Marcellus Drilling News

Economic Impact | Ethane | Industrywide Issues | Ohio | Processing Plants | Statewide OH

OH Gov Kasich Keeps Cracker Plant “Incentives” a Secret–for Now
May 27, 2015May 27, 2015

We continue to find it deliciously ironic that the jingoistic man who hates having “foreigners” from places like Texas, Oklahoma and Louisiana come to work in his state in the oil and gas fields, Ohio Gov. John Kasich, is the man who is desperately courting a Thai and Japanese joint venture to invest billions in his state. Along with that investment will come workers from those countries. We’re talking, of course, about the recent announcement that that PTT Global Chemical, Thailand’s largest integrated petrochemical and refining company, and money partner Marubeni Corporation, a Japan-based company, have selected Belmont County, OH as the location to build a $5 billion ethane cracker plant complex (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). The key negotiator of the deal is JobsOhio, which is an agency set up by Kasich to promote the state. That is, JobsOhio = John Kasich. Now we learn, from none other than PTT, that JobsOhio/Kasich offered “an aggressive incentive package” to lure the project there. How aggressive? JobsOhio (i.e. Kasich) is keeping the details of the incentive package secret until PTT signs the paperwork to proceed with the project–something that won’t happen for at least a year or two…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Maryland | Regulation | Statewide MD

Maryland’s Pusillanimous Gov Allows Frack Moratorium to Become Law
May 27, 2015May 27, 2015

What a disappointment Maryland’s new Republican governor, Larry Hogan, has turned out to be. On his way out of office, Maryland’s previous governor, Martin O’Malley (Democrat), created strict drilling regulations that would allow fracking in Maryland THIS YEAR (see Maryland Gets Ready to Frack! Gov O’Malley Files New Regulations). O’Malley was a disaster as Maryland’s governor, and even though he lobbed new fracking regs over the wall in a sleazy political move (he’s running for president), we tipped our hat to him for doing the right thing–even if he did it for his own personal reasons. The prospect of any fracking was too much for the environmentally insane that belong to Maryland’s legislature. They passed a two-year moratorium bill and sent it to Hogan for his signature (see Maryland Closer to a 2-Year Fracking Ban, Will Gov have Guts?). Looks like the pusillanimous Gov. Hogan doesn’t have guts after all. He’s already defeated just a few months into his first term. Last Friday the Baltimore Sun quotes his office as saying Hogan, who supposedly supports shale drilling, will let the bill become law without his signature–a cop out if ever we’ve seen one…
Read More “Maryland’s Pusillanimous Gov Allows Frack Moratorium to Become Law”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Democrats Admit Wolf’s PA Severance Tax Goes as High as 20%
May 27, 2015May 27, 2015

A diverse coalition of industry and business groups has come together, led by the Pennsylvania Chamber of Business and Industry, to oppose PA Gov. Tom Wolf’s disastrous idea of a severance tax on the Marcellus Shale industry. The coalition has just launched a very effective television commercial. How do we know it’s effective? The Democrat PR machine (i.e. PBS’s StateImpact Pennsylvania) writes about the commercial and shows a screen shot of the Youtube version of it–but they don’t embed the Youtube version so you can actually watch it . Don’t worry, we embed it below. PBS can’t have anyone actually watch the thing for goodness sake! That might actually sway a few people. Amazingly, we do get an admission from the Democrats at StateImpact that if the price of natgas remains low in PA, Wolf’s severance tax actually zooms up to 20%–not the 5% he claims it is. Looks like somebody at StateImpact didn’t follow instructions to let the governor’s office review the story before it was published. Oh oh…
Read More “Democrats Admit Wolf’s PA Severance Tax Goes as High as 20%”
Economic Impact | Electrical Generation | Industrywide Issues | Ohio | Regulation | Trumbull County

Lordstown $800M Gas-Powered Electric Plant Gets Village Approval
May 27, 2015May 27, 2015

In April 2014, MDN told you about a proposal from Clean Energy Future to build an $800 million electric generation plant in Lordstown (Trumbull County), OH. The plant will be fired by natural gas from the Utica and Marcellus (see Clean Energy Plans NatGas Electric Generation Plant in Lordstown). At that time, the plan was to begin construction in December 2015 and complete the plant by the end of 2018. There was some initial resistance to the location, so Clean Energy Future changed the location and moved up the timeline to build it (see Lordstown Gas-Powered Electric Plant Moves Up Construction Timeline). Last night the last major hurdle was scaled when the Lordstown Village Council gave the project a big thumbs up. The Village Council voted to offer the project a number of incentives and actively worked to get the deal done–not something you observe very often with these kinds of projects…
Read More “Lordstown $800M Gas-Powered Electric Plant Gets Village Approval”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Triad Hunter | Tyler County | West Virginia

Magnum Hunter Sells 5K Acres for $41M in Tyler County, WV
May 27, 2015May 27, 2015

Magnum Hunter Resources’ drilling subsidiary, Triad Hunter, is selling 5,210 net acres of leases in Tyler County, WV to an undisclosed competitor for $40.8 million, the company announced yesterday. The sale will take place tomorrow. According to MHR, the acreage is “non-core,” “undeveloped,” and “unproven.” The leases on the acreage are also set to expire soon, so it’s drill now or never–and for MHR, it was never. Why not convert that acreage into some cold, hard cash? Incidentally, if you do the math, it works out to be a sale price of $7,831 per acre…
Read More “Magnum Hunter Sells 5K Acres for $41M in Tyler County, WV”
Energy Companies | Pennsylvania | Range Resources Corp | Washington County

Washington, PA Neighborhood Concerned about Range Drilling Plan
May 27, 2015May 27, 2015

There are, in MDN’s book, two types of opposition to shale drilling–legitimate and illegitimate. Under the illegitimate heading are the nutters who want to ban shale drilling because it extracts a fossil fuel. We call them global warming Kool Aid drinkers. They lie about shale drilling at every turn in an attempt to enlist the support of the hoi polloi, the common folk, to oppose it. That’s what’s happened in New York. Then you have what we would call legitimate opposition–or perhaps a better word is “concern” about shale drilling. That comes from people who live in residential neighborhoods who aren’t thrilled about the truck traffic, noise, dust, nighttime lights and other negatives that come with shale drilling. The adult approach is to try and find a compromise–a way to accommodate shale drilling but reduce its impact on those who live nearby. Range Resources faces such a situation with a plan to drill a 3-well pad that may eventually go to 10 wells in a residential area of Chartiers (Washington County), PA. The pad would be about 1,000 feet from the nearest home–less than 2/10ths of mile. The neighbors are understandably concerned…
Read More “Washington, PA Neighborhood Concerned about Range Drilling Plan”
CNG/LNG | Exporting | Industrywide Issues | Regulation

Canadian LNG Project to Export Marcellus Gas Gets DOE Approval
May 27, 2015May 27, 2015

In April MDN shined the spotlight on one of four LNG export projects planned for Nova Scotia, Canada–Pieridae Energy’s Goldboro LNG project (see Canadian LNG Project Woos Europeans with Promise of Marcellus Gas). There are a number of hurdles Pieridae must overcome before the first shovel hit the ground to build the facility. The Maritimes & Northeast pipeline has to get FERC permission to reverse its flow. The gas has to get to the Maritimes & Northeast pipeline in the first place via new pipelines from either Kinder Morgan or Spectra Energy. The price of oil has to rise to make it economical. And oh, since it will be U.S. shale gas from the Marcellus/Utica feeding the LNG plant getting exported, the U.S. Dept. of Energy will need to approve export licenses for the plant. You can check that last one off the list. The DOE announced last week they are granting Pieridae permission to export up to 292 billion cubic feet (Bcf) per year of natural gas (0.8 Bcf per day) to countries that have a Free Trade Agreement (FTA) with the U.S. The DOE has not yet ruled on exports to non-FTA countries…
Read More “Canadian LNG Project to Export Marcellus Gas Gets DOE Approval”
Anti-Drilling/Fossil Fuel | Cuyahoga County | Hydraulic Fracturing | Industrywide Issues | Litigation | Ohio | Regulation

Broadview Hghts, OH Won’t Appeal Overturned Home Rule Law
May 27, 2015May 27, 2015

In March MDN told you about the crushing defeat of a home rule law in Broadview Heights, a Cleveland, OH suburb (see OH Antis Handed Crushing Defeat in Broadview Hghts Home Rule Case). A Cuyahoga County Common Pleas Court judge struck down Broadview Heights’ so-called community bill of rights that bans all oil and gas drilling–including shale drilling. The judge rightly ruled that only the state–and not localities–have the right to regulate oil and gas drilling. That caused the anarchists at the Ohio Community Right to Know Network (OHCRN) to call for an uprising. They “refuse” to recognize the court’s decision (i.e. they’re lawless). Fortunately for the citizens of Broadview Heights, city leaders do still recognize the rule of law. Last week the city announced it will not appeal the decision, because it has no basis on which to appeal it. But that doesn’t stop the nutters from an OHCRN associate group, calling itself Mothers Against Drilling In Our Neighborhoods, from filing yet another frivolous lawsuit, which they’ve done…
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Energy Companies | Rex Energy

Unusual Move: Rex Energy Adds Analyst to its Board of Directors
May 27, 2015May 27, 2015

Rex Energy has a new member on its board of directors–Jack N. Aydin. We don’t typically report on new additions to boards of directors, but this one is unique and different. Normally board members (of exploration and production companies) have experience working for other E&Ps. Or board positions are awarded to major stockholders–sometimes referred to as “activist investors” (what used to be called corporate raiders). Jack Aydin is the only person we’ve heard of that has made the transition from E&P analyst to the board room…
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Best of the Rest

Marcellus & Utica Shale Story Links: Wed, May 27, 2015
May 27, 2015May 27, 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: Wed, May 27, 2015”
Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC May Un-pause OH Utica Shale Drilling Earlier than Expected
May 26, 2015May 26, 2015

PDC Energy announced at the end of 2014 they would not drill any new wells in the Ohio Utica Shale in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). Not long after that, PDC announced early results from an Ohio Utica well pad they named (we kid you not) “Dynamite” (see PDC Energy’s Interesting 2014 – “Dynamite” in the Utica). Kind of a twisted sense of humor, no? Because of the results PDC continues to get from the Dynamite well pad, they told analysts on an earnings call earlier this month they may un-pause drilling in the Utica sooner than anticipated. When? If the price of crude oil hits $70 per barrel (right now it’s just shy of $60/barrel), PDC has said it will likely begin drilling again in the Utica. However, even if the price is in the mid- to high-sixties, that may be enough to tempt them to re-enter the Utica, given their “Dynamite” results…
Read More “PDC May Un-pause OH Utica Shale Drilling Earlier than Expected”
Boardwalk Pipeline Partners | Energy Services | Industrywide Issues | Kentucky | Kinder Morgan | Litigation | Pipelines | Tennessee Gas Pipeline | Williams

KY Court Decision Goes Against Pipelines re Eminent Domain
May 26, 2015May 26, 2015

In December of 2013, a group of people opposed to the Bluegrass natural gas liquids (NGL) pipeline in Kentucky called KURE (Kentuckians United to Restrain Eminent Domain) sued the Bluegrass, a joint venture of Williams and Boardwalk Pipeline Partners, to prevent them from using eminent domain (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). The argument was that the NGLs flowing through the pipeline just pass through Kentucky and don’t benefit local Kentuckians, therefore the pipeline has no right to use the state’s eminent domain law to force landowners to accept the pipeline. That is, it’s not a permitted utility under the definition of the law. In March 2014, a circuit court judge agreed with KURE and told Bluegrass they could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). That takes a pretty big stick away from the Bluegrass in their fight to lay the pipeline. Not long after the judge’s decision Williams gave up on the project, although Boardwalk didn’t (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The circuit court judge’s decision was appealed, and last week the Kentucky Court of Appeals upheld the previous no-eminent domain decision. This new decision has implications for the Bluegrass to be sure, but it has even more implications for an active project now under way by Kinder Morgan…
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Hydraulic Fracturing | Industrywide Issues | North Carolina | Regulation

Lawsuit Won’t Stop NC Agency from Drilling Test Holes in Shale
May 26, 2015May 26, 2015

An interesting twist in the story out of North Carolina where a judge recently halted the forward momentum on fracking in the Tar Heel State that was set to begin in July (see Judge Puts NC Fracking on Hold Pending Outcome of Lawsuit). Even though Wake County Superior Court Judge Donald W. Stephens’ decision means the Mining and Energy Commission (MEC) can’t issue permits for drilling and fracking in shale deposits, that isn’t stopping the N.C. Department of Environment and Natural Resources (DENR) from contracting with a private drilling company to sink a series of test holes in Stokes, Scotland, Hoke and Cumberland counties starting June 12 to see whether shale gas is present in those locations…
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Energy Companies | Rice Energy

Rice Energy CFO Buys Another 6K Shares of Rice Midstream Stock
May 26, 2015May 26, 2015

Grayson T. Lisenby, senior vice president and chief financial officer for Rice Energy, likes what he sees in the company he works for. Lisenby recently bought another 6,000 shares of Rice Energy Midstream stock, which makes his total stake in the midstream subsidiary 27,652 shares, worth $457,000. It’s always a good sign when management eats its own dog food. In particular, if the money guy, the CFO, likes what he sees enough to put his own money at risk, that’s a really good sign…
Read More “Rice Energy CFO Buys Another 6K Shares of Rice Midstream Stock”
Energy Services | Seventy Seven Energy

Seventy Seven Energy Sells Trucking Subsidiary for Undisclosed Sum
May 26, 2015May 26, 2015

MDN recently told you Seventy Seven Energy–an oilfield services company with major operations in the northeast, the old Chesapeake Oilfield Operating division of Chesapeake–continues to operate in the red, which it has done since it became its own company in July 2014 (see Seventy Seven Energy 1Q15: Red Ink Continues to Flow Heavy). We also told you the company recently secured a $100 million loan (see Seventy Seven Energy Secures $100M Loan to Keep on Drillin’). Seventy Seven announced yesterday they are selling their trucking company subsidiary, Hodges Trucking (rig hauling company), for an undisclosed amount of money to Aveda Transportation and Energy Services Inc…
Read More “Seventy Seven Energy Sells Trucking Subsidiary for Undisclosed Sum”
Ethane | Industrywide Issues | Processing Plants

OOGA: Cracker Plants Would Turn Ethane from Expense into Cash
May 26, 2015May 26, 2015

There are three potential, large scale ethane cracker plants in play in the Marcellus/Utica region: Shell with a proposed plant in Beaver County, PA; Odebrecht with a proposed plant in Wood County, WV; and PTT Global Chemical with a proposed plant in Belmont County, OH. Of the three, Shell’s project seems the most likely to get built. The Odebrect plant is on hold, and the PTT plant is the new kid with lots of fanfare–but it’s way to early to gauge whether or not it’s a serious venture. We’ve written a number of stories over the years about the enormous economic benefits of a cracker plant–the jobs in building the plant, and then the jobs at the plant and the jobs for dozens/perhaps hundreds of satellite plants that will locate near it. The economic impact from a single cracker plant is upward of a staggering $20 billion. One of the often overlooked and little-talked-about aspects of the plants is what it will do for drillers. Right now a lot of ethane, the hydrocarbon that will feed these plants, is being produced in the tri-state area of PA, WV and OH. And right now ethane is an expense. Ethane is costing drillers money! They have to dispose of it somehow. When a cracker plant opens, drillers can then sell ethane to the plant and make money on ethane. It magically turns from an expense into cash…
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