Monthly Archives: April 2016

This is the comment that was heard from a number of exhibitors at the Ohio Valley Oil & Gas Expo held this past Tuesday evening and Wednesday.  Congratulations to MPR Supply Solutions, The Belmont County Commissioners and Port Authority.  This is the fourth year of the expo and was probably the best. The Ohio Valley Oil & Gas Expo was sold out.  In fact there was a waiting list for exhibitors.  With NatGas prices beginning to recover and the likelihood of the cracker plant happening, I strongly recommend that you reserve your booths as soon as possible next year. There was Networking Reception Tuesday evening that featured speakers, Callum Streeter, COO EdgeMarc Energy, Rob Wingo, and Paul Wojciechowski, Project Director, PPTGC America, LLC, the company looking to build the cracker plant in Belmont County, OH. Wojciechowski’s comments were of particular interest to everyone there.  He outlined some key dates working toward the final “Go-NoGo” decision for the cracker plant.


Oilfield services firm Baker Hughes, currently mired in a highly contested merger with larger rival Halliburton, on Wednesday reported a $981 million net loss for the second quarter. The loss compared to a $589 million loss in the year-earlier quarter. Among the quarter’s expenses was a more-than $110 million related to the Halliburton purchase. Revenue fell 41.8%, to $2.67 billion, from $4.59 billion one year ago. In North America, Baker Hughes’ largest market, first-quarter operating revenues plunged more than 59%, to $819 million, from more than $2 billion one year ago. Baker Hughes’ world could be changing considerably if Halliburton kills the deal to purchase Baker Hughes.  First, Baker Hughes will receive approximately $3.5 billion as the break fee.  These funds will certainly help offset the tough times which Baker Hughes has been experiencing as the result of the price decline. Baker Hughes was probably handcuffed by the Halliburton deal.  If the deal goes down in fla

Pennsylvania’s Independent Regulatory Review Commission approved an update to the state’s oil and gas drilling rules Thursday, voting 3-2 on changes proposed by the state Department of Environmental Protection (DEP) are in the public interest. The new rules have been under development for five years and include separate chapters for the state’s Marcellus Shale play operations and smaller, conventional oil and gas companies. The regulations now face another challenge in the Legislature where energy committees in both the House and Senate are expected to try to block the rules from taking effect. If the Republican-controlled House and Senate pass the resolution, it could be vetoed by Democratic Governor Tom Wolf, who supports the regulations. DEP Secretary John Quigley said he was pleased with the vote. “This validates five years’ worth of tremendous public service by a tremendous group of public servants,” he said. This final regulatory package will improve protection of wa

This past Tuesday there was the annual Upstream PA Seminar.  Dave Spigelmyer, President, Marcellus Shale Coalition, was one of the featured speakers.  Spigelmyer’s comments provided real insight into the situation of the NatGas industry in PA which is very challenging. Spigelmyer’s presentation included this information: There are 8972 unconventional wells in PA 800 shut in 766 drilling not completed 551 inactive 6805 unconventional wells are producing NatGas These wells produce 390 billion cu. ft. of NatGas monthly 5 trillion cu. ft. annually 20% of the total U.S. production The low price of NatGas has resulted in the significant reduction in CAPEX spending. Upstream operators have had major job reductions There has been considerable pressure on the supply chain. Calls for higher taxation and new regulations have eroded investment stability in PA. NatGas production in PA will likely some decline in 2016. Many wells are waiting infrastructure development The Marcellus operators

JKLM has drilled and is producing the 1st ever Utica Well in Potter County, PA.  January results were 9.2 mmcf / day for 24 days, Feb production was 9.8 mmcf / day for 29 days.  This is the Sweden Valley 103 2HU well in Summit Township in Potter County. JKLM is owned by Mr. Terry Pegula, a very successful and well-known operator and ex-CEO of East Resources.  Shell bought out East Resources in 2010 for approx. $4.7 billion.  JKLM has accumulated 100,000+ leasehold acres in Potter County, PA. JKLM currently has five approved well pads in Potter County; 2 in Summit Township, 2 in Sweden Township, and 1 in Ulysses Township with a total of 16 active well permits in place. Shell has found much success in the Northern Utica in Tioga County PA.  Travis Peak is now drilling in Tioga as well.  Seneca Resources has also found success in the Northern Utica in McKean County, PA.  The question is no longer is the Utica present and commercially viable in North Central PA, the question now is

The Halliburton – Baker Hughes deal has experienced a number of delays and setbacks since the deal was announced in November 2014.  Going into the deal, the management of Halliburton recognized that it would have to sell numerous businesses in order to allay the Department of Justice (DOJ) concerns about Halliburton monopolizing oil field services.  DOJ finally sued two weeks to stop the merger. Besides combatting the DOJ, Halliburton had pass muster in Europe.  The EU had raised many monopoly questions and delayed any decision. GE and the Carlyle Group may come to Halliburton’s rescue.  Two weeks ago, there were stories in the press that GE was looking to purchase a number of businesses from a Halliburton – Baker Hughes deal.  Some people in the industry commented that GE may actually have been lobbying DOJ to sue in order to get better leverage. Last Friday, CNBC reported that the Carlyle Group had conversations with Halliburton about purchasing businesses valued at $7 bi

Chesapeake Energy said Monday its banking syndicate reaffirmed the independent producer’s senior secured revolving credit facility’s $4 billion borrowing base, Kallanish Energy learns. To maintain the base, Chesapeake agreed to pledge additional assets as collateral, while the next scheduled borrowing base redetermination review was postponed until June 2017. The amendment includes a collateral value coverage test, which may limit Chesapeake s borrowing capacity if its collateral coverage ratio falls below 1.25 times, tested as of March 31, 2017. The amendment provides temporary covenant relief, with the facility s senior secured leverage ratio suspended until September 2017, then reverting to 3.5 times through December 2017, and decreasing to 3 times thereafter. In addition, the amendment reduces the interest coverage ratio to 0.65 time from 1.1 times through March 2017, after which it will increase to 0.70 times through June 2017, then reverting to 1.2 times in September 2017 an