Marcellus & Utica Shale Story Links: Fri, Feb 20, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Access Midstream Partners | Bradford County | Chesapeake Energy | Energy Companies | Energy Services | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Williams
PA Landowners File RICO Royalty Lawsuit Against Chesapeake/Williams
Along with acquiring Access Midstream (formerly Chesapeake Midstream), Williams has just acquired a brand new lawsuit. Two Bradford County, PA law firms along with a New Jersey law firm on Tuesday filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit on behalf of 90 landowners in Bradford County against Chesapeake Energy and Williams Partners (because Williams is now the owner of what was Access Midstream) claiming Chessy and Williams/Access conspired to defraud landowners of royalty money by deducting post-production expenses they had no right to deduct…
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Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Susquehanna County
Cabot O&G Loses PA Supreme Court Case to Extend Lease
In October MDN told you about an important lawsuit that went to the Pennsylvania Supreme Court, a case called Harrison v Cabot Oil & Gas (see Important Landowner/Driller Case Heads to PA Supreme Court). In brief, Susquehanna County, PA landowners Wayne and Mary Harrison signed a lease with Cabot Oil & Gas for $100 per acre and 12.5% royalties. Learning that others in the area got better deals and feeling they were not only hoodwinked but pressured into signing, they sued Cabot halfway through the lease to dissolve it. Ultimately that lawsuit was decided in favor of Cabot. But by the time the lawsuit was done and dusted, the original 5-year term had expired without Cabot drilling. The Harrisons claimed since Cabot hadn’t drilled, the lease is now over with. Cabot said the lease went on “pause” when the Harrison’s sued–you can’t very well drill with an active lawsuit. This “lease on pause” case was appealed all the way to the Supreme Court in PA, and on Tuesday they rendered their decision…
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Chesapeake Energy Sues McClendon for Taking His Rolodex with Him
This is rich. Yesterday Chesapeake Energy sued its former co-founder, Aubrey McClendon, claiming he took his rolodex (“contacts list” for our younger readers) with him when he left the building. Chesapeake said the data McClendon took with him had “trade secrets” in it. McClendon, in responding to the frivolous lawsuit, said that the data he took was part of his contractual agreement with Chesapeake. McClendon was and remains Chessy’s biggest partner, with a working interest in almost all of the wells they’ve drilled. Apparently his ongoing relationship with the company he co-founded bothers the Powers That Be (corporate raiders Carl Icahn and Mason Hawkins)…
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OH Frack Truck Facility Given Green Light, Mayor Tries to Stop It
MDN first told you about a frack truck washing facility in Columbiana, OH last September (see Frack Truck Washing Facility Shut Down Until ODNR Permit Issued). The facility, flying under the name of Clear Creek, made a misstep by not first obtaining a permit from the Ohio Dept. of Natural Resources before it began operations. They immediately stopped operations and applied for the permit–it was a brand new requirement that Clear Creek was not aware of. A temporary permit to operate was granted by ODNR last week. The mayor of Columbiana, Ryan Blakeman, opposes the facility’s right to operate and he’s trying to find any grounds he can to appeal the ODNR permit and stop Clear Creek…
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Rex Energy 2014: Revenues Up 39%, Production Up 66%, 50 New Wells
Rex Energy, our “little energy company that could, and does” in the Marcellus and Utica Shale turned in its 2014 financial and operational update yesterday. Rex had a good year in 2014, despite prices for natural gas heading lower. They hit a new high for production–averaging 154.4 million cubic feet equivalent per day (MMcfe/d)–that’s 66% more than the 2013 average. Total proved reserves jumped up 57% to 1.3 trillion cubic feet. Rex drilled 50 new wells across their acreage in the Marcellus and Utica Shale, and they brought 46 wells online during the year. They earned $298 million in revenue in 2014 (up 39% over 2013) and they have $420 million of liquidity–money available to use for more drilling…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Northampton County | PennEast Pipeline | Pennsylvania | Pipelines
PA’s Schizophrenic Anti-Drillers: Go Slow, Hurry Up
Anti-drillers are an interesting (and hypocritical, perhaps schizophrenic) bunch, as we’ve pointed out many times. They eschew “dirty” fossil fuels, yet they use fossil fuels every day, from the moment they wake up to the moment they go to bed (and even while they’re sleeping). Take the anti-drillers in Pennsylvania. A story mainstream media refused to report was the fact that the PA State Democrat Party–the home of anti-drillers in the Keystone State–passed an official plank in their platform in June 2013 ahead of the election for governor that would place an ongoing moratorium on all new Marcellus Shale drilling in the state (see PA Democrat Party Votes to End Marcellus Shale Drilling Statewide). Their reasoning? We need more data. We need to slow it down. We don’t have enough facts. We need to deliberate. Contrast that with anti-drilling Supervisor Andy Donello from Upper Nazareth Township in southeast PA (and others like him) with respect to the PennEast Pipeline…
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Canada’s 1st LNG Export Facility Gets Green Light; Marcellus Gas?
The Bear Head LNG export facility in Nova Scotia, Canada has just taken another huge step forward. You may recall last August when we outlined the $2.2 billion project proposed by Australian company Liquefied Natural Gas Limited, or LNGL (see Deal to Purchase Site for Nova Scotia LNG Plant Advances Quickly). On Tuesday, the company reported they have received necessary Canadian regulatory approvals to move forward with the project. Why are we going on about an LNG plant in Nova Scotia? Because Marcellus Shale gas will feed it…
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Marcellus & Utica Shale Story Links: Thu, Feb 19, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH | Summit County
OH Supreme Court Strikes Down Home Rule in Gas Drilling Case
Cases before the high courts of both New York and Pennsylvania in the past year have ruled that local municipalities can control oil and gas drilling within their borders–so-called “home rule” statutes. In the case of NY the high court went berserk and said towns can actually ban such drilling, which of course strips away private property rights guaranteed under the U.S. Constitution. In PA it was a little better, but not much. PA’s high court gutted provisions in the state’s Act 13 law making for a crazy-quilt patchwork of local zoning regulations that PA’s drillers must now navigate through. One state’s high court, however, has gotten it right. Yesterday the Ohio Supreme Court issued its long awaited ruling in the Munroe Falls v Beck Energy case (for background, see Beck Energy & Munroe Falls Go to Court – Again). In a 4-3 ruling, the OH Supremes said the City of Munroe Falls cannot stop Beck Energy from drilling a well that was properly permitted by the Ohio Dept. of Natural Resources (ODNR)…
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PA Production in 2H14 Soars to New Record; 4 Tcf in 2014
The Pennsylvania Dept. of Environmental Protection (DEP) published its semi-annual (every 6 months) production report yesterday for Marcellus/Utica Shale gas production. The big news is that once again PA has shattered another record. In the second half of 2014 PA produced 2 trillion cubic feet (Tcf) of natural gas, making it ~4 Tcf for the entire year. That works out to be around 16% of all gas used throughout the United States–coming from a single state. Chesapeake Energy produced the most gas in 2H14 (with 712 producing wells), followed by Cabot Oil & Gas (340 producing wells). Below we have some more stats and facts about PA’s production for 2014…
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PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax
Somehow in the flurry of news last week when Pennsylvania Gov. Tom Wolf released his so-called proposal to tax the Marcellus Shale industry (see PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax), we missed the fact that Wolf threatened the entire Marcellus Shale industry with a ban on drilling if the industry doesn’t fall into line and support his tax. Sure sounds like good old Philly-style break-their-kneecaps talk from the kinder, gentler and oh-so-much-smarter than everyone else Tom Wolf. His precise words: “…the alternative is not really no tax, the alternative is no drilling, a ban as in the case of New York.” Our collective jaws hit the ground. How can anyone not see this man for what he is? For what he’s trying to do (end drilling)? Like an old-style mob boss–you pay him or you get hurt–and hurt real bad. Fortunately, some groups like the Pennsylvania Independent Oil and Gas Association (PIOGA) isn’t taking Wolf’s threat lying down. They’re in the mood to fight…
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Why did PA DEP Acting Sec Quigley Mass Fire Gas Advisory Board?
Even though he’s still only “acting” Secretary of the Dept. of Environmental Protection (DEP), John Quigley is cleaning house at the DEP–installing his own yes-men and women in important positions–and doing it just prior to issuing important new drilling regulations. For some time politicians and old-line mom and pop conventional (non-shale) drillers have been making a fuss that the rules that apply to shale drillers should not apply to non-shale drillers. Fair enough. There are some major differences. But the timing for creating a new Conventional Oil and Gas Advisory Committee in addition to the Oil and Gas Technical Advisory Board (OGTAB)–and mass firing the members of the OGTAB (as Quigley has done) seems darned peculiar in light of the fact they have to publish new drilling regulations this year or what has been a 3-year process will need to be restarted all over again…
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Braskem | Energy Services | Ethane | Industrywide Issues | Odebrecht | Processing Plants | Statewide WV | West Virginia | Wood County
First Cloud Appears for Odebrect WV Ethane Cracker Plant Project
Hmmm. Is there a cloud on the horizon over the Odebrecht ethane cracker project proposed for Parkersburg, WV? Until now every single thing we’ve read or heard (or discussions we’ve had with David Peebles from Odebrecht) have indicated the WV ethane cracker project is full speed ahead, pedal to the metal. It was only at the tail end of 2013 that the project was announced (see WV Announces Brazilian Company to Build Ethane Cracker Complex). The $4 billion project will construct not only an ethane cracker, but several petrochemical plants as well (see Odebrect Cracker Aims to Attract Chemical/Plastics Manufacturing). In fairness, Odebrecht has said a final decision won’t be made until later this year (see Odebrecht WV Cracker Plant Decision “By End of 2015?). And until now, it certainly seemed like this project, even more than the Shell cracker in Pennsylvania, has had the momentum. Then we read this…
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Rice Energy Trims 2015 Budget 19%, Production Soars 61% in 4Q14
Yesterday Rice Energy, a small but rapidly growing driller in the Marcellus and Utica Shale, issued a recap of 2014 along with “guidance” (or projections) for what they plan to do in 2015. The disappointing but understandable news is that Rice plans to spend less money drilling in 2015 than they did in 2014–$890 million for 2015 compared with $1.1 billion in 2014–a 19% reduction. That’s not nearly as deep a cut as many Marcellus/Utica drillers. For 2015, Rice plans to drill 61 new wells using that $890 million, and bring 36 new wells online. Production for Rice soared in 4Q14–up 61% from the previous quarter! Below are a pair of announcements from yesterday with loads of details…
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Magnum Hunter Slashes Drilling Budget by 75% for 2015
In 2014 Magnum Hunter’s capital budget for drilling (most of it in the Marcellus and Utica) was $400 million (see Magnum Hunter 2014 CapEx: Utica/Marcellus). We recently warned you that MH was planning to quit drilling in 2015, at least until they get a 40% discount from oilfield services companies (see Magnum Hunter CEO: No New Marcellus/Utica Drilling in 2015). Indeed that seems to be the case. Yesterday MH released their 2015 budget. It contains $100 million (down 75% from 2014), which is mostly tidying up wells already under way and drilling perhaps one or two new wells, along with some change for more acreage acquisitions…
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Along with acquiring Access Midstream (formerly Chesapeake Midstream), Williams has just acquired a brand new lawsuit. Two Bradford County, PA law firms along with a New Jersey law firm on Tuesday filed a RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit on behalf of 90 landowners in Bradford County against Chesapeake Energy and Williams Partners (because Williams is now the owner of what was Access Midstream) claiming Chessy and Williams/Access conspired to defraud landowners of royalty money by deducting post-production expenses they had no right to deduct…
Anti-drillers are an interesting (and hypocritical, perhaps schizophrenic) bunch, as we’ve pointed out many times. They eschew “dirty” fossil fuels, yet they use fossil fuels every day, from the moment they wake up to the moment they go to bed (and even while they’re sleeping). Take the anti-drillers in Pennsylvania. A story mainstream media refused to report was the fact that the PA State Democrat Party–the home of anti-drillers in the Keystone State–passed an official plank in their platform in June 2013 ahead of the election for governor that would place an ongoing moratorium on all new Marcellus Shale drilling in the state (see 
Cases before the high courts of both New York and Pennsylvania in the past year have ruled that local municipalities can control oil and gas drilling within their borders–so-called “home rule” statutes. In the case of NY the high court went berserk and said towns can actually ban such drilling, which of course strips away private property rights guaranteed under the U.S. Constitution. In PA it was a little better, but not much. PA’s high court gutted provisions in the state’s Act 13 law making for a crazy-quilt patchwork of local zoning regulations that PA’s drillers must now navigate through. One state’s high court, however, has gotten it right. Yesterday the Ohio Supreme Court issued its long awaited ruling in the Munroe Falls v Beck Energy case (for background, see 