Marcellus Drilling News

Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA 2014 Impact Fee Disbursement Info: Why Did PUC Delay?
June 11, 2015June 11, 2015

Once again the Pennsylvania impact fee–the equivalent of a state severance tax on all oil and gas drilling in the state–will bring in an enormous amount of revenue for the state: $223.5 million for calendar year 2014 to be exact. That’s down slightly from the $225.7 million levied in 2013. Yesterday the PA Public Utility Commission (PUC) released the official numbers, a day after state Republicans leaked a draft version of the report. Those rascally Republicans wanted to share the news that the impact fee is doing just fine, thank you very much, and we don’t need Democrat Gov. Tom Wolf’s Marcellus-killing severance tax of 17.3% just to feed the beast (teachers’ unions). Note that drillers are required to pay their impact fee/tax by April 1st. Last year the PUC, under then-Gov. Tom Corbett, released a preliminary report of monies raised and to be distributed on April 4th (see 2013 PA Impact Fee Sets Record: $224.5M, Grand Total Now $630M). This year the PUC, under Gov. Tom Wolf, still hadn’t released the report by early June. Why did the PUC hold back the report this year? It took Republicans leaking the details to force the hand of the PUC into releasing the official numbers. Was the PUC, under Wolf’s newly appointed chairperson Gladys M. Brown, sandbagging for political reasons–to influence the debate on the severance tax by withholding important information? You decide. Below we have a breakdown of the numbers for 2014–who’s getting how much–along with some pretty charts from the PUC…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA 2014 Impact Fee Payments: List of Drillers & What They Paid
June 11, 2015June 11, 2015

After being shamed into it by state Republicans, the Pennsylvania Public Utility Commission (PUC), after delaying it for two months, yesterday released the numbers for the 2014 impact fees–the equivalent of a severance tax on PA’s drillers. The total raised was $223.5 million, to be divvied up between those places where drilling takes place (receiving 60% of the fee) and other boondoggles cooked up by Harrisburg politicians (the other 40%). See today’s companion story on who gets what from the 2014 impact fee (PA 2014 Impact Fee Disbursements: Why Did PUC Delay?). This post concentrates on the drillers themselves and how much money each one contributed to the impact fee pot for 2014. Below are some helpful pie charts from the PUC (including the number of active wells in the most-drilled counties), followed by the entire list of who paid how much…
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Economic Impact | Industrywide Issues | Statewide WV | West Virginia

WV’s GDP Soars Thanks to Marcellus/Utica Wells & Pipelines
June 11, 2015June 11, 2015

Last year West Virginia’s gross domestic product–the total value of all goods and services produced in the state–increased by 5.1%. Only two other states–Texas and North Dakota–had bigger increases in GDP. What was the reason for the growth? Was it tourism? Nope. The solar and wind industry? Nope. Timber harvesting? Nope. Surely because of coal–WV is a big coal state? Nope. Coal is in decline in the state. You may have guessed by now the reason for WV’s hot GDP growth rate is the Marcellus/Utica industry. With the expansion of drilling, the buildout of “massive” processing plants and yes–the addition of major new pipelines–the state is on a tear economically. So what? Higher GDP equals more investment, more jobs, more prosperity for everyone in the Mountain State…
Read More “WV’s GDP Soars Thanks to Marcellus/Utica Wells & Pipelines”
Energy Companies | Energy Services | EV Energy Partners | Industrywide Issues | M3 Midstream | Momentum | Ohio | Pipelines | Processing Plants | Statewide OH | Williams

Williams Buys Less of Utica East Ohio than Previously Planned
June 11, 2015June 11, 2015

In April MDN told you that Williams would buy out EV Energy Partners 21% share in Utica East Ohio (UEO)–a midstream/pipeline company operating in Ohio (see Williams Buys Out EVEP Interest in Utica East Ohio Midstream for $575M). The original press releases in April, from both Williams and EVEP, clearly state that Williams would buy the entire 21% EVEP share in UEO. But that didn’t happen. Yesterday Williams announced they have closed on an additional 13% from EVEP (not 21%) and for $357 million (not $575 million). The Williams press release says the other 8% share went to the other partner in the venture. You have to read the EVEP press release to learn that the other partner is M3 Midstream, otherwise known as Momentum. Seems a funny thing happened on the way to the forum…
Read More “Williams Buys Less of Utica East Ohio than Previously Planned”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Republicans Hold Firm in Opposing Wolf Severance Tax
June 11, 2015June 11, 2015

Pennsylvania Gov. Tom Wolf continues to face stiff opposition from the public at large, and (more importantly) from Republicans in the PA state legislature. The leadership of both the PA House and Senate have lined up against Wolf’s severance tax, which he claims is 5% but now everybody freely admits is really closer to 17% (see PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%). The PA budget is due by June 30. Negotiations between Gov. Wolf and the legislature continue. When the two sides meet, the temperature in the room noticeably drops. Wolf is in over his head and apparently doesn’t know it–or won’t admit it. He set an unrealistic expectation with teachers’ unions that he would pay them off for their support by taxing the #$#@ out of the Marcellus industry–transferring the hard-earned money of Marcellus producers to Big Education takers. PA Republicans in the state legislature are the firewall. Let’s hope the firewall holds…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pipelines | Regulation

Anti Drillers Demand DRBC Hold 7 Meetings on PennEast Pipeline
June 11, 2015June 11, 2015

Some 16 so-called “environmental and community” groups (leftist/socialist groups) are calling on the Delaware River Basin Commission (DRBC) to hold seven public hearings on the proposed PennEast Pipeline, a 114-mile pipeline slated to run from the Scranton, PA area to the Trenton, NJ area. Why stop at seven? Why not 10? Or 20? Or 50? Let’s have a public hearing every day of the week! The aim is, of course, to provide free publicity and a forum for anti-drillers to engage in their freak shows. We’ve watched plenty of them at the podium at these kinds of meetings–and yes, it’s a freak show. The DRBC, itself tending to the anti-drilling side of the isle, is trying to interfere with the Federal Energy Regulatory Commission’s (FERC) sole authority to permit or not permit the PennEast. Apparently there’s a bit of detente on the issue and FERC will hold one joint public hearing with the DRBC. The freaks, er, a “environmental groups” are demanding the DRBC up that number to seven–because two minutes allotted for each speaker in front of the microphones and cameras is just not enough…
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Energy Services | Enterprise Products Partners | Industrywide Issues | Ohio | Pipelines | Statewide OH | Taxation

ATEX Express Ethane Pipeline Says it’s Tax-Exempt in Ohio
June 11, 2015June 11, 2015

School districts and local governments in 13 Ohio counties along which the ATEX (Appalachia-to-Texas Express) natural gas liquids pipeline runs, are miffed that ATEX doesn’t want to pay property taxes on the pipeline. The 1,230-mile ATEX pipeline originates in Washington County, PA and connects to four fractionators in the Marcellus/Utica Shale region. The pipeline, which crosses 265 miles of Ohio, went online in early 2014 (see Let it Flow! ATEX Ethane Pipeline Testing Now, Online Soon). State law stipulates that only pipelines classified as public utilities are liable for property taxes. Private, non-public utility pipelines are not on the hook for local property taxes. However, ATEX may be liable for Ohio’s commercial activity tax…
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Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

PA Electric Co Spending $6M in Upgrades to Help Mariner East Pipe
June 11, 2015June 11, 2015

Pennsylvania Electric Company (Penelec), a subsidiary of FirstEnergy Corp., is an electric utility that serves 600,000 customers in 31 Pennsylvania counties. Penelec also serves some of the electric needs for the Marcellus/Utica industry in the state. Penelec announced Monday that the company is spending $6 million to construct several new power lines and rebuild several others. Why? To serve natural gas pumping stations being constructed in central Pennsylvania by Sunoco Logistics’ Mariner East pipeline. Penelec is quick to add that the improvements will also “enhance service reliability” for 3,000 customers in the area as well…
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Energy Companies | MDS Energy

Marcellus Driller MDS Sets up Financial Subsidiary in Denver, CO
June 11, 2015June 11, 2015

A small Marcellus-focused drilling company based in western Pennsylvania is expanding–to Denver, Colorado! But not to drill wells. MDS Energy was established in 2005 by Michael D. Snyder. By 2006 the company offered its first investment partnership. Drilling companies today are as much about investments and finance as they are about sinking holes in the ground. MDS quickly grew and in 2007 founded a sister company to concentrate on oilfield services (drilling, construction, etc.) called First Class Energy. First Class has gone on to drill over 1,000 wells, mostly for MDS competitors since MDS themselves haven’t drilled all that many wells–we count 39 permits in PA, some of which are likely duplicates, issued to MDS Energy from January 2013 through April 2015, according to the newest edition of the Marcellus and Utica Shale Databook just released. In 2011 MDS formed MDS Energy Development, LLC, an investment firm concentrating on oil and gas investments. In order to offer investments as a broker-dealer (able to execute trades for themselves or others), MDS formed the subsidiary MDS Securities, LLC. It is MDS Securities that is expanding and moving its headquarters to Denver…
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Best of the Rest

Marcellus & Utica Shale Story Links: Thu, Jun 11, 2015
June 11, 2015June 11, 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: Thu, Jun 11, 2015”
American Energy Partners | Ascent Resources | Belmont County | Energy Companies | Gulfport Energy | Jefferson County (OH) | Monroe County | Ohio | Utica Shale

Big McClendon News: Sells 35K Utica Acres, Creates New Company
June 10, 2015June 10, 2015

We have major news coming from Aubrey McClendon’s American Energy Partners (AEP). A lot of news. So buckle in. First we’ll tell you the news, then we’ll give you our take on that news–what it means. In brief, the news coming from AEP HQ in Oklahoma City is this: (1) AEP’s Marcellus/Utica AEP subsidiary, American Energy Appalachia Holdings, has been spun out into a 100% standalone company and has changed its name to Ascent Resources; (2) the CEO of Ascent is the same guy who was the CEO of American Energy Appalachia Holdings–trusted McClendon lieutenant Jeffrey A. Fisher; (3) Ascent has cut a deal with Gulfport Energy to sell 35,000 prime Utica Shale acres for $407 million; and (4) Ascent has just sold shares in the company and taken out new loans for $977 million, giving them $700 million in cash after they pay off certain other loans. Whew! Here’s the details, along with a little news of our own about AEP…
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American Energy Partners | Ascent Resources | Belmont County | Energy Companies | Gulfport Energy | Jefferson County (OH) | Monroe County | Ohio | Utica Shale

Details on Gulfport’s Purchase of 35K AEP Utica Acres + New Stock
June 10, 2015June 10, 2015

As we report in our lead story today, Aubrey McClendon’s American Energy Partners has decided to spin out it’s Marcellus/Utica operation into a brand new, 100% independent company. That new company, formerly called American Energy Appalachia Holdings, is now called Ascent Resources. Ascent has turned around and immediately sold 35,325 net acres in prime Utica Shale country–Monroe, Belmont and Jefferson counties in Ohio–to one of AEP’s chief competitors in the Utica, Gulfport Energy. In addition, Gulfport has just announced they are floating another 10 million shares of stock. If the new shares sell for anything close to today’s current share price, that will net the company another $440+ million. Below we have the details (from Gulfport) on the deal with AEP to purchase prime Utica acreage complete with four drilled wells and a pipeline gathering system, along with Gulfport’s announcement about the new stock offering…
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Industrywide Issues | Research

A Sad First: EIA’s June DPR Reports Marcellus Production Slips
June 10, 2015June 10, 2015

This is a sad milestone in the Marcellus Shale. The U.S. Energy Information Administration (EIA) issued their latest Drilling Productivity Report (DPR) on Monday. We thought last month’s edition would show production in the Marcellus Shale would contract–but surprisingly it did not (see EIA DPR May 2015: Shale Production Slips, But Not in Marc/Utica). Overall production of natural gas in the U.S. did slip in May, but in the Marcellus and Utica natgas production went up. But the June edition of the report brings us the sad news that production in the Marcellus will decline from last month–by 28 million cubic feet per day (Mmcf/d). Also of note in the June report: There was a single shale play in which natural gas production will increase from the previous month. Can guess which one? It was the Utica!…
Read More “A Sad First: EIA’s June DPR Reports Marcellus Production Slips”
Centre County | Chevron | Energy Companies | Pennsylvania

Chevron Lists Another 6,630 Marcellus Acres for Sale in Central PA
June 10, 2015June 10, 2015

Chevron continues a slow bleed of selling Pennsylvania Marcellus Shale assets in 2015. In February the company put up for sale 12 tracks of Marcellus acreage in Bedford, Blair and Cambria counties in PA–just over 17,000 acres total (see Chevron Selling 17K Marcellus Shale Acres, More Sales Coming). In May, Chevron posted another 11,700 acres for sale in Clearfield and northern Cambria counties (see Chevron Shops Another 11,700 Marcellus Acres in Central PA). In June the company has just listed another 6,630 acres along with four drilled wells–all of it in Centre County…
Read More “Chevron Lists Another 6,630 Marcellus Acres for Sale in Central PA”
Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

Drillers Hope to Get Forced Pooling Law Passed in WV This Year
June 10, 2015June 10, 2015

Supporters of the forced pooling bill that failed to pass in the 60-day regular session of the West Virginia legislature this year are not done. MDN previously reported on House Bill (HB) 2688 which was “a sure thing” for passage earlier this year. But at literally the eleventh hour the bill died in a tie vote (see The Real Story of Why Forced Pooling Bill Failed in WV). It seems the bill died because Democrats got their knickers in a twist over other legislation they couldn’t get passed, so they denied the Republican-controlled legislature a win on this bill. Politics. We’ve previously covered the various aspects of this bill of which we are aware (see our stories here). We also predicted the bill may get another chance this fall (see WV Forced Pooling Bill HB 2688 May Get Another Vote This Fall). Seems that was prescient. WV media is reporting that forced pooling was once again front and center at an interim meeting of the Joint Committee on Energy in the WV legislature on Monday. The West Virginia Oil and Natural Gas Association is on a mission to educate and promote forced pooling with the hope of getting a compromise bill passed this year…
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Energy Services | Industrywide Issues | PennEast Pipeline | Pipelines

PennEast Pipeline Hands Out Another $70,000 in “Grants”
June 10, 2015June 10, 2015

Another round of “largesse” has just been served up from the PennEast Pipeline (see PennEast Payola? Buying Support One Community at a Time). Don’t get us wrong–the organizations receiving the latest round of $70,000 in “grants” from PennEast are exceptionally worthy organizations–volunteer fire departments, after school programs, etc. We just a have a problem with the timing of it all (see our thoughts here: Will Companies Continue Making Grants after Pipelines are Built?). Here’s the list of the 14 organizations that each received a $5,000 check from PennEast this week…
Read More “PennEast Pipeline Hands Out Another $70,000 in “Grants””