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    Gulfport Energy: Utica Provides “Reliable, Repeatable Growth”

    Gulfport Energy is among a number of companies we’re highlighting today that, earlier this week, delivered their 4Q17/full 2017 update. Gulfport is an “independent” oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. Gulfport also owns acreage along the Louisiana Gulf Coast. Although Gulfport drills (we’d call it “dabbles”) elsewhere, make no mistake–the Utica Shale is the company’s main focus. During 2017, Gulfport spud (drilled or began to drill) 94 Utica wells. Gulfport turned-to-sales 68 Utica wells in 2017. The Utica wells drilled last year had an average lateral length of approximately 8,150 feet. It took Gulfport an average of 19.2 days to drill a well, a decrease of 16% over the time it took to drill wells in 2016. Gulfport currently runs three drilling rigs in the Ohio Utica, with plans to decrease that number down to two in March, when the contract expires for one of the rigs. So what about 2018? As you can imagine, running one less rig means drilling less wells in 2018. Gulfport is budgeted to drill 36 to 40 Utica wells with an average lateral length of 11,200 feet this year. They plan to turn-to-sales 33 to 37 wells with an average lateral length of 8,000 feet. Gulfport made a profit of $435.2 million last year, versus losing $979.7 million in 2016 (a $1.5 billion swing into the black). According to CEO Michael Moore, “Our Utica asset provided reliable, repeatable growth throughout the year.” Here’s the full reliable, repeatable Gulfport update…
    Read More “Gulfport Energy: Utica Provides “Reliable, Repeatable Growth””

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    WV House Advances Bill to Fix Post-Production Deductions

    Earlier this week MDN told you that West Virginia royalty owners are pushing Senate Bill (SB) 360 to fix the issue of post-production deductions drillers take from royalty checks (see WV Royalty Owners Push Bill to Fix Post-Production Deductions). SB 360 would eliminate post-production expenses, such as transportation or severance taxes from royalty owners’ checks. The new news is that the WV House of Delegates is working on its own version of SB 360, called House Bill (HB) 4490. On Wednesday, the House Judiciary Committee voted to report the bill out–that is, they approved the bill to go on to the next step. But the vote, which was a voice vote, was split, indicating the ultimate success of the bill is far from assured. Needless to say drillers are not happy with either SB 360 or HB 4490. According to Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association, her group (which represents many, perhaps all of WV’s shale drillers) is not actively opposing the bill, but they are letting everyone know they don’t support it–which we call a distinction without a difference. Hundreds of people who work for the drilling industry rallied at the state Capitol in Charleston on Wednesday–there to push for passage of a bill that appears to be on the fast track: HB 4268, the “co-tenancy” bill. Below is an article covering the rally, which mentions HB 4490 on post-production deductions…
    Read More “WV House Advances Bill to Fix Post-Production Deductions”

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    Shell Tries to Calm Troubled Ambridge Water Authority re Pipeline

    Shell wants to build a 97-mile ethane pipeline to feed the mighty $6 billion cracker plant its building in Beaver County, PA. Shell chose not use eminent domain but instead negotiated with (paid big bucks for) rights of way along the pipeline’s path. Earlier this month additional details came out about the proposed project when the Pennsylvania Dept. of Environmental Protection (DEP) published an application from Shell for stream crossing permits. When the details became known, the Ambridge Water Authority (in Beaver County), an organization that oversees a reservoir that provides drinking water for ~30,000 people, expressed “strong opposition” to the route of the pipeline (see Ambridge Water Authority Strongly Opposes Shell Ethane Pipe Route). But wait. Didn’t Ambridge know the route back in October 2017, when Shell first filed an application for the project? Yes they did. However, the stream crossing permit application reveals details either not in, or not obvious, in the original application–details that the pipeline will go under three streams that feed the Ambridge reservoir. That got the board up in arms. In a statement, the Water Authority said, “we will do everything in our power to try and have the pipeline relocated outside of our watershed and away from our main, and only, raw water line.” Tuesday night the Authority held a regularly scheduled meeting. Shell sent along several officials to talk with members of the board, to try and calm the troubled waters at Ambridge, so to speak. Did it work? Not really…
    Read More “Shell Tries to Calm Troubled Ambridge Water Authority re Pipeline”

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    Final State Permits Expected Soon for OH Mountaineer NGL Storage

    Some new details have emerged with respect to the Mountaineer NGL Storage facility proposed for Monroe County, OH, located just across the river (and border) from West Virginia. What did we know about the proposed project? The Colorado company behind the project plans to spend up to $500 million to build it; some 20 drillers have expressed interest in contracting with the facility to store ethane; and the nearby PTT Global cracker plant project (if it gets built) and the under-construction Shell cracker plant are both interested in connections to the facility. Last November, we learned there is a construction delay until mid-this year (see Yet Another Update on Stalled Mountaineer NGL Storage Proj in OH). Why the delay? Because of regulators in Ohio. At the “Emerging Opportunities Ohio Valley Conference” held yesterday in WV, Mountaineer NGL president David Hooker provided an update and some new-to-us details about the project. He said his company will file paperwork for “final state permits” in March. While “not a lot has changed” with Ohio regulators dragging their feet, here’s something that has changed. In order to pump out the NGLs from the underground storage cavern, brine (salty water) will be pumped down the bore hole, to force the NGLs back up to the surface. Original plans called for a single brine pond to store the liquid when it’s at the surface, waiting to be used. New plans call for two brine ponds. So far Mountaineer has spent $20 million on the project. If everything gets approved and demand develops as expected, the plan is to spend up to $130 million, which will build enough infrastructure to store 3 million barrels of NGLs. However, there is also a stretch goal of investing up to $500 million to store 10 million barrels. Here’s an update from our friends at Kallanish Energy, who attended yesterday’s event…
    Read More “Final State Permits Expected Soon for OH Mountaineer NGL Storage”

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    Last In-Person DRBC Frack Ban Circus Held in Lehigh Valley

    In September, MDN told you that the obsequious members of the Delaware River Basin Commission (DRBC) had slavishly obeyed their radical environmental masters by voting to move forward with a permanent ban on fracking in the Delaware River Basin (see DRBC Votes Tomorrow on Permanent Frack Ban Resolution). The final ban language/regulation was dropped like a bomb by DRBC staff on Nov. 30 (see DRBC Drops Permanent Frack Ban Bomb – Public Hearings in January). The DRBC announced they would allow public comment, via written communication, through Feb. 28. They also planned four public hearings (i.e. freak shows) to allow antis the opportunity to parade before the microphones and make jerks of themselves (we’ve seen it many times). Antis said three months wasn’t enough time to crank up the form letter machine nor is it enough freak show opportunities, so the DRBC caved (yet again) to the only constituency they listen to: anti-drillers. The DRBC subsequently announced they would extend the public comment period from Feb. 28 to Mar. 30 and add another two freak show public hearings to the roster (see DRBC Schedules More Freak Shows on Proposed Frack Ban Regulation). Yesterday the final in-person session was held in the Lehigh Valley, at Lehigh Carbon Community College. What’s that? The Lehigh Valley isn’t actually IN the Delaware River Basin? You think that actually matters? The purpose was to locate the session somewhere that’s solidly against fracking. Yesterday’s session didn’t disappoint. Grab the peanuts and popcorn…
    Read More “Last In-Person DRBC Frack Ban Circus Held in Lehigh Valley”

  • Other Energy Stories of Interest: Fri, Feb 23, 2018

    The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: DCNR to release PA state forest drilling report by early summer; 2017 was a good year for Washington County’s economy, thx to shale; what Ohioans need to know about PA serial protester; Marcellus/Utica fighting strong Gulf of Mexico bias; oil price jumps; shale remains leading source of U.S. crude; a downside for midstreamers in new tax law; Shell backing both deepwater and shale; and more!
    Read More “Other Energy Stories of Interest: Fri, Feb 23, 2018”

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    EQT Pulls Trigger to Split Company in Two: Drilling & Pipelines

    After EQT announced its plan to buy/merge in Rice Energy last year, the company got pushback from a couple of so-called activist investors (i.e. corporate raiders). One raider, Jana Partners, tried its best to stop the EQT/Rice deal outright (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana slithered away after the merger happened (see Corp Raider Slinks Away After Losing EQT Fight; Selling Stock). However, a second raider, D.E. Shaw, supported the merger but lobbied hard that once the merger is complete, the company should split itself into two companies: upstream (drilling) and midstream (pipelines). Shaw’s pressure made EQT tap dance to their tune (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). True to their word, once Rice was merged in, EQT then added a couple of new board members and set about exploring how to separate the company into two companies. The theory is that by separating, each company can focus on what it does best (drilling or pipelines), meaning each separately will have a higher valuation/stock price than the two combined. That is, “the sum of the parts” is worth more than the whole. The review process is now done, and EQT’s Board of Directors voted to proceed with a plan to divide the company in two…
    Read More “EQT Pulls Trigger to Split Company in Two: Drilling & Pipelines”

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    XTO Exploded Belmont Well Still Not Capped, Neighbors Stay Away

    Last Thursday XTO Energy was drilling a Utica Shale well on the Schnegg well pad near Captina Creek (York Township, Belmont County, OH) when they “lost control” of the well and it exploded and caught fire (see XTO Energy Utica Well Explosion in Belmont County – 100 Evacuated). As we reported yesterday, most evacuees were allowed to return home, with just a few still not able to access their homes (see Most Evacuees Return Home After XTO Well Explosion in Ohio). However, we’ve since that time, we’ve learned that although evacuees were allowed to return home (and some did, to check on things/grab items), none of them stayed overnight in their own homes. Why? The well is still not capped. And as long as it’s not capped and continues to “spew” methane into the air, residents don’t feel safe. Can’t say that we blame them. We wouldn’t want to be in the vicinity either. The latest news is this: Power was restored to the area yesterday, but since the power has been out since last Thursday, you can imagine the condition of refrigerators and freezers in those homes where power was off. XTO has pledged to replace all fridges and freezers, and compensate residents for the cost of food lost, from having the power turned off. There’s still no estimate on when the well will be capped (a damaged crane has to be removed first)…
    Read More “XTO Exploded Belmont Well Still Not Capped, Neighbors Stay Away”

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    Rover Starts Up 2nd Mainline Compressor, Volume Grows to 2 Bcf/d

    Yesterday the Federal Energy Regulatory Commission (FERC) granted Rover Pipeline permission to start operations at its Mainline Compressor Station 2 in Wayne County, OH. Rover is a “monster” pipeline, a $3.7 billion, 711-mile natural gas pipeline that runs from western PA, northern WV and eastern OH through OH into Michigan and eventually to Canada. Rover is the largest of all Marcellus/Utica pipeline projects that will (within the next month or so) begin to flow 3.25 billion cubic feet per day (Bcf/d). With the startup of this second mainline compressor, volume along the portions of the completed pipeline will flow 2 Bcf/d. The company maintains it is on track to have the pipeline fully operational by the end of March. It is an engineering marvel, although not without some bumps along the way (see yesterday’s post, Ohio EPA Continues to Target Rover Pipe in New FERC Letter). Here’s the stellar news that the Wayne compressor is, likely as you read this, up and running…
    Read More “Rover Starts Up 2nd Mainline Compressor, Volume Grows to 2 Bcf/d”

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    New WV Facility Ships First Compressors for M-U Pipe Customers

    Bidell Gas Compression facility in Weirton, WV (click for larger version)

    In March 2017, Bidell Gas Compression, a subsidiary of Canadian company Total Energy Services, announced it would establish its U.S. manufacturing headquarters in Weirton (Hancock County), WV–in the northern panhandle of WV (see Biddel Gas Compression Selects WV Northern Panhandle for US HQ). Biddel manufactures and sells pipeline compressors. The site they chose in Weirton includes a 100,000 square-foot building, part of the old ArcelorMittal machine shop operation. On Monday, Biddel shipped out from the new Weirton facility, their very first truckload of newly manufactured compressors. The news article we spotted says delivery of the compressors will happen today. We’re assuming delivery is to a Marcellus/Utica pipeline project, somewhere in our region, given the short time between shipment and delivery. This is a feel-good story. It is one more evidence that our industry, which used to import everything from workers to equipment, has matured. We now make what we use right here at home! Here’s the deets on Biddel’s first compressor shipment…
    Read More “New WV Facility Ships First Compressors for M-U Pipe Customers”

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    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…
    Read More “Weatherford Intl – On the Road to Recovery…or to Bankruptcy?”

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    Time to Go on Offense and Sue PA Big Green Groups

    Yesterday MDN brought you the news that THE Delaware Riverkeeper and several residents from West Goshen, PA (in Chester County, near Philadelphia) had lost a court appeal that would have stopped Sunoco’s Mariner East 2 pipeline in the town due to a violation of a local zoning ordinance (see PA Town Loses Appeal to Block ME2 Pipe with Local Zoning Ordinance). Our coverage of that story was from the perspective that local town ordinances do not trump state oil and gas regulations. Which is true. However, MDN friend Tom Shepstone, writing on his always-excellent Natural Gas Now website, had a slightly different take on the importance of the lawsuit. There is a deeper, more insidious strategy at play by Riverkeeper that Tom picked up on in this lawsuit. He does a masterful job of exposing that strategy (using the PA Environmental Rights Amendment) in his post, which we reproduce below. Which is interesting, and everyone needs to be aware of what’s happening. However, it was Tom’s final solution/admonition that had us standing up and cheering. Tom concludes (as MDN has been advocating for years) that it’s time to take the fight to the opposition. Their strategy of endless, frivolous lawsuits is having a negative effect on our industry. It’s time we litigate them in return–and expose their fraudulent use of our tax system to shield their overt political activities. It’s time to sue them…
    Read More “Time to Go on Offense and Sue PA Big Green Groups”

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    Shell Gives “Transformational” $1M Gift to Pa. Community College

    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…
    Read More “Shell Gives “Transformational” $1M Gift to Pa. Community College”

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    Keep It…Sell It…GE Now Back to Keeping Baker Hughes

    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 Baker Hughes and GE Complete Merger, World’s 1st Fullstream Co.). But four months later, GE’s new CEO, John Flannery, said he wants out of the marriage (see 4 Months After Buying Baker Hughes, GE Wants to Sell It). Flannery said he was looking to sell all of, or part of, GE’s majority stake in what is now called “Baker Hughes, a GE Company.” Then yesterday, Flannery changed his mind again. Can anyone say, “Flaky Flannery” three times really fast? Yesterday GE said the Baker Hughes unit is now off the table and will not be sold as part of a plan to divest the company from $20 billion worth of businesses it owns. GE now “likes the combination [with Baker Hughes] a lot.” Go figure. Here’s the latest…
    Read More “Keep It…Sell It…GE Now Back to Keeping Baker Hughes”

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    US LNG Exports Report 2016 to 2017 – Where is Our Gas Going?

    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…
    Read More “US LNG Exports Report 2016 to 2017 – Where is Our Gas Going?”

  • Other Energy Stories of Interest: Thu, Feb 22, 2018

    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!
    Read More “Other Energy Stories of Interest: Thu, Feb 22, 2018”