Rice Boys Invest in Fracking Software Company, Toby Joins Board
After selling Rice Energy to EQT (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US), the four Rice brothers, all of whom worked at Rice Energy (and left after the merger), launched a new venture (see Rice Brothers Act II – $200M Marcellus/Utica Investment Firm). Dan, Toby, Derek and Ryan Rice plus a fifth partner, a former VP at Rice, pooled $200 million of their money (and their expertise) and launched Rice Investment Group (RIG). RIG has just closed on a round of investment in Cold Bore Technology, a company that uses software to do better fracking. Toby Rice joined Cold Bore’s board. It’s good to see the boys back and active.
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The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Natural gas service coming to Tunkhannock; Ohio county commissioners visit Shell cracker site; New CNX Midstream president sees opportunity in the pipelines; Tug Hill alliance grows, secures funds for wind farm review; City workers’ pension funds hinge on Mayor de Blasio’s environmental stand; Is the Niobrara really the next big thing?; Construction reaches its peak at Duke’s Lake Julian, NC plant; NJ lawmakers seek to limit disposal of fracking by-products; U.S. shale’s glory days are numbered; The changing U.S. energy trade balance is still dominated by crude oil imports; Industry, regulators unite to defend fracking in Mexico; Tokyo to back US exports of shale gas to Asia; Temporary natural-gas generators power data centers.
Yesterday Range Resources, the very first company to sink a Marcellus Shale well back in 2004, announced it has cut a deal to “sell a proportionately reduced 1% overriding royalty in its Washington County, Pennsylvania leases for gross proceeds of $300 million.” Yeah. What, exactly, does that mean? More high finance stuff. The deal, as we try to understand it, reminds us of “factoring” that we learned about in our college business classes. You know, selling the money you will receive in the future from accounts receivable for a lump sum today? We think of this deal as kind of like that. Not exactly, but kind of.
The hits keep rollin’ in. Last month the U.S. Energy Information Administration’s (EIA) monthly “Drilling Productivity Report” (DPR) estimated that this month (in October) the country’s seven major shale plays would produce an amazing, all-time high of 73 billion cubic feet per day (Bcf/d) of natural gas production (see 
Nine Energy Service, an oilfield services company that competes with companies like Halliburton and Baker Hughes, operates in a number of shale basins, including the Marcellus/Utica. Magnum Oil Tools is a “downhole technology” company providing completions products including dissolvable frac plugs and a number of other patented inventions. Magnum also has operations in the Marcellus/Utica. Yesterday Nine announced it is buying out and merging in Magnum in a deal worth $493 million.
Here’s a theme we return to from time to time, when we spot a story worth highlighting. Not everyone can or even should go to college following high school. Some students would be better served by learning a skill, a trade, and entering the workforce sooner rather than later. There are a number of skilled trades in the shale industry–in all segments from upstream (drilling) to midstream (pipelines) to downstream (petrochemicals). Last week a workforce forum was held at the Mon Valley Career & Technology Center in Washington County, PA. A panel discussion pointed out we’re quickly heading for a shortage of skilled workers for shale (and other industries) in the tri-state area.
On September 21, Dominion Energy stopped pulling gas from pipelines into the Cove Point LNG export facility (on the shoreline of Maryland) in order to conduct scheduled maintenance (see 
The Obama years were a disaster for the country in general, and the oil and gas industry (all coal) in particular. One of the egregious examples of overregulation under Obama (wild, far-out overregulation) was reducing so-called fugitive methane (CH4)–preventing teeny tiny leaks of methane from pipelines, wellheads, etc. Obama’s Stalinist EPA put in place expensive requirements to capture nearly every last molecule of CH4–making it uneconomical for many drillers and pipeline companies, driving them from the industry. The Trump Administration is correcting many of the egregious regulations of the Obama era. On Monday, Team Trump floated reworked (relaxed) regs for methane emissions.
It’s one thing for mud and sediment to wash away from a pipeline drilling site due to heavy and relentless rains–as we have experienced in the northeast these past few months. But it’s another thing entirely when actual sections pipeline sitting at the construction site float away! That happened in Franklin County, Virginia last Thursday. The landowner, who was (and is) opposed to the 303-mile Mountain Valley Pipeline from slicing through his property, has complained repeatedly about erosion and sediment from the construction path spilling over onto his farmland. Friday morning he woke up to MVP pipes washed onto his cornfield following torrential rains and wind, the leftovers of Hurricane Michael.
Here’s a project we have not actively tracked in the past–but recently popped up on our radar. Virginia Natural Gas’ “Southside Connector” project is a roughly 9-mile pipeline from Norfolk, VA to Chesapeake, VA that company officials say will fill a gap between two main supply lines. A 24-inch pipe will be installed at least 3 feet deep and cross under the Elizabeth River, which has prompted the owner of a shipyard on the river to object. As is typical of these things, antis are involved. Virginia Natural Gas’ president has responded to that opposition (i.e. lies) with a letter to the editor to defend what is the final leg of a 200-mile project begun back in 1992.
Hey Andy Cuomo: Your days of blocking pipeline projects are numbered. There’s momentum building in Washington, D.C. to address the issue of rogue politicians like Cuomo from blocking federally-approved interstate pipeline projects, as Cuomo has done with several such projects (Constitution Pipeline, Northern Access, Millennium). There’s talk among Team Trump to fix this problem (see