Posts Authored by Aaron M. Bruggeman

Marathon sells Speedway division to 7-Eleven in $21-billion transaction

Plans for Marathon Petroleum to spin off its Speedway division (see our November 12, 2019 blog post) have been realized. Company officials announced the sale of the division “to the parent company of 7-Eleven in a transaction worth $21 billion,” whio.com reports. In a media release, Michael J. Hennigan, president and chief executive officer, said, "[o]ur announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets.” The transaction “was approved unanimously by the boards of directors of both companies,” according to the article. For more, read the full article and full release

National

Pandemic hits oil and gas industry

Oil and gas has been greatly affected by the coronavirus, according to WTOV9. The industry was saved hardships when Governor DeWine considered it “essential” for the lockdown period. However, a drop in demand led to crude oil to trade at a negative price. Workers remained positive and compliant as new safety precautions were implemented for their well-being. However, oil and gas production is expected to rise steadily as the country reopens. For more, read the full article.

Ohio

One-two punch of warm weather, COVID-19 may lead to shale bankruptcies

Natural gas prices “bobbing not far from 25-year lows hit on March 23” as warmer spring weather and COVID-19 pandemic lockdown measures “have slashed commercial demand for heating” has led to major budget changes for exploration and production companies — and bankruptcies may be next, investing.com reports. Gas production in the lower 48 U.S. states averaged 92.92. billion cubic feet per day for the week ending March 27, slightly lower than the previous week. Bankruptcies “are expected to gain momentum in the second quarter, accelerating as some drillers are forced to shut in production amid reduced oil demand and low available storage capacity.” For more, read the full article.

National, Oil & Gas Litigation

Ohio’s natural gas producers shift focus from production to profits

A change is underway for Ohio’s natural gas producers; after focusing on boosting production the past few years, they are now looking at ways to increase profits, the Akron Beacon Journal reports. Jeff Fisher, CEO of Ascent Resources, told attendees at the annual Ohio Oil & Gas Association meeting, “[i]nvestors are demanding that we put growth aside and manage the business with the idea of making profit,” according to the article. Producers have been so successful at boosting production that demand growth “has been phenomenal,” but supply “has been a little more phenomenal,” Fisher said. Matt Hammond, the association’s president, said while he doesn’t expect double-digit production increases to continue, the mood among those at the meeting “remains good.” For more, read the full article.

Ohio

EQT may sell “small portion” of royalties from natural gas production

Pittsburgh-based EQT Corp., the largest independent natural gas producer, “is in talks to have an investor take a 1 percent royalty interest in revenue from natural gas production,” the Pittsburgh Business Times reports. The company’s new management team “has been working to cut drilling costs and improve the company’s financial picture” as the domestic shale industry is experiencing sharp declines, according to the article. EQT said during the third-quarter conference call “it was evaluating ways to monetize its interest in natural gas production.” Then-Interim CFO Kyle Derham said, “[w]e are confident this strategy could generate significant proceeds that can be used to de-lever without a significant impact on development returns.” For more, read the full article.

Pennsylvania

Ohio’s natural gas and oil production jumped again in third quarter of 2019

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management’s quarterly report released in December showed natural gas and oil production in Ohio “jumped up again” in the third quarter of last year, Farm and Dairy reports. Horizontal wells “produced 673,962,146 Mcf, or 673 billion cubic feet, from the beginning of July to the end of September,” a 9-percent increase over second-quarter production. Third-quarter oil production was up 24 percent. The report listed 2,419 horizontal shale wells in production. For more, read the full article.

Ohio

Ohio’s shale industry generated $78B in investment over the past decade

The Utica and Marcellus shale formations “account for more than 85 percent of U.S. shale gas production growth since 2011,” and a recent JobsOhio report finds proximity to them in eastern Ohio “is the greatest contributing factor to the tens of billions” of investment dollars plugged into the state’s economy during the past decade, according to an Akron Legal News editorial. The JobsOhio report, a byproduct of a Cleveland State University study, covers investment through 2018 and finds total investment in Ohio’s shale energy sector “has reached $78 billion since tracking began in 2011,” according to the article. Energy officials “expect an uptick in midstream and downstream investment for the near-term given the billions of dollars in projects” in late planning stages or that have broken ground as of 2019. For more, read the full article.

Ohio

Commission that oversees fracking to recommend changes to law

Ohio Oil and Gas Leasing Commission members are recommending changes in state law “governing fracking on public land and the size and operations of the commission,” The Columbus Dispatch reports. The Ohio Department of Natural Resources (ODNR) staff proposed changes and presented them to the commission, which includes ODNR Geological Survey Division Chief Mike Angle, “two members representing oil and gas interests, attorneys Matt W. Warnock and Michael W. Wise,” former Ohio EPA director Richard Shank representing the environment, and a public representative, former state Bureau of Workers’ Compensation CEO Steve Buehrer.

Proposed changes include ensuring “there are no conflicts of interest involving commission members when it comes to mineral rights,” adding members to the commission, and clarifying language “to allow state agencies to make lease stipulations,” among others. There are 2,142 wells on or beneath public property in Ohio; 64% of them are active, including 503 in wildlife areas, 31 in state parks, 20 in preserves and 10 in state forests. For more, read the full article.

Ohio

Marathon Petroleum executives resist idea to split company

Marathon Petroleum CEO Gary Heminger and Greg Goff, one of the company’s directors, recently assured employees “the company intends to continue as a diversified oil and gasoline company” in response to a New York hedge fund’s recommendation to break Marathon into three companies, the Akron Beacon Journal reports. Findlay-based Marathon operates a refinery in Canton and is the “majority owner in a partnership that operates MPLX, an oil and natural gas gathering network with operations in Stark County and the Utica Shale.”

Elliott Management, which owns 2.5% of Marathon’s stock, said it believes Marathon would be more valuable if the company split into three businesses: Speedway gas and convenience stores, a refining operation, and MPLX as a standalone “midstream business moving oil and natural gas from wells to refineries and processors.” For more, read the full article.

National

Cabot to sell stake in Meade Pipeline Company

Houston-based Cabot Oil & Gas Corp. has reached an agreement to sell its 20 percent stake in Meade Pipeline Co. to NextEra Energy Partners for $256 million, the Pittsburgh Business Times reports. Cabot’s regional headquarters is based in Pittsburgh; Meade “carries Marcellus Shale gas on the Atlantic Sunrise in eastern Pennsylvania,” and is “30 percent owner of the Central Penn Line, a 185-mile segment of the Atlantic Sunrise pipeline,” according to the article. The deal is expected to close by the end of this year. For more, read the full article.  

National, Pennsylvania
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