Marcellus Drilling News

Baker Hughes | Energy Services | Halliburton | Industrywide Issues | M&A

Big News: Halliburton in Talks to Buy Baker Hughes
November 14, 2014November 14, 2014

The biggest news to hit the oil and gas industry in recent memory happened yesterday. The financial press lit up (and ran HUNDREDS of stories) about the leak/announcement/news that oilfield services company Halliburton is “in talks” to buy out rival Baker Hughes. The largest oilfield services company in the U.S. (and in the world) is Schlumberger, followed by Halliburton (again, in both the world and in the U.S.). Baker Hughes (BH) is the fifth largest oilfield services company in the world, but #3 in the U.S. Halliburton’s market capitalization this morning–price per share times outstanding number of shares–is $47.65 billion. Baker Hughes’ market cap is $26.59 billion, up $5 billion since yesterday afternoon when the news broke. Combined, the two companies would be worth $74.24 billion and employ (if there are no layoffs) 144,000 people. Schlumberger’s market cap, by comparison, is $127.62 billion with 126,000 employees. Both Halliburton and BH are heavily involved in providing all sorts of services (rigs, fracking, logistics, etc.) for exploration & production companies in both the Marcellus and Utica, as well as every other major shale play in the U.S. AND in every conventional play around the world…
Read More “Big News: Halliburton in Talks to Buy Baker Hughes”
Accidents | Blue Racer Midstream | Energy Services | Industrywide Issues | Noble County | Ohio

Blue Racer Midstream Explosion Kills One Worker in OH
November 14, 2014November 14, 2014

There was an explosion and fire at a Blue Racer Midstream condensate pumping skid (equipment that moves natural gas liquids through the stabilizer process) in Noble County, OH. An electrical contract worker from Virginia, Norman Butler (48 years old), sadly, was killed. The pump station is located next to a CONSOL Energy drill pad in northwest Marion Township, about 50 miles west of Wheeling, WV, between Interstates 70 and 77. A CONSOL spokesperson said none of the equipment at their site was affected and everything has been shut-in for now…
Read More “Blue Racer Midstream Explosion Kills One Worker in OH”
Energy Services | GASFRAC | Ohio | Statewide OH | Utica Shale

GASFRAC Begins Waterless Fracking Job in OH Utica
November 14, 2014November 14, 2014

In May 2012 Canadian GASFRAC, a company that has pioneered waterless fracking by using liquefied petroleum gas (LPG, or propane) said they had contracted with an unnamed company to use their LPG fracking technology on two Utica Shale wells, as an experiment (see GASFRAC Waterless Fracking Technology Debuts in Utica Shale). How did it go? As far as we can tell, it never happened. Until now. According to the company’s third quarter update, released today, they’ve just begun to fracture their first well in the Utica. GASFRAC has been a company in trouble. They fired the CEO and COO in September 2012 (see Waterless LPG Fracking Company GASFRAC Fires its CEO, COO). The current CEO, according to today’s announcement, is still listed as being “interim”–meaning they still haven’t settled on a new long-term leader for the company. Revenues have tanked in the past year. Reading between the lines, the finances of the company look pretty bleak. According to interim CEO, Mark Williamson, all options are on the table for the company: soldier on and hope to improve the bottom line (not likely in our humble opinion), merge with someone else, or sell bits and pieces or the whole thing to someone else…
Read More “GASFRAC Begins Waterless Fracking Job in OH Utica”
Industrywide Issues | Pennsylvania | Pike County | Research | Wayne County

2 New USGS Studies Show Naturally Occurring Methane in NEPA Water
November 14, 2014November 14, 2014

Yesterday the U.S. Geological Survey released two studies of groundwater–one for Pike County, PA and the other for Wayne County, PA (both studies embedded below). The studies looked at well water samples in 2012 and 2013. In Wayne County 65% of the wells tested had detectable methane (i.e. natural gas) in the water. In Pike County, 80% of the wells had detectable methane in the water. Five alarms! Shale wells are polluting the water!! Oh wait…neither county has any shale drilling because both are in the Delaware River Basin and the DRBC (Delaware River Basin Commission) has so far not allowed shale drilling in the watershed. Methane can be either thermogenic (deep down methane found in shale) or biogenic (closer to the surface methane). Evidence of BOTH types were found in the survey. You can’t blame shale drilling, so what’s an anti-driller to do to when pesky scientific evidence rears its ugly head?…
Read More “2 New USGS Studies Show Naturally Occurring Methane in NEPA Water”
Energy Services | EnLink Midstream

EnLink’s Quest for Cash: Floats 10.5 Million Units to Raise $300M
November 14, 2014November 14, 2014

EnLink Midstream, a pipeline and processing plant company that operates in the northeast and other regions, is on a mission to raise cash. The company is actually two companies on paper: EnLink Midstream LLC (stock ticker ENLC) and EnLink Midstream Partners, LP (ticker ENLK). The later is a master limited partnership, or MLP, meaning they don’t issue shares of stock but something called “units”–which are roughly the same thing as shares of stock. EnLink’s units are publicly traded on the New York Stock Exchange. It was just last week that EnLink floated notes hoping to raise around $400 million (see EnLink Midstream Floats Notes, Hopes to Raise $400M for Expansion). Yesterday the MLP announced they are issuing another 10.5 million units. At this morning’s unit price of $29.43, that would represent another $309 million of cash. Hence our comment that they’re on a mission to raise cash…
Read More “EnLink’s Quest for Cash: Floats 10.5 Million Units to Raise $300M”
Blair County | Industrywide Issues | Pennsylvania | Statewide PA | Taxation

Altoona Politicos Say 5% Severance Tax a Marcellus “Killer”
November 14, 2014November 14, 2014

State Sen. John H. Eichelberger Jr., a Republican from Blair County (Altoona area) in Pennsylvania, had some tough words for incoming Democrat Gov. Tom Wolf: Forget about a 5% severance tax on the Marcellus industry. Eichelberger figures such a tax, while sounding “small” actually represents the snatch and grab of 50% of the profit companies now make in the state–and if you take away half of the profits they earn, most of them will stop drilling and leave. Hello! Anybody home at Democrat HQ? Anybody home at REPUBLICAN HQ? Are you listening?? Eichelberger is exactly right…
Read More “Altoona Politicos Say 5% Severance Tax a Marcellus “Killer””
Energy Services | Pennsylvania | Statewide PA | UIL Holdings

Phila. City Council’s 6-Hour Hearing on PGW Sale, UIL Appearance
November 14, 2014November 14, 2014

More on the drama of the corrupt Philadelphia City Council’s scuttling of the sale of the municipal-owned Philadelphia Gas Works (PGW) to Connecticut utility UIL Holdings. Yesterday City Council held hearings on alternatives to selling PGW and made a representative from UIL wait until the very end of six hours of hearings to give him 10 minutes to speak…
Read More “Phila. City Council’s 6-Hour Hearing on PGW Sale, UIL Appearance”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Nov 14, 2014
November 14, 2014November 14, 2014

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: Fri, Nov 14, 2014”
Chief Oil & Gas | Energy Companies | Lease & Royalty Payments | Marshall County | Ohio County | Tug Hill Operating | West Virginia

More Details on Tug Hill $100M Lease in WV Panhandle
November 13, 2014November 13, 2014

We have some more details about that lease deal for $100 million by Tug Hill Operating to lease land in Marshall and Ohio counties in the northern panhandle of West Virginia that we wrote about yesterday (see Panhandle WV Landowners Broker $100M Deal with Tug Hill Operating). We know a bit more about Tug Hill and the person behind it, and we now know that the $100M deal is with about 500 families (average of $200,000 signing bonus per family), and that it’s not too late for others to get in on the deal…
Read More “More Details on Tug Hill $100M Lease in WV Panhandle”
Energy Companies | Rice Energy

Rice Energy 3Q14: Production Up 93%, 2 Board Members Resign
November 13, 2014November 13, 2014

Rice Energy, focused solely on the Marcellus and Utica region, released their third quarter report yesterday and reports adding another 10,000 acres to their Marcellus/Utica portfolio–now with 136,422 acres under lease in the northeast. The company keeps drilling at a rapid clip, operating two rigs in the northeast. Because of previously drilled wells, production is up 93% from last year at this time–to 247 million cubic feet per day (Mmcf/d) on average during 3Q14. On the P&L side, Rice narrowed its loss during 3Q14 to $6.9 million, or 5 cents per share, down from $33.7 million, or 38 cents per share in 3Q13. Below is the update for Rice’s Marcellus and Utica drilling program, including midstream operations. At the very bottom of the update are details about the resignation of two board members…
Read More “Rice Energy 3Q14: Production Up 93%, 2 Board Members Resign”
Energy Companies | Rice Energy

Rice Energy Readies Midstream Subsidiary IPO – How Much?
November 13, 2014November 13, 2014

Following in Antero’s footsteps, Rice Energy announced last week that they will launch an initial public offering (IPO) for stock in a new spun-off midstream subsidiary–Rice Midstream. You may recall Antero Resources, a company that concentrates on the Marcellus/Utica region, launched an IPO for their company a year ago that hauled in $1.57 billion (see Antero’s IPO Fetches $1.57B, Company Valued at $11B!). The much smaller Rice followed with their own IPO which did better than hoped, bringing in a cool $924 million (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Antero very recently floated an IPO for a midstream subsidiary and hauled in another $1B (see Antero Midstream IPO Hauls in $1B, Stock Trading High). Now Rice is floating an IPO for a midstream subsidiary. No, not to keep up with the Jones (we don’t think, anyway). But because it makes sense. How much is Rice looking to make?…
Read More “Rice Energy Readies Midstream Subsidiary IPO – How Much?”
Axiall | Energy Companies | Energy Services | Gastar Exploration | Hydraulic Fracturing | Industrywide Issues | Litigation | Marshall County | West Virginia

Gastar Fracking Near WV Chemical Plant Halted Pending Court Review
November 13, 2014November 13, 2014

Chemical manufacturer Axiall, with a plant in Natrium (Marshall County), WV, has successfully stopped Gastar from fracking several drilled shale wells located near the chemical plant. Why? They’re afraid that the fracking process will allow gas to travel underground and affect their previously drilled brine wells in the area. That exact scenario, according to Axiall, played out last year when Triad Hunter fracked wells nearby. The fracking, according to Axiall, led to a blowout at one of their brine wells and the well began emitting natural gas–an explosion hazard. A judge agreed with Axiall and put a stop to any fracking by Gastar pending a full hearing before the court…
Read More “Gastar Fracking Near WV Chemical Plant Halted Pending Court Review”
Energy Companies | Hess | Utica Shale

Hess Talks Utica at Investor Day – Predicts 40,000 Boe/d by 2020
November 13, 2014November 13, 2014

Earlier this week Hess hosted an analyst/investor day to discuss the company’s plans and strategies now that it has shed its retail and transportation operations (Hess doesn’t own those green Hess gas stations any more, see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Two weeks ago we noted with interest that Hess said almost nothing about the Utica in its third quarter update (see Hess 3Q14: Says Almost Nothing About Utica Operations). That changed earlier this week. During the analyst/investor soirée, Hess had quite a bit to say about the Utica…
Read More “Hess Talks Utica at Investor Day – Predicts 40,000 Boe/d by 2020”
American Energy Partners | Antero Resources | Energy Companies | Gulfport Energy | Ohio | Statewide OH

Muskingum Watershed District Sells only 136M Gal of Water So Far
November 13, 2014November 13, 2014

The Muskingum Watershed Conservancy District (MWCD), organized in 1933 to reduce the effects of flooding and conserve water for beneficial public uses, oversees 16 dams and reservoirs across 22 counties in Ohio, covering 20% of the state. It is a massive area under the oversight and control of the MWCD. We’ve previously covered their deals with Antero Resources to lease District property for drilling. We’ve also covered District deals to sell water to Antero and other shale drillers (see Muskingum Watershed Votes to Sell 209M Gals of Water for Fracking). Although the district has voted to sell 209 million gallons of water, so far in 2014 they’ve only sold 136 million gallons–or the amount of water used in four days by the city of Akron, OH. According to officials with the MWCD, water sales have had a “negligible” impact on the reservoirs–lowering the several reservoirs used by less than 3/4 of an inch. MWCD lowers reservoirs more than that each year for winter anyway–so actually there’s been no impact, especially since much of the water sold flows through pipelines instead of tanker trucks…
Read More “Muskingum Watershed District Sells only 136M Gal of Water So Far”
Energy Companies | Energy Services | Pennsylvania | Shell | Tioga County (PA) | UGI Energy Services | Utica Shale

UGI First Utility in PA with Direct Connection to Utica Shale
November 13, 2014November 13, 2014

The next big story for the Pennsylvania Marcellus Shale is not the Marcellus…it’s the Utica Shale, a layer a few thousand feet below the Marcellus. Our first piece of evidence? In September we brought you the exciting news that Shell has drilled six Utica wells in Tioga County, PA, two of them going online with stellar production (see Shell Drills 2 Successful Utica Wells in NEPA Marcellusland). Our second piece of evidence? UGI, a major utility company in Pennsylvania, reports they’ve just hooked one of those Utica wells into their natural gas distribution system–making UGI the first PA utility to directly tap into a Utica Shale well for retail residential delivery…
Read More “UGI First Utility in PA with Direct Connection to Utica Shale”
Industrywide Issues | Pennsylvania | Research | Statewide PA

Bernstein: Marcellus Production Will Slow, Hit 25 Bcf/d in 2017
November 13, 2014November 13, 2014

A fascinating pair of research reports from Sanford C. Bernstein & Co. LLC as been analyzed and summarized in a top notch article by SNL Financial. Historically the Marcellus has been divided into northeast Pennsylvania and southwest PA, the SW including WV and a tiny bit of eastern OH. Also historically, the NE portion of the Marcellus has produced more dry gas (methane only) than the SW, which is richer in wet gas (or natural gas liquids). However, because of lack of pipelines in the NE, researchers say dry gas production throughout the Marcellus–particularly in the NE–will slow over the next few years. Another juicy tidbit from the report: Bernstein researchers predict natgas production from the Marcellus will hit 25 billion cubic feet per day (Bcf/d) by end of 2017–just three years from now…
Read More “Bernstein: Marcellus Production Will Slow, Hit 25 Bcf/d in 2017”