Marcellus Drilling News

Anti-Drilling/Fossil Fuel | CNG/LNG | Exporting | Industrywide Issues | Pennsylvania | Statewide PA

“Peaceful” Protesters Removed from LNG Export Hearing in Philly
April 17, 2015April 20, 2015

Another example of a “peaceful, non-violent” protest occurred yesterday in Philadelphia. City Councilman David Oh organized a meeting to discuss the feasibility of locating a facility inside city limits to liquefy and export natural gas. The city owns Philadelphia Gas Works (PGW), the largest municipal-owned utility in the country. PGW already has a small LNG facility in the city, but currently it’s set up to import LNG, not export it. Councilman Oh wanted to explore the possibility of converting the site to export LNG. You may recall the corrupt Philly City Council nixed a potential deal to sell PGW to UIL Holdings (see Philly City Council Kills the Phila. Gas Works $1.86B Deal). Since that time, City Council members like Oh have tried to save face and figure out how they might turn around the near-bankrupt PGW. One of the most promising ideas is to set up a small exporting operation. A meeting to discuss that idea was held on the campus of Drexel University. A meaningful portion of those attending were anti-drilling nutters who wouldn’t shut up and had to be escorted out by Drexel security personnel. Yep, just more of your “peaceful, non-violent” types out to make a point…
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Energy Services | Industrywide Issues | Kinder Morgan | Luzerne County | Pennsylvania | Pike County | Pipelines | Susquehanna County | Tennessee Gas Pipeline | Wayne County

Kinder Morgan Hops on the Pipeline Payola Bandwagon in NEPA
April 17, 2015April 17, 2015

Look–we’ve written about this before and we’re not going to belabor the point–about pipeline companies using payola to buy support for the pipelines they plan to build through communities. The Constitution Pipeline did it last March in New York (see Constitution Pipeline Payments to Groups – Donations or Payola?). PennEast recently did it this March in southeast Pennsylvania and New Jersey (see PennEast Payola? Buying Support One Community at a Time). Now it’s Kinder Morgan’s turn. KM handed out checks this week in Wayne, Susquehanna, Pike and Luzerne counties in northeastern PA. It’s amazing how much good press, and good will, a $10,000 donation can buy you–especially when you give it to a school…
Read More “Kinder Morgan Hops on the Pipeline Payola Bandwagon in NEPA”
CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Regulation | Statewide MD

Cove Point LNG Plant STILL Waiting for Final DOE Approval?!
April 17, 2015April 17, 2015

Something a tad strange caught our eye. Yesterday America’s Natural Gas Alliance (ANGA) released a white paper (copy below) and held a conference call to step up pressure on the Obama Dept. of Energy–with pleas to do the right thing and grant final approval for a list of LNG export projects currently on the list. Some of those projects have been waiting years for a final approval. We knew all of that–but one of the projects named by ANGA on the call and in the white paper is Cove Point. Which made us scratch our head. We thought Cove Point was already was already fully approved by the plethora of government agencies, including DOE, that need to approve it. We reported that Dominion began construction of the facility last October (see Dominion Breaks Ground on Cove Point, MD LNG Export Facility). Just last month Dominion threw a big party to celebrate the project’s approval and future prospects with no less than the Japanese ambassador attending (see Dominion Needles Anti-Drillers by Throwing Party for Cove Point LNG). But now here’s ANGA saying the DOE needs to provide a “final” approval for Cove Point. What gives?…
Read More “Cove Point LNG Plant STILL Waiting for Final DOE Approval?!”
Columbiana County | Energy Companies | Hilcorp Energy | Lease & Royalty Payments | Ohio

Hilcorp Gets Permission to Drill Under Columbiana County Cemetery
April 17, 2015April 17, 2015

Earlier this week we had some fun telling you about Hilcorp’s request to drill under a quarter of an acre of a cemetery in Columbiana County, OH (see Zombie Alert! Hilcorp Wants to Drill Under OH Cemetery). Fairfield Township trustees needed some extra time to consider the matter. After finding out that if they didn’t sign it would prevent a lateral from being drilled, affecting neighboring landowners (cutting them out of royalties–no lateral, no money), all but one trustee voted to sign the deal. The one holdout thought the town should get more in a signing bonus/royalties. He thinks $500 for a quarter acre and 15% royalties isn’t enough…
Read More “Hilcorp Gets Permission to Drill Under Columbiana County Cemetery”
Energy Services | Erie County (OH) | Industrywide Issues | Ohio | Pipelines | Spectra Energy

Erie County, OH Rolls Out Red Carpet for NEXUS Pipeline
April 17, 2015April 17, 2015

It doesn’t seem to happen often enough, which is why this is noteworthy: The Erie County, OH Board of Commissioners (with three members) sent an official letter to the Federal Energy Regulatory Commission (FERC) to endorse and support the proposed $1.5 billion NEXUS Gas Transmission pipeline from Ohio through Michigan and into Canada (see NEXUS Gas Pipeline Pre-Files with FERC, New Details Come to Light). The NEXUS, like all other proposed pipelines in the northeast, has encountered plenty of opposition (see CORNy Opposition to NEXUS Pipeline in Eastern Ohio). But all three Erie County commissioners want FERC to know their county stands behind the pipeline and welcomes it through their neck of the woods–which means new pipeline trenches would be dug in places where pipelines have not previously been installed. The commissioners are rolling out the red carpet for this “greenfield” project coming through their county. Refreshing!…
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Energy Companies | Gulfport Energy

Gulfport Upsizes Stock Offering to 9.5M Shares, Seeks $454M
April 17, 2015April 17, 2015

An update to a story we brought you yesterday about Gulfport Energy. We told you that Gulfport is both floating 7.5 million shares of new stock and floating IOUs (senior notes) to raise money (see Gulfport Looks to Raise $600M+ with Notes & New Stock Offering). At the time Gulfport had not announced the price per share they were looking for and we theorized that if they got the current price of $49.15 they would haul in around $368 million from new stock sales. Gulfport updated the offering. It’s now 9.5 million shares and Gulfport has announced they’re looking for $47.75 per share. Consulting our handy calculator, that would generate $454 million…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Apr 17, 2015
April 17, 2015April 17, 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, Apr 17, 2015”
Industrywide Issues | Pennsylvania | Research | Statewide PA

Exclusive: PA Feb Natgas Production Numbers Show Decrease from Jan
April 16, 2015April 16, 2015

Kudos to the Pennsylvania Dept. of Environmental Protection. On April 1 they published the very first monthly production numbers for oil and gas production in the state–for the month of January (see PA’s First Monthly O&G Production Report Goes Live). At the time, the DEP said going forward new production numbers would be released 45 days after the end of a calendar month, and that February’s numbers would be released by April 14. Those numbers were released–just before midnight on the 14th! They kept their word and are to be commended for it. MDN has analyzed the numbers from February, comparing them to January. Unfortunately several drillers have failed to file their monthly reports on time–most notable among them is EQT. Because EQT’s numbers are missing for February (one of the larger drillers in PA), it throws off any kind of meaningful analysis. However, we have enough of the picture from other major drillers who did file on time–drillers like Cabot Oil & Gas, Range Resources and Southwestern Energy–that we can tell you this: Production in PA from January to February went down by an appreciable amount. Currently, without EQT’s numbers in the mix, February production decreased 17% from January levels. Once missing numbers are added, we expect production to have decreased somewhere around 8-10% overall. Below we have a couple of charts with the natural gas production data rolled up, something you won’t find anywhere else!…
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Industrywide Issues | Ohio | Statewide OH | Taxation

Celebrate! Ohio Severance Tax Increase Dead in 2015
April 16, 2015April 16, 2015

Very good news for the Ohio Utica Shale industry: RINO Gov. John Kasich’s plan to raise the severance tax is dead–at least for this year. Yesterday Ohio legislators stripped out a proposed tax hike from the state’s budget bill. We’re still not out of the woods yet as far as a tax increase down the road. Legislators decided to set up a “study committee” made up of both House and Senate members to consider a severance tax increase in the future. This is the third year in a row Kasich has tried and failed to raise the severance tax. Perhaps sensing yet another defeat on the tax issue, last month Kasich made a not-so-subtle threat that if the drilling industry doesn’t accept his 6.5% severance tax now, a ballot initiative may just pop up out of thin air to enact a higher severance tax–and that imitative would probably be for 10% or more (see OH Gov Kasich the Bully: Accept My 6.5% Tax or Risk a 10%+ Tax). In other words, you take my “minor” shakedown or I’ll be sure you get screwed over big-time. Will Kasich carry out his threat?…
Read More “Celebrate! Ohio Severance Tax Increase Dead in 2015”
Belmont County | Energy Companies | Gulfport Energy | Jefferson County (OH) | Lease & Royalty Payments | Ohio | Utica Shale

Gulfport Energy Pays $12,500 per Acre for 24K OH Utica Acres
April 16, 2015September 14, 2015

Gulfport Energy announced yesterday they’ve picked up 24,000 dry gas acres in the “core” of the Utica play–in Belmont and Jefferson counties in Ohio. The lease seller is Paloma Partners III, a small energy & exploration company headquartered in Houston and backed by Encap Investments and Macquarie Americas. According to the Paloma website, they own(ed) 24,000 in the Utica and had planned on drilling “in late 2015.” We’re assuming they added a few thousand acres to that total since the web page was last updated and that they will now not drill at all–since they’ve just sold all of their Utica acreage to Gulfport. The purchase price was $300 million. Doing the math, Gulfport paid Paloma $12,500 per acre–which is perhaps the highest such deal price per acre we’ve seen to date. Here’s the full update from Gulfport on the Paloma acreage purchase, along with production numbers from 1Q15 which show a 161% increase from 1Q14…
Read More “Gulfport Energy Pays $12,500 per Acre for 24K OH Utica Acres”
Energy Companies | Gulfport Energy

Gulfport Looks to Raise $600M+ with Notes & New Stock Offering
April 16, 2015April 16, 2015

In addition to Gulfport’s big news yesterday that they are paying $12,500 per acre for leases in eastern Ohio (see today’s companion story), Gulfport also announced yesterday they are whole hog into the cash-raising business. The company says they’re raising more cash to help pay the $300 million it’s taking them to buy the Ohio acreage–plus have some left over to pay down current debt. Yesterday, in two separate press releases (see below), Gulfport said they are a) floating 7.5 million new shares of stock, and b) floating $300 million of new senior notes (IOUs). The price of Antero’s stock this morning is trading around $49.15 per share. If they get that price for the 7.5 million shares, it would raise something north of $368 million for the company…
Read More “Gulfport Looks to Raise $600M+ with Notes & New Stock Offering”
Antero Resources | Energy Companies

Antero Resources 1Q15: Production up Big 89% Over 2014
April 16, 2015April 16, 2015

Antero Resources, one of the largest Marcellus/Utica drillers, continues to impress. Antero released first quarter 2015 numbers yesterday and they show an 89% increase in production over the same period last year, and a 17% increase in production over fourth quarter of 2014. Antero completed 41 Marcellus wells in 1Q15 and hooked 30 of them up to production. For those wells online for 30 or more days, they averaged 13 million cubic feet per day equivalent of natural gas. Antero currently operates 7 rigs and 2 completion crews in the Marcellus. The company reports not doing much in the way of drilling/completions in the Utica during 1Q15 mostly because they are transitioning to 7-pad units. They plan to drill another 45 Utica wells by the end of this year…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Natgas Production Up 66% in 1Q15
April 16, 2015April 16, 2015

Magnum Hunter Resources, now a pure play company focusing on the Marcellus/Utica region, released first quarter production results yesterday and they look impressive. Natural gas (and equivalents) was up 66% for first quarter 2015 over the same period in 2014. The question is, however, how much longer will Magnum Hunter be able to continue pulling a rabbit out of the hat? In 2014 the company drilled 53 wells. This year they plan to drill 5 because of the low price of natgas (and lack of funds). It will be interesting to watch as the year progresses. In the meantime, let’s celebrate this nice increase in 1Q15!…
Read More “Magnum Hunter Natgas Production Up 66% in 1Q15”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Regulation | Wastewater

GreenHunter Releases 2014 Update, Plans to Barge Brine in 2015
April 16, 2015April 16, 2015

GreenHunter Resources, the fresh water and wastewater subsidiary of Magnum Hunter Resources, reported their fiscal year 2014 and 2014 operating results yesterday–in both a press release (below) and an analyst phone call (excerpts below). MDN eagerly scoured the announcement and a transcript of the analyst call for mention of the ongoing controversy of barging brine down the Ohio River. GreenHunter is building and has nearly completed four new injection wells in Meigs County, OH. They plan to begin barging brine to those wells sometime this year, according to GreenHunter COO Kirk Trosclair. GreenHunter has a major/ongoing disagreement with the U.S. Coast Guard (USCG) over whether or not guidelines issued in 1987 allow them to transport brine from shale wells (see GreenHunter Keeps Pressure on USCG to Barge Brine on Ohio River). While there’s no mention of the USCG or lack of a USCG permit, there was plenty of talk about barge operations beginning by the end of this year…
Read More “GreenHunter Releases 2014 Update, Plans to Barge Brine in 2015”
Dominion Energy | Energy Services

Dominion Top Utility on Forbes’ “America’s Best Employers” List
April 16, 2015April 16, 2015

Congratulations to Dominion, a major midstream and utility company headquartered in the Old Dominion state–Virginia. Dominion is the top-ranked U.S. utility on Forbes magazine’s 2015 “America’s Best Employers” list. The company ranked 37th overall among the 500 employers in 25 industries that were included on the list, and was the top-ranked employer among all industries in Virginia. Dominion is attempting to build the $5 billion, 550-mile Atlantic Coast Pipeline from West Virginia through Virginia and into North Carolina to bring cheap, abundant Marcellus and Utica Shale gas to the southeast (see Dominion Commits to Major New Marcellus/Utica Pipeline Project). It’s nice to see a quality company like Dominion get recognized for being a thoughtful, caring company and a great place to work–contrary to the hokey fairy tales told by anti-drillers about evil, nasty, Big Oil & Gas companies…
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Industrywide Issues | M&A

As Shale Drilling Slows, So Too Do Mergers & Acquisitions
April 16, 2015April 16, 2015

Research and consulting firm GlobalData says merger and acquisition (M&A) values in the upstream oil and gas sector (drilling) decreased significantly from $2.9 billion in February 2015 to $829.8 million in March 2015. GlobalData expects the number of deals to remain low in second quarter 2015. Here’s a high level overview of their latest report…
Read More “As Shale Drilling Slows, So Too Do Mergers & Acquisitions”