Marcellus Drilling News

CONSOL Energy | Energy Companies

CONSOL Energy Floats $650M in Senior Notes, Paying Off Old Debt
March 25, 2015March 25, 2015

Yesterday MDN told you about the mad dash to raise cash by Carrizo Oil & Gas and Rice Energy (see The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy). Carrizo went the equity route, selling shares of stock, and Rice Energy went the debt route, selling IOUs or notes. It seems the mad dash is far from over. Now comes word that CONSOL Energy is also going the debt route–floating $650 million of senior notes. CONSOL will use the money to pay off older debt…
Read More “CONSOL Energy Floats $650M in Senior Notes, Paying Off Old Debt”
Industrywide Issues | Research | Weather

Marcellus/Utica 3-Month Temp Forecast: Cold, Warm, Warm
March 25, 2015March 25, 2015

Every now and again we check in on the weather forecast–the long range forecast–from Weather Services International. Why? Because the weather has a great deal to do with the price of natural gas, and the price of natural gas has a great deal to do with whether or not drillers are willing to drill for it. Forthwith, here is the temperature forecast for the next three months across the U.S., by region (the Marcellus/Utica is, of course, in the Northeast)…
Read More “Marcellus/Utica 3-Month Temp Forecast: Cold, Warm, Warm”
Dominion Energy | Education | Energy Services | Industrywide Issues

Dominion to Issue $1.5M in Education Grants in Energy, Environment
March 25, 2015March 25, 2015

Dominion, a major natural gas utility and midstream company operating in Connecticut, Maryland, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia and the District of Columbia is looking to give away $1.5 million. But not just to anyone. Yesterday Dominion announced they will issue grants that focus on energy, environment and workforce development in the states and areas where they operate. ThepProgram awards up to $50,000 for higher education projects and up to $10,000 for K-12. But, you have to fill out an application and the application must be filed no later than May 15. What are you waiting for! Here’s the details from Dominion…
Read More “Dominion to Issue $1.5M in Education Grants in Energy, Environment”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Mar 25, 2015
March 25, 2015March 25, 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: Wed, Mar 25, 2015”
Energy Companies | Equinor/Statoil | Gastar Exploration | Lease & Royalty Payments | Marshall County | Noble Energy | Utica Shale | West Virginia | Wetzel County

Statoil Cuts Deal to Drill Under 474 Acres of the Ohio River in WV
March 24, 2015March 24, 2015

The Vikings are Coming! Er, well, at least the Norwegians are. And they’re not coming to conquer but to drill–underneath the Ohio River in West Virginia on the border of Marshall and Wetzel counties. The West Virginia Department of Commerce has cut a deal with Norway-based Statoil which allows the company to drill and frack for oil and natural gas on 474 acres thousands of feet beneath the Ohio River. What are the lease terms? An average price of $8,732 per acre with 20 percent production royalties. That translates into a signing bonus of $4.14 million. And that’s not all. WV is near to signing a deal with Noble Energy and Gastar Exploration on two other Ohio River tracts that will provide lease bonuses of $4.9 million and $749,000 (respectively) along with 20% royalties…
Read More “Statoil Cuts Deal to Drill Under 474 Acres of the Ohio River in WV”
Energy Companies | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Range Resources Corp | Statewide PA | Washington County

Range Resource Secret to Drilling More Productive Wells for Less $
March 24, 2015March 24, 2015

Every year drillers get better at what they do. They experiment, they learn, they grow. Here’s an example from Range Resources. Range went back to a well pad they previously drilled with five wells and drilled two more. The two new wells used a different technique. Comparing the first year of production from the new wells with the first year of the original wells, the two new wells produced 53% more natural gas (per well) than the old wells did. Tell us again, peak oil/gas theorists, how the shale boom is just a flash in the pan and will be all gone by the end of this decade. Here’s more details on how Range increased production by 53%–what their “secret” is to drilling more productive wells using LESS money per well…
Read More “Range Resource Secret to Drilling More Productive Wells for Less $”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Gov Wolf Digs In Like a Chigger with Severance Tax Plan
March 24, 2015March 24, 2015

Newly elected Pennsylvania Gov. Tom Wolf, whose administration is filled with Ed Rendell retreads, remains “dug in” when it comes to a severance tax. One of the Rendell retreads (with ties to the anti-drilling PennFuture) is John Hanger, former Secretary of the Dept. of Environmental Protection under Rendell. Hanger is Wolf’s Secretary of Planning and Policy (see PA Gov-Elect Wolf Appoints John Hanger Secretary of High Taxes). Hanger ran against Wolf and Wolf’s (now) chief of staff, Katie McGinty, who is herself another Rendell retread, before dropping out of the governor race last year (see Pass One Last Joint for John Hanger). True to his far-left lib Dem roots, Hanger (as Wolf’s mouthpiece on this issue) is saying we need those high severance taxes and we need them now. Squishy RINO Republicans, like Senator Joe Scarnati, will consider adopting the severance tax–but only after ~~being bribed enough~~, er, ah, pension reform is dealt with first…
Read More “PA Gov Wolf Digs In Like a Chigger with Severance Tax Plan”
Industrywide Issues | Pennsylvania | Research | Statewide PA

PA 2014 Top 5 Lists for: Wells Drilled / Inspections / Violations
March 24, 2015March 24, 2015

We’ve written about it before, but once again we want to highlight the excellent service provided by Marcellusgas.org. They maintain a data site filled with facts and figures on every shale well in Pennyslvania. Everything from production to how much brine/wastewater is produced to the number (and type) of violations for each well (and for each driller). It’s a true treasure trove. You can access a lot with a free membership, but it only costs $20 a year to access a whole lot more. (No, we don’t even know the guy who runs it and we don’t get paid to sing their praises!) Marcellusgas.org recently sent an email to members with some “top 5” lists for 2014: the top 5 counties with highest number of wells drilled, top 5 drillers by number of wells drilled, top 5 for number of inspections (by county and driller) and top 5 for number of violations (by county and driller). We found the lists interesting and thought you would too…
Read More “PA 2014 Top 5 Lists for: Wells Drilled / Inspections / Violations”
Carrizo Oil & Gas | Energy Companies | Rice Energy

The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy
March 24, 2015March 24, 2015

The “get cash through the door” game continues for both drillers (E&P) and midstream companies. We have two more drillers looking to get cash through the door in two different ways. Last week, Carizzo Oil & Gas, an independent oil and gas company with drilling operations in several shale plays including the Marcellus and Utica, floated a plan to use equity financing (selling more of the company via shares of stock) to raise $205 million by floating 4.5 million shares of stock for $45.50 per share. Carrizo, which has no plans to drill new wells in the northeast in 2015 (see Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015), will use the money to pay down debt. Meanwhile, Rice Energy, which is a “pure play” energy company targeting the Marcellus/Utica, announced yesterday they’re going the IOU route–issuing new notes, or promises to repay loans (incurring more debt), hoping to raise $400 million to be used for “for general corporate purposes, including capital expenditures”…
Read More “The Mad Dash to Raise Cash Continues: Carrizo & Rice Energy”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Marcellus Industry Consolation Prize: DEP Conventional Board
March 24, 2015March 24, 2015

Pennsylvania Dept. of Environmental Protection Acting Sec. John Quigley packed the DEP’s Oil & Gas Technical Advisory Board with members who will rubber stamp his onerous new drilling rules (see PA DEP Sec Quigley Pulls a Fast One, Changes Drilling Rules). Quigley used the excuse that the board was splitting in two, one board (the TAB) to cover unconventional/shale drilling, the other–Conventional Oil and Gas Advisory Committee (COGAC)–to cover traditional, vertical-only drilling. TAB is arguably the more important board because conventional drilling, which once was the only kind of drilling in the state, has all but shriveled up. There’s hardly any conventional drilling in PA these days. So with the TAB safely full of Quigley acolytes, it’s time to hand out the consolation prizes to the industry by giving them seats on the COGAC. Which is exactly what happened yesterday…
Read More “PA Marcellus Industry Consolation Prize: DEP Conventional Board”
Hydraulic Fracturing | Industrywide Issues | Public Opinion

Gallup Poll on Fracking Shows it to be a Partisan/Political Issue
March 24, 2015March 24, 2015

Gallup is out with a nationwide poll that asks this question: Do you favor or oppose hydraulic fracturing or “fracking” as a means of increasing the production of natural gas and oil in the U.S.? The headline that news organizations are reporting is that across all age groups and party affiliations, it’s a 40/40 split–40% favor fracking and 40% oppose it. If you dig a little deeper, you find this should be the real headline: Republicans favor fracking, Democrats oppose it. If you dig deeper still, you’ll find those who have grown a brain (50+ years old) are in favor of fracking, while inexperienced (and frankly dumber) young people oppose it. That about sums up the poll numbers (see them below). At least, those are the poll numbers shared by Gallup. They don’t bother to share the cross-tabs–the underlying details of the poll. We’d love to see it broken out by region–or by state. Did Gallup weight the poll with people from New England or California and under-represent places like Texas and North Dakota? We don’t know. Therefore we don’t know how truly reflective this poll is of “average” American opinion…
Read More “Gallup Poll on Fracking Shows it to be a Partisan/Political Issue”
Chesapeake Energy | Energy Companies

Chesapeake Slashes 2015 Budget Again, Another $500M
March 24, 2015March 24, 2015

Just a month ago Chesapeake Energy released their disastrous 2014 numbers and their stock price took a huge hit. Along with the numbers for 2014, Chessy released a projected budget for 2015 of $4-$4.5 billion, down 34% over 2014 (see Chesapeake Energy Earnings Down 60%; Cutting Budget 34% in 2015). It’s a month later and Chesapeake has just slashed the 2015 budget again–another $500 million. They blame it on the low commodity price of natural gas…
Read More “Chesapeake Slashes 2015 Budget Again, Another $500M”
Chesapeake Energy | Energy Companies

Carl Ichan Ups Ownership of Chesapeake, Continues to Lose $
March 24, 2015March 24, 2015

Corporate Raider Carl Ichan continues his stranglehold on Chesapeake Energy. Ichan, you may recall, holds the second highest number of Chesapeake shares of stock and was largely the person responsible for booting Aubrey McClendon from the company he co-founded in April 2013 (see McClendon Exits Chesapeake, Well-Bonused “Friends” Replace Him). In the lead-up to ejecting McClendon, Ichan increased his ownership in the company, starting in November 2012 (see Carl Ichan Ups Stake in Chesapeake Energy). He upped his ownership again after McClendon left, in August 2013 (see Corporate Raider Carl Ichan Ups Stake in Chesapeake – Again). How has that worked out for Carl? He’s losing money hand over fist (see Carl Icahn Has Lost $633 Million on Chesapeake Gamble…So Far). But channeling his inner Britney Spears (“Oops I Did It Again”), Carl just can’t get enough of the money-losing Chessy. He’s just increased his stake again–to 11% of the company. He remains Chessy’s #2 stockholder, behind fellow corporate raider Mason Hawkins…
Read More “Carl Ichan Ups Ownership of Chesapeake, Continues to Lose $”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Washington County

Jesse White is Back, Trying to Run as Republican for Judge
March 24, 2015March 24, 2015

This is really rich. Remember Jesse White–a member of the PA House of Representatives (Washington County, PA) who cyber bullied some of his own pro-drilling constituents using fake online IDs? (see How the Mighty Have Fallen: PA Rep White Admits Guilt, Not Sorry) White didn’t, as any normal person would, resign in shame for his disgusting offense. He served the rest of his term and the Democrats in his district were obtuse enough to put him on the ballot again. He lost last November, big time (see End of an Ignominious Era: PA Rep Jesse White Loses). White has now set his sites quite a bit lower–running for PA magisterial district court judge. Around our neck of the woods they call it being a town justice–as low as you can go in the court system (no offense intended to magisterial judges who do an important job!). But get this: White tried to lock up both the Democrat AND Republican lines on the ballot for the upcoming primary in May–by getting 100 or so RINOs to sign his petition for the Republican line on the ballot. Just one problem–not all of the signatures were legit and a judge tossed enough of them that old Jesse can’t run as a Republican. That has him crying the blues yet again…
Read More “Jesse White is Back, Trying to Run as Republican for Judge”
Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Mar 24, 2015
March 24, 2015March 24, 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, Mar 24, 2015”
Lease & Royalty Payments | Ohio | Statewide OH

Strategy Change? Some Buy Mineral Rights in OH Instead of Leasing
March 23, 2015March 23, 2015

A change in strategy? The Wheeling News Register is reporting an uptick in the purchase of mineral rights in the Upper Ohio Valley area. If a landowner owns both the surface and mineral rights, the typical situation is that the landowner will lease the mineral rights to an energy company for a certain period of time, receiving an up-front signing bonus. If drilled, the landowner will receive ongoing royalties from any gas (or oil) produced. But in some cases, instead of leasing, energy companies are buying the mineral rights. That is, the mineral rights become separated from ownership of the land on the surface. The energy company then owns the mineral rights, along with the right to use a bit of the surface to locate a drill pad and wells. The landowner selling the mineral rights gets a higher initial signing bonus by selling the mineral rights as opposed to leasing. But they also get zero royalties when selling the mineral rights. It becomes a decision between a little more money now, or a lot more money later. What kind of money are we talking about?…
Read More “Strategy Change? Some Buy Mineral Rights in OH Instead of Leasing”