously covered by SPWA. Vantage will get access to water for its active drilling program in the county (they own 48,000 net acres in Greene County) along with some revenue from a surcharge that will be levied to other oil and gas drillers who want to purchase water from SPWA. The SPWA will get a major expansion and new pipelines to service residents in the county not currently served–along with a new revenue source in selling more water to drillers. The SPWA gets its water from the Monongahela River. Sounds like a good deal with winners all around–except last month Vantage Energy put itself up for sale (see Marcellus Driller Vantage Energy Puts Itself Up for Sale). So how does spending $30 million square with a company attempting to sell itself?…
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    Rex Energy Reshuffles the Top Management Deck after COO Departs

    A reshuffling of senior management has taken place at Rex Energy. The current president and chief operating officer (COO), Pat McKinney, is leaving the company “to pursue an opportunity in the investment banking industry.” Rex’s CEO, Tom Stabley, will assume the role of president and will henceforth become president & CEO. Robert Ovitz, senior vice president for operations at Rex since only last fall, will become the new COO. Ovitz previously worked for Noble Energy for 13 years and was the guy who established Noble’s presence in the Marcellus Shale in PA and WV…
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    Director of Philly’s Emergency Mgmt to Dela. Riverkeeper: Stuff It

    stuff itThe director of Philadelphia’s Office of Emergency Management, Samantha Phillips, has told anti-drilling zealots to (in our words) “stuff it” with respect to their demands to know the city’s emergency plans in case a trainload of oil derails in or near the city. Phillips will not disclose detailed emergency plans–rightly so–for fear that terrorists could potentially use the information should such a disaster ever occur. Of course public safety is the last thing on the minds of anti-drillers like those in THE Delaware Riverkeeper–a group attempting to incite unrest in Philly by sponsoring “scare them to death” rallies. Phillips is holding firm and will not release details to Riverkeeper to sleazily use in furthering their own twisted agenda…
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