The Daily Digger

by Jackie Stewart, Energy in Depth As Pennsylvania-based anti-fracking group Community Environmental Legal Defense Fund (CELDF) announces its hope of placing a so-called Community Bill of Rights measure on the ballot in Youngstown for a seventh time, a new EID report shows that the City of Youngstown has already spent $187,219 to put the measure on the ballot thus far. All six previous “Community Bill of Rights” ballot measures have failed. Freedom of Information Act (FOIA) requests and documents from the City of Youngstown and Mahoning County Board of Elections confirm that the city has paid $19,219.55 advertising the six previous ballot measures. Each time the so-called Community Bill of Rights is placed on the ballot, the City of Youngstown pays approximately $6,000 in required advertising costs. The Mahoning County Board of elections has confirmed that $168,000 has also been paid by the City of Youngstown to print the ballots, additional advertising, ballot space, poll worke...

From Seeking Alpha's transcript of DTE's 2nd quarter earnings call: Moving on to a NEXUS update, I know many of you are interested in the progress and the timing of this project. So, before I get into that, and get into the timing, I'll reiterate what I said on the first quarter call, and that is that the precise in-service date for NEXUS doesn't materially impact our 2017, 2018 or long-term EPS profile. So, we want to get moving on the project, but near-term earnings are not the driver of that desire.  So that said, as you know, the FERC quorum has not yet been restored. And as I said on the first quarter call, we expected a year-end 2017 in-service date if we received a FERC certificate by the end of the second quarter or sometime within reach of midyear.  We also said on the first quarter call that if the FERC certificate wasn't received within that timeframe, then the project might push into 2018. Well, that's where we are now, with a in-service date ...

From the Tribune Chronicle: With few concerns and minimal safety issues related to the construction of the first power plant along Henn Parkway, there is no reason to keep a second facility from going in next door, local leaders said. Village fire Chief Travis Eastham said his department has responded to eight calls since construction of the Lordstown Energy Center started in April 2016. Of those, six were medical emergencies, one involved a mismarked gas line and the other was related to a welding spark that started a small fire that was out before emergency crews arrived, Eastham said.  “I’ve talked to residents who live not far from the construction (site) and I feel really confident from a safety standpoint about this second project,” he said. “I support it 100 percent as the fire chief, and I see no reason why there shouldn’t be a second power plant.”  About 200 people, including at least two dozen area construction workers, gathered at Lordstown High School on Tue...

From Bloomberg: Oil prices have been lousy for so long that U.S. producers are hoarding unfinished wells rather than pumping crude out of them. In the natural gas patch, just the opposite is happening.  While the energy slump has idled lots of wells for both commodities, their economics have diverged. Oil remains at half its price in 2014, leading to a record backlog of drilled-but-uncompleted wells spread across shale formations where fracking brought on a surge in crude production. Meanwhile, gas futures are almost double last year’s low, and the so-called fracklog of wells in the Marcellus gas fields of Pennsylvania and West Virginia is shrinking as drillers there unleash supplies to take advantage of higher prices.  By the end of June, the fracklog in the Marcellus was the smallest in the three and a half years since government data has been collected. The drop portends a production boom that could imperil bullish gas bets, which jumped to a three-year high in May o...

From Business Journal Daily: This November city voters will again – for the seventh time since May 2013 – vote on a ballot issue to restrict activity related to oil and gas extraction in the city.  The Youngstown Community Bill of Rights Committee will hold a news conference Monday to announce it has secured the necessary number of signatures to place such an issue on a city ballot.  The activitists will hold their event at 2:15 p.m. in front of City Hall, according to a media advisory. Following a brief news conference, the committee will deliver the signatures to the clerk of City Council’s office to be submitted to the Mahoning County Board of Elections for certification.  The seventh version of the Community Bill of Rights charter amendment is one of two issues the committee announced in early June that it would seek signatures for. Click here to continue reading. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From NGI: A subsidiary of Rice Energy Inc. has purchased all of the assets held by upstart Lola Energy LLC in a series of transactions that were finalized this month, according to deed transfers and assignments of interest filed in three northern West Virginia counties and another in southwest Pennsylvania.  Lola was formed in 2015 with a $250 million private equity commitment from Denham Capital Management LP and funds from its executive management team. CEO Jim Crockard's LinkedIn profile indicated the company "exited" its position in a "confidential sale" this month to "an undisclosed strategic buyer just ahead of breaking ground on the company's first permitted pad location" in Greene County, PA.  Crockard's profile also said the company built a nearly 20,000 acre position through leasing and mineral buying in Greene County and Monongalia County, WV. At the time Lola was formed, the company was already leasing in Greene County and e...

From the News and Sentinel: Because of the ongoing production, pipeline work, rig construction and other oil and gas-related activity in the county, Ohio Oil and Gas Association Director of Public Relations Mike Chadsey and Chamber of Commerce official Barbara Carslund decided to gather the organizations together to inform residents of developments in the industry, and how they expect their plans will impact local jobs and the economy in a positive way.  Chadsey said he wanted to emphasize that the industry has been in a downturn in the last couple of years, but that it is beginning to make a comeback.  “Monroe County has been at the heart of the industry coming out of the downturn,”Chadsey said. “Certainly the Wayne National Forest leases play a part in that, and Monroe County is geographically located on top of some really good geology. That is the fundamental basis of what we are talking about tonight.”  Chadsey noted he thinks the industry’s cycles should be ...

From The Chronicle: NEXUS gas pipeline opponents are arguing the federal government acted illegally during the approval process for the project and, specifically, failed to ascertain its safety.  Those assertions were filed in federal court in Akron Wednesday in response to a motion from NEXUS and the Federal Energy Regulatory Commission to dismiss a lawsuit from the group of more than 60 people including landowners from Medina, Summit and Stark counties.  In its motion to dismiss, NEXUS says the court has no jurisdiction in the matter because the Natural Gas Act of 1938 gives “exclusive review” to a federal court of appeals in Washington, D.C.  NEXUS also said that FERC “performed substantial independent analysis of pipeline safety issues.”  The suit asks the federal court to vacate and overturn a recommendation made last Nov. 30 by a commission unit that the pipeline’s planned route through Medina, Lorain and other counties be approved for the $2 billion...

From The State: Dozens of Ohio farmers have complained that their fields have been flooded after heavy rains by crews pumping storm water out of open trenches. Some have asked a federal judge to tell the company to stop doing it, arguing it violates their land agreements.  Those agreements compensate the owners for putting the pipeline on their land, but farmers say it doesn't give the company the right to flood their adjacent land. Energy Transfer Partners said it has been dealing with unprecedented rainfall and is trying to avoid and minimize impact on crops.  Doug Phenicie, whose family farms about 1,800 acres (728 hectares) near New Washington in northern Ohio, said he watched this spring as a bulldozer pushed standing water onto a neighbor's field. "It looked like waves at the ocean," he said.  A muddy, brown stream rippled across his soybean field last week following another big storm as crews pumped out more water. It's become a common sight, he sa...

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From the Pittsburgh Post-Gazette: Two major players in Pennsylvania’s Marcellus Shale gas boom sought to convince a Bradford County judge on Thursday to narrow or throw out a lawsuit by the state attorney general, who accuses the companies of misleading landowners about lease terms and cheating them out of royalties.  Oklahoma-based Chesapeake Energy Corp. and Texas-based Anadarko Petroleum Corp. argue the state’s case is fundamentally flawed because it misapplies Pennsylvania’s consumer protection law to a situation where the apparently harmed party — the landowners — were not consumers, but sellers, of mineral rights.  “The consumer protection statute does not regulate the conduct of purchasers,” Daniel Brier, an attorney for Chesapeake, told Senior Judge Kenneth Brown. He said four-fifths of the state’s complaint should be dismissed for that reason alone.  In a case originally filed in 2015 , the attorney general’s office alleges that Chesapeake and three of i...

From Powersource: Zach Scott was a year old and his brother was still in the womb when their dad got laid off from Halliburton in 1986, the year after oil prices tanked and ushered in the largest industry downturn until, some argue, the current one.  Within two years, 20 percent of the workers in the oil and gas industry had lost their jobs. Many of them did not return and they discouraged their children from going into the industry — creating a generational gap that is now coming home to roost.  Mr. Scott’s father did neither of those things. He kept coming back to the oil and gas fields, despite the multiple layoffs that used to count as battle scars for industry veterans.  Cautiously, things appear to be turning up again, leaving companies scrambling for workers and wondering if those they have let go will return. If those former employees don’t come back, will the industry known for bluster, swearing and endless hours away from home be able to recruit the hot...

From Business Journal Daily: Oil and gas production in eastern Ohio’s Utica shale is projected to rise next month as exploration activity continues to trend upward in the shale play, according to the latest data from the U.S. Energy Information Administration.  EIA’s Drilling Productivity Report shows that the Utica is expected to produce 52,000 barrels of oil per day in August, up from 50,000 barrels a day for July.  Natural gas production also remains strong in the Utica, EIA said. Utica wells are projected to yield 4.55 billion cubic feet of dry and wet gas per day in August, compared with 4.45 billion cubic feet in July, an increase of 104 million cubic feet per day.  Oil and gas production in the nearby Marcellus shale in Pennsylvania and West Virginia is also on the increase, EIA reported.  Wells in the Marcellus should produce 42,000 barrels of oil per day in August, up from the 41,000 barrels per day recorded for July. Read the rest of this articl...

From The San Diego Union-Tribune: Natural gas in the U.S. is abundant and figures to remain a dominant source for the nation’s energy supply for years to come, a leading industry analyst said at a national conference for utilities commissioners in San Diego this week.  But at the same time, Andrew Weissman warned that natural gas prices may be headed for wide fluctuations in the coming years.  “We face tremendous swings in demand that we can’t predict,” said Weissman, ​​ founder of EBW AnalyticsGroup , a company based in Washington, D.C., that provides consulting services in the oil and natural gas markets.  “And it’s likely to create conditions where, either with no notice, supplies become extremely tight or, with no notice, we’re flooded with natural gas.” Read the whole article by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

New permits issued last week:   0   (Previous week:  10 )  -10 Total horizontal permits issued:  2552   (Previous week:  2551 )  +1 Total horizontal wells drilled:  2057   (Previous week:  2052 )  +5 Total horizontal wells producing:  1590   (Previous week:  1590 )  +-0 Utica rig count:  26   (Previous week:  23 )   +3 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From Seeking Alpha: In the finance community, merger arbitrage is sometimes referred to as “a business of picking up nickels in front of a steamroller.” By contrast, the EQT Corporation ( EQT )–Rice Energy ( RICE ) merger arbitrage situation increasingly appears to be an exercise of “picking quarters in front of a scarecrow.”  Following the stir created by the activist hedge fund JANA Partners, which is advocating against the merger and demanding immediate separation by EQT of its upstream and midstream businesses instead, the arbitrage spread has widened dramatically and is currently at a level that makes expected return on RICE and EQT to the assumed transaction closing materially differential, presenting investors participating in these two stocks with a dilemma.  Based on July 14 closing prices, a position in the EQT-RICE merger arbitrage pair would earn a ~6% annualized return if the transaction closes in mid-December. By the standards of the merger arbitrage trade...

From Reuters: U.S. energy regulators on Wednesday gave Energy Transfer Partners LP a list of tasks to complete before the Rover natural gas pipeline can enter service.  The $4.2 billion Rover project from Pennsylvania to Ontario is the biggest gas pipeline under construction in the United States.  ETP has long said it expects the first phase of Rover to enter service in late July with the second phase by Nov. 1.  Several energy analysts, however, have said an order by the U.S. Federal Energy Regulatory Commission (FERC) on May 10 banning ETP from new horizontal directional drilling under waterways and roads after a spill in Ohio could cause delays. Click here to read more. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From NGI: Houston-based EnerVest Ltd., one of the largest privately held onshore exploration operators in the United States, is working with its investors and lenders to recapitalize over-leveraged equity funds and may sell more assets to ensure it is in compliance. However, one of the funds is not about to be taken over by one of the lenders, a spokesman told NGI.  A story published Monday in The Wall Street Journalsaid a $2 billion fund launched in 2013 was “worth essentially nothing” and had wiped out investments by major pensions, endowments and charitable foundations.  The fund’s lenders, led by Wells Fargo & Co.,“are negotiating to take control of the fund’s assets to satisfy its debt, according to people familiar with the matter,” the Journalsaid.  EnerVest spokesman Ron Whitmire, chief administrative officer, said that’s not true.  “Wells Fargo is not trying to take control of any of EnerVest’s funds to satisfy the debt,” Whitmire said. In simp...

From MarketWatch: After two years of significant declines in upstream oil investments, the sector is finally facing a rebound in 2017 and it all comes down to one thing: a sharp jump in money flowing into U.S. shale oil projects.  The International Energy Agency, in a report out on Tuesday, predicts a 53% upswing in shale investments this year, even as oil prices are struggling to make a sustainable push above $50 a barrel.  “The largest planned increase in upstream spending in 2017 in percentage terms is in the United States, in particular in shale assets that have benefited from a reduction in breakeven prices as a result of a combination of improvement in costs and efficiency gains,” the IEA said.  The big rise in U.S. activities is expected to give global upstream — or exploration and production — investments a 6% bump in 2017, following a 44% plunge between 2014 and 2016. Russia and the Middle East are also seen ramping up spending on upstream projects, albe...

Source: Bob Moriarty for Streetwise Reports   07/19/2017 A novel use of fracking could ramp up production in the conventional North Texas oil wells that Molori Energy holds in a JV with Ponderosa Energy, says Bob Moriarty of 321 Energy. Energy resource companies are uniquely different than gold and silver resource companies. With energy companies, you either hit and produce oil and gas or you go out of business. With junior resource companies in the gold and silver space, you never want to try to go into production. After all, that's where you fail. You can never fail as long as you keep drilling. With gold and silver juniors, they want to drill until their projects resemble Swiss cheese, not produce. After all, you might eventually hit something if investors will keep throwing money at you. All the while, management can continue to collect those fat paychecks and issue themselves more options every time their stock hits a new low. ...

From NGI: The initial start-up for Energy Transfer Partners LP's (ETP) Rover Pipeline could be pushed back to "late summer" due to recent regulatory setbacks, the company said Monday.  ETP/Rover spokeswoman Alexis Daniel told NGI’s Shale Daily that "as a result of our continued efforts to work with" the Federal Energy Regulatory Commission and the Ohio Environmental Protection Agency (Ohio EPA), "we are anticipating that the Phase 1 section has the potential for an in-service date of late summer of 2017. At this time we do not anticipate any delays to the November 2017 in-service date on Phase 2."  Daniel was responding to a question about last week's letter from FERC Office of Energy Projects Director Terry Turpin, which outlined several clean-up and mitigation activities ETP/Rover would have to complete before receiving in-service authorization. Click here to read more. Also from another NGI article: Rover Pipeline LLC and parent En...

New permits issued last week:   10   (Previous week:  2 )  +8 Total horizontal permits issued:  2551   (Previous week:  2544 )  +7 Total horizontal wells drilled:  2052   (Previous week:  2040 )  +12 Total horizontal wells producing:  1590   (Previous week:  1587 )  +3 Utica rig count:  23   (Previous week:  25 )   -2 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

A press release received by email from Krugliak, Wilkins, Griffiths, & Dougherty Co., L.P.A.: Munroe Falls Ordered to Pay Beck Energy’s Attorney’s Fees  Over Frivolous Court Case On July 13, 2017, the Summit County Court of Common Pleas awarded Beck Energy $45,000.00 in attorney’s fees against the City of Munroe Falls (Munroe Falls) for having to defend against a frivolous lawsuit brought by the city. The frivolous Complaint sought (1) a Declaratory Judgment requiring Beck Energy Corporation (Beck Energy) to obtain a zoning certificate prior to the commencement of drilling the Sonoco oil and gas well and (2) a Stay prohibiting Beck Energy from commencing any drilling activities at the Sonoco oil and gas well. After the filing of the frivolous Complaint, Beck Energy sent a letter demanding that Munroe Falls dismiss the lawsuit on the grounds that it lacked any good faith basis under the Ohio Supreme Court’s decision in Morrison v. Beck Energy Corp., 143 Ohio St.3d 271, 2...

From The Columbus Dispatch: With three legislators objecting to the “raid,” a state board on Monday approved appropriating $15 million from an oil-and-gas fund designated by law to protect Ohioans and the environment, to be used to pay a settlement of an unrelated lawsuit.  The Controlling Board voted 4-3 to remove the money from the fund, which is used in part to seal “orphan” natural-gas and oil wells, to fund a settlement with landowners near Grand Lake St. Marys whose properties have flooded since a widening of the dam spillway in 1997.  In response to questions about the legality of the move, Department of Natural Resources officials said temporary language long inserted in state budgets permits money to be withdrawn from an assortment of funds to pay legal settlements.  Rep. Jack Cera, D-Bellaire, objected to using the fund for an unrelated purpose.  “This multimillion-dollar cash grab by the state shows where Columbus politicians’ priorities are — n...

by Jackie Stewart, Energy in Depth This week, Thailand-based firm PTT Global Chemical (PTTGC) America  announced  it would purchase land along the Ohio River in Belmont County for $13.8 million to build a proposed $6 billion ethane cracker plant. The processing plant will support the  record-breaking natural gas  production coming out of Ohio by allowing a valuable component of the natural gas, ethane, to be “cracked” locally into ethylene, a feedstock source for the petrochemical industry. To date, a  total investment made by possible from revenue generated by Ohio liquor sales and private investment by this company  totals approximately $130 million invested over the past 28 months to bring a multi-billion ethane cracker to the Ohio. Although a final decision to build the plant has not been announced, it’s safe to say that  Ohio is “all-in ” to support the project and the game-changer that will come as a result from the manufacturing of petrochemi...

From the OOGA: On July 6th, the Ohio House of Representatives overrode a total of 11 line-item vetoes pertaining to House Bill 49, the state budget bill. One of those veto overrides dealt with the Oil and Gas Leasing Commission, the state body that was created to review state properties for potential oil and gas leasing. Let’s take a look at current law and what the language included in the state budget bill actually does.  House Bill 133 (sponsored by State Representative John Adams) was passed and enacted by the state legislature in June, 2011. It was signed into law by Governor John Kasich on June 30, 2011 and became effective law on September 30, 2011. The bill created the Oil and Gas Leasing Commission, which was charged with overseeing and facilitating the leasing of land owned or controlled by state agencies and universities. These properties were classified into four distinct tiers. However, it is important to note that state nature preserves were excludedfrom these t...

New permits issued last week:   2   (Previous week:  11 )  -9 Total horizontal permits issued:  2544   (Previous week:  2540 )  +4 Total horizontal wells drilled:  2040   (Previous week:  2039 )  +1 Total horizontal wells producing:  1587   (Previous week:  1587 )  +-0 Utica rig count:  25   (Previous week:  23 )   +2 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From The Canton Repository: Rover Pipeline has not cleaned up diesel-contaminated waste that state regulators told the company to stop dumping near the water supplies of tens of thousands of Stark County residents.  Ohio Environmental Protection Agency Director Craig Butler cited Rover’s failure to properly dispose of the waste as an example of how Rover and parent company Energy Transfer Partners have stiff-armed state regulators.  On Monday, Butler said he had referred Rover’s violations to the Ohio Attorney General for civil action, including a civil penalty of almost $1 million.  Dallas-based Energy Transfer is building the $4.2 billion Rover Pipeline across Ohio, including parts of Stark, Tuscarawas and Carroll counties. The interstate pipeline will carry natural gas produced by wells in the Utica and Marcellus shales.  Despite Ohio EPA’s attempts to negotiate a settlement, Rover and Energy Transfer argue they’re exempt from state regulation because t...

From Bloomberg: Jana Partners LLC just isn't a fan of Big Gas. In a frosty letter delivered to EQT Corp. on Wednesday, the activist investor heaped scorn on the company's recently announced deal to acquire fellow natural gas producer Rice Energy Inc.: While EQT would indeed become the country’s largest natural gas producer, there is no unique value that accurues [sic] to shareholders generated simply by being the biggest.  Now Jana, which has taken a 5.8 percent stake in EQT, plans to mount a campaign to scuttle the $8.2 billion cash-and-stock deal. Rice's discount to the implied offer has duly widened this week (news of Jana's stake surfaced on Monday):  Click here to read more. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From EurekAlert! Science News: Researchers have found that the microbes inhabiting a hydraulically fractured shale formation produce toxic, corrosive sulfide through a poorly understood pathway. The team's findings, published this week in mSphere®, an open-access journal of the American Society for Microbiology, reveal that the oil and gas industry may need new ways to monitor and mitigate sulfide-producing bacteria in fractured shales.  "This is a pretty inhospitable environment of high pressure, salinity and temperature some 2,000 meters underground. You'd think that microbes introduced during the fracturing process would die, but some of them make a good life for themselves," says Mike Wilkins, an environmental microbiologist at The Ohio State University in Columbus and senior researcher on the study. "The industry spends a fair amount of money trying to keep microbes out of these systems."  Hydraulic fracturing, also known as "fracking,"...

by Jackie Stewart, Energy in Depth The stack of defeats for anti-fracking activists and the  Community Environmental Legal Defense Fund (CELDF)  in Ohio continue to pile up. For the  third year in a row , fringe environmental activists attempted a ballot measure to advance a so-called “bill of rights” charter amendment in Athens, Ohio. Today, and similar to the past two years, the Athens County Board of Elections again voted  unanimously  to reject a “bill of rights” ballot initiative, ruling the measure as “invalid.” It truly is Groundhog Day in Athens, as anti-fracking activists are recycling the same talking points as last year in the wake of the vote. Activist Dick McGinn again  called  the Board of Election’s decision a “travesty” and vowed to file a protest. McGinn was clearly one of the whopping three people who attended the anti-fracking event at the Athens County Board of Elections today, showing again how incredibly marginalized oppositi...

From NGI: The highly anticipated Rover Pipeline, a massive 3.25 Bcf/d Appalachian takeaway project scheduled to come online later this year, will likely begin partial service this month, backer Energy Transfer Partners LP (ETP) has confirmed.  "The Phase 1 section of the Rover Pipeline from Cadiz, OH, to Defiance, OH, is expected to be in service in July," ETP spokeswoman Alexis Daniel told NGI. "We do not anticipate any delays to the November 2017 in-service date on Phase 2."  Despite delays in receiving its FERC certificate, ETP has held to a tight schedule for Rover, maintaining its plans to bring the project online in two phases this year. The full Phase 1 -- connecting producing areas of Ohio, West Virginia and Pennsylvania to the Midwest Hub in Defiance, OH, via Rover's Mainline A segment -- was originally scheduled to come online this month.  ETP had to revise its schedule slightly after the Federal Energy Regulatory Commission, responding to a ...

New permits issued last week:   11   (Previous week:  3 )  +8 Total horizontal permits issued:  2540   (Previous week:  2536 )  +4 Total horizontal wells drilled:  2039   (Previous week:  2032 )  +7 Total horizontal wells producing:  1587   (Previous week:  1584 )  +3 Utica rig count:  23   (Previous week:  24 )   -1 Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog