Marcellus Drilling News

Bucks County | Industrywide Issues | Pennsylvania | Taxation

Latest Tax Marcellus Bill from Rep Tina Davis: Effective Rate of 11%
February 13, 2015February 13, 2015

It’s another day, must be time for another liberal Pennsylvania Democrat to propose taxing the the Marcellus industry into oblivion, and right on cue PA Rep. Tina Davis (Bucks County, near Philadelphia) has introduced one. Her plan goes well beyond the plan offered earlier this week by PA Gov. Tom Wolf. Wolf’s plan is for a 7.5% tax, that taken with the existing state corporate income tax pushes an effective severance tax rate to well over 10%. That’s not enough for the tax ravenous Tina Davis: She not only wants a 5.2% severance tax with 4.6 cents per Mcf (effective rate of maybe 8% total), she wants to keep the current impact fee, which is another 3% (not the 1.9% claimed), creating an effective rate of somewhere around 11%. Let’s just save the Dems some time: Tax the Marcellus industry 99% and let those money-grubbing corporations keep 1%. That’s what PA Dems really want. What’s that? You say not all money earned by corporations (and citizens) belongs to the government? You silly goose. Of course it all belongs to the state…
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Energy Companies | WPX Energy

WPX CEO Riffs on Company Strategy Change from Gas to Oil Drilling
February 13, 2015February 13, 2015

Some people, and some companies, just have plain old bad luck and rotten timing. Like WPX Energy. WPX didn’t like the business it was in–drilling for natural gas in Pennsylvania, so they’ve sold off 46,700 acres and 63 operational wells in northeastern PA to Southwestern Energy for $300 million (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). They still have some acreage in southwest PA they’re trying to dump. What has WPX’s attention these days? What’s the all-fire hurry to get out of the northeast? They’re trying to convert the company from gas to oil drilling–just in time for oil prices to go as low as they’ve been in a generation. Talk about bad timing!…
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Carbon County | Energy Services | Industrywide Issues | Luzerne County | PennEast Pipeline | Pennsylvania | Pipelines | Regulation

More Silly Antics from Antis at FERC PennEast Pipeline Hearing
February 13, 2015February 13, 2015

We’ve been to a number of Federal Energy Regulatory Commission (FERC) scoping hearings, as well as hearings by the New York Dept. of Environmental Conservation. Whether it’s a hearing on pipelines, compressor stations or shale drilling, anti-fossil fuel nutters always show up and it seems as if they read from the same script every time. The latest example of that comes from Carbon County, PA where the silly antics of antis was on full display once again, this time at a FERC hearing on the PennEast Pipeline. Example: One anti-pipeline nutter used part of her 3 minutes of talk time to read the lyrics from a Disney movie (boggles the mind)…
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Energy Services | Industrywide Issues | Pipelines | Williams

Williams CEO Says Pipeline Opposition Equals More Coal Use
February 13, 2015February 13, 2015

In a recent interview, the CEO of Williams, Alan Armstrong, was quite candid: The problem slowing natural gas pipeline development is not the low price of oil and gas–it’s politics. Armstrong says he would prefer federal oversight, by FERC, shutting out “local voices” that muck up the works. We’re not sure we totally agree with that viewpoint. Freedom and liberty are messy things, but we understand his sentiment. Armstrong points out there’s no one “who’s in charge” when it comes to pipelines, and process which makes for endless debates and trying to reconcile innumerable opinions…
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Baker Hughes | Energy Services | Halliburton | Industrywide Issues | Jobs

Halliburton Laying Off Up to 6,400, Says Baker Hughes Not a Factor
February 13, 2015February 13, 2015

Halliburton, the county’s second largest oilfield services company, announced earlier this week they’re laying off some 6.5% to 8% of their 80,000 employees, which translates to 5,000 to 6,500 jobs. The company Halliburton is buying, Baker Hughes, announced in January they are laying off 11% of their workforce (see Baker Hughes Announces 7,000 Layoffs Due to Low Oil Price). Also in January, the country’s (and world’s) largest oilfield services company, Schlumberger, laid of 9,000 workers (see Schlumberger Firing 9,000 to Reduce Head Count, “Low Oil Prices”). To which we say, it’s getting ugly out there…
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Energy Companies | EV Energy Partners

EV Energy Partners CEO Resigning, VP/CFO Promoted
February 13, 2015February 13, 2015

Changes are coming at the top of EV Energy Partners (EVEP). Mark Houser, current president and CEO, will resign at the end of February. Houser will remain on the board. In his place, EVEP is promoting Michael Mercer, senior VP and CFO, to the top post of president/CEO. EVEP says the move was planned. EVEP, you may recall, has been trying to unload a hoard of Utica Shale acreage (more than a half million acres) for the past three years–largely unsuccessfully (see EVEP’s Mark Houser Says More Utica Acreage Sales Ahead in 2014). They recently sold their interest in Cardinal Midstream to a pair of South Korean companies (see Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M). Perhaps Mercer will have more luck shopping their considerable inventory of Utica acreage?…
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Air Quality | Industrywide Issues | Regulation | Research

New Study: Most Natgas Processing Facilities Leak < 1% Methane
February 13, 2015February 13, 2015

The EPA is getting ready to drop draconian new regulations on the oil and gas industry claiming that methane is leaking out everywhere. A major field study led by Colorado State University and published this week in the peer reviewed journal Environmental Science & Technology examined 114 gathering facilities and 16 processing plants across 13 states looking for methane leaks. What did they find? The vast majority natural gas facilities had minuscule leak rates of less than 1%…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Feb 13, 2015
February 13, 2015February 13, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax
February 12, 2015February 12, 2015

Newly elected Pennsylvania Gov. Tom Wolf has turned out to be another tax and spend liberal. Surprise! If you’re a regular MDN reader, you’re not surprised. We warned you about this from day one. Wolf released his severance tax plan yesterday, and it’s even worse than what he talked about on the campaign trail. He’s proposing a 5% severance tax PLUS another 4.7 cents per thousand cubic feet of natural gas that flows from a well. PA’s House Majority Leader Dave Reed (Republican) says it works out to be roughly a 7.5% tax–one of the HIGHEST IN THE NATION. On top of low low gas prices and rigs beginning to idle and capital budgets slashed 30-50%. In other words, if this tax is passed, not only will it not bring in Wolf’s disingenuous promise of $1 billion “for the children” (i.e. teachers unions), it will KILL Marcellus drilling in the state–and that’s not a bluff. It’s now apparent that Wolf is a man completely out of his depth and not ready for a big job like governor…
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Industrywide Issues | Pennsylvania | Statewide PA | Taxation

PA Towns to Gov Wolf: Don’t Kill the Impact Fee with Your New Tax
February 12, 2015February 12, 2015

Yesterday Pennsylvania Gov. Tom Wolf (Democrat) proposed what amounts to a 7.5% severance tax on Marcellus and Utica Shale drilling in the state (see our lead story today). Wolf’s severance tax is being erroneously reported as a 5% severance tax PLUS 4.7 cents per thousand cubic feet of natural gas produced at the wellhead. When you work it out, it’s actually about 7.5%, NOT 5% as Wolf misleadingly implies. Coupled with PA’s high corporate income tax rate, the proposal, if passed, would put PA at the top of the list of states taxing the oil and gas industry, essentially killing future Marcellus Shale drilling in the state (not an idle threat). Some of those most opposed to this hare-brained plan are the townships where drilling actually happens–they stand to loose big-time because the impact fee money they get now will be traded away for a few table scraps. The impact fee will be converted into the severance tax–and given away to Philadelphia…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Statewide PA | Taxation

John Quigley’s Old Employer Likes High Wolf’s Marcellus-Killing Tax
February 12, 2015February 12, 2015

MDN has several stories today about the newly proposed 7.5% severance tax on Marcellus Shale drilling proffered by newly-elected Pennsylvania Gov. Tom Wolf. If you want to know whether or not this severance tax will work to undermine, and even stop, Marcellus Shale drilling, all you have to do is look at the comments of anti-drilling groups in the state–like the comments of the radical PennFuture. You may recall that Wolf’s nominee to head the Dept. of Environmental Protection, John Quigley, used to work for PennFuture (what does that tell you about the future of drilling in the state?). According to the new “acting” CEO and head of PennFuture, this severance tax will help to end Marcellus Shale drilling in the state…
Read More “John Quigley’s Old Employer Likes High Wolf’s Marcellus-Killing Tax”
CONSOL Energy | Energy Companies

Corporate Raider Mason Hawkins Holds 14% of CONSOL Energy Stock
February 12, 2015February 12, 2015

We consider this bad news for CONSOL Energy: Corporate raider (mainstream media calls it “activist investor”) Mason Hawkins, founder, chairman and CEO of Southeastern Asset Management, has just purchased another boatload of stock in CONSOL Energy. Hawkins, you may recall, is part of the dynamic duo, along with corporate raider Carl Ichan, who pressured Aubrey McClendon to leave Chesapeake Energy in 2013 (see Breaking: Chesapeake Energy CEO Aubrey McClendon Gets Pink Slip). Hawkins and Ichan then hired Doug Lawler as their proxy who came in and fired over 1,200 people at Chesapeake–an action intended to line the pockets of Hawkins and Ichan. Southeastern was/is the #1 stockholder in Chesapeake with 13.4% of Chessy’s stock. Southeastern is now, we believe, the #1 stockholder in CONSOL. After Hawkins’ latest spending spree, Southeastern now owns (according to our calculations) 14% of CONSOL’s stock…
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CNG/LNG | Exporting | Industrywide Issues | Pipelines

Repsol Accelerates Plan for Canadian LNG Exports Fed by Marcellus
February 12, 2015February 12, 2015

Spanish oil giant Repsol loves North American shale. In December, Repsol purchased the troubled Canadian company Talisman Energy for $8 per share (see Spanish Respol Buys Marcellus E&P Talisman Energy for $8/Share). That deal is awaiting regulatory approval before it becomes official. Repsol is also contemplating building an LNG (liquefied natural gas) export facility along the coast of Saint John, Newfoundland. Those plans, according to new filings with Canada’s National Energy Board, have been accelerated. Part (much?) of the gas that will feed the Saint John LNG operation will come from, yes, the Marcellus and Utica Shale…
Read More “Repsol Accelerates Plan for Canadian LNG Exports Fed by Marcellus”
Energy Companies | Southwestern Energy | Statewide WV | West Virginia

Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus
February 12, 2015February 12, 2015

Southwestern Energy is one of the few exploration and production (E&P) companies that is bucking the trend. Most E&Ps are slashing their 2015 drilling budgets by a third or more. Not Southwestern. They recently closed on the purchase of a massive 413,000 Marcellus Shale acres, mostly in West Virginia, from Chesapeake Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). Southwestern paid $5.375 billion. Rather than pull back on spending, in December the company announced it would double its investment in drilling for the northeast (see Southwestern Energy on a Tear – Doubles Marcellus Budget for 2015). We picked up a few more details on Southwestern’s plans for 2015, which include drilling 70 wells in northern WV…
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Energy Services | FMC Technologies

FMC Technologies Axing 2,000 Jobs, Some in the Marcellus/Utica
February 12, 2015February 12, 2015

FMC Technologies is a subsea oil-field equipment manufacturer and supplier of hydraulic fracturing technology and other wellhead services in North America–including a large presence in the Marcellus/Utica region. The company, based in Texas, employs 20,000 people worldwide. Yesterday FMC became the latest big oil and gas industry firm to announce job cutbacks due to low oil prices. FMC said it will trim (more like ax) 10% of its workforce, some 2,000 people, most of them in North America and located “outside of Houston.” One can deduce that some number of those lost jobs will be in the Marcellus/Utica…
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Economic Impact | Industrywide Issues | Marshall County | Property Value | West Virginia

Marshall County Property Values Rise Yearly Thx to Marcellus
February 12, 2015February 12, 2015

In contravention to the erroneous claim by anti-drillers that property values go down when drilling comes to town, Marshall County, WV continues to prove it’s just the opposite. Last year at this time MDN told you that the property values in Marshall County for 2013 had collectively risen an astonishing $605 million–in just one year (see When Drilling Comes to Town, Property Values Go…UP, Not Down). What about property values in 2014? They broke the record, again. Values are up a collective $631 million!…
Read More “Marshall County Property Values Rise Yearly Thx to Marcellus”