Marcellus Drilling News

Energy Services | MarkWest Energy

MarkWest Hauls in $650M Cash from New IOUs, Paying Down Old Debt
March 4, 2015March 4, 2015

Last week MDN highlighted the latest round of debt financing being offered by MarkWest Energy (see MarkWest Floats Notes Seeking $650M…or $500M…or $1.15B – Which?). We noted two announcements about debt financing–one offering $650 million in IOUs (otherwise called notes) and one for $500 million. Seems the $500 million announcement was a restatement or reiteration of a round of financing from 2014. How do we know? MarkWest yesterday said it had successfully completed closed it’s offering of $650 million…
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Energy Services | Williams

Williams Hauls in $1B Cash from New IOUs, Paying Down Old Debt
March 4, 2015March 4, 2015

Not to be outdone by MarkWest that just raised $650 million in cash from new IOUs–MDN noted last week that Williams had gone shopping for several multiples of that amount (see Williams Goes Shopping for $3B, Floating Notes to Pay Down Debt). Williams reported yesterday they were successful in raising all $3 billion, some of which they’ll use to pay down older debt…
Read More “Williams Hauls in $1B Cash from New IOUs, Paying Down Old Debt”
Broome County | Energy Services | Industrywide Issues | Leatherstocking Gas | New York | Pipelines

Leatherstocking Moves Forward with Pipeline System in Windsor, NY
March 3, 2015March 3, 2015

By Andy Leahy (see MDN note at end)

New applications filed Feb. 20 and 27 with the New York State Public Service Commission show that built-up areas of Windsor, NY (Broome County) are in line to be the first in a sequence of small town conversions to natural gas previously announced by Leatherstocking Gas Company, LLC. Assuming the Windsor application doesn’t hit any hitches with the state, Leatherstocking’s target date for installation is Fall 2015, according to Town Supervisor Carolyn Price. “It’s one of the most frequently asked questions I get,” Price told MDN Monday morning. “When am I going to get natural gas?” Price also said a number of Windsor residents, while they wait, have needed to replace furnaces, and they’ve been installing propane-fueled burners–because those are reported to be more easily switched over to natural gas, down the road…
Read More “Leatherstocking Moves Forward with Pipeline System in Windsor, NY”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Drills 53 NE Wells in 2014, Plans Just 5 in 2015
March 3, 2015March 3, 2015

Magnum Hunter Resources (MHR) released its full year and fourth quarter 2014 update yesterday (selected portions below). MHR is a small-to-medium sized, but growing, driller focused almost totally on the Marcellus and Utica Shale. They own 80,000 net acres in the Marcellus and 120,000 net acres in the Utica. In 2014, the company drilled a combined 53 wells and achieved an average daily production of 101.3 million cubic feet equivalent. However, 2015 is a different matter. They plan to drill just 5 wells (and maybe not even those). They’re actively seeking joint venture partners who will give them a total of $500 million to drill in the Utica. The chief problem that we see is that MHR is swimming in debt…
Read More “Magnum Hunter Drills 53 NE Wells in 2014, Plans Just 5 in 2015”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies

Magnum Hunter Investor Call Transcript + Slide Deck
March 3, 2015March 3, 2015

In addition to releasing their 2014 update yesterday, Magnum Hunter Resources also held an analyst/investor conference call including CEO Gary Evans and other top MHR managers. Below we’ve included a transcript of the prepared remarks on that call (with highlighted passages of interest to MDN readers). We’ve also included their brand new PowerPoint presentation. We indicate our favorite slides from the new presentation…
Read More “Magnum Hunter Investor Call Transcript + Slide Deck”
Housing | Industrywide Issues | Litigation | Pennsylvania | Washington County

Prejudice in Washington, PA – Judge Says No Marcellus Boarding House
March 3, 2015March 3, 2015

Discrimination and prejudice have finally won in Washington, PA–and a dilapidated eyesore will continue to exist because of it. We’re speaking about plans to renovate a former, run-down convent into a boarding house for Marcellus Shale workers in Washington, PA. We’ve previously chronicled City Council’s opposition to the project (see Washington, PA Votes to Reject Marcellus Boarding House). We’ve also chronicled the shameful opposition of Rev. William Feeney and the Immaculate Conception church across the street from their denomination’s abandoned convent–opposed to the plan because it might attract “transients” to the neighborhood (see Marcellus Prejudice on Display at Washington, PA Church). The reverend and parishioners may want to re-read Matthew 25:31-40. The developer looking to create Marcellus housing at the old convent, Robert Starr, took the matter to court. Yesterday he lost…
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Pennsylvania | Potter County | Utica Shale

Dr. Terry Engelder Says Utica the Best Bet in Potter County, PA
March 3, 2015March 3, 2015

At a recent meeting in Coudersport (Potter County), PA, Dr. Terry Engelder of the Dept. of Geosciences at Penn State University and one of the leading experts on the Marcellus spoke to a packed room of more than 100 people about the Marcellus, the Utica, and the prospects for drilling in Potter County. Engelder said Potter County’s best bet is likely the Utica Shale layer…
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Energy Companies | WPX Energy

WPX Energy Axes 8% of Its Workforce, Consolidates Offices in Tulsa
March 3, 2015March 3, 2015

As we’ve previously mentioned, WPX Energy is now largely out of the Marcellus and Utica region. They sold off their most developed leased acreage–46,700 acres and 63 operational wells–to Southwestern Energy earlier this year (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). WPX still has some acreage in southwest PA they’re looking to unload–but they’ve mostly exited stage left. We’ve also previously mentioned the company has rotten luck–they decided they didn’t like the low price of natural gas in the northeast and so they retooled the company to drill for oil instead–just in time for the price of oil to tank (see WPX CEO Riffs on Company Strategy Change from Gas to Oil Drilling). WPX’s CEO, Rick Muncrief, was installed by a corporate raider. You know what that means. When times get tough, the little guys get axed from the payroll. And that’s just what’s happened. Yesterday WPX announced they’re “trimming” (that’s what firing is called these days) 8% of the workforce…
Read More “WPX Energy Axes 8% of Its Workforce, Consolidates Offices in Tulsa”
Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Dramatic Budget Cutbacks in Marcellus Budgets for 2015
March 3, 2015March 3, 2015

It’s not an understatement to say that drillers in Pennsylvania are in a fight for their very existence. Socialist Gov. Tom Wolf has convinced a great many PA residents in the state that it’s perfectly fine to steal money from drillers and landowners and redistribute it to Big Education. What Wolf and those who blindly follow him don’t realize is that Wolf’s nosebleed severance tax is the equivalent of a butcher knife to the neck of the goose laying Marcellus golden eggs–those eggs being jobs and current tax revenue. If Wolf & company pull the trigger on the tax, it will be catastrophic for the drilling industry in the state. Drilling is already decreasing–by huge numbers. Capital budgets for 2015 have been slashed–typically in one-third to one-half of 2014 levels. New drilling may all but stop with such a new tax–denying the tax and spend Democrats the revenue they seek “for the children.” What will they do then? The Marcellus Shale Coalition is blowing the trumpet to warn people of the coming train wreck that is Tom Wolf’s severance tax. One of the ways they are doing it is with an emailed newsletter called Marcellus Moments. Yesterday’s edition contains an excellent table showing Marcellus drillers and how much they’ve announced they are cutting back on their capital budgets for 2015. When you see it table form (below), it’s rather shocking. Do the Dems really think drillers will just keep on drilling when their already-squeezed profits disappear into a socialist tax black hole? Although the Marcellus is the biggest, it’s not the only shale play around. Rigs can be moved…
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Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Taxation

Beaver County Officials Don’t Think Wolf’s Tax Will Kill Shell Cracker
March 3, 2015March 3, 2015

Let’s do some simple arithmetic and use some basic logic. If you drill less Marcellus and Utica Shale wells, you get less natural gas and gas liquids–like ethane. If you have less ethane, and if there’s already several pipelines flowing that lesser amount of ethane out of the region, you don’t have much left over to feed a big ethane cracker plant–like the one Shell is considering for Beaver County, PA. Make sense? It does to PA’s new Senate Majority Leader, Jake Corman, who said a proposed severance tax–that would cause drilling to drastically be scaled back–may kill the Shell project (see New PA Senate Leader Says Severance Tax Could Kill Cracker Plant). Although Democrats like PA Gov. Tom Wolf don’t like the fact that actions (and not good intentions) have consequences, they do. And a severance tax will drastically reduce the number of new Marcellus wells drilled in the state, and cause a decrease in the amount of ethane being extracted. Local business and political leaders in Beaver County don’t quite see it that way though…
Read More “Beaver County Officials Don’t Think Wolf’s Tax Will Kill Shell Cracker”
Energy Services | Industrywide Issues | Ohio | Pipelines | Regulation | Rockies Express Pipeline | Statewide OH

REX Pipeline Zone 3 East-to-West Project Gets FERC Approval
March 3, 2015March 3, 2015

A big announcement yesterday from Tallgrass Energy Partners, owners of the Rockies Express Pipeline (REX). REX has received approval from the Federal Energy Regulatory Commission (FERC) to modify “certain facilities” along the REX pipeline from Monroe County, OH all the way to Moultrie County, IL–something they call the Zone 3 East-to-West Project. When complete, it means REX will flow an additional 1.2 billion cubic feet of natural gas per day from the Utica and Marcellus to Midwest markets. A second important announcement: The Seneca Lateral of the REX (Noble County, OH) is now fully operational. REX upgraded compressor stations along the Seneca Lateral which has boosted available capacity on the pipeline to 600 million cubic feet per day…
Read More “REX Pipeline Zone 3 East-to-West Project Gets FERC Approval”
Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | New York | Pipelines | Statewide NY | Williams

Latest Anti-Drilling Attack on Constitution Pipeline: “It’s Illegal”
March 3, 2015March 3, 2015

We’ve noticed a renewed effort on the part of anti-drillers to stop the already FERC-authorized Constitution Pipeline, slated to run from Susquehanna County, PA–where they can actually drill for natural gas–through upstate New York to Schoharie County (see FERC Issues Final Approval for Constitution Pipeline in PA/NY). New York State’s Dept. of Environmental Conservation (DEC) must grant what’s called a 401 Water Quality Certificate that allows the Constitution to lay pipe through and under swamps, creeks and other bodies of water. The DEC held a series of public hearings on the Constitution (see Pro-Drillers Out in Force at Constitution Pipeline Hearing in Binghamton). Last week the time for public comment closed–which is why we’re now seeing anti-drillers launching a coordinated attack, as a last-ditch effort to stop the Constitution. Their attack includes sympathetic (and sycophantic) media stories and an attempt to re-brand the Constitution as “the Keystone XL pipeline of natural gas.” What a joke! Bobby Kennedy Jr. went on MSNBC (a network virtually no one watches) to make some outrageously false claims about the Constitution pipeline and FERC. It all adds up to a well-coordinated, well-funded attack by Big Environment trust funders…
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Best of the Rest

Marcellus & Utica Shale Story Links: Tue, Mar 3, 2015
March 3, 2015March 3, 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 3, 2015”
Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

Free/Accurate Online Royalty Calculator for OH Utica Wells
March 2, 2015March 2, 2015

A cool new online tool has just been released for landowners (and nosy neighbors) who want to calculate estimated royalties for any individual Utica Shale well in Ohio–with a reasonably high degree of accuracy. The tool is called the Ohio Shale Well Royalty Calculator and was created by WellRev Ohio LLC–a Canton, OH company that specializes in assisting county auditors, school districts and local governments calculate tax revenue from oil and gas wells. Below is a link to the new calculator along with MDN’s brief instruction guide for how to use it…
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Energy Companies | Penn Virginia Corporation

George Soros Finally Bullies Penn Virginia into Selling Itself
March 2, 2015March 2, 2015

Billionaire bully George Soros, the guy who bankrolls just about anything liberal and Democrat has, for years, played both sides of the fence when it comes to the issue of shale drilling (see George Soros Plays Both Sides of Fracking Issue, for Profit). We told you one year ago that Soros had taken a major position in exploration & production (E&P) Penn Virginia (see Penn Virginia the Latest Plaything for Billionaire George Soros). Penn Virginia has a small position in the Marcellus Shale, only 21,700 net acres with no drilled wells. We said the following last March: “Why did he invest? To instill good LibDem values like lifetime employment, free condoms, etc. in the capitalist heathens at the company? Nope. Soros invested $29.1 million in Penn Virginia, grabbing a 9.1% ownership, so he can force them to sell themselves.” What is the Wall Street Journal reporting now? Penn Virginia is shopping for a buyer because they’re being forced to by Soros. It took nearly a year, but Soros got his way in the end. Some people buy and flip houses or buy and flip cars for profit. Soros, playing with the lives of everyone employed at a company, buys and flips companies like Penn Virginia–just to make a buck…
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Energy Services | EnLink Midstream | Guernsey County | Industrywide Issues | Noble County | Ohio | Pipelines | Washington County (OH)

EnLink OH Condensate Pipe in Trouble? Open Season Extended Again
March 2, 2015March 2, 2015

EnLink Midstream is clearly having trouble getting enough business to justify building a new condensate pipeline in Ohio. In August 2014, EnLink announced a new 45-mile condensate pipeline that will stretch across Guernsey, Noble and Washington counties in Ohio (see EnLink Midstream Announces New Condensate Pipeline in ORV). The project, which connects to another EnLink pipeline in Washington County, is called the Ohio River Valley Pipeline, or ORV. In mid-December, EnLink launched a 30-day binding open season for shippers to sign up for capacity on the new pipeline (see EnLink Launches 1 Month Open Season for ORV Condensate Pipeline). An open season is the time when shippers sign on the dotted line and commit to paying for and using the pipeline when it’s built. If EnLink doesn’t get enough customers, they won’t build it. In January EnLink announced there were extending the open season another six weeks (see EnLink Extends Open Season for OH Condensate Pipeline by 6 Weeks). Those six weeks have come and gone, and guess what? EnLink has just announced they’re extending the open season again, another six weeks…
Read More “EnLink OH Condensate Pipe in Trouble? Open Season Extended Again”