Marcellus Drilling News

Blue Racer Midstream | Economic Impact | Energy Services | Industrywide Issues | MarkWest Energy | Pipelines | Processing Plants

Blue Racer Exec Says NE Midstream Needs Another $30B+ Investment
January 31, 2014January 31, 2014

Blue Racer Midstream CEO Jack Lafield spoke at the Hart Energy Marcellus-Utica Midstream Conference and Exhibition in Pittsburgh yesterday, and he had some interesting things to say. As for the $10 billion in infrastructure already invested in the Marcellus/Utica, Lafield says that’s “only a fraction” of what’s needed for investment in the coming years. Lafield says at least $30 billion more needs to be spent “just to keep up with the demand” for infrastructure. Yikes! He also said in his 42 years in the industry, “this is about as good as it gets.”

Also speaking yesterday was MarkWest Vice President of Corporate Development, Scott Garner, who said that MarkWest is spending $2 billion this year on the Marcellus/Utica. As MDN found with our list of 111 midstream/infrastructure projects published in our Marcellus and Utica Shale Databook Volume 2, we estimated there’s at least $40 billion in projects planned or already in process over the next five years or so. Here’s more pickings from yesterday’s conference:
Read More “Blue Racer Exec Says NE Midstream Needs Another $30B+ Investment”
Industrywide Issues | Ohio | Statewide OH | Taxation | Utica Shale

OH Gov. John Kasich: Goldilocks and the Utica Shale Tax
January 31, 2014January 31, 2014

John “foreigner hunter” Kasich, who sounds more like a Democrat every day, says he won’t accept a “puny” severance tax increase on Utica Shale drilling. He wants him a big, fat, mother of a tax increase on Utica drilling–and nothing less will do. In comments yesterday, Kasich (strangely) started to channel fairy tales, telling reporters that tax increases on drilling are “…kind of like porridge. It can’t be too cold, it can’t be too hot, it’s got to be just right.” Wow, Kasich would make Karl Marx proud.

Here’s the latest back and forth between Kasich and his own Republican Party, a party ready to cave (yet again) on the issue of taxes:
Read More “OH Gov. John Kasich: Goldilocks and the Utica Shale Tax”
Energy Services | GreenHunter Resources | Industrywide Issues | Ohio County | Regulation | Roads | Wastewater | West Virginia

GreenHunter’s Wheeling Frack Wastewater Facility Hits a Snag
January 31, 2014January 31, 2014

GreenHunter Water, which is building a frack wastewater recycling (and potentially barging) facility in Wheeling, WV, has hit a snag. So far, it’s a pretty big snag. Last year the company received approval from the Wheeling Planning Commission to proceed with the plant, after initial resistance. So far, the WV Dept. of Environmental Protection (DEP) has not issued any permits because they won’t and don’t need to review the plant until it’s ready to start operating. Then they’ll visit and evaluate.

However, the WV Dept. of Transportation’s Division of Highways (DOH) has rejected GreenHunter’s plan to have trucks with frack wastewater entering and exiting the plant. The DOH rejection happened last August and according to the DOH, they haven’t heard a thing from GreenHunter since…
Read More “GreenHunter’s Wheeling Frack Wastewater Facility Hits a Snag”
Industrywide Issues | Pennsylvania | Public Opinion | Statewide PA

Statewide PA Poll Shows Strong Majority Want Marcellus Drilling
January 31, 2014January 31, 2014

The Democrat candidates running in the primary for governor in Pennsylvania, all of whom (with maybe one exception) support less Marcellus drilling in the state, including a draconian moratorium, might want to pay attention to the results of the recent statewide poll conducted by Franklin & Marshall College. It shows 68% of Pennsylvanians support Marcellus Shale drilling. They WANT the gas industry in the state. It shows the wacko fringe objectors to be 27%. You do the math and see how you win by bashing shale drilling in PA.

Here’s a summary of the results from the latest F&M poll:
Read More “Statewide PA Poll Shows Strong Majority Want Marcellus Drilling”
Devon Energy | Energy Companies

Utica Driller Devon Energy Picks Up 2 New Board Members
January 31, 2014January 31, 2014

Devon Energy announced earlier this week that they’ve added a pair of drilling industry veterans to their board of directors. The additions are “immediate” and include Barbara M. Baumann, 58, a former BP Amoco executive who currently serves as president and owner of Cross Creek Energy Corporation, and John E. Bethancourt, 62, a retired Chevron executive. Devon is a major acreage holder in the Utica Shale with 157,000 acres under lease.

Does this sudden, with no warning, addition signal problems or issues? We don’t think so, but we don’t know. We haven’t come across any scuttlebutt about Devon–they seem to be doing well, focusing largely on oily shale plays, including the Utica. A couple of years ago the company picked up $2.2 billion from Chinese oil major Sinopec International Petroleum Exploration Production Corp. in a joint venture deal (see China Makes $2.2B Investment in U.S. Shale, Including Utica). Last October Devon more or less bought out Crosstex Energy (see Crosstex Energy Gets a Name Change, Merger with Devon Proceeds). Seems like everything is going well, full speed ahead with no corporate raiders lurking in the background. Whew. Here’s the board announcement from earlier this week:
Read More “Utica Driller Devon Energy Picks Up 2 New Board Members”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

Reaction to TGP’s Planned Pipeline Across Massachusetts
January 31, 2014January 31, 2014

For the past month and a half, MDN editor Jim Willis hasn’t seen a day without a story about how natural gas prices have skyrocketed in New England (and even around New York City) because there aren’t enough natgas pipelines to the region. Not enough infrastructure. We find it amusing that the governors of six New England states recently sent a letter to their regional coop asking for help in getting more pipelines to the region (see Blue State Blues: 6 New England States Want New Natgas Pipeline). One of those states–Vermont–passed a law banning fracking (see Vermont Becomes First State to Ban Fracking). And yet Vermont wants that cheap, fracked gas from the Marcellus! How’s that for hypocrisy?

Knowing that New England tilts pretty far to the political left (and is mostly anti-fracking), we found it interesting when we spotted a story about communities in Massachusetts being approached by Kinder Morgan and their Tennessee Gas Pipeline with plans to extend the pipeline through their communities–across the entire state. How will they respond? Mass protests (pun intended)? Keep the evil, fracked gas away? No fracking way jest keep them pipes away? Interestingly, no. The attitude (so far) is more like, let’s find out where you want to run the pipeline and we’re sure we can accommodate it. Wow! What a change in attitude a price hike of $100 per thousand cubic feet of natural gas can create…
Read More “Reaction to TGP’s Planned Pipeline Across Massachusetts”
Anti-Drilling/Fossil Fuel | Enbridge | Energy Services | Industrywide Issues | Pipelines | Regulation

Marcellus Gas Heading North: Canadian Pipeline Gets “Green” Light
January 31, 2014January 31, 2014

Seems like today is midstream day on MDN. Many of our stories revolve around pipelines and processing plants, including our lead about MarkWest (be sure to give it a read). Here’s an interesting story about a pipeline project in Canada that has a Marcellus tie-in. Enbridge Gas Distribution wants to expand their natural gas pipeline in the Toronto area, spending upward of C$686 million to do it. The “greens” of Canada (garden variety fossil fuel-hating anti-drillers) objected. The greens’ objection #1: If we just turn our thermostats down low, we won’t need the extra gas. The Ontario Energy Board said: Nope. Not buying that one. Objection #2: This pipeline will bring in that evil, nasty, fracked Marcellus Shale gas and kill us all because it pollutes water (in the U.S.) and releases fugitive methane into the atmosphere (global warming, heeelp!). Again, the Ontario Energy board said: Nope. Not buying that one either.

Below is the full story about the pipeline. Embedded in it is the response by the calm, wise heads from the Ontario Energy Board to the greens, responding to them on the shale gas issue:
Read More “Marcellus Gas Heading North: Canadian Pipeline Gets “Green” Light”
Coterra Energy (Cabot O&G) | Energy Companies | Hydraulic Fracturing | Industrywide Issues | Pennsylvania | Susquehanna County

Vol 2 Photojournal for Cabot Well in Susquehanna County, PA
January 31, 2014January 31, 2014

A quick note to let you know that tomorrow (Saturday, Feb. 1) you can once again download Photojournal of a Pennsylvania Natural Gas Well: Book 1: Ground Preparation. It’s a really cool book of photos (and captions) taken by a non-professional photographer, Susquehanna County resident Janice Gavern. MDN recently reported on Janice’s project to document a Cabot Oil & Gas shale well being drilled just outside of Montrose, PA, close to (yes) Dimock (see PA Resident Snaps 8,000 Pictures of Cabot Well Construction).

Jancie has been a busy beaver. She’s now posted her second volume in this multi-volume series: Photojournal of a Pennsylvania Natural Gas Well: Book 2 Site Set-up. You can grab a copy of this volume for free on Sunday, Feb. 2. Be sure to grab them while they’re free! It will save you $9.99 (or if you like, download it and pay the $9.99 to give Jan a little bit of money for her efforts).

What if you don’t own a Kindle reader? No problem. You can download and install a Kindle reader application on your computer, smartphone–just about any device you have that connects to the internet. So don’t lack of a Kindle stop you from grabbing a copy of Jan’s books.
About MDN

A Brief Word About MDN Site Technical Problems
January 31, 2014January 31, 2014

Dear MDN Readers:

Over the past several days the MDN website has, at times, slowed down significantly and in some cases was unresponsive and not loading. In addition, for some time now the site has not “remembered” logged in subscribers who revisit the site, causing them to have to log in again repeatedly each day. My profound apologies.

Last night I had the site moved to a new server and it seems to be responding well today (at least so far). I have also found and corrected the issue causing logged in subscribers to not be remembered on subsequent visits.

Please be on the look-out today and report to me any strange behavior (can’t load the site, still having to log in repeatedly). I’m doing my best to resolve these technical issues and appreciate your patience and help.

Kind regards,
Jim Willis
Editor, MDN
Best of the Rest

Marcellus & Utica Shale Story Links: Fri, Jan 31, 2014
January 31, 2014January 31, 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, Jan 31, 2014”
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
January 30, 2014January 30, 2014

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…
Read More “NY DEC Com. Martens Says No NY Fracking Until 2015 Earliest”
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
January 30, 2014February 4, 2014

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…
Read More “Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer”
American Energy Partners | American Energy Utica | Energy Companies | Ohio | Statewide OH | Utica Shale

McClendon’s New Company Gets Another Half Billion $ for Utica
January 30, 2014January 30, 2014

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?…
Read More “McClendon’s New Company Gets Another Half Billion $ for Utica”
Antero Resources | Energy Companies

Antero Resources Will Spend $2B+ in Marcellus/Utica in 2014
January 30, 2014January 30, 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:
Read More “Antero Resources Will Spend $2B+ in Marcellus/Utica in 2014”
Energy Companies | Gulfport Energy | Ohio | Statewide OH | Utica Shale

Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO
January 30, 2014January 30, 2014

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:
Read More “Gulfport’s James Palm to Retire in 2 Weeks, Search on for New CEO”
Economic Impact | Energy Services | Industrywide Issues | Pipelines | Transco | Williams

Williams CEO: Transco Pipeline will Double Capacity by 2017
January 30, 2014January 30, 2014

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:
Read More “Williams CEO: Transco Pipeline will Double Capacity by 2017”