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    PA Marcellus Property Sold as High as $16,700/Acre at Auction

    toot your own hornThis has to be a record for the Marcellus… The Pennsylvania court had ordered an auction of various parcels of land in Susquehanna and Bradford counties (in the prolifically productive northeastern “dry gas” portion of the Marcellus). There were 222 acres of land in total located in prime Marcellus drilling country. An auction was held on Oct. 30 in Wysox, PA and the land was all sold–to various buyers from across the country. Here’s the kicker: Some of the land sold for $16,700 per acre! This is rural farm land folks, not prime real estate in the middle of downtown. The money paid was not for a gas lease but the new owners get mineral rights with the land. You know the land was purchased in hopes of turning around and leasing it for Marcellus drilling. We don’t know for sure, but some of the land may even have been purchased by drilling companies (time will tell).

    If we might immodestly say so, the ad agency that helped promote the auction wisely sought out and purchased advertising on MDN. You may have recalled seeing the ads during October? Looks like that proved to be a wise decision! Here’s the “let us toot our own horn” press release issued by United Country Real Estate–the company appointed by the court to list and sell the property:
    Read More “PA Marcellus Property Sold as High as $16,700/Acre at Auction”

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    Antero Resources 3Q13: Stars Aligned, More Marcellus/Utica

    Antero Resources continues to focus on the Marcellus and increasingly the Utica Shale. Antero claims to be the most active driller in the Marcellus with 15 active drilling rigs–we don’t doubt it. Earlier this week as part of their third quarter update, Antero announced they will add a fifth drilling rig in the Ohio Utica where they’ve already drilled 12 wells (now online and producing) and with another 12 wells currently in process of being drilled. Antero loves the Utica.

    The stars certainly seem to be in alignment for Antero. A month ago the company went public and their stock price soared (see Antero’s Stock Climbs 18% on First Day of Trading). The day the company went public it was valued at $11 billion. As of this morning, a month later, it’s worth $14 billion. Yow! Antero can also boast of having the Utica Shale’s #1 producing well (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d). Lot’s of good things happening for Antero, especially in the Utica. Here’s what they say about the last 3 months, and what they think lies ahead…
    Read More “Antero Resources 3Q13: Stars Aligned, More Marcellus/Utica”

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    Milestone: 600 Wells Now Drilled in OH Utica Shale

    Another milestone reached in the Ohio Utica Shale: 600 horizontal shale wells have now officially been drilled in the Utica Shale. There are 963 permits approved and active. Of the 600 drilled, 174 are in production as of November 2nd.

    Here’s the latest report from the Ohio Dept. of Natural Resources with details for each and every well permitted and/or drilled:
    Read More “Milestone: 600 Wells Now Drilled in OH Utica Shale”

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    MarkWest Open Season for “Little” Ethane Pipeline

    MarkWest Energy yesterday announced an open season for a “little” ethane pipeline in Pennsylvania. The little pipeline, which we now have a name for–MarkWest Liberty Ethane Pipeline–will run from Majorsville, PA to Houston, PA, about 30 miles. It is a pipeline to other pipelines. The MarkWest plant in Houston will provide access for the incoming ethane to be pipelined out of the area via the Mariner West pipeline (to Sarnia, Canada, going operational later this month), the Mariner East pipeline to the Marcus Hook refinery near Philadelphia (not ready until 2015), and the ATEX ethane pipeline to the Gulf Coast (ready sometime in 1Q14).

    The open season begins today and runs through Dec. 9th. The announcement from MarkWest, along an explanation from MDN about why this is important news:
    Read More “MarkWest Open Season for “Little” Ethane Pipeline”

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    Crestwood Midstream 3Q13: Merger Done, Pedal to Marcellus Metal

    In early October, Crestwood Midstream and Inergy Midstream completed their mega-billion-dollar merger (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). Yesterday the newly merged company which kept the Crestwood Midstream name, issued their third quarter operations and financial update. Robert G. Phillips, Chairman, President and CEO said with the merger now behind them, it’s (our words) pedal to the metal, full speed ahead. Phillips is really excited about the company’s prospects for growth in the Marcellus Shale and said so yesterday.

    Phillips said by the end of 2013 Crestwood gathering capacity in the Marcellus will hit 500 million cubic feet per day (Mmcf/d), which is a 25% increase from the end of 2012. By the end of 2014, he expects their Marcellus gathering capacity to grow to 750 Mmcf/d, up another 50%. Yes indeed, Crestwood is high on the Marcellus!…
    Read More “Crestwood Midstream 3Q13: Merger Done, Pedal to Marcellus Metal”

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    Atlas Resource 3Q13: Production Up, Losses (Way) Up Too

    Atlas Resource Partners is a Pittsburgh-based exploration and production (E&P) company with active drilling operations not only in the Marcellus/Utica region but another four resource plays as well. Production for the company has gone up–way up–in 3Q13 thanks to newly acquired acreage and operations, but also due to more wells going online in the Marcellus/Utica. However, the company’s financials continue to be troubled. They show a net loss of $39.7 million for 3Q13–which is almost 4x the loss for the same period last year.

    Revenue was up for Atlas in 3Q13 (that’s a good thing), but costs and expenses rose even more (that’s a bad thing). Selected portions of the Atlas 3Q13 update:
    Read More “Atlas Resource 3Q13: Production Up, Losses (Way) Up Too”

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    MarkWest to Build 5th Cryo Plant in WV Courtesy Antero Resources

    MarkWest Energy continues its Marcellus/Utica infrastructure expansion. In an announcement yesterday, MarkWest said they will build a fifth (!) 200 million cubic feet per day cryogenic gas processing plant at its Sherwood (Doddridge County), WV facility. In the latest edition of the Marcellus and Utica Shale Databook (2013 Volume 2), MDN lists all of the projects announced by MarkWest and others (111 projects in all). This one is brand new and would be 112. MDN estimates this new cryogenic processing plant along with two others currently under construction at the Sherwood complex cost in the neighborhood of $200 million each to build.

    Cryogenic plants separate natural gas liquids (NGLs, or “wet gas”) from methane (“dry gas”). Why a fifth plant at the same facility? It’s being built at the request of Antero Resources. MarkWest signed a deal with Antero to provide them with wet gas processing capacity at the plant. MarkWest says the new plant will be built and online by third quarter of 2014. When it goes online, the total processing capacity at the Sherwood complex will be 1 billion cubic feet of natural gas per day–a really astonishing number. Here’s the MarkWest announcement:
    Read More “MarkWest to Build 5th Cryo Plant in WV Courtesy Antero Resources”

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    PA DEP Sec. Abruzzo Announces Winners of $3M in CNG Grants

    Part of the Pennsylvania Act 13 law, passed in early 2012, is a provision called an “impact fee” collected from Marcellus drillers (ultimately from landowners, because fees and taxes are always passed down the line). The first year the fee was collected it brought in over $200 million. The so-called fee is really 60% fee and 40% tax, as we’ve written about many times before. Why? Because 60% of the money collected stays in the communities impacted by drilling–for use with first responders, roads, etc. The other 40% is what MDN calls “walking around money”–money that’s spent by politicians in Harrisburg to curry favor with voters (i.e. vote buying). A lot of that money goes to southeastern PA (Philly area) where there is no drilling–but such was the sleazy political price to be paid in order to pass the legislation. Yes it stinks–but it is what it is.

    If there’s any good use for a teeny tiny sliver of the 40% walking around money, it happened yesterday in Scranton, PA, where the PA Dept. of Environmental Protection (DEP) Sec. Chris Abruzzo was on hand at the Cabot Oil & Gas’ “CNG Celebration” event at Johnson College (see our companion story today about the event). Abruzzo was there to announce the list of grant winners who will share in $3 million of Act 13 money to purchase, refit or supply filling stations for vehicles to run on compressed natural gas (CNG). By handing out this seed money, Gov. Tom Corbett hopes to encourage more companies and organizations to switch to cheaper and much less polluting natural gas as a power source. Below is the DEP announcement and list of winners of this year’s grant. The DEP will be back next year with even more money to award. They start accepting applications on Saturday…
    Read More “PA DEP Sec. Abruzzo Announces Winners of $3M in CNG Grants”

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    Cabot’s Big CNG Celebration at Johnson College in Scranton, PA

    Yesterday Cabot Oil & Gas held a “CNG Celebration” at Johnson College in Scranton, PA. Unfortunately MDN could not be on hand to help celebrate. However, we do have a couple of stories to bring you from that event.

    The purpose of the event was several-fold: announce Johnson College’s curriculum expansion with new courses in compressed natural gas (CNG) technology and eventually a certification (with financial and technical assistance from Cabot); PA DEP Sec. Chris Abruzzo was on hand to announce $3 million in grants to businesses and organizations to purchase or retrofit vehicles to run CNG (see our companion story today); welcome the Marcellus Shale Coalition’s new executive director, David Spigelmyer; and show off some impressive big trucks and other vehicles running CNG. “Celebration” is an appropriate word that about covers it!…
    Read More “Cabot’s Big CNG Celebration at Johnson College in Scranton, PA”

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    Chesapeake’s Lawler Says 3Q13 was “Transformational” for Company

    Transformers - DecepticonsChesapeake CEO Doug “the ax man” Lawler said the company had “an exciting third quarter” (tell that to the families of 1,200 people now out of a job), and that the company saw a “significant transformation and the implementation of a new strategy for Chesapeake” during the past quarter. That’s certainly a true statement. The numbers for the company have improved over a year ago, which will be music to the ears of Lawler’s boss corporate raider Carl Icahn (and will fatten Icahn’s bank account when he sells in the next year or two, sleazeball).

    Yesterday Chesapeake issued their third quarter operations and financial update, accompanied by a phone call with select analysts who asked puff questions of Lawler and former Aubrey McClendon “friend” and CFO Nick “Dom” Dell’Osso. One bit of good news amongst all the hot air issued yesterday: Chesapeake’s Utica Shale production went up a dramatic 91% from 2Q13 to 3Q13, as pipelines and processing plants have come online. According to Lawler, that trend will continue into 2014 as more infrastructure comes online…
    Read More “Chesapeake’s Lawler Says 3Q13 was “Transformational” for Company”

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    Rex Energy 3Q13: Continued NE Expansion, Including Upper Devonian

    As the third quarter reports continue to flood in, we have an update from Rex Energy, one of our favorite smaller (but important) Marcellus/Utica Shale drillers. Rex Energy, an independent exploration and production (E&P) company headquartered in State College, PA issued their 3Q13 update on Tuesday, and company leaders conducted a phone call with analysts yesterday. Among the important gleanings: Rex is doing interesting and important drilling in the Upper Devonian Shale layer (above the Marcellus) with impressive results. They’ve reached almost 100 million cubic feet of gas production per day, a 39% increase over the same time last year. And Rex now has leases on 21,000 Utica Shale acres in Ohio.

    An interesting tidbit from yesterday’s phone call: Rex co-founder and CEO Thomas C. Stabley says one of the secrets of Rex’s success has been to develop “quality midstream solutions” in each of their core areas. Here is the 3Q13 update issued by Rex on Tuesday, followed by (some of) the phone call transcript from yesterday:
    Read More “Rex Energy 3Q13: Continued NE Expansion, Including Upper Devonian”

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    Halcon CEO Says No More S***** Wells in Northern OH Utica

    Drillers are still figuring out the Utica Shale–the best places to drill, and the best places to not drill. Sometimes the “don’t drill here” lessons are tough because each well drilled costs a lot of money ($8 million or more, typically). On an analyst call Tuesday to discuss third quarter results, Halcon Resources Corp. CEO Floyd Wilson used some salty language to describe where they don’t intend to do more Utica drilling, which is in northern Trumbull County, OH. Instead, he said they’ll concentrate their efforts on the southern part of the county where they have more leased acreage that he believes will yield a better result.

    Here’s a small portion of the phone transcript where Wilson talks about the Utica and where he definitely won’t be drilling again:
    Read More “Halcon CEO Says No More S***** Wells in Northern OH Utica”

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    1st NRG Inches Closer to Utica Drilling – Still Not There Yet

    1st NRG Corp. is a small-but-growing exploration and production company headquartered in Denver, CO. Their drilling program to date has been centered in Wyoming (coal bed methane drilling). For more than year 1st NRG has been saying “we’re gonna start drilling in the Utica, you wait and see” (our words). They issued a press release more than a year ago that said, essentially, they are interested in the Utica (see 1st NRG Corp Newest Entrant in OH Utica Shale). They then issued a release saying they had raised $7 million for Utica drilling (see 1st NRG Corp Gets $7M Loan to Begin Drilling in Utica, Other Plays), and another saying they were looking for more money to drill in the Utica (see 1st NRG Still Looking for $ to Drill 7K Acres in Utica Shale).

    It’s November and has been eight long months since the last press release–so it must be time for another. Lookie here, we have one! This time, however, there’s been a change. 1st NRG says they have “signed an agreement with a private energy company to participate in the development of prospective acreage.” That still isn’t “we’re drilling our first well,” but we guess it’s a half step closer. Here’s the latest press release that’s short on details and long on puffery and descriptions of the Utica…
    Read More “1st NRG Inches Closer to Utica Drilling – Still Not There Yet”

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    Sunoco Provides Brief Update on Mariner East/West Pipelines

    Sunoco Logistics is in the midst of spending over $1 billion on two pipelines to carry ethane (and propane) from the Marcellus/Utica region to markets where it can be processed and sold. One of those pipelines is the Mariner West pipeline, currently in testing and due to go online this month, which carries ethane all the way to Sarnia, Canada. The other is Mariner East which will carry first ethane and then propane to the Marcus Hook refinery in Philadelphia. Mariner East will go online in stages beginning in 2014.

    Both pipelines are extremely important to the Marcellus/Utica region. We have a brief update on both projects from Mike Hennigan, President and CEO of Sunoco Logistics, as delivered yesterday on an analyst phone call reviewing the company’s third quarter numbers…
    Read More “Sunoco Provides Brief Update on Mariner East/West Pipelines”