Marcellus & Utica Shale Story Links: Fri, Apr 17, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Exclusive: PA Feb Natgas Production Numbers Show Decrease from Jan
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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Celebrate! Ohio Severance Tax Increase Dead in 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?…
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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
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…
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Gulfport Looks to Raise $600M+ with Notes & New Stock Offering
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…
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Antero Resources 1Q15: Production up Big 89% Over 2014
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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Magnum Hunter Natgas Production Up 66% in 1Q15
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!…
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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
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…
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Dominion Top Utility on Forbes’ “America’s Best Employers” List
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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As Shale Drilling Slows, So Too Do Mergers & Acquisitions
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…
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Marcellus & Utica Shale Story Links: Thu, Apr 16, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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American Energy Partners | Chesapeake Energy | EMG | Energy Companies | Energy Services | Harrison County | Industrywide Issues | Litigation | Ohio
EMG Stabs McClendon in the Back re Chesapeake Data Lawsuit
This is a strange and complicated tale that boils down to this: Aubrey McClendon has a singular talent for finding and taking money from people who later turn around and stick a knife in his back. You may remember in February the story we brought you that Chesapeake Energy had sued its former co-founder, Aubrey McClendon, claiming he stole data on his way out the door (see Chesapeake Energy Sues McClendon for Taking His Rolodex with Him). McClendon responded that he contractually had every right to take the data he took with him (see McClendon Hires Top PR Firm to Respond to “Stolen Data” Charge). This is where it gets complicated. Aubrey has spun off several companies from his new company American Energy Partners (AEP). For example, one of the companies (named in the Chesapeake lawsuit) is American Energy-Utica, LLC, (AEU), operating in Ohio’s Utica Shale region. A major funding partner for AEU is Energy & Minerals Group (EMG). EMG is, essentially, in charge of AEU. EMG has just cut a deal with Chesapeake, behind Aubrey’s back, to give Chesapeake 6,000 acres of leases in northern Harrison County along with $25 million in extortion, er ah hush money, er ah “damages” thereby removing EMG/AEU from the Chesapeake lawsuit. The lawsuit against Aubrey and mother company AEP will continue–but the child company/EMG investors won’t be part of it. Aubrey is hopping mad because EMG didn’t tell him nor seek his blessing on their deal with Chesapeake…
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Eclipse Resources Nixes Joint Venture Idea, Cuts Capex 57% in 2015
Eclipse Resources is a relatively new driller formed by a group of former Rex Energy people. Eclipse is headquartered in State College, PA but does most of its drilling in the Ohio Utica. Eclipse announced yesterday they have decided not to pursue a joint venture after all. As recent as a month ago, Eclipse was saying, “…the Company is currently in negotiations with certain financial partners regarding a potential joint venture to accelerate drilling on its assets without burdening the Company’s balance sheet” (see Eclipse Resources has “Transformative” 2014, Cutting Back in 2015). Eclipse previously announced a cutback in their 2015 budget of 20% over 2014 spending levels (see Eclipse Resources Gets $440M from New Stock, Trims 2015 Capex 20%). Because they’ve decided not to do a jv, Eclipse is now cutting back this year’s budget by 57% over 2014. They will now drill just 19 new wells this year and place 29 wells into production…
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Accidents | Energy Services | Industrywide Issues | Marshall County | Pipelines | Regulation | West Virginia | Williams
WV DEP to Fine Williams for Condensate Pipeline Leak in WV
A follow up to our story from Monday when we told you that Williams experienced two pipeline ruptures in Marshall County, WV following heavy rains (see Williams Pipelines Rupture in Marshall County After Heavy Rains). One of the pipelines that burst was a 4-inch condensate pipeline. West Virginia regulators have signaled they will fine Williams for the condensate pipeline leak because it ended up in the nearby Little Grave Creek–contaminating some six miles of the creek. We now know how much condensate leaked out. According to the WV DEP, 132 barrels of condensate (or roughly 5,500 gallons) leaked out. Cleanup and sampling of the creek is still in progress. But that begs the question, what the heck is condensate?…
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Anti-Drilling/Fossil Fuel | Energy Companies | Industrywide Issues | Litigation | Lycoming County | Pennsylvania | XTO
Democrat County Judge Rules PA AG’s Case Against XTO Can Proceed
Not long after she took office, Pennsylvania’s Democrat Attorney General, Kathleen Kane, brought criminal charges against XTO Energy for an accidental spill in Lycoming County, PA that happened two years before she was in office (see PA AG Abuses Her Authority, Files Criminal Charges Against XTO). Yes, this is the same Kathleen Kane who may be forcibly removed from office because she lied under oath, a little criminal offense called perjury (see PA Grand Jury Finds Anti-Drilling AG Kathleen Kane Lied Under Oath). Meanwhile, Kane continues her reign of terror against XTO and others (see Minuteman Enviro Says PA AG Office “Terrorized” Family Members, Filing Lawsuit and PA Attorney Gen. Kane Abuses Office Again, Arrest Warrant for EQT). The latest on the XTO sham case is that Democrat Lycoming County Judge Marc Lovecchio has (surprise!) refused to dismiss the charges against XTO…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | New York | Pennsylvania | Regulation | Statewide NY | Statewide PA
New Bill Aims to Keep Drilling/Pipelines Out of Dela. River Basin
A new bill aimed at restricting shale drilling and pipelines in the Delaware River Basin has just been re-introduced by a pair of Delaware Democrats in Congress. It flies under the name of the Delaware River Basin Conservation Act. This is the fifth time the bill has been introduced (in 2013 it was HR 644, click here for the full text of the bill). The bill would vest the already out-of-control U.S. Fish and Wildlife Service with power and money to “identify and implement conservation activities” in the Delaware River Basin. The tipoff that this is anti-drilling is that it’s being promoted by the William Penn Foundation as well as the Delaware River Basin Commission. DRBC board members say the bill doesn’t step on their toes at all. In fact, DRBC welcomes the bill because it will help with “defending environmental quality in ways that are outside of its [DRBC’s] operations.” In other words, it’s one more tool to ensure shale drilling never happens in the Delaware River Basin…
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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 
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 
This is a strange and complicated tale that boils down to this: Aubrey McClendon has a singular talent for finding and taking money from people who later turn around and stick a knife in his back. You may remember in February the story we brought you that Chesapeake Energy had sued its former co-founder, Aubrey McClendon, claiming he stole data on his way out the door (see