Marcellus Drilling News

Butler County | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Rex Energy

Rex Energy to Restart Drilling Near Mars School Following Vote
May 29, 2015May 29, 2015

Let the drilling begin! The three members of the Middlesex Zoning Hearing Board (Butler County, PA, where the Mars School District is located) voted unanimously on Wednesday to reject challenges by anti-drillers to changes in zoning laws that allow Rex Energy to drill a series of wells on a pad about 3/4 of a mile from the Mars School. Four Martian parents have worked themselves up into a frenzy, convincing themselves that faraway drilling will harm their precious, innocent lil’ chil’ren. The Martians have enlisted the help of anti-drilling groups from the opposite side of the state–the Philadelphia area–tapping into their deep pockets to fund endless lawsuits and appeals that are costing Middlesex taxpayers big bucks to defend (see Dela. RiverKeeper, Clean Air Council Cost Middlesex Residents $35K+). (By the way, when is the IRS going to investigate THE Delaware Riverkeeper for clear violations of their 501(c)(3) tax exempt status? Riverkeeper continues to operate, politically, far outside of the Delaware River Basin. Their tax exempt status should be revoked.) The zoning board vote was good news for Rex who says they won’t waste any time in returning to the drill site to begin work. By the time the Martians are done suing, the wells will already be drilled…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Regulation | Washington County

Range Capitulates, Closing 4 Freshwater Ponds in Mt. Pleasant, PA
May 29, 2015May 29, 2015

More than two years of acrimony and lawsuits are now over for Range Resources in Mt. Pleasant (Washington County), PA. Mt. Pleasant is one of the original seven selfish towns that sued PA to overturn portions of the Act 13 oil and gas law. The town was giving Range a hard time over four freshwater ponds (called “impoundments,” not to be confused with wastewater impoundments) the company was using to drill wells in nearby non-Mt. Pleasant locations. The town served the company with notices of violation in July 2013 and then held a public hearing in August 2013 where things got heated between the town and Range (see Range Resources Argues with Mt Pleasant over Water Impoundment). Mt. Pleasant kept after them (see Mt. Pleasant Zoning Bd Says Range Water Impoundments in Violation), and after them (see Mt Pleasant Twp Shenanigans re Range Request for Water Ponds), and after them (see Mt. Pleasant, PA Continues to Ride Range Over Water Ponds). Sooner or later a company can take a hint that a township is anti-business. Range is throwing in the towel, closing down all four freshwater ponds, and leaving town…
Read More “Range Capitulates, Closing 4 Freshwater Ponds in Mt. Pleasant, PA”
Crime | Industrywide Issues | Litigation | Mahoning County | Ohio | Regulation

Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K
May 29, 2015May 29, 2015

A final footnote to tell you about concerning the notorious case of illegal frack wastewater dumping near Youngstown, OH that happened in 2012 and 2013. Ben Lupo, previous owner of D&L Energy and its associated company Hardrock Excavating, directed employees to dump frack wastwater hauled by Hardrock into a drain that emptied into a stream that emptied into the Mahoning River near Youngstown, OH (see Youngstown Business Dumped >200K Gal of Untreated Wastewater). It was later discovered that from September 2012 to end of January 2013, Lupo was responsible for dumping at least 30 loads of frack wastewater literally down the drain and into the river. After an investigation and charges, last August Lupo plead guilty and was sentenced to 23 months in prison and a $25,000 fine (see Final Chapter for Youngstown Illegal Wastewater Dumper: Prison & Fine). The final final chapter has now been written. Lupo’s company, Hardrock Excavating, pleaded guilty on Thursday and was fined $100,000. In an interesting twist, the judge ordered $25,000 of that total to be paid to two environmental organizations…
Read More “Hardrock Pleads Guilty to Illegal Wastewater Dumping, Fined $100K”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Drought Conditions Begin to Affect Marcellus Drilling
May 29, 2015May 29, 2015

Drought conditions now exist over a large part of Pennsylvania, and because of it, we are beginning to see some impacts on Marcellus Shale drilling. The PA Dept. of Environmental Protection (DEP) oversees water management/withdrawals from streams and rivers in the central and western part of the state. The Susquehanna River Basin Commission (SRBC) oversees it in the northeastern part of the state. The DEP has not (yet) issued any restrictions, but the SRBC reports that restrictions previously written into water permits for drillers in the northeast have affected the withdrawals of two drillers: Cabot Oil & Gas (in Susquehanna County) and Seneca Resources (in Tioga County)…
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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…
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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!…
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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?…
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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”…
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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…
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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)…
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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”