Duke Buys Piedmont Natural Gas

Duke Energy, the largest U.S. power company by generation capacity, said Monday it’s acquiring Piedmont Natural Gas for $6.7 billion in cash and debt assumption, expanding by 66% its natural gas distribution business. Duke offered $60 in cash for each Piedmont share, representing a premium of roughly 42% to the stock s Friday close, Kallanish Energy calculates. Duke will assume roughly $1.8 billion of Piedmont s net debt. This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors, said Lynn Good, Duke’s CEO. Stable natural gas pricing has prompted a number of U.S. power producers to boost their natural gas infrastructure and lower dependence on power generation as demand for electricity weakens due to increased energy efficiency. Southern Co. said in August it would buy AGL Resources for roughly $8 billion in cash. Duke currently sells power to 7.3 million customers in North and South Carolina, Florida, Indiana, Ohio and
http://www.shaledirectories.com/blog/duke-buys-piedmont-natural-gas/

Virtual Pipelines: American Ingenuity at Its Best

Our friends at Marcellus Drilling News (www.marcellusdrilling.com ) reported a new phenomenon in the oil and gas industry “virtual pipelines.”  MDN had found that a paper mill in upstate New York converted to natural gas and could net get it from a pipeline so it decided to have compressed natural gas (CNG) trucked in, hence the birth of a virtual pipeline. What does a virtual pipeline mean to the environment?  The more fossil fuels will be used to haul the CNG to the plant.  Then there is the every present danger of truck hauling CNG on the highways and local roads.  Life would be so much better and safer if the pipelines would get built. MDN further reported that on the heels of the paper mill announcement it found a second virtual pipeline announcement. A company based in Florida called Pentagon Energy announces they’ve just scored their first contract–in the Marcellus Shale–to build a CNG “Mother Station” (think central hub) that will truck 2.5 billion cubic feet
http://www.shaledirectories.com/blog/virtual-pipelines-american-ingenuity-at-its-best/

Antero Resources Selects Veolia

Independent producer Antero Resources said Thursday it has selected French company Veolia to design, build and operate a $275 million water treatment complex in the Appalachian Basin, Kallanish Energy learns. Recycling the produced water from shale oil & gas production will save Denver, Colorado-based Antero to save roughly $150,000 per well, as well as reduce risk and cost associated with long-distance hauling of water for deep-well injection. The facility, located in Doddridge County West Virginia (roughly 120 miles south of Pittsburgh, Pennsylvania), will treat and recycle 2.51 million gallons a day of flowback and produced water. The companies also signed a separate 10-year pact under which Veolia will operate and manage the plant. Planned to enter service at the end of 2017, the future plant will eventually treat and recycle 60,000 barrels of produced water a day. Antero will own the treatment assets and ancillary facilities to be constructed by Veolia over the next two years. No
http://www.shaledirectories.com/blog/antero-resources-selects-veolia/

It Is Going To Get Worse Before It Gets Better

After reading comments from OilPro about Halliburton conference call, it seems like the scenario for the oil and gas industry is as follows: • The production budgets have been spent. Look for less activity in the 4th quarter and the rig count increasing. Both Halliburton and OilPro think the on land rig count get down to 600 by the end of the year. • With the start of the New Year in 2016, drillers will have new production budgets which means drilling will pick up. The common strategy for the E&P companies is “drill or die” which means they will be drilling once the new budgets go into effect. • Here’s comments • The projected low rig count should mean that the price of oil should move up a little. Let’s hope so. Here s an interesting perspective from Dave Lesar from OilPro. I think there s actually a different way you need to think about the customer base in North America, especially the independent customer base. And that s essentially with the high decline curves th
http://www.shaledirectories.com/blog/it-is-going-to-get-worse-before-it-gets-better/

Hess reportedly selling its 50% JV stake in Utica Shale assets

Oil and gas producer Hess, which over the last few years has remade itself into an exploration and production company, shedding millions of dollars in assets, reportedly is seeking buyers for its Utica Shale play assets. The New York-based explorer is working with Goldman Sachs to solicit bids for the assets, which could bring in up to $500 million, Kallanish Energy understands. The asset for sale is the company’s 50% stake in its joint venture with Consol Energy. In the Utica, Hess has a 50% working in 45,000 acres, with net production in 2015 between 20,000 and 25,000 barrels of oil-equivalent per day. It reduced its active rigs in the region to one from two. Representatives for Hess and Goldman Sachs declined to comment. Hess, once an integrated energy company, has been remaking itself into an E&P since settling a proxy battle in 2013 with activist investor Elliott Management. It sold its gas-station network and is spinning off its pipeline operations. The company sold some Utica
http://www.shaledirectories.com/blog/hess-reportedly-selling-its-50-jv-stake-in-utica-shale-assets/

Fracking Does Not Contaminate Drinking Water, Says New Yale Study

Environmentalist opposition to fracking undeterred by data It actually pains me to disagree with celebrity Mark Ruffalo who has talked against fracking.   I’ll blame the egoistical Josh Fox for spreading and promoting misinformation. Hopefully Mark will sit up and ‘read for himself’ reports from Yale University who drafted a report regarding findings, none of which lead to widespread systemic impacts on drinking water resources in the United States. Of course like any other industry process fracking needs to be correctly monitored. Environmental activists continue to claim that fracking (the use of horizontal drilling with high-pressure water) to unlock vast stores of natural gas and oil from shale formations contaminates drinking water. They hint that natural gas and the constituents of fracking fluids migrate through cracks from the shale formations into drinking water wells. In fact, intensive research efforts have yet to confirm that any contamination that has occurred in
http://www.shaledirectories.com/blog/fracking-does-not-contaminate-drinking-water-says-new-yale-study/

Commonwealth Court Supports the Fairfield Township and Inflections Energy LLC

The Commonwealth Court decision, in the case of B. Gorsline, et al. v. Board of Supervisors of Fairfield Twp. v. Inflection Energy, LLC, et al. – 1735 C.D. 2014, was an important victory for natural gas development. The decision established some extremely important precedents with big fracking implications going forward.  The essence of the original complaint filed against Fairfield Township Supervisors was a  local neighbor s opposition to construction traffic that would pass their residence on the way  to the proposed Inflections site.  They challenged the approval of the application (permitting) by Fairfield Township and appealed to the Lycoming County Court of Common Pleas where it inexplicably got assigned to a local judge  overturning the Township’s approval. Fairfield Township Zoning Map – Notice that R-A District (yellow) encompasses the bulk of the Township and prohibiting development there would have effectively excluded it from the Township. The Commonwealth Cou
http://www.shaledirectories.com/blog/commonwealth-court-supports-the-fairfield-township-and-inflections-energy-llc/

Gulfport and Rice Energy Form Midstream JV

Independent producers Rice Energy and Gulfport Energy said Thursday the companies are forming a joint venture to develop midstream assets to support Gulfport s dry gas Utica Shale development in eastern Ohio. Rice and Gulfport plan to invest roughly $520 million to develop gathering and compression assets and $120 million for water assets within the JV over the next six years. Initial construction of the system is expected to begin immediately and first deliveries are planned for mid-2016. “We are excited about furthering our midstream relationship with Gulfport across their position in the core of the Ohio Utica Shale,” said Daniel J. Rice IV, CEO of Rice. The JV will be supported by long-term, fee-based service agreements with Gulfport, Kallanish Energy understands. Rice will own 75% of the JV and be responsible for constructing and operating the JV s assets. “Gulfport has a strong history with Rice in the Utica Shale and we are excited to expand our relationship by creating f
http://www.shaledirectories.com/blog/gulfport-and-rice-energy-form-midstream-jv/

North American E&Ps Risk Financial Stress

North American E&Ps risk financial stress having missed the price hedge window Many North American exploration and production (E&P) companies – particularly small and mid-size firms risk financial stress, as just 11% of 2016 production is hedged, according to analysis by IHS. The “IHS Energy North American E&P Peer Group Analysis: Hedging Protection Set to Plunge in 2016,” assessed the amount of oil and gas hedging protections in place for 48 small, midsize and large North American E&P companies for the second-half of 2015 and full-year 2016. Overall hedging for second-half 2015 was largely unchanged from previous IHS analysis the North American E&Ps have 28% of total production hedged for the remainder of the year. The weighted-average hedged prices the group has in place for 2016 are $69.04 per barrel (Bbl) of oil and $3.83 per thousand cubic feet (Mcf) of gas. The small and mid-sized E&Ps increased 2016 hedging the most during the first-half of 2015, while the large E&Ps rema
http://www.shaledirectories.com/blog/north-american-eps-risk-financial-stress/

Midstream PA 2015

The second annual Midstream PA was very informative with presentations from representatives from Sunoco Logistics, Williams, MarkWest, UGI, Southwestern Energy, McNees, Wallace & Nurick, Dawood Engineering, PA Department of Community and Economic Development and Penn State’s Marcellus Center for Outreach and Research. The combination of industry and government at the event gave the attendees a look at what is happening now, but more importantly what is coming in 2016 and beyond. Some of the more interesting remarks: Everyone expects the big pipeline projects to continue with the only slowdown coming from acquiring permits. Some of the smaller midstream projects may get pushed a little. PA Pipeline Task Force’s comments: The primary focus of the report will be on gathering lines. The members of the task force are from the industry, business, government official from the state and local level and academia. The first draft of the report is due November 2nd. With the complete report d
http://www.shaledirectories.com/blog/midstream-pa-2015/

ECONOMIC GROWTH WIDESPREAD ACROSS METROPOLITAN AREAS IN 2014

Advance 2014, and Revised 2001–2013 GDP-by-Metropolitan-Area Statistics Real GDP increased in 282 of the nation s 381 metropolitan areas in 2014, led by growth in several industry groups: professional and business services, wholesale and retail trade, and the group of finance, insurance, real estate, rental, and leasing. Natural resources and mining remained a strong contributor to growth in several metropolitan areas. Collectively, real GDP for U. S. metropolitan areas increased 2.3 percent in 2014 after increasing 1.9 percent in 2013. Professional and business services contributed 0.61 percentage point to U.S. metropolitan area real GDP growth in 2014. This industry contributed to growth in 314 of the nation s 381 metropolitan areas. Growth in this industry accounted for more than half of real GDP growth in 49 metropolitan areas, and contributed more than one percentage point to growth in 28 metropolitan areas, most notably in Midland, MI (4.56 percentage points) and San Francisco
http://www.shaledirectories.com/blog/economic-growth-widespread-across-metropolitan-areas-in-2014/

Patriot Begins Drilling in the Permian

Dallas-based oil and gas company Patriot Energy said Tuesday it has begun drilling operations at its 440-acres Thoroughbred-1 prospect, in eastern Permian Basin, West Texas, Kallanish Energy understands.The Thoroughbred-1 well targets multiple potential pay zones including the Strawn Lime, Cline shale, Cisco sands, Triple M Credo, Middle Wolfcamp and Albaugh. Drilling should be completed in three weeks, reaching roughly 9,000 vertical feet in early October.Patriot Energy’s President, Michael Miller, believes the Permian Basin multiple pay zones wells “offer very attractive potential, even at today’s oil prices.”“The economics are acceptable today, and we believe prices will eventually find their way back up to a more normal level,” added Miller.The shale producer is currently extending its operations on a farm-out lease, which will encompass at least 8 prospects, with the option to further drill out remaining acreage.According to Patriot, other wells near the farm-out leas
http://www.shaledirectories.com/blog/patriot-begins-drilling-in-the-permian/