Marcellus & Utica Shale Story Links: Fri, Jan 31, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY
NY DEC Com. Martens Says No NY Fracking Until 2015 Earliest
In what is sure to be a bitter disappointment to New York’s landowners, Dept. of Environmental Conservation Commissioner Joe Martens said yesterday in testimony to lawmakers that he’s not going to issue any permits for shale drilling before 2015. Unless, of course, he’s forced to by a court (see Norse Energy Sues Gov. Cuomo to Force Release of Fracking Regs). Martens’ comments came as he gave testimony about the DEC’s budget for the next fiscal year, which begins on April 1st. Martens is not including anything in the DEC budget for shale drilling oversight and told lawmakers it would be “extremely unlikely” that permits would be issued before the end of March 2015, hence no need to bulk up his budget for it.Are we surprised? Not really. The decision of whether or not to allow fracking in New York has been a political and not a scientific one for a long time now–we’d say for years. Gov. Andrew Cuomo continues to push off the decision–not Health Commissioner Nirav Shah, not Joe Martens, but Cuomo. Shah and Martens are just foot soldiers that do their master’s bidding. This latest revelation of no fracking until 2015 further validates landowners’ resolve in pushing forward with lawsuits on various aspects of the drilling issue at various levels of the court system. It’s now obvious we will have to litigate for our freedoms–or loose them forever…
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American Energy Partners | American Energy Utica | Energy Companies | Hess | Ohio | Statewide OH | Utica Shale
Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer
Looks like the end of 2014 came in January of 2014 for Hess. On Oct 30, 2013 Hess’ Executive VP and President of Worldwide Exploration & Production, Greg Hill, said that Hess was working on figuring out their Utica Shale acreage and where the wet gas area is located so they could make decisions about where they will and won’t drill. Hill said they would make their final decision “at the end of 2014 once we finish delineation” (see Hess Officials Talk About the Utica on 3Q13 Earnings Call). Yesterday Hess announced they have struck a deal to sell to sell 74,000 Utica Shale dry gas acres to an unnamed buyer for $924 million. End of 2014 (and Christmas) came early for Hess. Why sell now? And, who was the buyer? MDN thinks we know (we speculate below).
Hess owns a 100% interest in 95,000 Utica Shale acres, and a 50% interest (in a joint venture deal with CONSOL Energy) for another 65,000 Utica acres. In consulting the Hess map of their Utica acreage below (from a November 2013 investor presentation), you can get a pretty good idea of where the acreage they’ve sold is probably located. Much of Hess’ 100%-owned acreage is in the “dry gas” area on the map–our money is that most of that acreage is what got sold. No doubt landowners will soon receive notifications if they are among those being traded to another drilling team. Below is the Hess announcement (which is brief), the map we located which helps shed light on the brief announcement, and our speculation on why they sold now, and who purchased…
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American Energy Partners | American Energy Utica | Energy Companies | Ohio | Statewide OH | Utica Shale
McClendon’s New Company Gets Another Half Billion $ for Utica
Former Chesapeake Energy CEO Aubrey McClendon’s new company, American Energy Partners, keeps the money rollin’ in. Last fall AEP lined up a big pile of cash to be used to purchase leases in the Utica Shale (see McClendon Gets a Little Help ($1.7B) from His Friends in OH Utica). In December, Aubrey floated 100 million “units” (i.e. stock) in an effort to raise up to $2 billion more (see McClendon Plan to Raise Additional $2B in “Unit” Offering). No word on how that effort is going.
In the meantime, time’s a wastin’, so Aubrey has raised another $500 million in private equity to help fund Utica Shale ventures (see the story below). MDN wonders, is it just coincidence that AEP’s brief announcement was issued yesterday, on the same day that Hess announced their sale of 74,000 Utica Shale acres to a mystery buyer? Interesting, no?…
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Antero Resources Will Spend $2B+ in Marcellus/Utica in 2014
Antero Resources continues to be in the news. Over the past couple of days MDN has reported on Antero’s recently released production results for their Utica Shale wells (see Another Antero Utica Well Top of the Heap: IP Rate of 40.2 Mmcf/d! and More on Antero’s Record Shattering Utica Shale Wells). On the heels of their 4Q13 update from a couple of days ago, Antero yesterday released their 2014 capital expenditure budget. The company plans to spend $2.6 billion in 2014. Of that, they will spend $1.8 billion for drilling and completion, $600 million for expanding midstream facilities and $200 million for core leasehold acreage acquisitions.
Get this: All of the $1.8 billion drilling budget will be spent on drilling in the northeast–75% of it in the Marcellus, and 25% of it in the Utica. And the $200 million for new leases will be spent in both the Marcellus and Utica as well. It’s a massive amount of money flowing into the northeast ($2 billion or more)–all from a single driller. Here’s the Antero budget update issued yesterday:
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Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO
Gulfport Energy announced yesterday that CEO James Palm will retire as of February 15 (just two weeks from now). Gulfport is one of the most important (and increasingly prolific) drillers in the Utica Shale. In 2013 Gulfport stole many headlines with their southeastern Ohio Utica shale wells breaking records left and right (see Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d).
Palm has been CEO of Gulfport for the past eight years. Was he pushed? No indications of that. It appears he’s simply exiting while Gulfport, under his expert guidance, is at a high point. No doubt he leaves the company as a very wealthy man. Here’s the brief Palm retirement announcement from Gulfport:
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Williams CEO: Transco Pipeline will Double Capacity by 2017
Williams President & CEO, Alan Armstrong, addressed the Hart Energy’s annual Marcellus-Utica Midstream Conference & Exhibition at the David L. Lawrence Convention Center in downtown Pittsburgh yesterday. He said several interesting things, but the one that caught our attention was this: Williams is going to spend $5 billion expand their Transco methane pipeline. Transco runs from the Gulf Coast to New York. Armstrong said they will be adding more mainline to the Transco–making it longer, by about 9%. Which doesn’t seem like much, but it will nearly double the capacity of the entire pipeline. That’s a big hairy deal with lots of implications: More gas can get to market for consumers (bringing down prices for consumers), more gas can be shipped from drillers (more revenue for drillers), and more Marcellus gas will make it’s way into northeastern markets (great for drillers and landowners).
A summary of Armstrong’s speech:
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Former Mainstream Reporter Sees the Fracking Light
Is there any hope that mainstream media reporters will ever tell the truth about the miracle of fracking? You may despair, but every now and again there’s hope. We spotted a column written in the more-or-less conservative Washington Times by a former reporter for the Associated Press, someone who also has worked for Newsweek, ABC News and “20/20”. That’s mainstream media cred if we’ve ever heard it! Not only that, but this reporter was once funded (in a professorship) by the rabidly anti-drilling Park Foundation. Fait accompli–a dyed in the wool mainstream media guy.
And yet, this mainstream media guy was able to see through the lies of the anti-drillers and come to the conclusion that yes, fracking is indeed a miracle and does not destroy the environment. Hallelujah! A mainstreamer who saw the light. Maybe there is hope?…
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New SW Ohio Electric Generating Plant to be Powered by Natgas
Middletown, OH, located on the border of Butler and Warren counties in southwestern Ohio, is about to get a new $500 million natural gas-fired electric generating plant. That is, they will if NTE Energy’s plan is approved. The new plant will generate enough electricity to supply 400,000 homes. Although the story we found about the plant doesn’t say where the gas will come from, you can bet your bottom dollar it will be fueled by Utica and Marcellus Shale gas…
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Marcellus & Utica Shale Story Links: Thu, Jan 30, 2014
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:
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More on Antero’s Record Shattering Utica Shale Wells
Yesterday MDN brought you the news that Antero had turned in some of the highest producing wells–ever–in the Utica Shale (see Another Antero Utica Well Top of the Heap: IP Rate of 40.2 Mmcf/d!). We got the context of their announcement slightly wrong, and admitted it at the top of that article. We believed one of those wells to be the #1 overall producing well in the Utica–but such is not the case. As we explained, Antero is now converting the production output from their wells into “gas equivalent” because many of these wells produce a lot of natural gas liquids, including ethane, butane and propane. Even though we got it slightly wrong, the wells are still awesomely impressive for the their record-breaking output.MDN thanks our friend and intrepid reporter Bob Downing at the Akron Beacon Journal for pointing out the change-up in how Antero reports its numbers (he gave us a courtesy call). Bob went on to research the Antero announcement and found that three of their recently announced wells are ranked in the Utica “top 10” most productive wells overall. Although the Antero wells may not be #1 in producing the most methane (“dry gas”), they produce an enormous amount of NGLs, which are a lot more profitable than plain methane! Here’s a pair of reports from Bob from yesterday:
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Chesapeake Energy | Energy Companies | Industrywide Issues | Jefferson County (OH) | Lease & Royalty Payments | Litigation | Ohio
OH Judge Says Filing Paperwork is Enough to Extend Lease
Ohio landowners should be aware of an important court case just decided that says, in essence, filing paperwork is enough proof of a driller’s intent that a lease can be extended beyond the initial signing period. Several landowners in Jefferson County, OH signed a lease with Fortuna Energy in 2006 that was later sold to Chesapeake Energy (in 2010). The lease was for a 5-year period. Three days before the end of the lease Chesapeake filed a Declaration of Pooled Unit (DPU) with the Ohio Department of Natural Resources. That is, they told ODNR in essence “here’s a group of properties we intend to drill on soon” requesting permission to “pool” them together into a drilling unit. That simple act was enough proof, according to a U.S. District Court judge, to allow Chesapeake to extend the original lease beyond the original 5 years.
And so now the landowners are stuck waiting for Chesapeake to actually do something other than file paperwork. Good luck with that…
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Utica Shale Transient Workers in Ohio Crosshairs
Calling OH Gov. John “foreigner hunter” Kasich: Ohio is being invaded by foreigners! Time for a dragnet to kick them out!! We refer, tongue-in-cheek, to Kasich’s disdain for non-Ohioans moving to Ohio to work in the Utica Shale drilling industry–doing nasty, hard jobs that often require someone who’s skilled at doing them–like pipefitting and welding, and man-handling equipment at rig sites (called a roustabout). Ohioans can certainly be trained, but often it takes people who have done it to show them how.
The Columbus Dispatch has taken a decidedly anti-drilling stance recently with a flurry of articles that attack the Utica Shale industry. Their latest article takes aim at “transient” workers–people Kasich calls foreigners. It’s jingoistic and repugnant–but then prejudice and ignorance always are. Here’s the Dispatch waxing eloquent on “transients”…
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Energy Companies | Energy Services | Gulfport Energy | Industrywide Issues | M&A | MarkWest Energy | Ohio | Ohio Gathering | Pipelines | Processing Plants | Statewide OH | Summit Midstream
Summit Midstream Closes Deal to Buy 40% Stake in Ohio Gathering
Last December MDN told you that Summit Midstream was buying out Gulfport Energy’s share of the Ohio Gathering pipeline and processing system (see Summit Midstream Buys Gulfport’s Interest in Ohio Gathering). As we said at the time, the deal appears complicated on paper with multiple names (like Blackhawk Midstream), but the bottom line was/is that Summit will be the 40% owner and MarkWest Energy will remain the 60% owner of the Ohio Gathering system.
Yesterday, in an announcement by Summit that’s equally dense with details (likely written by lawyers), Summit announced they’ve closed the Ohio Gathering deal. That’s the sum total of this announcement–that the deal is now done:
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Captain Planet to the Rescue! Rice Energy’s Sense of Humor
We just love this story. Rice Energy is one of our favorite Marcellus/Utica drillers. It was founded by Dan Rice and his boys. Dan was, for over 10 years, the single most successful mutual fund manager in the United States. After he helped found Rice Energy to take advantage of shale drilling in the northeast, his bosses at Blackrock fired him–for their own mistakes (see BlackRock’s Screw-up with Dan Rice & Rice Energy). Dan has had the last laugh, however. The company went public last week and is now valued at $2.8 billion (see Rice Energy IPO Soars, Brings in $84M More Than Expected).
What does this have to do with Captain Planet, you ask? It seems that Dan and the boys have a healthy sense of humor (which is why we love Rice). Instead of naming their wells after the landowner, which is the usual practice, they instead name Rice wells after super heroes! Including, yes, Captain Planet–the wacky environmentalist cartoon character from the 1990s. It just brings a smile to our faces, and we thought it would to yours as well. Below is the list of Rice wells and the super heroes they’re named after…
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The Band is Back Together! Anti-Drillers to Visit Binghamton U
The band is three-fourths back together. A group of radical anti-drilling organizations, including NYRAD (New York Residents Against Drilling), the League of [Liberal Democrat] Women Voters, NYPIRG, the Sierra Club and other lesser-known wacko organizations are sponsoring an “information” (i.e. propaganda) night at Binghamton University this Friday. And they’ve re-assembled most of the band, er, anti-drilling “experts” that visited Cornell University with their traveling road show/circus last October (see Latest Laughable NY Anti Tactic – Not Enough Gas, Just Move Along).
Retired systems engineer for IBM and Lockheed Martin Jerry Acton will be there to induce death by PowerPoint. So too will retired Mobil Oil Executive Vice President Lou Allstadt (who’s already made his millions, so he doesn’t want any silly “farmers” to make money too, who the *$#@ do they think they are?). Oh, and Brian Brock, an anti-drilling retired geologist. Notice a theme here? All retired, all anti-drilling, with nothing to do. Road trip!…
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In what is sure to be a bitter disappointment to New York’s landowners, Dept. of Environmental Conservation Commissioner Joe Martens said yesterday in testimony to lawmakers that he’s not going to issue any permits for shale drilling before 2015. Unless, of course, he’s forced to by a court (see 
Yesterday MDN brought you the news that Antero had turned in some of the highest producing wells–ever–in the Utica Shale (see