Marcellus Drilling News

Hydraulic Fracturing | Industrywide Issues | New York | Research | Statewide NY

USGS Study Finds 15% of NY Water Wells Already Have High Methane
December 18, 2013December 18, 2013

Well, imagine that. Even more scientific evidence has just arrived, courtesy the US Geological Survey (USGS), that there’s a whole lotta methane in the ground in the Southern Tier of New York State. So much methane that 15% of the water wells tested across nearly 2,000 square miles for more than a year by the USGS show methane levels so high that the methane needs to be monitored and/or mitigated. That is, miles away from any fracking or existing gas wells, water wells are saturated with naturally occurring methane. In case you miss the point: Fracking is NOT the cause of methane migrating to water wells in northeast PA and in New York. There is no shale fracking in NY! And yet, there’s methane–so much you can, oh, light your tap on fire?

What say you now anti-frackers? Yeah, we thought so. There’s NOTHING you can say. Your lies are exposed. Here’s the press release and a full copy of the study released yesterday by the USGS with data from their tests of water wells in NY state:
Read More “USGS Study Finds 15% of NY Water Wells Already Have High Methane”
Energy Services | Williams

Bad News: Corporate Raiders Take Aim at Williams
December 18, 2013December 18, 2013

Oh oh. Keith Meister runs a hedge fund (investment fund) called Corvex Capital. Keith Meister is a Carl Icahn student and disciple (have we told you lately how much we despise corporate raiders like Icahn?). Meister’s Corvex Capital has disclosed “surging” its position in midstream company Williams. In fact, Corvex Capital has a signed agreement with Soroban Capital Partners, another big investor in Williams. The two companies together are now the single largest shareholder in Williams. This is definitely not good news. It means the Corvex and Soroban plan to make mischief with Williams.

Corporate raiders like Icahn (and Meister) invest in companies purely to force the sale of assets and the firing of employees (i.e. to “cut costs”) in order to drive up the price of the stock, which they then turn around and sell at a huge profit. It’s sleazy, it’s slimy, and it’s the part of capitalism we don’t like (and we’re raging capitalists here at MDN HQ). Icahn, through his “tool” Doug Lawler, has forced the firings of 1,200 people at Chesapeake in the past year. Will such a fate come to Williams? We’d be nervous if we worked there…
Read More “Bad News: Corporate Raiders Take Aim at Williams”
Energy Companies | Rice Energy

Rice IPO Seeks to Raise $800M – Some Details Leak
December 18, 2013December 18, 2013

As MDN has been reporting since October, Rice Energy will, at some point, float an initial public offering (IPO) and start to trade shares on a stock exchange (see Rice Energy Rumored IPO – Dan Rice Gets Last Laugh). Last week the details started to come into focus. The company may be valued as high as $2.5B, initial initial public offering paperwork had been confidentially filed, and the public will get to the see the paperwork soon, likely in January (see Impending Rice Energy IPO Creating a Buzz).

The Rice story continues to fascinate and more information continues to “leak” out. The latest: The company is looking to raise $800M with their IPO. They’ve been losing money, but certainly not a lot as a percentage of the money they’re spending to drill. And, we have more insight into the (very young) management structure of the company…
Read More “Rice IPO Seeks to Raise $800M – Some Details Leak”
Pennsylvania | Statewide PA

Marcellus Moves PA to #2 Top NatGas Producing State
December 18, 2013December 18, 2013

Yesterday the U.S. Energy Information Administration (EIA) released an analysis that says Pennsylvania, because of the Marcellus Shale, is now the third largest producer of natural gas in the U.S., and it will almost certainly blow by Louisiana to become the #2 producer by the end of this year. PA’s production is up a mind-blowing 72% from 2011 to 2012–in one year! When the numbers are finally in this year, EIA expects another remarkable year for the Keystone State.

Also of note: For the first time (in a long time) West Virginia has broken into the top 10. Here’s the latest top-notch analysis issued by the EIA (the one government agency we actually love), that crows about PA and has a cool chart of the top 10 U.S. natural gas producing states:
Read More “Marcellus Moves PA to #2 Top NatGas Producing State”
Energy Companies | Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Seneca Resources | Tennessee Gas Pipeline

TGP Signs up Seneca Resources for Niagara Expansion to Canada
December 18, 2013December 18, 2013

MDN already brought you the announcement that Kinder Morgan, owner of the Tennessee Gas Pipeline, successfully closed an open season that will allow the the TGP to expand their service to the Gulf Coast. A second announcement from KM yesterday says they’re also expanding service northward, to eastern Canada. KM said they’ve signed up Seneca Resources (drilling subsidiary of Buffalo-based National Fuel) to ship 158,000 dekatherms of natural gas per day to eastern Canadian markets on what KM calls their Niagara Expansion Project.

Seneca and their Marcellus Shale production will be the “foundation shipper” for the $74 million Niagara Expansion. Here’s the second KM announcement from yesterday:
Read More “TGP Signs up Seneca Resources for Niagara Expansion to Canada”
Energy Services | Industrywide Issues | Kinder Morgan | Pipelines | Tennessee Gas Pipeline

TGP Pipeline Hits Open Season Target, $150M Expansion Coming
December 18, 2013December 18, 2013

Kinder Morgan, owner of the Tennessee Gas Pipeline (TGP), recently ran an open season to sell more capacity along the TGP to deliver Marcellus and Utica Shale gas to points along the Gulf Coast. They were looking to sell an extra 500,000 dekatherms per day. Yesterday KM announced they hit pay dirt and had achieved their goal. KM says they’ll now spend $150 million to extend and expand the TGP to meet the new demand.

Yesterday’s KM TGP announcement:
Read More “TGP Pipeline Hits Open Season Target, $150M Expansion Coming”
Energy Services | MarkWest Energy

Midstreamer MarkWest Issues (More) Stock to Raise $301M in Cash
December 18, 2013December 18, 2013

MarkWest Energy Partners is one of, if not THE largest midstream company in the Marcellus and now the Utica Shale. They have a LOT of irons in the fire, with multiple processing plants and pipeline projects under way in the northeast. Billions of dollars worth of projects. Which means every now and again you have to feed the cash monster–shovel in some new money–to keep those projects moving forward.

And so yesterday MarkWest announced yet another round of new stock being offered in hopes of raising a quick and cool $301 million worth of cold, hard cash to fuel continued growth and progress. Here’s the announcement:
Read More “Midstreamer MarkWest Issues (More) Stock to Raise $301M in Cash”
Best of the Rest

Marcellus & Utica Shale Story Links: Wed, Dec 18, 2013
December 18, 2013December 18, 2013

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: Wed, Dec 18, 2013”
Energy Companies | Ethane | Industrywide Issues | Pipelines | Range Resources Corp

Range Resources Inducted into the Marcellus “1 Bcf/d Club”
December 17, 2013December 17, 2013

Range Resources issued an update today on recent activities and recent milestones achieved. They’ve just achieved a huge one. Range is now the third driller to achieve 1 billion cubic feet per day of production in the Marcellus Shale, joining Cabot Oil & Gas and EQT in that distinguished and exclusive “club” (see EQT 2Q13: Welcome to the Marcellus “1 Bcf/d Club”). Range also, ahead of an official announcement from Enterprise Products Partners, says that the ATEX (Appalachia-to-Texas Express) pipeline to the Gulf Coast is now up and running and they’re using it to ship up to 10,000 barrels of ethane per day. MDN knew the pipeline was in the testing phase but we did not know it’s now fully operational (see Let it Flow! ATEX Ethane Pipeline Testing Now, Online Soon).

The full update from Range:
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Energy Companies | Hilcorp Energy | Lawrence County | Pennsylvania

Hilcorp Goes Hogwild in Lawrence County – 11 Pads on the Way
December 17, 2013December 17, 2013

Marcellus/Utica driller Hilcorp continues to focus its efforts in Lawrence County, PA. In fact, you may say they’ve gone “hogwild” in Lawrence! The Lawrence County Planning Commission last week reviewed plans from Hilcorp for 11 (yes 11) well pad sites. Each pad has at least one well on it, and more likely 2-4 wells (perhaps more)–meaning Hilcorp plans to drill at least a couple dozen wells in the near future in Lawrence.

Here’s the details for where the 11 well pads are located:
Read More “Hilcorp Goes Hogwild in Lawrence County – 11 Pads on the Way”
Energy Companies | WPX Energy

WPX Energy CEO Ralph Hill is Out, Interim CEO James Bender is In
December 17, 2013December 17, 2013

A “hmmm, that’s interesting” story from WPX. Yesterday we told you about WPX’s kerfuffle over water buffaloes in Susquehanna County, PA (see WPX Decides to Let Franklin Forks Families Keep Water Tanks). Today, in what is likely unrelated to the water buffalo story, WPX has suddenly announced the departure (booting out?) of CEO Ralph Hill at the end of this month. Hill has spent his entire career (32 years) first with Williams, and then with the spun-off WPX Energy. However, he’s not an old man by any stretch–perhaps in his early to mid-fifties. The announcement wishes him well in his “future endeavors”–not in his “retirement.” Not only is Hill out as CEO, he’s off the board of directors too. Hmmm. What does it all mean?

The company is appointing James J. Bender as interim president, CEO and board member, effective Dec. 31, 2013. Hill will stick around until March to help with the transition. Here’s the mysterious WPX announcement issued today:
Read More “WPX Energy CEO Ralph Hill is Out, Interim CEO James Bender is In”
Energy Services | Ethane | Harrison County | Industrywide Issues | Kinder Morgan | NGLs | Ohio | Pipelines | Statewide OH

UTOPIA is Coming! The UTOPIA Pipeline, that is…
December 17, 2013December 17, 2013

Kinder Morgan announced yesterday a plan to build a new 210-mile natural gas liquids (NGL) pipeline that will connect multiple fractionation facilities in Harrison County, OH, to Riga, MI. From Riga, the NGLs will hitch a ride via the KM Cochin Pipeline east to Windsor, Ontario, Canada where they will be delivered to NOVA Chemicals. The new $300 million, 10-inch pipeline from OH to MI has been cleverly named Utica To Ontario Pipeline Access (UTOPIA). The NGLs that will flow through the pipeline will already be refined (“fractionated” or separated) and will include ethane and propane.

Here’s Kinder Morgan’s good news announcement that UTOPIA is coming:
Read More “UTOPIA is Coming! The UTOPIA Pipeline, that is…”
Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

Cuomo Obstinately Says He’ll Continue to Dither on Frack Decision
December 17, 2013December 17, 2013

New York Gov. Andrew Cuomo continues to prevaricate/dither/postpone his decision on whether or not to allow fracking for shale gas in New York State. He said so yesterday at a news conference. By continuing to delay a decision far past everyone’s measure of reasonableness, he’s totally eliminated any chance he had of running for president. He’s also courting a lawsuit that will embarrassingly force him to do his job and make him release the new drilling rules (see Tom West Demands DEC Com. Martens Release the SGEIS – Soon). Today is the deadline by which Norse Energy’s lawyer Tom West has demanded a fixed date when the Cuomo administration will release new drilling regs. If that doesn’t happen (and it almost certainly won’t), a lawsuit to force the issue will be filed–perhaps as early as this month. Cuomo is out of time and out of options–yet he continues to prevaricate.

Meanwhile, Cuomo’s State Health Commissioner, Nirav Shah, continues to be Cuomo’s spear catcher and take all the heat because Shah refuses (at Cuomo’s direction) to announce whether or not he believes proposed drilling rules will protect the nebulous “public health.” Shah has humorously taken to spouting things about science being done in “sacred places.” Apparently sacred places are located everywhere but New York. Here’s how Cuomo’s dithering talk went yesterday…
Read More “Cuomo Obstinately Says He’ll Continue to Dither on Frack Decision”
Hydraulic Fracturing | Industrywide Issues | New York | Regulation | Statewide NY

A Natural Gas Christmas Carol, Starring Gov. Andy
December 17, 2013December 17, 2013

An early Christmas present for New York landowners and those with an interest in drilling in New York State, provided by our friends at the Joint Landowners Coalition: a “Natural Gas Christmas Carol”. It is funny, and sad–all at the same time. Give it a read! (Hey, it’s better than a lump of coal.)

Here’s the letter and a link to the PDF from the JLCNY…
Read More “A Natural Gas Christmas Carol, Starring Gov. Andy”
Energy Companies | Halcon Resources | Ohio | Statewide OH

Halcon Resources Lowers 2014 CapEx Spending, Not Production
December 17, 2013December 17, 2013

Yesterday Utica Shale driller Halcon Resources lowered their “guidance” (what they expect to do) in capital spending for 2014. That is, they said they will spend less money–about 14% less–than previously announced on their drilling programs in 2014. However, they also added they still expect to produce about the same amount of oil and gas, even though they’ll spend less.

Also in yesterday’s announcement, Halcon CEO Floyd Wilson, who tends to have a salty mouth (see Halcon CEO Says No More S***** Wells in Northern OH Utica), said the company will continue to sell off “non-core conventional assets” to raise an additional $300 million. Here’s the Halcon “spend less but produce more” announcement from yesterday:
Read More “Halcon Resources Lowers 2014 CapEx Spending, Not Production”
Exporting | Industrywide Issues | Research

EIA Early Release of 2014 Report Shows Plenty of Gas for Exports
December 17, 2013December 17, 2013

Yesterday the U.S. Energy Information Administration (EIA)–the one government agency MDN actually likes and believes to be effective–released preliminary data and an abridged version of their Annual Energy Outlook (AEO) for 2014 (full copy of the “early release” version embedded below). The full version will be along in Spring 2014.

So what does the early release version show? U.S. production of crude oil and natural gas will continue to go through the roof–thanks to natural gas. Crude oil production will continue to grow until 2020 or there about, before leveling off. Natural gas? Production increases until at least 2040. In addition, EIA says the increased production in natgas means exports–by both pipeline and LNG carriers–won’t negatively affect domestic prices. That is, EIA report provides justification for further approvals to export American natural gas…
Read More “EIA Early Release of 2014 Report Shows Plenty of Gas for Exports”