Marcellus Drilling News

Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Statewide PA | Sunoco Logistics

Sunoco Builds Stronger Case for Mariner East as Public Utility
May 12, 2014May 12, 2014

Brilliant move or manipulating the system? Your view will depend on your drilling proclivity. Late last week Sunoco Logistics, in a bid to strengthen its case before the PA Public Utility Commission (PUC) that the Mariner East pipeline should be considered a public utility, filed an application to deliver propane from western PA to its Twin Oaks terminal in Delaware County (eastern PA) using the Mariner East. By delivering propane from one end of the state to the other and redistributing it to customers in that area, Sunoco is attempting to prove that it is a public utility under PA’s definition.

MDN has chronicled Sunoco’s fight to use eminent domain against some recalcitrant landowners who refuse to allow the pipeline to cross their property in western PA, and homeowners in eastern PA who don’t want new compressor stations built along the pipeline’s existing route (see Sunoco Logistics Faces Hostile Crowd Over NGL Pipeline Station). Sunoco claims they are a public utility corporation with the right of eminent domain. Anti-drillers (and possibly some pro-drillers) fighting them claim they are not a public utility. The case is before the PA PUC and Sunoco has just hired attorney Michael Krancer and the legal beagles from the Blank Rome law firm to help out (see Sunoco Hires Big Gun Law Firms to Help Complete Ethane Pipeline). Looks like the legal assist is already paying off with this new strategy…
Read More “Sunoco Builds Stronger Case for Mariner East as Public Utility”
Anti-Drilling/Fossil Fuel | Housing | Industrywide Issues | Pennsylvania | Regulation | Washington County

Washington, PA Officials Try to Stop Marcellus Boarding House
May 12, 2014May 12, 2014

In early February MDN told you about the rank hypocrisy of those in Washington, PA who are trying to block the rehabilitation of an old, unused and in-disrepair convent from being converted into housing for Marcellus Shale workers (see Marcellus Prejudice on Display at Washington, PA Church). The story has advanced since then. Seems that a second developer has picked up the property from the original buyer with the same thought. The new developer, Phive Starr Properties, is proving to be a tad more assertive.

Phive Star had the gall to tell Washington officials last week that there’s a big old hole in their zoning laws and that by provisions in their own laws the city can’t keep out a boarding house in the former convent property. Which has city officials “scrambling” (and butt covering) to see if there’s anyway they can still prevent it…
Read More “Washington, PA Officials Try to Stop Marcellus Boarding House”
Industrywide Issues | Pennsylvania | Pipelines | Regulation | Statewide PA

New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?
May 12, 2014May 12, 2014

A new issue comes to light–for us anyway. The chairman of the Pennsylvania Public Utility Commission, Robert F. Powelson, writes an editorial in today’s Philadelphia Inquirer that claims America’s steel industry–in particular PA’s steel industry–is suffering from cheap steel pipeline imports from places like South Korea. The pipeline imported is used in shale drilling, namely in gathering pipelines and perhaps larger transmission pipelines. A lot of pipeline is also used during the drilling process itself. Powelson says “oil country tubular goods” or OCTG pipeline is illegally “dumped” on the market–meaning it’s sold below the cost to manufacture it. And that cuts some of the economic benefits PA would otherwise realize if PA or OH steel plants created that pipe.

Powelson’s proposed fix? Amend the Pennsylvania Gas and Hazardous Liquids Pipeline Act (Act 127) and require companies to report to the PUC the country of manufacture of the steel pipe used to transport natural gas from unconventional wells in PA. Would that work?…
Read More “New Issue: Ban Use of Cheap/Imported Steel Pipes in PA Marcellus?”
Economic Impact | Industrywide Issues | Jobs | Pennsylvania | Supply Chain | Washington County

Small Businesses Target Marcellus Industry in SW PA
May 12, 2014May 12, 2014

We’re always amazed at how many businesses find new work and new sources of revenue–which leads to expansions and new jobs–because of the Marcellus and Utica Shale. It is an economic engine like nothing we’ve seen in our lifetime. Not even Obama spending your money like a drunken sailor can come close to matching the economic miracle created by the Marcellus Shale. (Reminder: Every time the government spends money it comes from YOU and it destroys wealth–it never creates wealth.)

Recently a sign shop and a screen printing business (think customized t-shirts) in Washington County, PA merged to form a new business. That new business has just opened a second location in the heart of the Washington, PA business district. The main attraction? You guessed it–the Marcellus Shale and all of the businesses it’s attracting. The new sign sign shop, which bills itself as a “business branding company,” is targeting, in part, companies in the Marcellus supply chain…
Read More “Small Businesses Target Marcellus Industry in SW PA”
Best of the Rest

Marcellus & Utica Shale Story Links: Mon, May 12, 2014
May 12, 2014May 12, 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: Mon, May 12, 2014”
Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | New York | Pennsylvania | Regulation | Statewide NY | Statewide PA

Feds Attempt a Power Grab of Delaware River Basin
May 9, 2014May 9, 2014

New York Sen. Chuck Schumer earlier this week paid nominal lip service to the marvels of shale drilling (see Sen. Chuck Schumer Supports Fracking in NY – Sort of). Although some on the pro-drilling side didn’t like MDN’s take on the gasbag Schumer and his false support of drilling, we offer evidence of his true intentions. Yesterday Schumer and six other senators (all liberal Democrats) introduced a bill to “preserve and improve [the] Delaware River Watershed.” The so-called “Delaware River Basin Conservation Act of 2014” would “establish the Delaware River Basin Restoration Program within the U.S. Fish and Wildlife Service. The program would implement a coordinated approach, requiring the U.S. Fish and Wildlife Service director to adopt a basin-wide plan that sustains and enhances the Delaware River basin restoration and protection efforts. The program would support projects from federal, state, and local governments and stakeholders, ensuring that existing successful restoration plans are leveraged.”

Translation: The feds want to trample over the states and take over the Delaware River Basin, which means there never will be any shale drilling in places like Wayne County, PA which happens to sit in the basin. It’s a horrible bill–a federal power grab–and it needs to be opposed. Vigorously. Thanks Chucky, for your so-called “support” of shale drilling. Schmuck. An even bigger schmuck is Sen. Bob Casey–from Pennsylvania! He’s one of the seven lib Dem senators sponsoring this abomination…
Read More “Feds Attempt a Power Grab of Delaware River Basin”
Exporting | Industrywide Issues

Marcellus Gas Bound for Nova Scotia? Yes, if Emera Can Swing It
May 9, 2014May 9, 2014

Halifax energy conglomerate Emera Inc. wants to be the natural gas supplier to the Maritimes. But in order to do it, it appears that they will need to get Marcellus and Utica Shale gas from the U.S. And in order to do that–they need a pipeline. Fortunately Emera owns a 12.9% stake in the Maritimes and Northeast pipeline, which can help them do just that. It’s far from a controlling interest–but enough to (hopefully) persuade the operator to start flowing gas northward.

Here’s the story of Emera, which happens to have “some very significant relationships” with Marcellus drillers…
Read More “Marcellus Gas Bound for Nova Scotia? Yes, if Emera Can Swing It”
Anti-Drilling/Fossil Fuel | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County

Lawyer for NEPA Anti-Driller Vera Scroggins Tries Legal Maneuver
May 9, 2014May 9, 2014

A lawyer for little-known (outside of northeast Pennsylvania) anti-driller Vera Scroggins was in court in Susquehanna County earlier this week trying out the latest legal maneuver. Anti-drilling lawyer Gerald Kinchy–from Sayre, PA–was trying to sucker Judge Kenneth Seamans into “joining” landowners leased with Cabot Oil & Gas to the lawsuit. That is, the lawyer wants the court to treat landowners the same way it’s treating Vera–consider them as trespassing on their own land. Sound like convoluted legal fleecing? Well, that’s exactly what it is. And the judge wasn’t having any of it.

The whole thing got started when Vera started trespassing at Cabot Oil & Gas drilling sites, taking busloads of fellow anti-drillers around to point and gawk and claim Cabot was polluting Mother Earth. Cabot finally had enough and got the court to place a restraining order on her–for her own and others’ safety (see NE PA Anti-Driller Slapped with Trespassing Injunction). Since the restraining order disallowed Vera from stepping foot on any property leased by Cabot, it prevented her from visiting her favorite grocery store, among other things. So at Cabot’s request, the judge eased the restrictions just a bit (see Judge Lets PA Anti-Driller Sip More Lattes, Attorney Claims “Big Win”). She’s still banned from active drill sites, and that apparently irritates Vera. So she got the ACLU to take up her cause and defend her. Now, her lawyer from Sayre is trying to pollute the case before it goes to trial in June (maybe having second thoughts?)…
Read More “Lawyer for NEPA Anti-Driller Vera Scroggins Tries Legal Maneuver”
Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!
May 9, 2014May 9, 2014

As we predicted, Ohio Republicans caved and voted a high severance tax out of committee on Wednesday (see Bend Over Ohio – You’re About to Get a Frack Tax). The Republicans think it’s fine to steal money from one industry to give away to people who didn’t earn it. The Democrats are even worse. But here’s the funny thing. Ole’ Gov. John “foreigner hunter” Kasich isn’t satisfied with the Republican plan to raise the rate to 2.5%. He wants more (more more more!).

Since the Repubs have already bent over once, will they do it again for Kasich?…
Read More “OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!”
Energy Companies | Industrywide Issues | Lease & Royalty Payments | Olympus/Huntley & Huntley | Pennsylvania | Range Resources Corp | Regulation | Westmoreland County

Murrysville Turns Down Millions for Park Lease, Looks to Tighten Regs
May 9, 2014May 9, 2014

Final answer: No. Murrysville (Westmoreland County), PA Council voted to turn down millions of dollars to lease the 262-acre Murrysville Community Park for drilling under (not on) the park for shale gas. Huntley & Huntley–a company that often works as a land agent for Range Resources–has been courting Murrysville for nearly a year now (see Murrysville Park Lease to be Discussed at Meeting). In the end, it seems there just wasn’t enough support from residents to go forward. Guess they don’t need an extra pile of cash in Murrysville. They have enough, thanks.

Now, on to more pressing matters for the council–like crafting new zoning laws that make it hard to drill anywhere within the township…
Read More “Murrysville Turns Down Millions for Park Lease, Looks to Tighten Regs”
Anti-Drilling/Fossil Fuel | CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Maryland | Statewide MD

Anti-Drillers File Complaint with SEC re Cove Point LNG Facility
May 9, 2014May 9, 2014

Even though they’ve lost, the obstinate and unreasonable (not able to be reasoned with) people at Earthjustice and the Chesapeake Climate Action Network (CCAN) are once again trying to prevent the inevitable–the Cove Point, Maryland LNG export facility. Dominion is the company building the new LNG export facility at Cove Point. On the eve of Dominion’s annual shareholder meeting, Earthjustice and CCAN attempted a publicity stunt by filing a complaint with the Securities and Exchange Commission saying that Dominion has not provided adequate disclosure of financial and environmental risks in their plans to build the new $2 billion facility.

It’s just one more lame attempt by the same small group of virulent anti-drillers plus a ninny nanny anti-drilling investor from Trillium Asset Management (don’t ever invest money with Trillium) to stop progress…
Read More “Anti-Drillers File Complaint with SEC re Cove Point LNG Facility”
Belmont County | Energy Companies | Gulfport Energy | Ohio | Rice Energy | Statewide OH | Utica Shale

Gulfport Energy 1Q14: New CEO Tweaking the Utica Program
May 9, 2014May 9, 2014

Gulfport Energy is a major driller in the Utica Shale. In a first quarter 2014 update released earlier this week, we learn that Gulfport has added more acreage to their Utica portfolio–they now stand at 180,000 acres of leased land. Although several other drillers own more acreage, Gulfport has drilled the second highest number of Utica wells to date. They currently are operating seven drilling rigs in the Utica Shale. Gulfport’s brand new CEO, Michael Moore, makes the comment that, “a more measured, methodical approach to the development program in the Utica was needed.” We’re not exactly sure what that means, but Moore intends it to mean they’ll get more gas and liquids from the Utica wells their drilling.

Below are a few brief sections from the 1Q14 update. We also found and posted Gulfport’s PowerPoint used during their recent analyst call. There’s an extensive section on their Utica operations with lots of maps and charts and good information. Among the gems we discovered is that in 2013 Gulfport and Rice Energy formed a joint venture, combining their acreage in four townships in Belmont County, OH to drill in the Utica together in that area…

NOTE: MDN originally said the Gulfport/Rice jv is for Guernsey County, OH. We were mistaken. It is in Belmont County, OH. Our apologies!
Read More “Gulfport Energy 1Q14: New CEO Tweaking the Utica Program”
Carrizo Oil & Gas | Energy Companies

Carrizo O&G 1Q14: Utica Ramping Up; Extra $100M from the Bank
May 9, 2014May 9, 2014

Carrizo Oil & Gas is a Houston-based driller with drilling operations in four shale plays in the U.S. Two of the four are the Marcellus and Utica. Earlier this week Carrizo issued their first quarter 2014 operational and financial update. Among the tidbits MDN has picked up from that release: Carrizo has gotten a $100 million increase in the line of credit from their banks–more money to drill with; the company spent 75% of its drilling and completions budget in 1Q14 on the Eagle Ford, an “oily” play; for the rest of the year, the company is spending the majority of its budget for land acquisition on the Eagle Ford and the Utica; they will drill 9 Utica wells this year and they are currently negotiating a midstream (pipeline) solution for the Utica; they’ve recently added more Utica leases in Guernsey County, OH; in the Marcellus, Carrizo plans to drill a total of 25 wells this year, but they are hampered and somewhat frustrated by lack of midstream capacity in the Marcellus.

Below we have lifted out of the update those sections that provide the most information about Carrizo’s operation in the Marcellus and Utica…
Read More “Carrizo O&G 1Q14: Utica Ramping Up; Extra $100M from the Bank”
Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Industrywide Issues | Reserves (Proved and Unproved)

Magnum Hunter Gets Extra $92.5M Line of Credit: Proved Reserves
May 9, 2014May 9, 2014

Think “proved reserves” (a company’s best guess for how much retrievable oil or gas there is under their leased property based on real numbers) isn’t all that important? Just so much fluff that drilling companies throw out there to impress investors? That financial numbers like proved reserves don’t affect landowners? Think again. Proved reserves are a very serious business, especially when it comes to borrowing money used for more drilling.

Take Magnum Hunter Resources, for example. MHR concentrates their drilling and midstream activity in the Marcellus and now Utica Shale. Based on a semi-annual review of their credit worthiness by their banks (plural), the banks determined MHR’s proved reserves number has increased sufficiently that they are willing to extend MHR’s line of credit another $92.5 million–to $325 million. That’s a pretty hefty line of credit! Here’s the announcement from MHR…
Read More “Magnum Hunter Gets Extra $92.5M Line of Credit: Proved Reserves”
Commodity Price | Industrywide Issues | Research

EIA Releases Annual Energy Outlook – Gives Us the Big Picture
May 9, 2014May 9, 2014

The U.S. Energy Information Administration (EIA) has just released their Annual Energy Outlook 2014 (full copy embedded below). Each year the EIA performs a comprehensive review of all sources of energy used in the U.S., and they take their best guess at where supply and demand–and prices–will go in the near- and long-term (to 2040 for this report). The EIA employs some of the best brains in the business and of all the government agencies, the EIA is least susceptible to political manipulation by The White House. We love the EIA and the reports and information they generate.

When MDN editor Jim Willis attended the Platts Global Energy Forum last December, it was a real eye-opener (see Jimmy Goes to the Big Apple: Platts Global Energy Outlook Forum). Those of us heavily involved in the shale industry sometimes lose sight of the bigger picture. Shale energy is just one component–a very important component, but just one–in a much larger energy picture. This annual report from the EIA helps provide that larger perspective–helping us to see where the shale energy industry “fits” in the picture. One tidbit from the report we noticed was their prediction for where the commodity price of natural gas will go in the near- and long-term. The EIA says…
Read More “EIA Releases Annual Energy Outlook – Gives Us the Big Picture”
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, May 9, 2014
May 9, 2014May 9, 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, May 9, 2014”