Weatherford Intl – On the Road to Recovery…or to Bankruptcy?
Schlumberger is the world’s largest oilfield services (OFS) company. Weatherford International is the world’s fourth largest OFS company. They both have operations in the Marcellus/Utica region. We’ve posted a number of stories about Weatherford’s financial troubles–and seemingly inevitable march toward bankruptcy (see our stories here). In order to stay in business, in March 2017 Weatherford formed a joint venture with Schlumberger to service fracking markets in the U.S. and Canada (see Schlumberger Throws Weatherford a Lifeline, Challenges Halliburton). Nine months later, Weatherford sold their portion of the jv to Schlumberger, liquidating their fracking business here in the U.S. (see Weatherford Sells U.S. Fracking Business to Schlumberger for $430M). Financially it’s been a wild ride for Weatherford. But perhaps the company has now turned a corner. At least, that’s what some (certainly not all) analysts are saying. Yesterday Weatherford announced a “multi-step debt financing plan” to help take the pressure off, financially. The plan is to float $600 million of new IOUs (called notes). The notes will be “senior” notes–but unsecured. Meaning if the company does go belly up, good luck with cashing in your notes. The purpose of floating the notes is to pay off older notes. Floating new debt to pay off old debt. You can’t do that forever. But apparently you can do it for at least a few years…
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Shell Chemicals this week announced the donation of a $1 million gift to the Community College of Beaver County (CCBC). The gift will benefit the school’s process technology program and will be used to construct a new Shell Center for Process Technology Education building. CCBC President Chris Reber called it a “transformational gift” and an “extraordinary investment.” The gift will ultimately help train students to work for Shell and other companies that will benefit from Shell’s ethane cracker plant (being built in Beaver County). This isn’t the first huge gift for the process technology program at CCBC. In December, the Allegheny Foundation donated $1 million toward the first phase of the program’s expansion. Shell’s donation will fund the second phase. Aside from the big $1M announcement, Shell also awarded $2,500 (each) scholarships to 13 students in the CCBC process technology program. Shell has really stepped up to the plate in SWPA. They are investing in local talent and local institutions…
Industrial giant GE (General Electric) wooed and won the hand of Baker Hughes (BH)–the third largest oilfield services company in the world–buying/merging in Baker Hughes with GE’s Oil and Gas division in July 2017 (see 
The U.S. Department of Energy’s Office of Fossil Energy has just released an interesting report that shows the number and volume of LNG (liquefied natural gas) exports from Feb. 2016 (when U.S. LNG exports began) to Dec. 2017. It’s really quite fascinating. For example, which country do you think we have (so far) shipped more LNG to than any other country? Someplace in Europe? Maybe Japan or China? Nope. The #1 one trading partner that received our LNG for 2016-2017 was…Mexico! That’s right, Mexico. Even though we have all sorts of natural gas pipelines crossing the border into Mexico. Apparently those pipelines don’t connect with large parts of the country, so LNG tankers meet the need instead. Number two on the list of countries receiving our LNG exports: South Korea. Followed by China (#3), Japan (#4) and Chile (#5). The report also breaks down deliveries by other criteria. For example, even though Mexico was #1 on the list for our exports, if you break our exports down regionally, Asia/Pacific received most of our exports, while Latin America (including Mexico) was the #2 region. Or how about this: Free Trade Agreement (FTA) countries vs. non-FTA countries. Would it surprise you to learn that non-FTA countries got more of our exported LNG (52.7%) than FTA countries (43.3%)? The reason MDN readers should be interested in LNG exports is because exports are a huge future market for Marcellus/Utica gas. Be sure to spend some time with this important report…
The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Shell VP says cracker plant “starting to come out of the ground”; FirstEnergy powergen unit headed for bankruptcy; Ted Cruz visits Philly to support refinery; Sierra Club wants NC coal plant to keep burning coal instead of natgas; will natgas prices go up in the spring; Saudi Arabia’s gift to American shale producers; oil & gas continue to be 50%+ of world energy mix in 2040; and more!
As we reported yesterday, last Thursday XTO Energy was drilling a fourth Utica Shale well on the Schnegg well pad near Captina Creek (York Township, Belmont County, OH) when XTO “lost control” of the well and it exploded and caught fire (see 
Yesterday MDN brought you news that Uwchlan Township (Chester County, PA) has filed a lawsuit in an attempt to stop construction of the Mariner East 2 Pipeline (ME2) through portions of the town, claiming the pipeline violates a town ordinance for “setbacks”–how far the pipeline is located from buildings and other structures (see 
Last September none other than West Virginia’s Secretary of Commerce, Woody Thrasher, admitted publicly that his beloved state is decidedly unfriendly to new natgas-fired electric plant projects (see 
Uncommon common sense can be found among county leaders in Pittsylvania County, Virginia, who approved a rezoning request last night for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County. Although the entire path for MVP is important, there are two places where the pipeline’s path is critical and cannot be moved. One of those points is where it starts–and the other where it ends and connects to the mighty Transco. Pittsylvania County is where MVP ends–and where it can’t be moved. There many (many!) people who spoke out against MVP in various county hearings. Here’s where the uncommon common sense was exhibited. In speaking about those who railed against the pipeline, Pittsylvania Supervisor for the Westover District, Ron Scearce, said this: “One thing that’s surprising to me with all of this [opposition] is that there has not been one county resident who was affected by the project who spoke [against it].” Scearce gets it. A very vocal minority of environmental zealots, dedicated to defeating any fossil fuel project, are the ones who show up and speak out. The people across whose land the pipeline will run? They’re fine with it. Scearce and the other supervisors voting last night were not fooled by the tactics of the enviro-left. The property was rezoned to allow MVP by a UNANIMOUS vote…
West Virginia royalty owners (which sometimes means landowners, sometimes not) are pushing Senate Bill (SB) 360 to fix the issue of post-production deductions drillers take from royalty checks. A brief history: In December 2016, MDN reported on the huge WV Supreme Court decision against EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see 
What if a private company wanted to locate in a state, bringing with it 243,000 direct and spin-off jobs with an average salary of $93,000? And what if that company invested billions of dollars in the state economy? No doubt the state (and local municipalities) would offer up plenty of incentives to ensure they get the business. Pittsburgh and Philadelphia (and the State of Pennsylvania) are doing just that–offering up all sorts of incentives to attract Amazon to build its HQ2 project in the Keystone State–a project that promises a huge investment and thousands of employees. However, Amazon’s HQ2 will not employ 243,000 people and inject billions–not anywhere close. But there is an industry that is ALREADY doing exactly what we’ve outlined in the opening sentence. The Marcellus Shale industry has created 243,000 direct and indirect jobs (with an average salary of $93K per year) and has already pumped billions of dollars into the economy. And yet the State of PA and places like Pittsburgh and Philly are, in many ways, fighting against the industry! They don’t offer tax breaks, instead they offer new tax increases! What’s going on here? Why does PA treat Jeff Bezos and Amazon one way, and the Marcellus industry another? Why does PA pick “winners” and “losers” economically? That’s the important topic of a column we recently spotted by Lowman Henry, chairman and CEO of the Lincoln Institute…