Marcellus Drilling News

Commodity Price | Industrywide Issues | Research

Is Marcellus Production Heading for a Decline? EIA Says Yes
May 29, 2015May 29, 2015

A Reuters story is quoting analysis done by the U.S. Energy Information Administration (our favorite government agency) saying the EIA expects production in the Marcellus to remain flat for the next several years, and then begin a slow decline of 1% or so per year. The EIA prediction is based on the theory that natural gas prices in the Marcellus will remain really low–below $2 per thousand cubic feet (Mcf) through 2016, and the average price won’t hit $4/Mcf until 2020 or later. Private analysts (many of them) disagree and say production will continue to climb over the next several years as new pipelines come online and drillers “uncurtail” production that is idled right now. Who’s right?…
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Energy Services | MarkWest Energy

MarkWest Floats Another Round of IOUs–This Time for $1.2B
May 29, 2015May 29, 2015

Back in March, MarkWest Energy floated IOUs, otherwise called unsecured notes, and raised a cool $650 million in cash (see MarkWest Hauls in $650M Cash from New IOUs, Paying Down Old Debt). It worked so well the first time, MarkWest has decided to try it again. This time they’re floating IOUs looking to haul in a whopping $1.2 billion (with a “b”). MarkWest will use some of the proceeds from the new IOUs to pay off older IOUs. The new IOUs will be due and payable by MarkWest in 2025. Some of the new cash raised will no doubt go to finance MarkWest’s operations and expansion in the Marcellus/Utica…
Read More “MarkWest Floats Another Round of IOUs–This Time for $1.2B”
Energy Companies | Warren Resources

Warren Resources Converts Refinanced Debts into $200M Cash
May 29, 2015May 29, 2015

Warren Resources, an independent oil and gas company headquartered in New York City whose drilling is focused primarily in California but with a small operation in the Pennsylvania Marcellus Shale, has just refinanced $250 million worth of existing loans and notes and somehow has wound up with just over $200 million in cash as part of the process. How you can refinance loans and pull out that much cash we have no clue. If you understand the following financial machinations with its talk about first lien credit lines, second lien debt, incurrence tests, LIBOR floors and other financial mumbo jumbo, please enlighten us!…
Read More “Warren Resources Converts Refinanced Debts into $200M Cash”
Industrywide Issues | New York | Pipelines | Schuyler County | Statewide NY

Will Companies Continue Making Grants after Pipelines are Built?
May 29, 2015May 29, 2015

We love pipelines. We love the companies that build them. Pipelines are the safest form of transportation period–bar none. The thing we don’t love is how pipeline companies are buying support for their projects. We’ve written about it before (see Constitution Pipeline Payments to Groups – Donations or Payola?; PennEast Payola? Buying Support One Community at a Time; and Kinder Morgan Hops on the Pipeline Payola Bandwagon in NEPA). Our objection is not to these midstream companies making community grants–much needed funds for very worthy purposes. Our objection is to the timing of the grants. Rather than make the grants before all of the permits are granted and the work has begun, wait and make the grants after the work has begun–to prove you want to be a good neighbor. An article from Schoharie County, NY about the Constitution Pipeline’s payola caught our eye and sparked a question for us: Will the Constitution still be making these community grants, to prove they’re good neighbors, long after the pipeline is built?…
Read More “Will Companies Continue Making Grants after Pipelines are Built?”
Industrywide Issues | Noise | Pennsylvania | Regulation | Statewide PA

Who Ya Gonna Call? PA DEP (Noise) Ghostbusters!
May 29, 2015May 29, 2015

The Pennsylvania Dept. of Environmental Protection is wading into an area that’s likely best left to towns and municipalities: regulation of noise coming from Marcellus Shale drilling operations. The DEP wants drillers to craft a site-specific plan for noise mitigation for each and every well pad they drill. Problem is, the DEP won’t give drillers any standards against which to devise their plans. That is, the DEP isn’t willing to say “this loud is too loud at this distance from the drill site.” Drillers are understandably confused. How do you draw up a plan with no standards/no regulations? The DEP says noise is a funny thing–it can carry in one place but not another. They claim you can’t draw up hard and fast guidelines. One noise expert says trying to figure out the source of noise (and how to prevent it) is “sort of chasing ghosts”…
Read More “Who Ya Gonna Call? PA DEP (Noise) Ghostbusters!”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, May 29, 2015
May 29, 2015May 29, 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, May 29, 2015”
American Energy Partners | Energy Companies | Ohio | Statewide OH | Utica Shale

McClendon Running Out of Money?! Paloma Utica Deal Goes Bust
May 28, 2015May 28, 2015

In February 2014 MDN told you about a deal cut by wildcatter Aubrey McClendon to lease 130,000 acres in the Ohio Utica Shale, a deal with three different companies (see McClendon Confirms 3 New Utica Shale Deals: Hess, XTO, Paloma). At least one of those deals, with Paloma Resources, went bust this year. According to Paloma’s president, Christopher O’Sullivan, Aubrey didn’t have enough money to close the deal. Which makes us ask the question, is Aubrey running out of money to finance his massive expansion in the Utica?…
Read More “McClendon Running Out of Money?! Paloma Utica Deal Goes Bust”
Industrywide Issues | Pennsylvania | Research | Statewide PA | Wastewater

Research: Marcellus Frack Wastewater More Radioactive than Thought
May 28, 2015May 28, 2015

A study published in April reportedly concludes that fracking wastewater may be “more radioactive than researchers previously believed.” The study, titled “Understanding the Radioactive Ingrowth and Decay of Naturally Occurring Radioactive Materials in the Environment: An Analysis of Produced Fluids from the Marcellus Shale” (full copy below) was published in the peer reviewed journal Environmental Health Perspectives. In a nutshell, the study says previous looks at the “you’ll glow in the dark, you’re all getting irradiated” issue has only looked at the presence of radium in frack wastewater. The researchers say that in order to judge the true radioactivity of frack wastewater you need to consider the isotopes that radium and radon breaks down into hours, days, weeks, months and years later–especially in closed tanks. And when you do, the authors say the level of radiation people (and the environment) is exposed to goes much higher that previously thought. Is this the smoking gun? Here’s MDN’s layman’s perspective on this new study…
Read More “Research: Marcellus Frack Wastewater More Radioactive than Thought”
Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

Disaster on the Horizon: PA Gov Wolf Creates Pipeline Task Force
May 28, 2015May 28, 2015

Pennsylvania Gov. Tom Wolf has proven, once again, the job he was elected to do is just too big for him. He’s not up to the task. Gov. Wolf has just announced the creation of a “Task Force on Pipeline Infrastructure Development” that will add an additional layer of interference by anti-drilling “environmental organizations” on where pipelines can and (preferably, from their viewpoint) can’t be laid. The Task Force is supposedly an “unprecedented collaboration of stakeholders” from government, drillers, midstreamers, and anti-drillers (euphemistically referred to as environmentalists). A “can’t we all just get along” committee. And this Task Force will “recommend a series of best practices” for where/when/how gathering pipelines will get laid in the Keystone State. John Quigley, acting secretary of the Department of Environmental Protection (DEP) and former staffer at the anti-drilling PennFuture, will serve as chairman of the Task Force. God help us all…
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Energy Companies | Rex Energy

Hedge Fund Buys ~5 Million Shares of Rex Energy – 9% of Stock
May 28, 2015May 28, 2015

We’ve long written about, and have been fans of, a small driller by the name of Rex Energy. Rex has its headquarters in State College, PA and concentrates on just the Marcellus and Utica Shale region. Over the past year as prices have gone down for natural gas, Rex has sold off various subsidiaries and non-core holdings. The company now concentrates on drilling in just three counties–one in OH and two in PA (see Rex Energy to Sell Acreage in OH & PA, Focus on 3 Counties). Rex has had its financial struggles. In fact, in February it landed on David Fessler’s “Oil Company Death List,” an indication Rex’s debts may overwhelm its revenues (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). But Rex has soldiered on, trimming and cutting back. Yesterday we told you Rex announced a new addition to the board of directors (see Unusual Move: Rex Energy Adds Analyst to its Board of Directors). Seems like a good fit. But we asked the question, is something more at work here than just adding a new expert to the team? We have no proof of a connection, but not long ago a private investment hedge fund run by Zac Hirzel–Hirzel Capital Management–filed a Form 13G with the Securities and Exchange Commission to declare the fund has purchased nearly 5 million shares of Rex–or 9% of all outstanding shares…
Read More “Hedge Fund Buys ~5 Million Shares of Rex Energy – 9% of Stock”
Industrywide Issues | Regulation

EPA Power Grab: Redefines Waters of the U.S. to Include Everything
May 28, 2015May 28, 2015

The Obama Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act. Unfortunately (but typically) the Obama EPA once again did a power grab and has redefined just about everything but mud puddles as WOTUS and subject to regulation by the EPA. It is, in our opinion, an illegal power grab that must be vigorously opposed by Congress and the courts–to push the EPA back into it’s mansion (they long ago stopped inhabiting a mere box). This new rule is a direct assault on not only the oil and gas industry, but also farmers, ranchers and frankly all landowners with creeks, swamps and ponds (and no, we’re not exaggerating)…
Read More “EPA Power Grab: Redefines Waters of the U.S. to Include Everything”
Air Quality | Electrical Generation | Industrywide Issues | Lackawanna County | Pennsylvania | Regulation

Newspaper Admits PA Gas-Powered Electric Plant Will Pollute Less
May 28, 2015May 28, 2015

The world has gone topsy turvy. The anti-drilling Scranton Times-Tribune, normally a purveyor of half-truths when it comes to shale drilling, pipelines and the Marcellus Shale in general, has a story that grudgingly admits that no, a planned electric generating plant in Jessup, PA won’t pollute the air nearly as much as anti-drillers say it will. We’ve written a number of articles about Invenergy’s plan to build a 1500-megawatt plant (largest in the state) in the borough of Jessup (Lackawanna County), near Scranton, on an 80-acre former coal mine and landfill site (see MDN’s stories here). The plant will use clean burning Marcellus Shale gas to produce cheap electricity. The main objection to the plant is the possibility of air pollution. Experts interviewed by the Times-Tribune say you’re more likely to breathe harmful air pollution living downwind from a major highway than you are living downwind of this proposed plant…
Read More “Newspaper Admits PA Gas-Powered Electric Plant Will Pollute Less”
Energy Companies | Pennsylvania | Statewide PA | WPX Energy

WPX Completes $200M Sale to Still-Unnamed Buyer in NE Marcellus
May 28, 2015May 28, 2015

Earlier this month MDN told you that WPX Energy had sold contracts and contracted capacity to buy and sell natural gas on on Transco’s Northeast Supply Link pipeline for $200 million to an undisclosed buyer (see Mystery Buyer to Pay WPX Energy $200M for NE Marcellus Assets). We told you our best guess for who the buyer likely is: Southwestern Energy, the same company that just completed purchasing WPX’s leases and wells in Susquehanna County in February for $300 million (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). Yesterday WPX issued a press release to say the deal is now done and the money in the bank–but they still don’t/won’t name who the buyer was…
Read More “WPX Completes $200M Sale to Still-Unnamed Buyer in NE Marcellus”
Anti-Drilling/Fossil Fuel | Energy Companies | Exxon Mobil | Industrywide Issues | New York | Tompkins County

Park Foundation Resolution Defeated by ExxonMobil Shareholders
May 28, 2015May 28, 2015

It’s not often (enough) that the odious and disgusting Park Foundation suffers a total defeat–so we do a happy dance when it happens. It happened yesterday at ExxonMobil’s annual meeting where shareholders handed the Park Foundation (of Ithaca, NY) a humiliating defeat of their resolution that Exxon compose a cockamamie report every year detailing the so-called “risks” involved with unconventional drilling. Apparently the self-loathing Park Foundation wants Exxon to become self-loathing too–to produce a report that essentially says they’re creeps destroying Mother Earth by fracking. Three-fourths of Exxon shareholders said “no thanks.” Shareholders also voted down an idiotic proposal by a group of Catholic priests from Milwaukee who have lost their first love (Jesus Christ) in favor of a new love (Global Warming) to put a global warming expert on the board of directors. Ah, excuse us Fathers, whatever happened to your vow of poverty? Seems the priests of Milwaukee now have more money than the Lord Himself and want to throw their weight around at shareholder meetings rather than save souls…
Read More “Park Foundation Resolution Defeated by ExxonMobil Shareholders”
Ohio | Statewide OH

John “Foreigner Hunter” Kasich Ready to Announce Run for President
May 28, 2015May 28, 2015

This is so rich. RINO John Kasich, governor of Ohio and someone who despises “foreigners” from places like Texas and Oklahoma from working in his state while courting investments from Thailand and Japan with big money incentives (see OH Gov Kasich Keeps Cracker Plant “Incentives” a Secret–for Now), and someone who wants to tax the Utica Shale industry into oblivion (see OH Gov Kasich the Bully: Accept My 6.5% Tax or Risk a 10%+ Tax), thinks he’s presidential timber. We previously told you Kasich was seriously considering a run for the White House (see OH Gov “Tax Oil and Gas” Kasich Wants to Run for White House). We kind of thought it was a joke. Well, it’s no joke. According to a story in the Washington Post, Kasich will soon make an official announcement that he’s running…
Read More “John “Foreigner Hunter” Kasich Ready to Announce Run for President”
Best of the Rest

Marcellus & Utica Shale Story Links: Thu, May 28, 2015
May 28, 2015May 28, 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, May 28, 2015”