Marcellus & Utica Shale Story Links: Fri, Jan 23, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Antero Resources Slashes 2015 CapEx Budget 41%, Reduces Rig Count
Earlier this month, Antero Resources, one of the largest leaseholders and drillers in the Marcellus/Utica, announced they are laying off 250 landmen in WV, OH and PA because of low oil and gas prices (see Antero Resources Lays Off 250 Landmen, Blames Low Oil Prices). Seems it was an omen. On Tuesday, the company released details of their 2015 capital budget–and it’s not pretty. Antero is slashing their capital expenditure budget in the Marcellus/Utica by 41% over what they spent in 2014–$1.8 billion in 2015 compared to $3.05 billion in 2014. Ouch. They’ll operate an average of 14 drilling rigs in 2015 compared to the average of 21 they were operating by the end of last year. Ouch. They predict they will complete 130 Marcellus & Utica wells this year, down from 179 completed last year. Ouch. About the only bright spot is that production is predicted to increase, from an average of 1 billion cubic feet per day (Bcf/d) in 2014 to 1.4 Bcf/d in 2015. Why the big cuts? Yes because of the low commodity price for natural gas, but when you dig, you find the price for natgas in the northeast is lower than other areas of the country because of the lack of pipelines…
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Stone Energy Will Suspend Marcellus/Utica Drilling after 1Q15
Similar to the recent announcement by Antero Resources, Stone Energy has announced a big scale back in the Marcellus/Utica for 2015. However, whereas Antero is one of the biggest drillers in the northeast, Stone is one of the smallest drillers in the Marcellus/Utica. In 2014 Stone drilled 38 wells in the Marcellus, and a single Utica test well. The company plans to spend $450 million for drilling in 2015, down from $875 million spent in 2014–roughly half of what they spent last year. But the majority of that $450 million (75%) will go to drilling in the Gulf of Mexico and deep water. Only 8% of the budget, or $36 million, will go to the Marcellus/Utica region. Stone says after they complete a few wells in the first quarter of this year, they’re suspending all Marcellus drilling for the rest of this year–releasing the single rig that’s been operating in the Marcellus. Landowners signed with Stone–if Stone hasn’t already begun your well, you can forget about it for at least for the rest of this year…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Lease & Royalty Payments | Ohio | Triad Hunter | Utica Shale | Washington County (OH)
OH Village Gets $307K Signing Bonus, 18.25% Royaly to Lease 72 Acres
Last night, the village of New Matamoras, in Washington County, OH, was handed a check for $307,687.25. The general fund budget for all of 2014 was $121,368! The check came from MNW Energy, which is acting as the land broker for Triad Hunter (a division of Magnum Hunter Resources). The money is the up-front lease signing bonus for 72 acres of village owned-land that Triad plans to drill under. The payment amounts to a signing bonus of $4,275 per acre. When and if Triad drills, the village will get an 18.25% royalty on all gas/liquids produced. The biggest “problem” Matamoras had was how to cash the check! The next “problem” they have is how they’ll spend it. Here’s the low-down…
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PA Senate Reintroduces Two Marcellus Royalty Bills, SB 147 & 148
The “funny business” of shorting royalty checks in Pennsylvania–particularly by Chesapeake Energy–may soon come to an end. A pair of bills that didn’t make it past the House last session have been re-introduced in the Senate and both have already passed the Senate Environmental Resources and Energy Committee unanimously. State Sen. Gene Yaw, Republican from northeast Pennsylvania, re-introduced Senate Bills (SB) 147 & 148. SB 147 allows landowners the right to review drilling company records to verify proper royalty payment. It also requires drillers to pay royalties within 90 days of production. SB 148 prohibits drillers from “retaliating” against a landowner who questions royalty payments by canceling the lease or stopping drilling activity. Both bills are embraced by the Pennsylvania chapter of the National Association of Royalty Owners (NARO)…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Industrywide Issues | Reserves (Proved and Unproved)
Magnum Hunter Drilled 24 NE Wells in 2014, Proved Reserves Up 25%
Yesterday Magnum Hunter Resources, a growing driller in the Marcellus/Utica region, announced their “proved” reserves have jumped a healthy 25% by the end December 2014 over a year earlier. Proved reserves are defined as the estimated quantities of oil and gas which geological and engineering data demonstrate with reasonable certainty (90% or more certainty) to be recoverable in future years from known reservoirs under current economic and operating conditions. Magnum Hunter’s estimated total proved reserves increased in 2014 to 83.8 million barrels of equivalent (or MMboe), compared to 67.3 MMboe at the end of 2013. They reckon it breaks down as 70% natural gas and the rest natural gas liquids, condensate and oil. Magnum Hunter’s acreage in the Marcellus and Utica is impressive: they now own 80,000 net acres in the Marcellus and 125,000 net acres in the Utica. Last year they drilled 24 wells in the Marcellus/Utica. They have their eye on a potential future 1,000 more drilling locations in WV and OH…
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Antero Resources | Energy Companies | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline
Kinder Morgan NE Projects Update – Filing with FERC for Broad Run
Kinder Morgan, the largest midstream company in the U.S., issued a press release yesterday nominally to say they’ve raised the quarterly dividend by 10% or $0.45 per share because they had a great year last year, despite the low price of oil and the gyrations in the market. But as part of that update, if you put on your hip boots on and wade through all of the tiny print, you find some interesting nuggets and updates. For example, we get an important update on their Northeast Energy Direct project–an extension of the Tennessee Gas Pipeline through Massachusetts and New Hampshire. We also learn that Kinder is ready to file with FERC–this month–to move forward with the Broad Run Flexibility and Broad Run Expansion projects that will flow Marcellus and Utica Shale gas from West Virginia to delivery points in Mississippi and Louisiana. All (100%) of the capacity for the the Broad Run pipelines is already spoken for, by Antero Resources…
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The Beast Grows Hungrier: Southwestern Ups # Shares of New Stock
We’re not sure what to make of this as we’re not high finance people. But we find it intriguing all the same. MDN reported 10 days ago that Southwestern Energy would float 20 million shares of new common stock and 26 million “depositary” shares of stock in an effort to raise a boatload of new cash (see Southwestern Energy Floats 20M New Shares of Stock). A few days later, they upped it to 26 million shares of common stock and 30 million shares of depositary stock (see Feed the Beast: Southwestern Seeks $2.34B from New Stock Offering). It seems the beast grows even hungrier. Yesterday they upped it again–this time to 30 million shares of common stock and 34.5 million shares of depositary stock. Hmmm, what does it all mean?…
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Pro-Drilling New Yorkers Protest Gov. Cuomo During State of State
You want to know how biased local liberal media can be? Get this: Yesterday, on the day that New York Gov. Andrew Cuomo delivered his Santa Claus impersonation, er, State of the State address, more than 70 pro-drillers gathered outside the State Office Building in downtown Binghamton, NY for an hour during the middle of the work day to protest Gov. Cuomo’s decision to ban fracking. The only daily newspaper in Broome County, the local newspaper of record, the Press & Sun-Bulletin–didn’t carry a single word about the protest. Not one word. That’s how biased (and frankly censored) the Press & Sun-Bulletin is. Fortunately, three local television stations did cover the protest. The “new news” from the protest, aside from the fact that 70+ people took time out of their busy work days (yes, pro-drillers actually have jobs and pay taxes, unlike anti-drillers), is that the Joint Landowners Coalition of New York (JLCNY) is actively pursuing “options” to have the federal government intervene in New York’s frack ban. This issue is FAR from over–our side has just begun to fight…
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Dominion Energy | Energy Services | Industrywide Issues | Pipelines | Regulation | Statewide VA | Virginia
VA May Repeal Law Allowing Pipelines Access without Permission
Accessing a landowner’s property without permission, and later (potentially) forcing that landowner to allow a pipeline across the property via eminent domain have never been supported by MDN. Neither, it seems, is it supported by other pro-drillers, especially those in Virginia. State Sen. Emmett Hanger from Augusta County, VA (located in the Shenandoah Valley on the western edge of VA) is a conservative, business-friendly and pro-drilling Republican. Hanger, like MDN, supports Dominion’s $5 billion Atlantic Coast Pipeline (see Enormous Benefits for All Virginians from Atlantic Coast Pipeline). But Hanger, also like MDN, is not in favor of access without permission. Hanger is attempting to get a 2004 Virginia law repealed that allows access to private property without permission so Dominion (and others) can survey the property for pipeline routes. As Hanger points out, that kind of behavior is working against them in terms of community goodwill…
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Important Expose on John Quigley, Nominee to Head PA DEP
MDN friend Tom Shepstone, who writes the excellent Natural Gas Now blog site, has just posted a must-read article on John Quigley, PA Gov. Tom Wolf’s choice to lead the Dept. of Environmental Protection. Tom does some real investigative journalism–something you won’t read in the Harrisburg Patriot-News, the Philadelphia Inquirer, or Democrat Party satellite publications like StateImpact Pennsylvania. You certainly won’t read anything detailed about Quigley in the Scranton Times-Tribune! Real investigative journalism has gone out of vogue in those publications. But not with Tom. Rather than copy his excellent work here, we’ll ask you to click on the link below and take time to educate yourself on the “real” John Quigley.
- Natural Gas Now/Tom Shepstone (Jan 21, 2015) – Will the Real John Quigley Please Stand Up?
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Marcellus & Utica Shale Story Links: Thu, Jan 22, 2015
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Rumor Mill: Indian Oil Co Wants to Buy Chesapeake Energy
Carl Ichan, corporate raider and puppet master at Chesapeake Energy, must be rubbing his hands together in glee. The rumor mill is buzzing that Oil & Natural Gas Corporation Limited (ONGC), the state-run national oil company of India, is “aggressively” pursuing Chesapeake–to buy it. It appears ONGC wants to buy the whole company, although we don’t know that for sure. The ONGC/Chessy buzz has Chessy’s stock trading higher, which delights Mr. Ichan. Here’s what we’re able to find about this latest rumor…
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WV Leases Another 1,400 Acres Under Ohio River for Drilling
More drilling under the Ohio River is about to become reality. Last October, MDN told you about the deal to lease a 232-acre tract of land around and under the Ohio River in Marshall County, WV. The state leased the land for drilling to Gastar Exploration for $3,500 per acre plus a 20% royalty (see Gastar Wins Lease to Drill Under Ohio River in WV). That deal netted WV a tidy signing bonus check for $812,000, to say nothing of the royalties they’ll get once the gas starts to flow. WV liked that deal and decided to put more land under the river on the market (see WV Looks to Lease More Ohio River, Other State Land for Drilling). Yesterday the state confirmed they are close to finalizing a deal with Noble Energy to lease another 1,400 acres of state-owned land around and under the Ohio River–also in Marshall County. This new deal also nets the state $3,500 per acre, or $4.9 million, as a signing bonus…
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Rex Energy: Production Up 66% in 2014, New Drilling Area in 2015
Rex Energy, the little energy company that could (and does) successfully drill in the Marcellus and Utica Shale, announced in December that they would reduce their drilling budget in the Marcellus by 44% in 2015 (see Rex Energy Reduces 2015 Marcellus/Utica Drilling Budget by 44%). Yesterday the company released an operational update for 2014 that shows production was up 66% in 2014 over 2013 numbers. Fourth quarter production numbers were up 15% over third quarter. In addition, Rex has begun drilling a series of Marcellus wells in a new area of Butler County, what they call the Moraine East Area. They plan to drill drill 10 to 16 wells in the Moraine East Area and complete 4 to 10 wells in 2015. Here’s the rundown from Rex for what happened in 2014, and what they intend to do in 2015…
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Total Scales Back Investment in Utica Shale, Blames Low Oil Price
Total (pronounced “toe-tail”), is a French multinational integrated oil and gas company and one of the six “supermajor” oil companies in the world. Yesterday the relatively new CEO of Total, Patrick Pouyanne, announced that he’s scaling back in the North Sea fields and in U.S. shale plays. In 2012, Total plowed more than $2 billion into the Utica Shale, partnering with Chesapeake Energy (see Chesapeake Sells More of its Utica Leases to Total). In September 2014, Total sold off a smallish investment they had in Cardinal Midstream, a Utica midstream company, to South Korean investors for $400 million (see Total, EVEP Sell Interest in Cardinal Midstream to S Koreans for $612M). Patrick Pouyanne became CEO of Total last October after a freak runway accident killed Total’s colorful and long-time CEO Christophe de Margerie (see French Supermajor Total CEO Killed in Freak Runway Accident). Pouyanne is now making his mark on the company. He blames the plunge in oil prices for his action. Here’s what Pouyanne said at a conference in Davos, Switzerland earlier this morning…
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Earlier this month, Antero Resources, one of the largest leaseholders and drillers in the Marcellus/Utica, announced they are laying off 250 landmen in WV, OH and PA because of low oil and gas prices (see 
Carl Ichan, corporate raider and puppet master at Chesapeake Energy, must be rubbing his hands together in glee. The rumor mill is buzzing that Oil & Natural Gas Corporation Limited (ONGC), the state-run national oil company of India, is “aggressively” pursuing Chesapeake–to buy it. It appears ONGC wants to buy the whole company, although we don’t know that for sure. The ONGC/Chessy buzz has Chessy’s stock trading higher, which delights Mr. Ichan. Here’s what we’re able to find about this latest rumor…