The Daily Digger

From a press release: The Company reported net income from continuing operations attributable to common stockholders of $941 million ($3.43 per basic and diluted share) on a GAAP basis for 2015, including $1.5 billion of non-cash gains on unsettled hedges ($954 million net of tax), $98 million of non-cash equity-based compensation expense ($61 million net of tax), $104 million of impairments of unproved properties ($65 million net of tax), and $39 millionof contract termination and rig stacking expense ($24 million net of tax). Excluding these items, adjusted net income from continuing operations attributable to common stockholders was $152 million ($0.56 per basic and diluted share) for 2015, representing a 52% decrease over the prior year. Adjusted EBITDAX of $1.2 billion for 2015 was 5% higher than the prior year primarily due to a 48% increase in production, which was partially offset by a 20% decrease in the average per Mcfe price received after the impact of cash settled der...

From a press release: Stone had fourth quarter 2015 adjusted net income of $2.1 million, or $0.04 per share, before pre-tax impairment charges of $351.1 million. Full year 2015 adjusted net loss was $28.6 million, or $0.52 per share, before pre-tax impairment charges of $1,362.4 million. After impairment charges, the net loss was $318.7 million for the fourth quarter of 2015, or $5.76 per share, and $1,090.9 million for the full year 2015, or $19.75per share. The 2015 net loss compares with the 2014 net loss of $189.5 million, or $3.60 per share. The fourth quarter 2015 net loss compares with the fourth quarter 2014 net loss of $190.5 million, or $3.47 per share. Please see "Non-GAAP Financial Measures" and the accompanying financial statements for reconciliations of adjusted net income or loss, a non-GAAP financial measure, to net loss. Discretionary cash flow for the fourth quarter of 2015 totaled $114.6 million, compared to $90.1 million for the fourth quarter of 20...

From a press release: For 2015, Southwestern reported adjusted net income attributable to common stock, which includes a $13 million impact from a theoretical income allocation to preferred stock, of $71 million, or $0.19 per diluted share (reconciled below), when excluding a non-cash ceiling test impairment of natural gas and oil properties of $7.0 billion ($4.3 billion net of taxes) and certain other items typically excluded by the investment community in published estimates, which in aggregate decreased net income by $4.7 billion, or $12.47 per share (diluted). Including these items, the net loss attributable to common stock for 2015 was $4.7 billion, or $12.25 per diluted share. For 2014, Southwestern reported adjusted net income attributable to common stock of $801 million, or $2.27 per diluted share (reconciled below), when excluding a $131 million ($80 million net of taxes) gain on derivative contracts that have not been settled, discrete income tax adjustments totaling $46 m...

From the Times Reporter : State Rep. Andy Thompson, R-Marietta, is calling upon the University of Cincinnati Department of Geology to release its full findings from a study looking into water quality in Carroll and four other counties in eastern Ohio.  The study determined that natural gas drilling has had no effect on the quality of water coming from wells, primarily in Carroll County. It looked at water quality in Carroll, Columbiana, Stark, Harrison and Belmont counties from 2012 through 2015.  Researchers were trying to determine whether hydraulic fracturing — or fracking — creates dangerous levels of methane in well water.  Amy Townsend-Small of the University of Cincinnati presented the findings at the February meeting of Carroll Concerned Citizens in Carrollton.  In a press release, Thompson said he is “perplexed” at why the full study has not been released.  “It is unacceptable that taxpayers have funded this important groundwater study and t...

The FERC has issued a Draft Environmental Impact Statement for the ET Rover pipeline.  Here is some of what it said: We determined that construction and operation of the Projects would result in limited adverse environmental impacts, with the exception of impacts on forested land. This determination is based on a review of the information provided by the applicants and further developed from environmental information requests; field reconnaissance; scoping; literature research; alternatives analyses; and contacts with federal, state, and local agencies, and other stakeholders.   We conclude that approval of the Projects would result in some adverse and significant environmental impacts. Although many factors were considered in this determination, the principal reasons are.   • Rover would minimize impacts on natural and cultural resources during construction and operation of its Project by implementing its Plan and Procedures; HDD Contingency Plan; state-specific Ag...

A study from Harvard researchers concludes that methane emissions are on the rise despite EPA findings to the contrary.   Here is the abstract from the study : The global burden of atmospheric methane has been increasing over the past decade but the causes are not well understood. National inventory estimates from the US Environmental Protection Agency (EPA) indicate no significant trend in US anthropogenic methane emissions from 2002 to present. Here we use satellite retrievals and surface observations of atmospheric methane to suggest that US methane emissions have increased by more than 30% over the 2002–2014 period. The trend is largest in the central part of the country but we cannot readily attribute it to any specific source type. This large increase in US methane emissions could account for 30–60% of the global growth of atmospheric methane seen in the past decade. Despite the researchers' statement that the increased methane emissions cannot be attributed to any specifi...

From Market Realist: According to the EIA (U.S. Energy Information Administration), the Utica Shale in eastern Ohio has become one of the fastest-growing natural gas–producing regions in the United States. In its Drilling Productivity Report released on February 8, 2016, the EIA estimated that Utica Shale natural gas production reached ~3.2 Bcf (billion cubic feet) per day in January 2016. That’s ~2.2% more than production in December 2015 and 54% more than production in January 2015. In the past eight years, natural gas production at the Utica Shale has increased more than 19-fold. Enlarge Graph   Rigs and monthly additions from the average rig   According to Baker Hughes ( BHI ), the Utica Shale currently has 14 active rigs, down from 16 in December 2015. In comparison, 45 rigs were in operation in the shale in January 2015.   From January 2008 to January 2016, additional natural gas production per rig at the Utica Shale rose from ~0.20 MMcf (million cubic ...

From a Chesapeake Energy press release : For the 2015 full year, Chesapeake reported a net loss available to common stockholders of $14.856 billion, or $22.43 per fully diluted share. Items typically excluded by securities analysts in their earnings estimates reduced net income available to common stockholders for the 2015 full year by approximately $14.527 billion. The primary sources of this reduction were quarterly noncash impairments of the carrying value of Chesapeake's oil and natural gas properties largely resulting from significant decreases in the trailing 12-month average first-day-of-the-month oil and natural gas prices used in the company's impairment calculations. Adjusting for these items, 2015 full year adjusted net loss available to common stockholders was $329 million, or $0.20 per fully diluted share, compared to adjusted net income available to common stockholders of $957 million, or $1.49 per fully diluted share, for the 2014 full year.  Adjusted ebitda...

From NGI: Gastar Exploration Inc. said Monday that it would sell its Marcellus and Utica shale assets to an affiliate of privately held investment developer Tug Hill Inc. for $80 million and exit the Appalachian Basin in favor of its Midcontinent assets. The company added, however, that it would mostly suspend exploratory drilling there until 2017 on low oil and gas prices.  The sale would include Gastar's producing assets and proved reserves across 19,600 net acres in Marshall and Wetzel counties, WV. Financial analysts had expected the assets to bring Gastar nearly $100 million when the company announced that it would seek a buyer for the properties last October (see Shale Daily, Oct. 15, 2015 ). But the commodities downturn has complicated the market for acquisitions and divestitures.  In announcing the deal, Gastar made clear that it needed the money. The company has been hammered by widening Appalachian basis differentials, which forced it to idle its operations in ...

From Bloomberg Business: Windsor High School junior Kamille Hocking worried a dozen oil wells on her family’s 132-acre Colorado homestead might sicken them. Then, Rebecca Johnson, an Anadarko Petroleum Corp. engineer, used a blender in her chemistry class to show the interaction of swirling frack sand, city water and friction reducer.  “We heard a lot of stories about how it could get into the water and pollute the land,” said Hocking, who is 16. “I’m going to tell my parents that fracking fluid only makes cracks in the rock the size of a hair that the sand gets into and holds open.”  Facing 10 possible ballot initiatives restricting fracking, Anadarko has deployed 160 landmen, geologists and engineers such as Johnson to Rotary clubs, high schools and mothers groups. They demonstrate how drilling works and try to convince people that the technique and the accompanying chemicals and geological effects don’t harm the environment or public health. These de facto ambassadors...

From Fuel Fix: The Sierra Club weighed into the controversy over fracking and increased earthquake risk with a lawsuit accusing a Chesapeake Energy Corp. unit, Devon Energy Production Co. and New Dominion LLC of triggering tremors in Oklahoma and Kansas.  The environmental group said the companies’ practice of injecting liquid oil and gas waste into deep ground-wells contributed to a spike of more than 5,800 earthquakes in Oklahoma in 2015, up from an annual high of 167 in the years from 1977 to 2009, according to the complaint filed Tuesday in federal court in Oklahoma City. The lawsuit, which follows more than 20 others since 2011 making similar allegations, comes after a 5.1 magnitude quake shook the region Saturday.  The companies “have contributed and continue to contribute to the increased seismicity triggered by the waste handling, transport, and disposal activities at the injection wells owned or operated by the defendants throughout the state of Oklahoma and sou...

From a press release: Free cash flow for the fourth quarter of 2015 was ($33.5) million, compared to $42.9 million for the third quarter of 2015 and ($30.9) million for the fourth quarter of 2014. Free cash flow for the 2015 full year was $78.4 million, compared to ($192.3) million for the 2014 full year.  Adjusted net loss for the fourth quarter of 2015 was $32.2 million or $0.64 per fully diluted share, compared to $47.6 million or $0.93 per fully diluted share for the third quarter of 2015 and $7.4 million or $0.16 per fully diluted share for the fourth quarter of 2014. Adjusted net loss for the 2015 full year was $155.4 million, or $3.11 per fully diluted share. Adjusted net income for the 2014 full year was $16.2 million, or $0.34 per fully diluted share.  Net loss for the fourth quarter of 2015 was $60.6 million, or $1.18 per fully diluted share, compared to net loss of $48.5 million, or $0.95 per fully diluted share, for the third quarter of 2015 and net loss of $...

From a press release: Williams Partners reported unaudited fourth quarter 2015 net loss attributable to controlling interests of $1.605 billion compared with net income of $382 million in fourth quarter 2014. The unfavorable change was driven primarily by a $1.1 billion non-cash impairment of goodwill and $859 million of non-cash impairments associated with certain equity-method investments.  The impairments were largely the result of significant declines in energy commodity prices as well as market values of Williams Partners’ and comparable midstream companies’ publicly traded equity securities in the fourth quarter. The impaired equity-method investments and certain of the impaired goodwill relate to the acquisition of Access Midstream Partners completed in 2014. The remaining impaired goodwill was associated with 2012 acquisitions.  For the year, Williams Partners reported unaudited net loss attributable to controlling interests of $1.410 billion, compared with net i...

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From a Gulfport Energy press release: For the fourth quarter of 2015, Gulfport reported a net loss of $830.9 million, or $7.67 per diluted share, on oil and natural gas revenues of $190.2 million.  For the fourth quarter of 2015, EBITDA (as defined and reconciled below) was $81.0 million and cash flow from operating activities before changes in working capital was $93.1 million.  Gulfport’s GAAP net loss for the fourth quarter of 2015 includes the following items: Aggregate non-cash unrealized hedge gain of $24.8 million. Aggregate loss of $845.6 million in connection with the impairment of oil and gas properties. Aggregate gain of $10.0 million attributable to net insurance proceeds in connection with a 2014 legacy environmental litigation settlement. Aggregate loss of $43.6 million in connection with the impairment associated with Gulfport’s equity interest in Grizzly Oil Sands. Aggregate loss of $5.5 million in connection with Gulfport's equity interests in...

From an Antero Resources press release: Antero's initial capital budget for 2016 includes $1.3 billion for drilling and completion and $100 million for core leasehold acreage acquisitions and extensions. Antero's 2016 capital budget excludes Antero Midstream's(NYSE: AM) $435 million capital budget relating to low and high pressure gathering pipelines, compressor stations, fresh water pipelines and advanced wastewater treatment infrastructure. Antero Midstreamannounced its 2016 capital budget and guidance today in a separate news release, which can be found at  www.anteromidstream.com .  The $1.3 billion drilling and completion budget represents a 21% reduction in drilling and completion capital as compared to 2015. The budget decrease is primarily driven by continuing capital efficiency improvements, a reduction in rig count and the deferral and carryover of a total of 70 Marcellus and Ohio Utica well completions into 2017. Twenty of the deferred completions are Mar...

From the Observer-Reporter: FTS International, the well-completion company that recently laid off workers at its two Washington County sites, is in the process of selling its sand-hauling assets to a third party.  The decision is mentioned in an internal memo from the company’s chief executive officer that was provided to the Observer-Reporter.  On Friday, the Fort Worth, Texas-based company, which is the largest private oil and gas well completion service in North America, laid off an undisclosed number of people at its sand-hauling site in Venetia and others at its larger operations complex near Eighty Four.  While not providing the number of people who were let go, the company acknowledged in an e-mail Monday it was “adjusting headcount” in response to lower customer demand. The company said it was not closing its Venetia or Eighty Four facilities.  A former employee, who asked to remain anonymous, said later Monday, FTSI laid off 34 sand-truck drivers a...

From Forbes: With capital markets tightening and oil still below $30 a barrel in spite of the deal announced between Qatar, Russia, Saudi Arabia and Venezuela today to freeze oil output at current levels , a growing number of increasingly distressed oil and gas companies are fully drawing the remaining availability of their outstanding revolving credit facilities – often in the hundreds of millions of dollars – to provide themselves with options in an impending financial restructuring.  “The companies are making these drawdowns now, everyone realizing that cash is king and possession is nine-tenths of the law, and it’s better to have cash in the bank in place and extend that runway than not,” says Becky Roof, a managing director at the global consulting firm AlixPartners.  This month alone Chaparral Energy , Midstates Petroleum and LINN Energy – three oil and gas companies with operations largely in the South Central U.S. – have drawn down the remaining amounts on th...

From the Akron Beacon Journal: Land acquisition for a new liquids-only pipeline across northern Ohio is proceeding with little uproar from neighbors.  The $500 million Utopia East Pipeline has generated little community opposition, unlike two bigger natural gas pipelines that will also cross northern Ohio.  It will run 210 to 215 miles through 14 counties from Harrison County in Ohio’s Utica Shale area west to Fulton County near Toledo where it would connect with an existing pipeline. It would pass through parts of southern Stark and Wayne counties.  The pipeline, 12 inches is diameter, will ship about 50,000 barrels of liquids per day, said Allen Fore, a vice president for public affairs with Texas-based Kinder Morgan, the pipeline giant behind the new project.  The capacity could be boosted to 75,000 barrels per day with the addition of two more pump stations. Two pump stations are planned.  Construction would likely take place in 2017 and the line...

From SNL: The U.S. EPA recently requested funding to study the effects of hydraulic fracturing on air quality, but oil and gas industry advocates promptly dismissed the proposal as unnecessary.  In its budget request for the 2017 fiscal year, the EPA proposed a nearly $1.5 million funding increase for its Air, Climate and Energy research program, which would "undertake a coordinated effort to study the potential effects of hydraulic fracturing on air quality." The study would be in keeping with a memorandum of agreement signed by the EPA, U.S. Department of Energy and U.S. Department of the Interior, according to the budget justification.  "This research strategy is designed to evaluate the potential impacts of hydraulic fracturing on air quality to support sustainable approaches to unconventional oil and natural gas development and production," the agency said.  Not surprisingly, the proposal drew exasperation from industry advocates, especially those in st...

From a press release: With more than $150 billion in debt on their balance sheets, nearly 35 percent of pure-play exploration and production companies (E&P) listed worldwide, or about 175 companies, are at high-risk of slipping into bankruptcy in 2016, according to a new Deloitte study, " The Crude Downturn for E&Ps: One Situation, Diverse Responses ." The outlook is almost equally alarming for about 160 other E&Ps that are less leveraged but cash flow constrained.  "2016 will be the year of hard decisions. We could see E&P bankruptcies surpass Great Recession levels as companies struggle to remain solvent," said John England , vice chairman and U.S. oil and gas sector leader, Deloitte LLP. "Access to capital markets, bankers' support and derivatives protection, which helped smooth an otherwise rocky road for the industry in 2015, are fast waning. A looming capital crunch and heightened cash flow volatility suggest that 2016 will be a pe...

From Pittsburgh Business Times: Shell has a deal in place to build a new office in the onetime headquarters of Michael Baker International in New Brighton, Beaver County, sources told the Business Times.  The 76,000-square-foot building is close to the Potter Township site where Shell continues to consider a new ethane cracker plant. Shell did not confirm the decision.  “For confidentiality reasons, we do not comment on the status of current or potential commercial arrangements,” a Shell spokeswoman said Wednesday. Kurt Bergman, president and CEO of Michael Baker International, and a spokesman both deferred questions to Shell. Read more by clicking here. At a time when these sorts of projects are more up-in-the-air than ever, this is an interesting indicator that the cracker plant in Beaver County is a strong possibility. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From a press release: New Report Proposes Strategic Extension of American Petroleum Power  The past decade witnessed an American energy revolution driven by shale growth; by actively promoting hydrocarbon output, Congress can boost recovery & make geopolitical headway  NEW YORK, NY (2/11/2016) – While the naysayers preach oil’s decline and overestimate the viability of alternative energies, American shale oil companies—after radically and rapidly repositioning the country in global oil markets and boosting economic recovery—have been largely neglected. A new paper by Manhattan Institute Senior Fellow Mark Mills illustrates the increased importance of oil to the global economy and outlines steps Congress can pursue to ensure the international competitiveness of America’s shale industry and reshape a volatile geopolitical order.  Mills argues that low oil prices aren’t a sign of oil’s decline, but of the need to implement policy reforms that allow more domestic ...

From a press release : Community Action of Wayne and Medina counties received a donation Wednesday from Kinder Morgan, developer of the Utopia East Pipeline Project, toward its new expansion at Lincoln Way Center, 905 Pittsburgh Avenue, Wooster, and core services, including Head Start, safety programs, parents’ support groups, housing, economic assistance programs, and more.  Allen Fore, vice president of public affairs for Kinder Morgan, presented a check for $5,000 to Melissa Pearce, president and CEO, at the Community Action Wayne/Medina facility.  “Thanks to this generous investment, we can reach more low income residents in the communities we serve,” said Pearce. Fore, along with other Kinder Morgan representatives, toured the facility and interacted with the children that benefit from the organization’s Preschool Head Start program.  “Kinder Morgan is proud to partner with Community Action of Wayne and Medina counties because we believe in the organization...

by Jackie Stewart, Energy in Depth Just two years ago, the Appalachian region in Ohio suffered one of the most devastating job losses of 2013: the  Ormet aluminum smelting plant  in Monroe County, located along the Ohio River closed, leaving  1,000 people  out of work in Ohio and West Virginia.  If the job losses weren’t bad enough, the closure also meant that millions in tax revenues would also be lost.  But then along came the development of Ohio’s Utica Shale. Thanks to natural gas development in the area, Monroe County has had an  over 340 percent increase in tax revenue , which has not only filled the void left by the plant closure, but has also brought back  hope  to the community that had been shattered two years ago. Today, natural gas development has been  said  to be the “lifeline” for Monroe County. Tax revenues increased from $1.5 million in FY2010 to a whopping $6.8 million in FY2015. The tax loss from Ormet, dur...