EQT completes $6.6 billion acquisition of Rice Energy

EQT Corp. has completed its acquisition of Rice Energy Inc. following the recent approval of the $6.6 billion deal by EQT and Rice Energy shareholders , reports the Pittsburgh Business Times. The newspaper says the merger of the Pennsylvania-based companies, which operate in the Marcellus and Utica shale plays, creates the largest independent natural gas producer in the country. For more, read the full story.

Ohio, Pennsylvania, West Virginia

Chesapeake boosts production with new well-completion techniques

Chesapeake Energy has been using new well-completion techniques to coax more production from its oil and natural gas holdings in the Utica shale play, according to the Canton Repository. The newspaper says the company reported the new completion techniques improved 120-day Utica well results by 25%, and that Chesapeake plans to continue testing new completion methods in the Utica and Marcellus shale formations. For more, read the full story.

Ohio

DeWine sues Rover Pipeline for discharges into waterways

Ohio Attorney General Mike DeWine has filed suit against Rover Pipeline LLC for alleged illegal discharges into waterways during construction of a natural-gas pipeline across the state, reports the Columbus Dispatch. The newspaper says DeWine's office filed the complaint, State of Ohio v. Rover Pipeline, LLC, in Stark County Common Pleas County in Canton on behalf of the Ohio Environmental Protection Agency. The lawsuit alleges that Rover violated environmental and clean-water laws by discharging drilling fluids and sediment-laden storm water while building the pipeline, according to the Dispatch. For more, read the full story.

Ohio, Oil & Gas Litigation

Energy Transfer Partners closes sale of stake in Rover Pipeline

Business Wire reports that Energy Transfer Partners has announced that its subsidiaries, Energy Transfer Interstate Holdings and ET Rover Pipeline (“HoldCo”), have closed the previously announced sale of a 49.9% interest in HoldCo to Blackstone Energy Partners. As a result of the closing, HoldCo is now owned 50.1% by Energy Transfer and 49.9% by Blackstone. Upon completion, the 713-mile Rover Pipeline will be able to transport 3.25 billion cubic feet of natural gas per day from the Marcellus and Utica shale plays to markets across the United States and in Canada. For more, read the full story.

National, Ohio, Pennsylvania, West Virginia

Chesapeake says Justice Department has dropped probes of royalty, land practices

The U.S. Department of Justice has ended a three-year investigation of Chesapeake Energy Corp.’s oil and natural gas royalty payment and land purchase practices without taking action, according to Reuters. The news service reports that Chesapeake said in a recent securities filing that the Justice Department advised it on September 19, 2017 that it had concluded the probes. The department had subpoenaed documents from the company in 2014 after dozens of landowners and others accused it of short-changing them on royalties for natural gas and other fuels. For more, read the full story.

National, Ohio

South Korean company acquires stake in Eureka Midstream Holdings

Eureka Midstream Holdings LLC, which is focused on the Appalachian oil and natural gas basin, has announced a new ownership structure in which SK Holdings Co. Ltd. of South Korea takes an ownership stake in the company, according to Oil & Gas Financial Journal. The news site says Blue Ridge Mountain Resources Inc., formerly known as Magnum Hunter Resources, has agreed to divest 100% of its equity investment in Eureka Midstream. Blue Ridge had been in an equity partnership in Eureka with Morgan Stanley Infrastructure Inc., which now has entered into a new partnership with SK Holdings. For more, read the full story.

Ohio, Pennsylvania, West Virginia

Federal court upholds approvals for LNG projects

The Associated Press reports that a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit has upheld U.S. Department of Energy decisions approving three projects to export liquefied natural gas (LNG), including Dominion Energy's export terminal in Cove Point, Maryland that will use natural gas from the Marcellus and Utica shale plays. The news service says the Sierra Club was seeking to overturn approvals for Dominion’s terminal as well as ones in Louisiana and Texas, claiming they would increase air and water pollution and contribute to global warming. But the three-judge panel ruled in a unanimous opinion that the Energy Department fulfilled its legal obligations in approving the projects under the National Environmental Policy Act and other laws. For more, read the full story.
 

National, Ohio, Oil & Gas Litigation, Pennsylvania, West Virginia

Federal court grants Chesapeake’s motion in royalty dispute

On October 25, 2017, the federal district court for the Northern District of Ohio issued an opinion in Lutz v. Chesapeake Appalachia, LLC, 4:09-cv-2256 (N.D. Ohio 2017) granting Chesapeake’s renewed partial motion for summary judgment concerning Lutz’s allegation of underpayment of royalties on a producing well. The leases at issue contained the following language: “The royalties to be paid by Lessee are: … on gas … produced from said land and sold or used off the premises … the market value at the well of one-eighth of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale.” After a lengthy procedural history, the district court certified the question to the Ohio Supreme Court of whether Ohio follows the “at the well” rule or the “marketable product” rule in relation to royalty payments. The “at the well” rule states post-production costs of gas are to be shared proportionately by the working interest and royalty owners, while the “marketable product” rule states all post-production costs must be borne solely by the operator.

The Supreme Court of Ohio – in Lutz v. Chesapeake Appalachia, LLC, 148 Ohio. St.3d 524 (2016) – had declined to answer the at-the-well question, holding: “Under Ohio law, an oil and gas lease is a contract that is subject to the traditional rules of contract construction. Because the rights and remedies of the parties are controlled by the specific language of their lease agreement, we decline to answer the certified question.” After that decision, the district court held that the Ohio Supreme Court – under traditional contract construction principles – would apply the “at the well” rule to the leases at issue, and reject application of the “marketable product” rule. This case will likely affect how working interests and royalty interest holders structure oil and gas leases in the future.

Ohio, Oil & Gas Litigation

Company plans to spend $150 million on NGL storage facility in Ohio

Mountaineer NGL Storage has announced plans to spend $150 million — and potentially as much as $500 million — on its proposed natural gas liquids storage facility along the Ohio River near Clarington, Ohio, reports the Times Leader in Martins Ferry. The newspaper says the company hopes to store up to 420 million gallons of ethane, propane and butane in caverns at the site. David Hooker, the company’s managing director, said he expects all environmental permits for the project to be obtained within the first six months of 2018, after which construction can begin. For more, read the full story.

Ohio

Range Resources executive says Appalachian basin can expect lower production

A Range Resources executive says natural gas production in the Appalachian basin cannot continue on its current rapid upward trajectory despite improved drilling and well-completion techniques, Platts reports. Range Senior Vice President Alan Farquharson told the energy news site that Appalachian producers will eventually experience “sweet spot exhaustion,” and will have to turn to tier two and tier three wells resulting in lower productivity per well. For more, read the full story.

Ohio, Pennsylvania, West Virginia
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