Monthly Archives: January 2016

Natural gas spot market prices are narrowing between the benchmark Henry Hub and pricing points in and around the Marcellus and Utica shale plays as new pipeline projects have come online, the U.S. Energy Information Administration said Wednesday.“With limited infrastructure to deliver natural gas to consumers, the Marcellus region can quickly become oversupplied, causing prices within the Marcellus [especially Pennsylvania] to be discounted,” the EIA said.New infrastructure projects have come online to alleviate the disconnect between prices in producing and consuming areas around the country, Kallanish Energy understands.While prices in the Marcellus are still low, trading under $1.50 per million British thermal units (MMBtu), the gap between Marcellus region price points and Henry Hub has narrowed, Kallanish Energy finds.The price at Transcontinental Pipeline’s (Transco) Leidy Hub in central Pennsylvania averaged $0.93/per MMBtu below the Henry Hub price from Dec. 1, through


Pipeline giant Williams and its Williams Partners affiliate said Monday Williams Partners’ 2016 capital budget for growth was chopped by $1 billion – 33% — to $2 billion, Kallanish Energy learns.Williams also said it’s maintaining its quarterly dividend at 85 cents a share. Williams Partners’ current yield is now 15%.The sharp cut in 2016 capital and investment expenditures includes project deferrals, delays and cancellations due to current commodity prices and sharply higher costs of capital.“Our strategy remains intact and the underlying fundamentals of our business are strong despite the slower growth rates producers currently face,” said Alan Armstrong, CEO of Williams Partners’ general partner. “Our revised capital plan addresses the realities of our current market environment while continuing to invest in the growing demand side of our business.”The $2 billion growth capital funding needs include $1.3 billion for Transco (pipeline) expansions and other inters

Eclipse Resources said last week it expects to record a fourth-quarter impairment charge of $750-$850 million on certain Ohio oil and gas properties, due primarily to the huge commodity-price decline. The estimated impairment charge remains subject to revision based upon further analysis and final review, the independent producer said. Eclipse added it doesn’t anticipate the expected impairment will result in a violation of any financial covenants associated with its senior secured revolving credit facility or senior unsecured bonds. In other Eclipse news, the State College, Pennsylvania-based company last Thursday began a private offer to exchange $550 million of outstanding 8.875% senior unsecured notes due in 2023, for the company’s new 9% senior secured second-lien notes due in 2023. The exchange offer expires on Feb. 18, unless extended by Eclipse, Kallanish Energy learns. The settlement date is Feb. 19. The second-lien notes will be initially secured by second-priority liens

Global mining giant BHP Billiton said Friday it’s writing-down the value of its U.S. shale assets by $7.2 billion pre-tax due to the ongoing price plunge in crude oil and natural gas.The huge impairment charge is the third BHP has taken due to the company’s push into shale in 2011, when it spent $20.6 billion (including assumed debt) on two acquisitions at a time when oil and gas prices were much higher than now. Oil and gas markets have been significantly weaker than the industry expected, said Andrew Mackenzie, BHP’s chief executive. The impairment charge will reduce the value of BHP’s onshore US operating assets to roughly $16 billion, including deferred tax liabilities, Kallanish Energy finds.Due to the collapse in oil prices over the past 18 months, BHP has chopped its operating costs and capital spending in the U.S., and reduced the number of rigs from 26 to five by March 31. While we have made significant progress, the dramatic fall in prices has led to the disappointin

Columbia Pipeline Group said that its Columbia Gas Transmission unit has filed with the Federal Energy Regulatory Commission (FERC) to move forward with its $850 million WB Xpress project. WB Xpress is an interstate pipeline between West Virginia and Virginia that includes roughly 26 miles of pipeline replacement and approximately three miles of new line, along with two new compressor stations. Line capacity will top off at 1.3 billion cubic feet per day (Bcf/d), Kallanish Energy learns. The project will deliver Appalachian Basin gas to Mid-Atlantic markets, as well as Gulf Coast markets via a downstream, third-party interstate pipeline expansion from an existing interconnect in West Virginia. Columbia says WB Xpress “will significantly improve the service and flexibility of the region’s interstate pipeline system.” Pending FERC authorization, Columbia expects to begin WB XPress construction in 2017, and bring the project online in the second half of 2018. FERC also authorized C

Those of us in the industry , have family and/or friends in the oil & gas industry are concerned about the future outlook of PA’s role in the continued production of natural gas. It appears the outlook is – bright and clean. Wheww! Thank you Cabot for your efforts in sharing information with the public on the natural gas status in PA. Supporters and adversaries may derive information from resources ‘unknown’, Cabot is vigilant on sharing facts from well-known resources. Below is an unbiased letter from a commissioner, Pamela A. Witmer, of the Pennsylvania Public Utility Commission (PUC) as published by the Philadelphia Inquirer on Sunday, January 3. Overview: PA continues to be the nation’s second largest producer of natural gas (second only to TX), the exporting of gas will spur the Commonwealth economically and provide more jobs, and, when the pipeline is fully operational it will reduce the cost of heating and electric bills in PA. Marcellus Shale sources the majority of

Consol Energy on Wednesday sharply cut its 2016 capital budget for its E&P division, Kallanish Energy reports.Capital expenditures (CAPEX) for E&P is now set at $205 million to $325 million $185 million lower than the previous guidance of $400-$500 million, based on the guidance midpoint.Total E&P capital, including midstream, has been cut by roughly $1 billion since 2014 – from $1.2 billion to the projected $205-$325 million with corresponding production projected to grow 60%, from 235.7 billion cubic feet-equivalent (Bcfe), to roughly 377 Bcfe, respectively.The reduction in 2016 E&P CAPEX “reflects continued benefits from drilling and completion efficiencies, and the deferral of mainly wet gas completions into 2017,” Consol said. Consol’s updated 2016 plan reflects the company s operational flexibility to respond effectively to the continued weakness in commodity prices, as well as the company s commitment to de-lever the balance sheet through the execution of the organic fr