Marcellus Drilling News

Chesapeake Energy | Energy Companies

Are the Buyout Sharks Starting to Circle Chesapeake Energy?
June 23, 2015June 23, 2015

The buyout sharks are circling midstream behemoth Williams, as we reported yesterday (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). For some time, there have been rumors that the upstream sector may also see more buyout activity. Specifically, Chesapeake Energy is a favorite name that keeps reappearing. Are the buyout sharks starting to circle Chesapeake? MDN spotted an open letter to corporate raider Carl Ichan on the Seeking Alpha website. Icahn is the second largest investor in Chesapeake. We think the letter illustrates what’s wrong with capitalism, if we might be so bold as to say so. The letter writer encourages Ichan to make a bid for Chessy since the company’s stock is priced half today what it was a year ago. The letter writer predicts a buyout bid by Ichan would create a bidding war and somebody else would buy the company for big bucks, enriching Ichan and other investors (and no doubt lead to more Chesapeake employees losing their jobs). What if Ichan himself wins the bidding war he starts? No sweat. Just wait 6-12 months, says the letter writer, and then break the company apart into pieces and sell it off piece by piece and make 3-4x your original investment. We think that’s a phenomenally poor idea…
Read More “Are the Buyout Sharks Starting to Circle Chesapeake Energy?”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

More on PIOGA Request to Keep DEP in its Regulatory Box
June 23, 2015June 23, 2015

Yesterday MDN brought you the story of the Pennsylvania Independent Oil & Gas Association’s (PIOGA) third request to intervene in the Act 13 lawsuit decided by the PA Supreme Court (see PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13). The point of PIOGA’s request is to make the DEP follow PA law when it comes to granting shale drilling permits. Our headline and some of the language we used in that article was not completely accurate–we’d like to admit that right up front (although our inaccuracy was not intentional). The headline states that the DEP has denied permits based on portions of the Act 13 lawsuit tossed out by the PA Supreme Court. In researching the issue and speaking with those knowledgeable about PIOGA’s request to the Supreme Court, we’ve not found a specific instance where the DEP has denied a permit based on the tossed out Section 3215(b)-(e). But while denying permits based on rejected portions of Act 13 is not taking place, something far more subtle and insidious IS going on–with the same result as if the DEP were denying permits based on tossed-out portions of Act 13. Let us explain…
Read More “More on PIOGA Request to Keep DEP in its Regulatory Box”
Energy Services | Energy Transfer Partners | Industrywide Issues | Ohio | Pipelines | Statewide OH | Taxation

For the Children: ET Rover Pipeline $91M in School Taxes 1st Year
June 23, 2015June 23, 2015

In the ongoing fracking wars, pipelines are the latest flash point for irrational anti-drillers. It used to be no one thought twice about a new pipeline going in the ground. But fear mongers from Big Green organizations like the Sierra Club claim those pipelines are a connection straight to Lucifer. We’ve seen groups of anti-fossil fuelers oppose pipelines like the PennEast, the Constitution, the Northeast Energy Direct and many others. One of those many others is the ET Rover pipeline, a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers that will cost $3.7 billion to build and run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. ET Rover is a project of Energy Transfer, the company making a play to take over Williams (see our other stories on that topic). This story is about ET Rover’s campaign to overcome opposition in Ohio where the majority of the pipeline (570 miles of it) will run. According to a press release issued yesterday, the ET Rover pipeline will generate more than $135 million in ad valorem tax revenue for Ohio during its first year in operation. Of that $135 million, an estimated $91 million will be directed to more than 36 local school districts. Perhaps the nutters opposing the pipeline should rethink their opposition before they screw their own kids out of $91 million? As you know, it’s always for the chil’ren. Libraries, hospitals, parks and senior centers are among other local entities that will benefit from the tax revenue from ET Rover…
Read More “For the Children: ET Rover Pipeline $91M in School Taxes 1st Year”
Energy Services | Williams

Williams Appoints New Top Attorney
June 23, 2015June 23, 2015

Clarification: The new Williams lawyer, Sarah Miller, was not hired specifically to fend off the hostile takeover bid from ETE. Our original headline and lead sentence for this story may have left that impression (since updated). Ms. Miller, as we point out in the article, has worked for Williams for the past 15 years. Her appointment, according to a Williams official, was already in the works long before the ETE bid. However, we maintain that Ms. Miller will be very busy in the coming weeks and months because of the ETE bid.

Williams has a new top lawyer who will help defend the company in a hostile takeover bid from Kelcy Warren, CEO of Enterprise Transfer Equity. Yesterday MDN shared the news that Warren, after six months of unsuccessfully trying to woo Williams into a merger deal, has dropped that effort and begun a new effort–a hostile takeover of the company (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). We don’t read much into the retirement of the previous top attorney at Williams–Craig Rainey. The press release says he retired. Since he was somewhere around 63 years old by our calculations, it’s not surprising Rainey retired. Replacing him is Sarah Miller who has worked for Williams for the past 15 years in various legal roles. Miller has been the “acting” top attorney at the company since March. Miller now has her hands full with an unwanted effort to take over the company…
Read More “Williams Appoints New Top Attorney”
Energy Services | Summit Midstream

Summit Midstream Gets New Head of HSE, former TCEQ Commissioner
June 23, 2015June 23, 2015

Summit Midstream has a small but growing presence in the Marcellus/Utica region. In 2013 Summit purchased a local pipeline gathering system in Doddridge County, WV from MarkWest Energy for $210 million (see MarkWest Sells Doddridge County, WV Pipeline System to Raise Cash). In June 2014, Summit bought 40% of Ohio Gathering for $377 million, a pipelines and processing plants operation in southeastern Ohio (see Summit Midstream Cuts $377M Check for 40% of Ohio Gathering). And in December 2014, XTO Energy inked a deal with Summit to build a local pipeline gathering network in southeastern Ohio–in Belmont and Monroe counties (see XTO Gets Serious in OH Utica, Hires Summit for Gathering System). Any major personnel changes that potentially affect the company are of interest here on MDN. Such a change has occurred. Summit announced yesterday that Zachary “Zak” Covar, former Commissioner of the Texas Commission on Environmental Quality (TCEQ), has joined Summit Midstream as Vice President in charge of Summit’s Health, Safety, Environmental and Regulatory affairs…
Read More “Summit Midstream Gets New Head of HSE, former TCEQ Commissioner”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Jun 23, 2015
June 23, 2015June 23, 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: Tue, Jun 23, 2015”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B
June 22, 2015June 22, 2015

Sunday evening MDN spotted what has to be THE biggest midstream story of 2015: Somebody wants to buy out and take over Williams Companies. The biggest midstream story of 2014 was the buyout of Access Midstream (the former Chesapeake Midstream) by Williams, creating a company that is nearly the size and certainly a worthy rival of the country’s biggest pipeline company Kinder Morgan (see Big News: Williams Partners Buying Access Midstream for $6B). Williams said at the time the “total transaction value” (or TTV) would create a combined company worth nearly $50 billion (see Deal Details for Williams/Access Midstream Merger – TTV of $50B!). Sunday evening Williams said, in a pair of prepared press releases, that somebody (they wouldn’t name who) has made an “unsolicited proposal” (almost sounding like an indecent proposal) to buy Williams for $64 per share, or a total deal worth $48 billion. Williams has rebuffed the offering, hiring some high-powered bankers to help them out of this mess. The guy and company making the offer, it has since been revealed, is none other than Kelcy Warren, CEO of both Energy Transfer Partners and Energy Transfer Equity, the main shareholder of ETP. ETP is very active in the Marcellus/Utica. We have as much as we can gather on Warren, background on ETP/ETE, his indecent proposal to Williams, and what Williams–one of if not THE largest midstream companies in the northeast–is doing in response to Warren’s proposal…
Read More “Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B”
Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

ETE Says Shareholders Big Winners in Potential Williams Merger
June 22, 2015June 22, 2015

Energy Transfer Equity is offering their side of the story in the proposed merger/takeover of Williams. MDN’s lead story today is about that merger. On Sunday, Williams issued a pair of press releases refusing to name who the suitor is, but essentially said that somebody (ETE) is making an offer to buy them (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). As you know, there’s always two sides to a story. ETE, the main investor in Energy Transfer Partners, is offering their side of the story. ETE’s version is much more lengthy than Williams and includes the claim that the ETE proposal offers a 32.4% premium to Williams stockholders “with a high degree of transaction certainty”…
Read More “ETE Says Shareholders Big Winners in Potential Williams Merger”
Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13
June 22, 2015June 23, 2015

Please see this MDN follow-up story for an important clarification/update: More on PIOGA Request to Keep DEP in its Regulatory Box

This story is why you pay MDN the “big bucks”–to break down complex issues into an easy-to-understand report. Last Friday the Pennsylvania Independent Oil & Gas Association (PIOGA) filed paperwork with the Pennsylvania Supreme Court asking for permission to, once again, intervene in the Act 13 lawsuit brought by seven selfish PA townships that resulted in portions of the Act 13 oil and gas drilling law to be struck down. Twice before PIOGA, which represents the companies directly affected by the Act 13 law, has filed to intervene and both times it was (incredibly) prevented from doing so. Apparently the people most affected by a lawsuit don’t have “standing” to defend themselves in PA courts–such is their system of “justice.” At any rate, PIOGA’s third attempt may succeed where the first two attempts failed, and that has the anti-drilling selfish towns, along with the Wolf administration, nervous. Why might PIOGA succeed this time? That’s where it gets complicated. In a nutshell, the zoning portions of the Act 13 law (Section 3304) were not the only sections to be struck down by the PA Supremes…
Read More “PIOGA Asks Supreme Court to Stop DEP Denying Permits Using Act 13”
Clay County | Cunningham Energy | Energy Companies | West Virginia

Cunningham Strikes Oil in West Virginia’s Big Injun Territory
June 22, 2015June 22, 2015

Back in 2013 we warned you that the injuns were coming–the Big Injun sandstone formation in West Virginia (see The Injuns are Coming! Injun Formation Drilling, that is). We told you then that Cunningham Energy of Charleston, WV was about to drill several shallow horizontal wells in the politically incorrectly named Big Injun Formation. We thought Cunningham was drilling for natural gas, but as it turns it, it was oil they were after. And, according to a press release, it’s oil that Cunningham has struck in the Big Injun…
Read More “Cunningham Strikes Oil in West Virginia’s Big Injun Territory”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else
June 22, 2015June 22, 2015

Magnum Hunter Resources’ (MHR) creditors (the bankers) want to be sure the company has enough money on hand to a) pay them back, and b) stay out of bankruptcy. So the creditors gave MHR a deadline of last Friday, June 19th, to make sure they have $65 million cash on hand. MHR couldn’t do it–so the creditors gave them a new deadline–July 10th. The company says they’ve already raised $55.6 million–so they just need a measly $9.4 million to meet the requirement by the new deadline. Or else…
Read More “Magnum Hunter’s Bankers Say Get $65M in Cash by July 10, Or Else”
Beaver County | Belmont County | Energy Companies | Ethane | Industrywide Issues | Ohio | Pennsylvania | Processing Plants | Shell

Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope
June 22, 2015June 22, 2015

In April Ohio officials announced Belmont County, OH has been chosen as the site of a potential ethane cracker plant (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). Which led us to admit that since we’ve been teased with a cracker for over three years now–with NO ONE actually committing to such a plant–we’re experiencing “cracker fatigue.” But not long after Shell made some serious moves toward committing to build a cracker plant in western Pennsylvania, not far from Pittsburgh. The most recent positive sign is that Shell finally, after three years of faffing about, earlier this month purchased the property the plant would be built on (see Shell Buys Beaver County, PA Property for Future Cracker Plant). Does a Shell cracker reduce the likelihood of an cracker plant being built less than two hours away in Belmont County, OH? Not according to officials in Ohio. In fact, they’re not worried at all…
Read More “Are OH Officials Worried about Shell’s PA Ethane Cracker? Nope”
Eclipse Resources | Energy Companies

Eclipse Lowers IOU Offering Expectations – by $100M
June 22, 2015June 22, 2015

Last week Eclipse Resources, a small but important driller primarily focused on the Ohio Utica Shale play, announced they are floating senior notes (IOUs) in an attempt to raise $650 million (see Eclipse Resources Floats $650M in New IOUs). Poof! There goes $100 million. On Friday Eclipse said they thought about it and they now want to raise $550 million with those notes, not $650 million as previously advertised…
Read More “Eclipse Lowers IOU Offering Expectations – by $100M”
Anti-Drilling/Fossil Fuel | Crime | Industrywide Issues

The Envrionmental Radicalization of the Anti-Drilling Movement
June 22, 2015June 22, 2015

MDN is beginning to see a pattern. It dawned on us as we were recently listening to several news reports of why young people become “radicalized” and join forces with militant Islamists like those in ISIS (what we used to call Al-Qaeda). People who have become radicalized break laws. They often kill other people. They sometimes commit suicide by strapping bombs to themselves in an attempt to kill others. Sane people have a hard time understanding it. What drives these people to such extremes? What motivates them? Why do kids–some of them from America and other Western counties–become radicalized? Frankly, it usually (almost always) stems back to their childhood. Their heads have been crammed with liberal pap about hating America from a young age. People hate America because they hate freedom. As we were mulling this over, we had a revelation: It’s the same with some anti-drillers. In the same way some young people (and some older people) become radicalized and join ISIS, some are radicalized and join the “green” movement…
Read More “The Envrionmental Radicalization of the Anti-Drilling Movement”
About MDN | Calendar

Calendar of Events for Jun 22 – Sep 21 (90 Days)
June 22, 2015June 22, 2015

Below are upcoming events for the next three months (90 days). To see the full list of future events, visit this page: //marcellusdrilling.com/calendar/.

NOTE: To have an item included, please email it to: calendar@marcellusdrilling.com.
Read More “Calendar of Events for Jun 22 – Sep 21 (90 Days)”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, Jun 22, 2015
June 22, 2015June 22, 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: Mon, Jun 22, 2015”