Marcellus Drilling News

CONSOL Energy | Energy Companies

CONSOL Energy 2015: E&P Budget Cut 33%, Utica Expands
January 30, 2015January 30, 2015

CONSOL Energy released its fourth quarter 2014 and plans for 2015 today. Overall CONSOL’s revenues were way down for 4Q14 over 4Q13–down 90%. But that was due to a number of coal operations they discontinued in 2014. The gas drilling division had another outstanding quarter–pumping 70.5 billion cubic feet of natural gas for the quarter, up 45% year over year. For 2015 CONSOL plans to spend $1 billion on their Marcellus drilling budget (down from $1.5 billion in 2014). Marcellus Shale costs for CONSOL were $2.83 per million cubic feet equivalent (Mcfe) in 4Q14, a $0.18 per Mcfe improvement from 4Q13 which saw costs of $3.01 per Mcfe. The company achieved “all-in cash costs” of only $1.71 per Mcfe in the Marcellus Shale. And no, we’re not sure what the difference is between costs and “all-in cash costs.” Perhaps one of our smart readers can enlighten us in the comments? The trend is obviously good–it’s costing them less and less to produce more and more gas. CONSOL says in their update that the Utica Shale continues to grow in importance for the company…
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Energy Companies | Ohio | PDC Energy | Statewide OH | Utica Shale

PDC Energy’s Interesting 2014 – “Dynamite” in the Utica
January 30, 2015January 30, 2015

PDC Energy had an interesting 2014 in the Marcellus/Utica. During the year they sold off their 131,000-acre Marcellus Shale operation to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). They entered the year intending to drill 18 Utica Shale wells (they came close). Along the way they had an accident and spilled drilling mud into a creek (see PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH). During the year they fired (?) reassigned (?) their CEO back to the board and promoted the COO to be CEO (see Changing Chairs at PDC Energy: New President/CEO). And at the end of last year, the company announced they will push the pause button on new Utica drilling in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). Yesterday PDC provided a high level overview of 2014 (none of the above items mentioned) which includes a few brief statements about the Utica and Marcellus. One of the items their most excited about? A 4-well Utica pad called (we kid you not), “Dynamite”…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell

Shell Trimming $15B in Spending Next 3 Years – PA Cracker?
January 30, 2015January 30, 2015

Shell released their fourth quarter 2014 results yesterday, along with comments on what’s ahead for 2015. Full year profits for Shell were up in 2014–to $19 billion (a mind-blowing number). However, the company plans to trim $15 billion worth of spending in over the next three years. Ouch. MDN wondered if the Shell ethane cracker plant planned for Monaca, PA is on the list to trim…
Read More “Shell Trimming $15B in Spending Next 3 Years – PA Cracker?”
Accidents | Brooke County | Energy Services | Enterprise Products Partners | Ethane | Industrywide Issues | Pipelines | West Virginia

PHMSA Update on ATEX Pipeline Explosion in WV – Faulty Weld?
January 30, 2015January 30, 2015

It’s been five days since a section of the Appalachia to Texas (ATEX) Express ethane pipeline ruptured/exploded and burned in Brooke County, WV (see ATEX Ethane Pipeline Explodes, Burns near Follansbee, WV). Since the pipeline is under the regulatory oversight of the Pipeline and Hazardous Materials Safety Administration (PHMSA), that organization is doing the investigation into the accident. The rupture and resulting fire burned approximately 24,000 barrels of ethane and scorched some 5 acres of woodland. What has the PHMSA learned so far? Not much. They have some theories, according to an initial report. It appears that the 20-inch pipeline ruptured near a section that had been welded together…
Read More “PHMSA Update on ATEX Pipeline Explosion in WV – Faulty Weld?”
CNG/LNG | Economic Impact | Exporting | Industrywide Issues | Pennsylvania | Processing Plants | Statewide PA

PA-Based Air Products Wins Another Gulf LNG Plant Contract
January 30, 2015January 30, 2015

Air Products is a Wilkes-Barre, PA manufacturer that builds huge rocket-looking “production trains” or “heat exchangers”–pieces of equipment that turn natural gas into liquefied natural gas, or LNG. Last September, Air Products signed a deal to produce two heat exchangers for an LNG export plant in Texas (see Air Products Wins Contract for TX LNG Plant, Marcellus Connection?). They’ve done it again! Air Products announced Wednesday they’ve signed another agreement–this one is to produce three heat exchangers for the Cameron LNG Liquefaction Project, located in Hackberry, Louisiana. As with the Texas plant, we believe there’s a connection to the Marcellus in this new sale…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | PennEast Pipeline | Pipelines

NJ Conservation Group Opposes PennEast Pipeline – Self Interest
January 30, 2015January 30, 2015

Bet you didn’t know that if the PennEast Pipeline, a 110-mile pipeline from Wilkes-Barre, PA to Trenton, NJ is built, it will pollute the drinking water for 2.5 million people. That’s the faux claim made by the New Jersey Conservation Foundation in a resolution they’ve just passed opposing the project. It’s pretty obvious the board of the Foundation is packed with anti-fossil fuelers (all of whom use fossil fuels every day of their lives). Such is the wacky world of anti-drillers. Make reckless and false claims, have those claims picked up and amplified by a sycophantic media that NEVER challenges them on those claims, and try to bend the unthinking public’s will against a project like the PennEast. Standard play book…
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Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jan 30, 2015
January 30, 2015January 30, 2015

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Energy Services | GASFRAC

Fire Sale for GASFRAC Waterless Fracking Co, Interim CEO Resigns
January 29, 2015January 29, 2015

Canadian oilfield services company GASFRAC continues to be a company in serious trouble. Which is sad. GASFRAC, you may recall, is one of the few companies that has a commercially viable waterless fracking technology using liquefied petroleum gas (liquid propane). GASFRAC was working on their first Utica Shale frack job late last year (see Details on GASFRAC’s Waterless Frack Test in OH Utica). But the company has been in trouble for some time. They fired the CEO and COO back in late 2012 (see Waterless LPG Fracking Company GASFRAC Fires its CEO, COO). The company filed for bankruptcy a few weeks ago (see Waterless Fracking Company GASFRAC Files for Bankruptcy). Since 2012, GASFRAC has had an “acting” CEO. As of yesterday, he’s not acting anymore–he’s now gone along with another board member. In February the company will be de-listed on the Toronto Stock Exchange. The good news is that the bankruptcy court is allowing them to proceed with either a sale of the whole company, or its pieces, post haste…
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Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf Signs Exec Order to Ban Drilling Under State Land
January 29, 2015January 29, 2015

Pennsylvania Gov. Tom Wolf is, disappointingly, keeping campaign promises to his anti-drilling supporters. Today he will make a trip to Benjamin Rush State Park in northeast Philadelphia to sign an executive order to prohibit (for now) any more leases for drilling under (not on) state-owned land. The move is creating child-like excitement among far-left “environmentalist” groups like PennEnvironment–well known for rabid anti-drilling activities. You may recall two governors ago Democrat Gov. Ed Rendell was hell bent for leather in leasing state-owned land for drilling ON said land. After his voracious appetite for money was sated and his Democrat cronies in the legislature spent all $444 million of it, Rendell tried to pretend that he’s an environmentalist by slapping an executive order–a moratorium–on any more leasing of state-owned land. Hypocrite. Last year Gov. Tom Corbett lifted that moratorium with an executive order of his own so that another $75 million of badly needed revenue could be raised by leases for drilling under (not on) state land. Today, Gov. Wolf will turn down that $75 million with an executive order of his own for purely political pandering reasons. How utterly disappointing (but not surprising)…
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Carrizo Oil & Gas | Energy Companies | Guernsey County | Ohio | Statewide OH | Utica Shale

Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015
January 29, 2015January 29, 2015

Carrizo Oil & Gas is the latest Marcellus/Utica driller to cut their 2015 capital expenditures (capex) budget–by 35% over 2014. According to the Carrizo announcement below, they plan to spend $450-$470 million on drilling, most of it in the Eagle Ford (Texas) where they’re running three drilling rigs. They will spend only has much as they have to on “lease maintenance” in the Utica Shale–which we take to mean they’ll only do what they must to show they still intend to drill on leases that may soon expire. In the update below we get some numbers for Carrizo’s second Utica Shale well, in Guernsey County, OH. The update also indicates Carrizo continues to throttle back production in the Marcellus. It says nothing about new drilling in the Marcellus, so we presume there isn’t any planned for 2015…
Read More “Carrizo Cuts Budget 35%, No Drilling Planned in Utica/Marcellus in 2015”
Energy Services | Energy Transfer Partners | Industrywide Issues | Lease & Royalty Payments | Ohio | Pipelines | Richland County | Statewide OH

Advice to OH Landowners Approached for Pipeline Easements
January 29, 2015January 29, 2015

The Energy Transfer Partners Rover pipeline (ET Rover) is probably the biggest pipeline project currently under way in the U.S. It’s bigger than the Keystone XL pipeline! In places like Richland and Crawford counties in Ohio, ET Rover is actually two pipelines–42 inches in diameter, sitting side by side. The entire length is 820 miles and will stretch from WV and PA through OH and into Michigan and eventually to Canada. Landowners in Richland and Crawford attended a meeting sponsored by a Columbus law firm last night to hear some sobering truth: the pipeline will happen and it is coming. But that doesn’t mean landowners are helpless. The attorneys offered some good advice that all landowners approached for pipeline easements should listen to…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Regulation | Southwestern Energy | Statewide WV | West Virginia

WV Legislature Passes Bill to Help Southwestern Keep Drilling
January 29, 2015January 29, 2015

Currently in West Virginia, if an E&P company, say Chesapeake Energy, has applied for and received permits to drill dozens or hundreds of wells which are currently in various states of being drilled, and then decides to sell those leases and drilling operations to someone else, like Southwestern Energy, the drilling law passed a few years ago says the new company buying those leases and drilling operations must re-apply for all of those permits to continue drilling. That’s a big problem. Southwestern, you may recall, has just paid Chessy $5.375 BILLION for leases, wells and drilling operations–most of it in WV. Can you imagine what will happen? Rigs idled…people laid off…chaos and confusion. It’s an economic disaster. So you can understand why the WV legislature has dispensed with the rules and passed a bill in record time that fixes the problem, allowing Southwestern (or anyone else) to assume permits on leased property that changes hands…
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Antero Resources | Energy Companies | Industrywide Issues | Reserves (Proved and Unproved)

Antero Proved Reserves Rocket Up 66%; Dev Costs Just $0.61/Mcf
January 29, 2015January 29, 2015

Antero Resources, one of the largest drillers in the Marcellus and Utica Shale region, issued a press release yesterday to crow about some important numbers. The first important number is 66%–as in Antero’s “proved reserves” of natural gas (and liquids and oil) jumped 66% in 2014–to a mind-blowing total of 12.7 trillion cubic feet equivalent (Tcfe). Proved reserves means using existing technology and under these economic conditions, Antero can reasonably, with very high confidence, extract at least 12.7 Tcfe. Astonishing. Another number to crow about: $0.61, as in it costs the company only 61 cents per thousand cubic feet (Mcf) to find and develop/extract that gas. Of course what’s missing in that number is the midstream component–processing and pipelining it to market. But still, it shows that these large companies can still make money even in a low cost environment, which is reassuring…
Read More “Antero Proved Reserves Rocket Up 66%; Dev Costs Just $0.61/Mcf”
Columbia Pipeline Group | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Regulation | Washington County

Columbia Withdraws Compressor Plan, Seeks Alternative in SWPA
January 29, 2015January 29, 2015

Columbia Midstream Group, a subsidiary of NiSource, has withdrawn an application to build a compressor station in South Strabane Township (Washington County), PA and has, instead, applied to build two smaller facilities at the same site: a launcher/receiver facility and a metering station (both related to pipelines). The land they intend to build on is a 251-acre plot owned by Range Resources. Nearby residents who attended a public hearing on Tuesday night were still against the plan, even though it’s not nearly as big and noisy and polluting as a compressor station…
Read More “Columbia Withdraws Compressor Plan, Seeks Alternative in SWPA”
Accidents | Brooke County | Energy Services | Enterprise Products Partners | Ethane | Industrywide Issues | Pipelines | West Virginia

Enterprise Releases 2014 Results – Remains Mum on ATEX Explosion
January 29, 2015January 29, 2015

Enterprise Products Partners, a huge $41 billion midstream company with 51,000 miles of pipelines, and the company that built the Appalachia to Texas (ATEX) Express pipeline, released their 2014 results today. In the update is no mention of the explosion and fire along the ATEX in Brooke County, WV that happened on Monday (see ATEX Ethane Pipeline Explodes, Burns in Brooke County, WV). We’ve looked, and haven’t found a peep about what caused the explosion. The agency charged with investigating the pipeline rupture is the federal Pipeline and Hazardous Materials Safety Administration (PHMSA)…
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Columbia Pipeline Group | Energy Services | NiSource

Columbia Pipeline Floats IPO, Hopes for Upward of $1B
January 29, 2015January 29, 2015

Last September NiSource announced they would spin off subsidiary Columbia Pipeline Group into its own company (see NiSource Splits in Two: Columbia Pipeline Will be Separate Company). It took a few months, but the two operations finally determined which executive would go with which company (see Who Gets the Kids in NiSource/Columbia Gas Divorce?). Earlier this week we finally learned the details of the initial public offering (IPO) for Columbia–how much money they plan to raise. NiSource said the IPO will float an initial 40 million “common units” (think shares of stock) with an option to add another 6 million to the pot. They hope to get between $19 and $21 per unit, meaning a total of between $760 million on the low side, to $966 million on the high side…
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