Marcellus & Utica Shale Story Links: Mon, May 11, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Litigation | Maryland | Regulation | Statewide MD
DOE Grants Cove Point LNG Final Approval, Earthjustice Sues
We have two big pieces of news to share with you today about the Cove Point, Maryland LNG export facility being built by Dominion. The first is that yesterday, after a years-long process, the Obama Dept. of Energy finally gave Dominion their final stamp of approval to build the facility. Last month we pointed out this last piece of the puzzle still had not fallen into place (see Cove Point LNG Plant STILL Waiting for Final DOE Approval?!). It now has. There is nothing else in the way to stop the project. Except, possibly, a lawsuit–which is the second big piece of news. On Wednesday we told you that the Federal Energy Regulatory Commission had finally, this week, responded to a request for a re-hearing on the facility demanded by anti-drilling groups. FERC declined (see FERC Says “No” to Anti’s Request for Cove Point LNG Re-hearing). As we explained on Wednesday, the groups needed an official response from FERC on a re-hearing before they could launch yet another frivolous lawsuit. As we predicted on Wednesday, they’ve now filed a frivolous lawsuit in another last-gasp attempt to stop the Cove Point export facility from becoming reality…
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Anti-Drilling/Fossil Fuel | Crestwood Midstream | Energy Services | Industrywide Issues | New York | Regulation | Schuyler County | Statewide NY
NY DEC Signals Support for Seneca Lake Propane Storage Project
A little good news coming from New York State for a change. The state’s Dept. of Environmental Conservation (DEC) has “quietly” given its support to the Crestwood Midstream plan to use a depleted salt cavern along the shores of Seneca Lake to be used as a propane storage facility. We’ve written about this before–about the very safe plan to use it in this manner, and about protesters like Sandra Steingraber who seem to enjoy trips to the county jail for blocking the facility, repeatedly (see Steingraber, 2 Others Sent to Jail for Refusing to Pay Fine). In February an “issues conference” was held before an administrative law judge where testimony was given by both sides–Crestwood Midstream and anti-drillers. The anti-drilling side is being funded by the odious Earthjustice and National Resources Defense Council (NRDC). The DEC has sent a brief (full copy below) saying, in essence, (a) those against the project haven’t proven this facility would bring about environmental Armageddon, as they say it would, (b) some of the loonies opposing it don’t even have standing to oppose it, and (c) no more hearings are required. The only continuing reservation we have, and the reason we’re not celebrating just yet, is that the person who will make the ultimate decision is the head of the DEC, the anti-drilling Joe Martens, a man deeply in the pocket of Big Green…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Marshall County | Ohio County | West Virginia
Wheeling Non-Profits Sue Chesapeake for Taking O&G with No Lease
A group of non-profit organizations in the Wheeling, WV area is suing Chesapeake Energy claiming the company illegally stole oil and natural gas from underneath their property without a valid lease. The Parks System Trust Fund of Wheeling, Ohio Valley Medical Center, Elmhurst House of Friendship, Vance Memorial Presbyterian Church, the Children’s Home of Wheeling and the YWCA are all joint owners of 224 acres bequeathed to them in 1957. The groups say Chesapeake illegally pooled their acreage with others in a local drilling unit and proceeded to extract oil and gas without paying them…
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Rice Energy Doubles Production 1Q15; Utica Flows; Ekes Out a Profit
Rice Energy, a driller focused on the Marcellus and Utica Shale region, released their first quarter 2015 update yesterday. Counter to most others, Rice was actually able to eke out a gain of $152,000 for 1Q15 (most others, in fact we think all others, experienced a loss in 1Q15). Of course that’s down radically from 1Q14 when the company made $129.5 million! But still, they ended up on the positive side of the balance sheet. The big news was that Rice more than doubled their production in 1Q15 from a year ago–to an average 440 million cubic feet equivalent per day (Mmcfe/d). Unlike last year, this year 15% of Rice’s production came from the Utica Shale (last year it was 0%). Rice’s midstream division continues to experience strong growth as well–by volumes shipped and by revenue. Below we have Rice’s update yesterday, links to several stories analyzing Rice’s results, and a copy of the newest PowerPoint slide deck, used by Rice management on their earnings call with analysts…
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Gastar 1Q15: NE Production Up 5%, No New Marcellus Wells in 2015
Gastar Exploration has a small but meaningful drilling program in both the Marcellus and Utica Shale with close to 60,000 acres leased. As we reported in February, Gastar is scaling back operations in the northeast for the balance of 2015 (see Gastar Finishing 5 Wells, Then Idling Rigs in Marcellus/Utica). The company released their first quarter update yesterday and reports northeast production is up a hair, from 6,400 barrels of equivalent per day (Boe/d) in 1Q14 to 6,700 Boe/d in 1Q15–a 5% increase. Here’s the portion of yesterday’s update dealing with the Marcellus/Utica…
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PDC Energy Turns a Profit in 1Q15, Utica Production Up
In 2014 PDC Energy sold off its 141,000 of Marcellus Shale leases to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). However, PDC kept its Utica Shale acreage, although they aren’t drilling any new wells in the Utica for the time being (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC continues, for now, to focus on the Wattenberg field in northern Colorado. They must be doing something right because the company seems to be one of the few shale drillers to turn a profit in 1Q15…
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Industrywide Issues | Ohio | Pennsylvania | Research | Statewide OH | Statewide PA | Statewide WV | West Virginia
Rig Counts Continue Big Decline in April, NE May Have Bottomed
The rotary rig count tabulated by Baker Hughes continued to slide in April. The latest monthly rig count report shows another 134 land-based rigs in the U.S. were laid down between March and April. As of April there were 943 active rigs drilling on land in the U.S., down from 1,067 rigs in March. Ouch. What about the Marcellus and Utica region? MDN has done some analysis and we have reason to hope that we may have hit the bottom in the northeast as far as declining rig counts…
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Anti-Drillers Cheer PA Gov Wolf’s New Appointment to Head PUC
The Pennsylvania Public Utility Commission (PUC) “balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.” The PUC also greatly affects the state’s shale drilling industry (see Major Milestone: PA PUC Rules Mariner East IS a Public Utility and PA PUC Says Impact Fee Payment Calculations Still “Off”). So it was with keen interest that we noticed newly elected Gov. Tom Wolf has appointed a new head of the PUC, Gladys Brown, a true believer in man-made global warming and someone who advocates for so-called energy efficiency (i.e. lock down your thermostat) and reducing carbon emissions (i.e. tax industry into oblivion). We see a coming disaster with Brown at the helm of the PUC. Still glad you elected Wolf? No, we didn’t think so…
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Range Resources Floats Another $750M in IOUs to Pay Down Old Debt
Marcellus powerhouse driller Range Resources first announced yesterday that they are floating $500 million of new IOUs (called senior notes), then a short time later changed it and say no, they’re now offering $750 million of new IOUs instead. Cash from the senior note offering will go to pay off older IOUs and debts. The new round of IOUs will come due in 2025. Here’s the Range two-step from yesterday…
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Marcellus & Utica Shale Story Links: Fri, May 8, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Chesapeake’s Rorschach 1Q15 Update – Seeing What You Want
Chesapeake Energy is the second largest natural gas producer in the United States and the largest producer in both the Marcellus and Utica Shale. Yesterday the company released their first quarter 2015 results and held an earnings call with analysts to discuss how things are going for the company. Depending on which media account you read today, you’ll find that Chesapeake is scaling back operations in the Utica Shale while at the same time looking to lease more land in the Utica; their rig count has been decimated and yet production rose 14% year over year; and one source says the company posted a big loss and is burning cash like crazy while another says it isn’t really losing money, costs are dropping and the outlook is improving. Yes, it runs the gamut. Apparently anyone can find about anything to love or hate about Chessy’s latest update. Kind of a like a rorschach test…
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Energy Services | Industrywide Issues | PennEast Pipeline | Pennsylvania | Pipelines | Regulation | Statewide PA
DRBC Makes a Play to Slow/Block the Penn East Pipeline
The Delaware River Basin Commission (DRBC), currently under investigation by pro-drilling groups for its collusion (possibly illegal) with groups like THE Delaware Riverkeeper, appears to be making a play to block the Penn East Pipeline. The Penn East Pipeline will be 114 miles of 36-inch diameter natural gas pipeline that will run from Luzerne County, PA to Mercer County, NJ–running through the DRBC’s “territory.” The DRBC has contacted the Federal Energy Regulatory Commission (FERC)–the only agency empowered to approve or not approve the project–declaring DRBC’s interest in being part of the process to approve it. How convenient that the DRBC is in bed with the virulent anti-drilling Delaware Riverkeeper–and the main focus of Riverkeeper right now is to stop the Penn East…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Research | Statewide PA
Penn State Uses Anti-Drilling Trout Unlimited for Marcellus Monitoring
More than a year ago MDN pointed out that a group begun with good intentions but later co-opted by anti-drillers, Trout Unlimited, has been outted as a radical so-called green group (see Trout Unlimited, Other Groups Outted as Radical Green Groups). So it was surprising to read that Penn State researchers, apparently desperate for volunteers for a stream monitoring project, are turning to the anti-drilling “volunteers” of Trout Unlimited to help them collect “scientific” samples from streams located near Marcellus Shale drilling. Anyone else here see a big red flag and potential conflict of interest?…
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Eclipse Resources 1Q15: Impressive Bump Up in Production & Revenue
Eclipse Resources, a relatively new driller formed by a group of former Rex Energy people, is headquartered in State College, PA but does most of its drilling in the Ohio Utica. Just a few weeks ago Eclipse announced they are cutting their 2015 drilling budget by 57% (see Eclipse Resources Nixes Joint Venture Idea, Cuts Capex 57% in 2015). Even with the cuts, Eclipse had by anyone’s measure, an impressive first quarter in 2015. Yesterday Eclipse issued their 1Q15 update showing net production is up 316% from 1Q14. During the first quarter they brought 20 new wells online and began drilling 10 more. Revenue was up a huge 77% in 1Q15, but because of interest payments, taxes and other expenses, the company, overall, experienced a loss of $34.1 million during 1Q15. Here’s the update…
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MarkWest 1Q15: Life is Good in the Marcellus/Utica Midstream
MarkWest Energy is perhaps the biggest midstream player in the Marcellus/Utica region. Of course they have operations in other parts of the country too–but the northeast remains their primary focus. MarkWest issued their first quarter 2015 update yesterday. Below we’ve selected out a brief portion focusing on the northeast. Life is generally pretty good in the midstream, as evidenced by the new processing plants MarkWest has recently brought online in the northeast. However, if you look at MarkWest’s financials, you’ll notice that revenue for 1Q15 was down a bit from the same period in 2014 ($467 million in 1Q15 vs $512 million in 1Q14). That can almost certainly be chalked up to driller curtailing some of their production, waiting for prices to go higher once again. Below we have excerpts of the update, a portion of the analyst phone call with lots of talk about the Marcellus and Utica, and a copy of MarkWest’s latest PowerPoint presentation…
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We have two big pieces of news to share with you today about the Cove Point, Maryland LNG export facility being built by Dominion. The first is that yesterday, after a years-long process, the Obama Dept. of Energy finally gave Dominion their final stamp of approval to build the facility. Last month we pointed out this last piece of the puzzle still had not fallen into place (see 
Chesapeake Energy is the second largest natural gas producer in the United States and the largest producer in both the Marcellus and Utica Shale. Yesterday the company released their first quarter 2015 results and held an earnings call with analysts to discuss how things are going for the company. Depending on which media account you read today, you’ll find that Chesapeake is scaling back operations in the Utica Shale while at the same time looking to lease more land in the Utica; their rig count has been decimated and yet production rose 14% year over year; and one source says the company posted a big loss and is burning cash like crazy while another says it isn’t really losing money, costs are dropping and the outlook is improving. Yes, it runs the gamut. Apparently anyone can find about anything to love or hate about Chessy’s latest update. Kind of a like a rorschach test…