Marcellus Drilling News

BP | Energy Companies | Industrywide Issues | M&A | Penn Virginia Corporation

BP Makes Offer to Buy Penn Virginia, Other Majors Interested Too
June 26, 2015June 26, 2015

Although headquartered in Radnor, Pennsylvania (near Philadelphia), Penn Virginia Corporation is an oil and gas driller (i.e. “producer”, i.e., E&P company) with only a small presence in the Marcellus Shale: 21,700 net acres with no drilled wells. They concentrate on oil drilling the Texas Eagle Ford Shale play. MDN told you in March that Democrat billionaire corporate raider George Soros, one of the most vile big money investors in the world who has repeatedly damaged not only corporations but entire country’s economies, had taken a 9.1% ownership position in Penn Virginia in order to force it to sell and was doing exactly that (see George Soros Finally Bullies Penn Virginia into Selling Itself). Since March all has been quiet, until yesterday when somebody leaked the rumor that oil and gas giant BP has made an offer to buy Penn Virginia, driving the stock price up over 20% at one point. However, another rumor says Penn Virginia rejected BP’s offer as too low and is holding out for more. In addition to BP, Exxon Mobil and Chevron are also said to be interested in buying Penn Virginia. All of this buyout talk is driving Penn Virginia’s stock price up, putting a big smile on George Soros’ face…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | Eureka Midstream

Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs
June 26, 2015June 26, 2015

On Monday, MDN told you that Magnum Hunter Resources (MHR) was having trouble scraping together $9.4 million to meet liquidity demands by creditors (see Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else). Today we report that one of MHR’s major investors has sold off millions of shares of the company’s stock (see Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock). There’s no ignoring that MHR, a mid-sized Marcellus/Utica driller, is a company in financial trouble. So perhaps it was not surprising that at yesterday’s closing day of the Hart Energy DUG East conference in Pittsburgh, MHR CEO Gary Evans announced that the company has a plan to rake in some big bucks. Number one, MHR has cut a deal to sell their Eureka Hunter pipeline subsidiary for $600-$700 million. Number two, Evans said MHR is working on two joint ventures for other companies to drill on or finance MHR’s drilling on MHR acreage in Ohio and West Virginia. The Ohio deal would bring in around $500 million, and the West Virginia deal around $100 million…
Read More “Magnum Hunter Cuts Deal to Sell Eureka Hunter & 2 New JVs”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock
June 26, 2015June 26, 2015

It’s not exactly penny stock level–yet–but Magnum Hunter Resources’ (MHR) stock price has been heading in that direction. A year ago MHR’s stock was trading at $8.31 per share. Yesterday it closed at $1.86 per share, down 78% in one year (see the chart below). MDN is not a “stock picking” site, although a number of investors from some of the world’s largest banks and investment firms do subscribe. We don’t often talk about the price of a company’s stock or who’s buying and selling a company’s stock–unless major investors (or management) is doing the buying or selling. A company’s stock price is a relative indicator of the company’s financial health. It’s no secret that the oil and gas industry’s “upstream” or drilling sector has been hard hit over the past 12 months and stock prices for companies in the sector have dropped. MHR is one of those stocks hard hit, not least of which because they owe a heck of lot more money than they’re making (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). So it caught our eye when we saw that one of MHR’s major stockholders, Relational Investors, dumped 6.3 million shares of MHR earlier this month–at a price of $1.29-$1.31 per share…
Read More “Magnum Hunter Investor Dumps 6.3 Million Shares of MHR Stock”
Accidents | Allegheny County | Energy Services | Industrywide Issues | Pennsylvania | Regulation | Sunoco Logistics | Washington County

PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling
June 26, 2015June 26, 2015

Although there’s been no publicly published notice, the Pennsylvania Dept. of Environmental Protection (DEP) has fined Sunoco Logistics for spilling non-toxic drilling mud (bentonite) at several locations when they were drilling for the Mariner East I pipeline. One of those instances was last September when Precision Pipeline, hired by Sunoco, was drilling under the Little Mingo Creek (see Mariner East Pipeline Drilling Spills Mud in Local Creek). Bentonite is non-toxic and used in products from shampoo to deodorant and toothpaste. It’s also used to lubricate the drill bit and carry drill cuttings out of the ground. While non-toxic, a whole lot of bentonite in the water can, of course, suffocate fish and cause problems for wildlife that happen to drink it. In March of this year, we noted that the DEP was telegraphing that they were about to assess a “significant” fine for the mud spills at Mingo Creek and a few other locations (see PA DEP: Sunoco Facing “Significant” Fine for Non-Toxic Mud Spills). The fine has been levied. The “significant” fine ended up being $95,000. Clipping Sunoco $95K, compared to the $8.9 million fine the DEP recently slapped on Range Resources for methane leaks, seems somewhat trivial and rather insignificant. Which is perhaps why the DEP hasn’t published, as they usually do, an official notice on their website about the fine…
Read More “PA DEP Fines Sunoco $95K for Mud Spills During Pipeline Drilling”
CNG/LNG | Exporting | Industrywide Issues

Downeast Plans to Begin Building ME LNG Export Facility in 2017
June 26, 2015June 26, 2015

In April MDN told you about a potential second East Coast LNG export terminal project that stands a good chance of getting built–in Maine of all places (see 2nd LNG Export Terminal for Marcellus Gas Advances – in Maine!). Downeast LNG, as the project is called, was originally planned to be an import-only facility. But last year, after getting preliminary approval for the import project from FERC, Downeast amended its application to become both an import AND export LNG terminal. And yes, it is Marcellus Shale gas they have in mind to export. We have progress to report: Downeast LNG has contracted with one of the world’s largest energy engineering and construction companies, CB&I, to design and build the facility when and if they get the necessary approvals. Downeast is hoping construction may begin as early as spring of 2017…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Partisan Gov Wolf Says He’ll Veto Any Budget Republicans Send Him
June 26, 2015June 26, 2015

Earlier this week Pennsylvania Gov. Tom Wolf’s budget and policy secretary, John Hanger, said this with regard to Republicans refusing to go along with Wolf’s Marcellus-killing severance tax: “Frankly, the Republican leadership is saying it’s our way or the highway” (see PA Republicans Say No Severance Tax in Budget Heading to Gov. Wolf). Yet yesterday top Democrat lawmakers let slip that when the Republicans send a budget to Wolf today or tomorrow, Wolf says he will automatically veto it–without having seen or read it. Tell us John, who’s really saying “my way or the highway” when it comes to the budget?…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Medina County | NEXUS Pipeline | Ohio | Pipelines | Regulation

Medina County, OH Antis Trot Out Home Rule Ballot Measure
June 26, 2015June 26, 2015

In February the Ohio Supreme Court, once and for all, struck down so-called “home rule” legislation passed by local municipalities where anti-drillers are able to convince enough citizens to vote for it (see OH Supreme Court Strikes Down Home Rule in Gas Drilling Case). When it comes to creating local laws and zoning ordinances that prohibit or otherwise try to control oil and gas drilling, Ohio state law stipulates only the State regulates it–not towns and villages and cities. That’s the law, and that’s the law the Supreme Court upheld. So along comes Sustainable Medina County, a group of virulent anti-fossil fuelers, with a new petition to put yet another so-called home rule “bill of rights” measure on the ballot in November, this time in an attempt to stop the NEXUS pipeline. What would you call this new initiative in light of the Supreme Court’s decision? We’d call it stark, raving mad…
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Hydraulic Fracturing | Industrywide Issues | Research

Northwestern U Prof Proposes Tweaks to Make Fracking Better
June 26, 2015June 26, 2015

A researcher at Northwestern University, Dr. Fengqi You, believes he has found a way to make fracking more environmentally friendly by making some tweaks in the way things are done. Dr. You says first you need to remove trucks from the equation and use pipelines to get water to and from fracking sites. Second, You says don’t drill all of the wells at once in the same place–spread it out over time to reduce the impact on the environment. Finally, You says to recycle frack wastewater instead of trucking it to injection wells. Do those things, says Dr. You, and fracking is A-OK. There doesn’t seem to be anything particularly earth-shattering or new in You’s research. Or did we miss something?…
Read More “Northwestern U Prof Proposes Tweaks to Make Fracking Better”
Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Statewide NY

NY Anti-Drillers’ Fracking Jiggery-Pokery Fools Venerable BBC
June 26, 2015June 26, 2015

In April 2014 MDN told you about a crackpot group of low-level elected officials in New York State calling themselves Elected Officials to Protect New York, formed to spread lies about fracking (see 800 NY Officials Work Against Constituents to Ban Fracking). Most of the “officials” are either former officials, or occupy offices low-level offices, one step above dog catcher. It’s a laughable group of hard-left socialists who feel like they need a cause to justify their pathetic existence. We’d pretty much forgotten about them, they’re so inconsequential. But then this group, which has apparently grown to 850 members, sent a letter signed by 10 of their members to a town in northern England–Lancashire–to extol the dangers of fracking. They warned Lancashire to not allow fracking or it will lead to the end of civilization as they know it. Or something like that. Anyway, the venerable BBC picked up on it and made quite a fuss about this group of “New York City” elected officials warning tiny Lancashire about fracking. As it turns out, the BBC was either hoodwinked or intentionally decided to misrepresent the group in nationally broadcast news about the letter. Breitbart’s UK operation exposed the whole thing and quite frankly, it had us laughing out loud…
Read More “NY Anti-Drillers’ Fracking Jiggery-Pokery Fools Venerable BBC”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jun 26, 2015
June 26, 2015June 26, 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: Fri, Jun 26, 2015”
Broome County | Hydraulic Fracturing | Industrywide Issues | New York | Pennsylvania | Research | Statewide PA

Syracuse U Prof to Defend Methane Migration Research (Sun. Night)
June 25, 2015June 25, 2015

The Joint Landowners Coalition of New York (JLCNY) and JLC United will air another live session of the Good News Table Talk Radio Show this Sunday, June 28 from 7-8 pm on WNBF Radio 1290 in Binghamton (listen online at: www.wnbf.com). Bob Williams, JLCNY Vice President and an environmental consultant with over 40 years experience, along with JLCNY board member Rob Rano, will interview and chat with acclaimed Syracuse University Earth Science professor, Dr. Donald I. Siegel. Dr. Siegel is the lead author of a Syracuse University study published earlier this year that found, after evaluating data from over 11,000 well water tests (34,000 samples) in Pennsylvania, that a water well’s proximity to fracking operations has no bearing on whether or not methane is found in that water well. In other words, fracking does not cause methane migration into water wells (see Syracuse U Study: Fracking Doesn’t Cause Methane in PA Water Wells). Radicalized environmentalists brook no dissent from their religious-like claims that fracking is the ultimate evil, so they immediately launched a smear campaign and personal attack against Dr. Siegel (see Syracuse Prof Targeted in Effort to Discredit Drilling Research). Tune in Sunday night to learn the truth–about water quality, methane migration, fracking fluids, and (yes) even about Dimock, PA…
Read More “Syracuse U Prof to Defend Methane Migration Research (Sun. Night)”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Republicans Say No Severance Tax in Budget Heading to Gov. Wolf
June 25, 2015June 25, 2015

Good news for Pennsylvanians. The PA legislature is moving forward with passing a budget bill that does not include a Marcellus-killing severance tax. The Gov. Tom Wolf administration has been obstinate and unyielding in their demand for a 17.3% severance tax (often mischaracterized by Wolf and the media as a “5%” severance tax). The Republicans in both the House and Senate have (amazingly) held firm in their position of no new severance tax since Marcellus drillers already pay an impact fee (i.e., a tax) equivalent to a 3.2% severance tax now. Wolf’s claim that his tax is 5% is a flat out, 100% lie. He bases the tax on the assumption that drillers will get $2.97 per thousand cubic feet when selling natural gas. In many places (especially the northeastern part of the state) drillers are getting less than half of that. The difference between what drillers actually get and what Wolf pretends they get, plus the “little extra” 4.7 cents per Mcf added to the “5%” tax, pushes the effective rate, according to the PA Independent Fiscal Office, to 17.3% (see PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%). Wolf’s chief budget negotiator, John Hanger, has stooped to a new low, even for him, by saying Republicans have put drillers ahead of PA’s school children. Hanger presumes the money EARNED by companies that risk their own capital somehow belongs to life’s TAKERS–teachers’ unions. The question now is, will Wolf sign the Republican budget that is about to land on his desk without the big increase in “education funding” he demands because he promised it to union members who voted him into office (i.e., political payola)…
Read More “PA Republicans Say No Severance Tax in Budget Heading to Gov. Wolf”
Energy Companies | Greene County (PA) | Pennsylvania | Rice Energy | Utica Shale

Rice Energy Exec: 90% of Utica Gas Will Come from 3-4 Counties
June 25, 2015June 25, 2015

An update on what Rice Energy is up to, from none other than Rice’s vice president in charge of exploration, Derek Rice. Derek said at yesterday’s Hart Energy DUG East conference in Pittsburgh that his company is, this week, finishing up work on a Utica Shale well in Greene County, PA. Derek admitted there’s differing opinions within the company about whether or not they should be drilling Utica wells in PA. He says the rock is great, they’re convinced of that. The “problem” is that it costs a heck of a lot more to drill a deep Utica well than it does a Marcellus well. If Rice can squeeze more costs out of drilling a Utica well, it will be profitable. He also said something very interesting about the geography of the Utica–that he believes 90% of the gas that will come out of the Utica play will come from just three or four counties…
Read More “Rice Energy Exec: 90% of Utica Gas Will Come from 3-4 Counties”
Allegheny County | CNX Resources | CONSOL Energy | Energy Companies | Pennsylvania | Utica Shale

CONSOL Energy May Add More Utica Wells to Pitt. Airport Project
June 25, 2015June 26, 2015

Correction: The information MDN used for this post was derived from an inaccurate news account that misstated CONSOL received a permit to drill one Utica well at the Pittsburgh Airport. That was factually incorrect. CONSOL has received no permits for a Utica well–only permits for Marcellus and Upper Devonian wells. If they pursue drilling Utica wells at the airport, they will likely need a new environmental impact study done first. Our thanks to CONSOL for contacting us to clarify.

From the “Hmmm, that’s interesting” department: Speaking at yesterday’s Hart Energy DUG East conference in Pittsburgh, CONSOL Energy vice president Craig Neal said the company is considering requesting a change in its drilling plan at the Pittsburgh International Airport. CONSOL, as you may recall, is in the midst of a multi-year program to drill 45 Marcellus Shale wells and a handful of ~~Utica and~~ Upper Devonian wells at the Pittsburgh Airport (see Sky is the Limit: CONSOL Begins Drilling at Pittsburgh Airport). The permits and plan call for ~~a single~~ no Utica Shale wells, but yesterday Neal said the company is mulling over the possibility of swapping out some of the Upper Devonian wells they had planned to drill on some pads with deeper Utica wells instead…
Read More “CONSOL Energy May Add More Utica Wells to Pitt. Airport Project”
Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties
June 25, 2015June 25, 2015

Last week MDN told you that a new royalty bill would be introduced in the Pennsylvania legislature to guarantee landowners get a minimum 12.5% royalty (see New Bill Pushes 12.5% Guaranteed Minimum Royalty for PA Landowners). The new bill, House Bill (HB) 1391 is, according to the bill’s main sponsor State Rep. Garth Everett, more narrowly focused than the previous bill introduced in 2013 (HB 1684). Gareth and a group of supporters from the PA chapter of the National Association of Royalty Owners gathered in the Capitol Rotunda in Harrisburg on Tuesday in a bill launch rally. We don’t (yet) have the language of the new bill, but we do have Everett’s description of what’s in the bill, a brief video interview of Everett from Tuesday’s launch rally, and a newspaper write-up from the event…
Read More “New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties”
Blue Racer Midstream | Energy Services | Industrywide Issues | Monroe County | Ohio | Pipelines | Processing Plants | Statewide OH

Blue Racer Brings OH Processing Plant Online, Continues to Expand
June 25, 2015June 25, 2015

Blue Racer Midstream, a joint venture between Caiman Energy II and Dominion, shared the good news yesterday that a second 200 million cubic feet per day (MMcf/d) cryogenic processing plant at its Berne Natural Gas Processing Complex in Monroe County, OH (known as Berne II, yes, they name these things) is now online and operating. Berne II doubles the processing capacity at the plant. Blue Racer also operates a processing AND fractionation complex in Natrium, WV. A 30-mile Y-grade (NGL) pipeline connects the two facilities so that Berne can send along its NGLs to Natrium for further processing. Fractionaters like those in Natrium separate NGLs into their component hydrocarbons, including ethane, butane, propane, etc. In addition to Berne II going online, Blue Racer gave us a general update on the expanding health of their operation: They have 14 long-term major Marcellus/Utica drilling customers; 650 miles of gathering pipelines in OH and WV with another 200 miles of new gathering lines under construction; and gathered volumes have doubled, and processed volumes have tripled in just the last year…
Read More “Blue Racer Brings OH Processing Plant Online, Continues to Expand”