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    Eclipse Closes on Deal for JV Partner in OH Utica

    1/3/18 Update: We received a cordial call from Eclipse Resources’ vice president Douglas Kris to alert us that our original headline and interpretation below misses the mark. We are happy to issue this correction. MDN’s interpretation of Eclipse’s JV news can be summed up in two points: (1) Eclipse got less than originally announced for this deal, and (2) the deal took longer than announced to get done. Both points need clarifying. Doug said on the first point, the original announcement quoted a range for the investment by Sequel, with the high end being $325 million. Due to the complicated structure of the deal, this first part of the deal which just happened (for $285 million) is less than the high end, but well within the originally quote range. AND the deal is not completely done, yet. By the time it is done, the total deal may be $325 million. As for the second point we made about a delay in the deal, Doug said the deal actually was done by September as originally forecast, but got held up by a delay with the Securities and Exchange Commission. A big “thank you” to Doug for alerting us. We like to make sure the information you read on MDN is correct! – Jim Willis, Editor

    Original Post: It costs a lot of money to drill new shale wells in the Marcellus and Utica. Depending on the layer and how deep it is, Marcellus wells cost in the neighborhood of $7 million each to drill. Utica wells cost several million dollars more because the Utica layer is deeper–nearly twice as deep as the Marcellus. The latest trend, pioneered by Eclipse Resources, is drilling really long laterals (the horizontal part of the well), which also increases the cost per well. Long lateral wells are called “super laterals”–typically defined as being a lateral longer than 15,000 feet (nearly 3 miles!). Eclipse is the reigning champ of drilling super laterals, having drilled the three longest onshore horizontal wells in the WORLD, each of them 3.5 miles or longer. Eclipse wants to keep drilling super laterals and needs money to do it. Last August during a conference call with stock analysts to discuss second quarter 2017 results, Eclipse CEO Ben Hulburt revealed the company has brokered a new deal with Sequel Energy Group LLC, an affiliate of GSO Capital Partners (see Eclipse Res. 2Q17: $325M JV to Keep Drilling, Wants More Acreage). The deal with Sequel is a joint venture (JV) in which Sequel ponies up $325 million in return for partial ownership of the wells drilled (and a requisite share of the profits). The deal was supposed to be signed, sealed and delivered by last September. That didn’t happen. Two days after Christmas Eclipsed announced the deal has finally closed–but the final amount is $285 million, not the previously announced $325 million. That’s $40 million less than the originally announced deal…
    Read More “Eclipse Closes on Deal for JV Partner in OH Utica”

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    CNX Resources Clipped $433.5K for Groundwater Violations in SWPA

    The Pennsylvania Dept. of Environmental Protection (DEP) has fined CNX Resources (formerly CONSOL Energy/CNX Gas) $433,500 for violations at four shale well sites in Greene County, PA. The violations, which happened in 2015/2016, include failure to control and dispose of wastewater properly and failure to prevent erosion. Some of the flowback/wastewater ended up in a small stream called Jacobs Run. We always find the language of these announcements by the DEP somewhat strange: “CNX Gas Company, LLC (CNX) has agreed to two civil penalties totaling $433,500 for violations at well sites in Greene County.” Really? The company getting fined has to “agree” to accept the fine? Apparently we don’t fully understand how regulatory agencies work in PA. What if CNX didn’t agree to the fine? Would the DEP come back with a lower amount, “Will you accept this fine instead?” But we digress. CNX themselves noticed the problems and self-reported the violations. After doing so, they fired two of the service companies they were using. The unnamed service companies were obviously guilty of cutting corners that resulted in improper disposal of wastewater. Interesting factoid: Half of all the wells CNX has drilled in PA are located in Greene County…
    Read More “CNX Resources Clipped $433.5K for Groundwater Violations in SWPA”

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    Marcellus Wells to be Drilled at Pittsburgh’s Oldest Working Steel Mill

    Pittsburgh’s oldest still operating steel mill, U.S. Steel Corp.’s Edgar Thomson steel mill, may soon be home to more than just a foundry. A privately owned oil and gas company headquartered in New Mexico–Merrion Oil & Gas Corp.–has signed a lease with U.S. Steel to drill a series of six (possibly more) shale wells on the Edgar Thomson Works property in Allegheny County. The plan is to drill one Marcellus well to begin with, and after testing, expand that with five more Marcellus wells. However, Merrion is not ruling out deeper wells to tap the Utica. Even though the location for the wells is as industrial as industrial gets–with noisy steel making (and the air pollution that goes along with it), antis are complaining that drilling a few shale wells will turn their lives into a dung heap. Nothing new about their reaction. What is new is Merrion. This is their first entry into the Marcellus/Utica region. Until now, Merrion has concentrated on other regions. According to one biased news outlet, Merrion has “no experience drilling into deep, tight, shale formations like the Marcellus.” Whether or not that’s true, we don’t know (we tend to doubt it). What we do know is that Merrion is a privately owned, family company started in 1960 by a former petroleum engineer. Merrion is not some upstart company that doesn’t know anything about the oil and gas business–quite the opposite. Merrion has already had preliminary meetings with the PA Dept. of Environmental Protection about their plans. An official permit request should be coming any time over the next three months…
    Read More “Marcellus Wells to be Drilled at Pittsburgh’s Oldest Working Steel Mill”

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    H&H Files Request to Drill Murrysville’s First Marcellus Wells

    Huntley & Huntley (H&H), a shale driller headquartered in Monroeville (Allegheny County), PA plans to drill Marcellus Shale wells in neighboring Murrysville (Westmoreland County), PA. H&H has filed for state permits for the Titan Well Pad project. This is will be the first Marcellus wells to be drilled in Murrysville. On May 3, 2017, Murrysville Town Council passed a new drilling ordinance that requires a 750 foot setback from the edge of the well pad–not from the bore hole (see Murrysville, PA Drilling Ordinance – Anatomy of a Compromise). The ordinance is quite restrictive, but apparently acceptable to the industry. Even though H&H has filed for permits, don’t expect to see drilling any time soon. Murrysville’s chief administrator estimates it will take the state “six to nine months” before they issue permits, and then H&H will have to go before town council with a request…
    Read More “H&H Files Request to Drill Murrysville’s First Marcellus Wells”

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    PA’s Largest NatGas-Fired Elec Plant Near Scranton Nears Startup

    It’s been a long road, but we’re finally close to startup for the first phase of what will be Pennsylvania’s largest gas-fired electric generating plant near Scranton, PA. The Invenergy plant, dubbed the Lackawanna Energy Center (located in the community of Jessup), will produce 1,480 megawatts of electricity when it’s fully built and running. Construction crews are hard at work in frigid temperatures, working to complete the first of three combined-cycle generator units. The work is 80% done on the first unit and on track to be completed by February. The plant is certainly having an impact on locals–both good and bad. On the bad side, we previously reported that antis in the Jessup community exacted their revenge on local political leaders for approving the plant by removing them from office (see Scranton Antis Get Political Revenge for Gas-Fired Power Plant). Hey, it’s a hard knock life. On the positive side, when MDN editor Jim Willis was visiting family in the area over the Christmas holiday, he heard family members talking about the “huge” plant going up. And they’re happy about it! As we reported in early December, a pipeline to feed the plant is now almost done (see UGI Pipeline to Feed Scranton NatGas-Fired Power Plant “On Track”). However, there is a cloud on the horizon that may delay a February start. The antis that threw out previous town board members take their seats today. Invenegy needs a final town approval to hook up to the town’s sewer system to handle some 56,600 gallons of “wastewater” (heated water) per day. Look for the antis to make trouble and try to delay the approval. Here’s an update on PA’s biggest gas-fired electric plant, coming online (hopefully) soon…
    Read More “PA’s Largest NatGas-Fired Elec Plant Near Scranton Nears Startup”

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    Atlantic Sunrise Pipeline Dismantles Old Barn in Pipeline’s Path

    STOP PRESS! 1/2/18 – 2:00 pm – Below is the full, original post MDN issued two hours ago. Our reporting was based on an article in the very biased Citizens’ Voice, a daily newspaper published in Wilkes-Barre, PA by the same rabidly biased, anti-drilling owners of the Scranton Times-Tribune. We should have known–the article published by the Citizens’ Voice was egregiously WRONG. It left out important facts that completely change the story. Williams reached out to MDN to set the record straight. In a nutshell, Williams’ original route for the Atlantic Sunrise Pipeline through Luzerne County totally missed a barn on the property of Dale Wilkie. Wilkie asked Williams to reroute the pipeline across his property–through his barn! Williams obliged, offering him a generous amount for the easement PLUS Williams offered to build Wilke a brand, spanking new barn to replace the old one! Wilke got estimates to rebuild the 100-year old barn as it is, using chestnut wood, making the estimate astronomically high ($400,000). This puts the entire story in a new light. We have more below from Williams responding to the Citizens’ Voice journalistic malpractice…

    Read More “Atlantic Sunrise Pipeline Dismantles Old Barn in Pipeline’s Path”

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    New England’s Lack of Pipelines = Most Expensive Gas in the WORLD

    Baby it’s cold outside! This was predictable (and indeed, MDN did predict it). With the arrival of an extended cold period, because of a lack of natural gas pipeline capacity in New England, recent spot prices for natgas near Boston have spiked to more than $35 per thousand cubic feet (Mcf). It gives New England the dubious distinction of paying the highest average price for natural gas in the entire WORLD. The price for the same gas about 250 miles away in the Marcellus? Between $1-$2/Mcf. And yet the dunderheads in New England, like U.S. Sen. Elizabeth “Pocahontas” Warren, continue to block new pipelines in the region. “Stupid is as stupid does,” as Forrest Gump said. We hope our friends in New England enjoy paying through the nose and every other orifice they possess over the next few weeks, until the arctic blast subsides…
    Read More “New England’s Lack of Pipelines = Most Expensive Gas in the WORLD”

  • Marcellus & Utica Shale Story Links: Tue, Jan 2, 2018

    We have a really big “best of the rest” today – stories that caught MDN’s eye over the break that you may be interested in reading. In today’s lineup: New regional director for PA DEP’s southwest office; Ohio energy industry watching effects of federal tax change on the Utica; new year, new development in Clinton County, PA; pipeline work in Lebanon County resumes following drilling mud spill; Marathon Pipe takes next step to reverse pipeline from Illinois to Louisiana; FERC advances Driftwood LNG project; US midstream companies to prosper in 2018; India to beat China in LPG demand; and more!
    Read More “Marcellus & Utica Shale Story Links: Tue, Jan 2, 2018”

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    PTT Global Chemical Officially Delays Cracker Decision Until 2018

    PTT Global Chemical, based in Thailand, continues to delay a final investment decision (FID) regarding their much-ballyhooed ethane cracker project in Belmont County, OH. In April 2015, PTT announced they are interested in building a ~$5 billion ethane cracker plant complex in Belmont County, OH (see It’s Official: Belmont County Chosen as POSSIBLE Cracker Plant Site). In May 2016, a story in the Bangkok Post said the final investment decision (FID) will definitely come in 2017. In December 2016, Belmont County officials said the FID would come by the end of March this year (see OH Cracker Final Decision Coming Soon, Site Now Cleared & Ready). But in February, PTT said the FID won’t come until “late 2017,” which is “several months later than we originally announced” (see PTT Global Delays Final Investment Decision for OH Ethane Cracker). Two weeks ago a PTT representative said the company will make some sort of an announcement “by the end of the year” (see PTT Global Final Decision re Belmont Cracker Plant Late Again). We now have the announcement: “PTTGC America will have a significant update that will demonstrate momentum for this project early in 2018. We thank all Ohio and Belmont County partners for their support, and we wish you a happy holiday season.” So the big announcement is that there will be another big announcement in “early 2018.” Yeah, we’re becoming irritated at being teased that the decision is just around the corner…
    Read More “PTT Global Chemical Officially Delays Cracker Decision Until 2018”

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    PA Fed Judge Rejects Class Action in Chesapeake Royalty Case

    Yesterday a Pennsylvania federal judge denied a group of 600+ Marcellus Shale landowners’ request to form a class action in arbitrating a royalty case against Chesapeake Energy. Although the judge’s decision is a disappointment for landowners, his decision should come as a surprise. In April, the same judge, U.S. District Judge Matthew Brann for the Middle District of PA, telegraphed that the landowners, under the law (and under the leases they signed) did not have a right to form a class action (see Chesapeake Scores Court Victory to Prevent PA Royalty Class Action). However, the landowners continued to pursue it by appealing the judge’s initial decision. Brann, in rendering yesterday’s decision, begins his written ruling with a quote from the Lord of the Rings: “Short cuts make long delays.” His point: The landowners tried to short circuit the legal process and they can’t. Landowners will need to individually litigate/arbitrate their cases with Chesapeake. The judge lectured landowners that they could have already been well on their way to a resolution of their individual cases had they not stubbornly continued to pursue class action arbitration. Below we have a brief background on the case to better understand the decision, followed by a copy of Judge Brann’s decision from yesterday… Read More “PA Fed Judge Rejects Class Action in Chesapeake Royalty Case”

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    Ultra Petroleum Sells Its 72K Marcellus Acres to Alta Res. for $115M

    Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. As recently as May of this year Ultra CEO Michael Watford signaled that the Marcellus acreage is not a drain on their budget, so they would just hold on to it and see what happens (see Ultra Petroleum 1Q17 – Holding on to 72K Marcellus Acres, for Now). What happened is the company saw an opportunity to cash in that acreage, and the wells producing on it, for $115 million in cold, hard cash that they can use elsewhere. Ultra announced a deal yesterday to sell all of their Marcellus acreage/wells, mostly located in Centre and Clinton counties in north-central PA, to Alta Resources. Alta is not a name we’ve seen a lot, but they were one of the first drillers we wrote about just after starting the MDN website back in 2009 (see Texas Billionaire George Mitchell is Betting on the Marcellus in PA). George Mitchell, widely recognized as the father of shale energy, was a partner in Alta and had glowing things to say about the Marcellus. Mitchell died in 2013. His legacy lives on. According to Alta’s website, the company has drilled or participated in more than a thousand wells–in Arkansas, Texas, Louisiana, Alabama, Pennsylvania and Alberta, Canada. The most recent news related to Alta in our area, prior to yesterday’s announcement, was their purchase of Anadarko’s Marcellus assets for $1.24 billion in December 2016 (see Anadarko Sells All Marcellus Assets for $1.24B to Alta Resources). Seems like December is the month to watch for an Alta purchase in the Marcellus!…
    Read More “Ultra Petroleum Sells Its 72K Marcellus Acres to Alta Res. for $115M”

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    Atlantic Coast Pipe Asks FERC to Begin Tree Cutting in WV, VA, NC

    Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project recently asked the Federal Energy Regulatory Commission (FERC) for permission to begin clearing trees along the path of the pipeline in all three states where the pipeline will run: West Virginia, Virginia, and North Carolina. FERC approved the project in October (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). However, two of the three states–Virginia and North Carolina–have not yet given final water crossing permits for the project (see Atlantic Coast Pipeline Delayed in Virginia by Water Board Vote and NC Plays “Death by a Thousand Questions” with Atlantic Coast Pipe). ACP isn’t letting state agencies put a damper on the project. Just a few weeks ago ACP announced it had signed contracts with four labor unions to do the construction work, and had filed eminent domain lawsuits against holdout landowners who have refused to negotiate leases (see Atlantic Coast Pipe Gets Ready to Build: Union Help, Eminent Domain). And now ACP is asking FERC for permission to begin clearing trees, giving antis apoplexy…
    Read More “Atlantic Coast Pipe Asks FERC to Begin Tree Cutting in WV, VA, NC”

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    PA PUC Votes to Let ME2 Pipe Restart Construction in West Goshen

    In July, West Goshen Township, in the Philadelphia suburb of Chester County, won a temporary victory in their efforts to stop Sunoco Logistics’ Mariner East 2 (ME2) NGL pipeline in their community (see Judge Temporarily Stops ME2 Valve Station in West Goshen). West Goshen objected to Sunoco building a new valve station. West Goshen wanted the valve station built next to an existing Mariner East 1 valve station, but Sunoco wanted to build the new station across the street from that location, citing safety concerns. West Goshen appealed a decision by the state Public Utility Commission (PUC) allowing Sunoco to build the valve station where they wanted to build it. In July an administrative law judge agreed with West Goshen, stopping not only construction of the valve station, but also construction of the ME2 pipeline itself through the township. Fast forward to today. Sunoco has given up the fight to build the West Goshen valve station, so yesterday the PUC voted 3-2 to allow Sunoco to restart construction of the pipeline in West Goshen. Of course the antis who run West Goshen like a private fiefdom are objecting because Sunoco hasn’t said what their alternative to building the valve station (a safety feature) will be. Hey, West Goshen’s “leaders” were the ones who didn’t want the valve station in the first place! West Goshen’s “leaders” are the ones who have made the pipeline through their community “less safe” because they didn’t want the valve station. Now they need to live with their bone-headed actions–and answer to their voting constituents…
    Read More “PA PUC Votes to Let ME2 Pipe Restart Construction in West Goshen”

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    NY Resident (& Lawyer) Sues DEC in Federal Court re Frack Ban

    In 2015 MDN told you about an Allegany County, NY attorney who had filed a lawsuit against the New York Dept. of Environmental Conservation (DEC) over their infamous frack ban. It was the first such lawsuit to be filed against the DEC since the frack ban was officially declared (see It’s Official: Cuomo Bans Economic Opportunity & Prosperity in NY). The lawsuit was filed in state Supreme Court in Allegany County. Don’t be fooled by the Supreme Court label. In screwed-up NY, Supreme Court is one level up from county court. The judge tossed the case saying the attorney/landowner didn’t have standing to file the lawsuit in the first place because he never had a permit to drill on his property. The Appellate Division upheld the decision against the attorney/landowner earlier this year. You see, in NY, everything is rigged–even our judicial system, where the judges want to protect their cushy jobs (appointed by our corrupt governor, Andrew Cuomo). The attorney/landowner from Allegany is back. This time he filed the same lawsuit in federal court–bypassing Cuomo-appointed judges. We have a copy of the 95-page complaint filed in U.S. District Court for the Western District of New York…
    Read More “NY Resident (& Lawyer) Sues DEC in Federal Court re Frack Ban”

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    Ridgetop Energy Services Expands Again – in Southern Marcellus

    Ridgetop Energy Services, headquartered in Canonsburg, PA, was started in early 2016 by Ridgetop Capital Partners. Ridgetop Capital is an energy and real estate investment firm. Since 2007, Ridgetop Capital has purchased 30,000 acres in the PA, WV and OH, and has invested $130 million in the region (often partnering with big drillers like EQT, Antero, Chesapeake, Range Resources and others). In addition to investing in acreage, Ridgetop also wanted in on some of the drilling action, so the company formed Ridgetop Energy Services in 2016 to buy up service companies that work in the shale space. In June, Ridgetop Energy bought Keystone Wireline (see Ridgetop Energy Services Buys Keystone Wireline Inc.). Ridgetop Energy is expanding again–by purchasing “two service rigs and a swabbing unit stationed in northern West Virginia” from C&J Energy Services…
    Read More “Ridgetop Energy Services Expands Again – in Southern Marcellus”