Pennsylvania, a.k.a. Penn’s Woods, is roughly 60 percent forest, with the largest unbroken block of trees spanning the state’s north central region. …read more
Source: FULL ARTICLE at Phys.org
Pennsylvania, a.k.a. Penn’s Woods, is roughly 60 percent forest, with the largest unbroken block of trees spanning the state’s north central region. …read more
Source: FULL ARTICLE at Phys.org
By Matt DiLallo, The Motley Fool
Filed under: Investing
When an oil and natural gas exploration company books its energy reserves, it’s really using its best guess based on the currently available data. As with most guesses based on limited data, they tend not to be as accurate as we’d like. Sometimes that’s a good thing, as in the case of our nation’s future natural gas supply.
A recent study by the Potential Gas Committee shows that the U.S. now has 26% more recoverable gas than the group estimated we had at the end of 2010. The total now comes to 2,383.9 trillion cubic feet, or Tcf. That’s really good news both for producers and for current and future end users.
Thanks to the Marcellus Shale, the Atlantic portion of the country has the highest ceiling, at an estimated 741.3 Tcf of recoverable natural gas. That means decades of production coming from the likes of Range Resources and Chesapeake Energy , which have large acreage positions in the Marcellus and in the region as a whole.
Chesapeake is already the nation’s second largest natural gas producer. The company pumps out 4% of our total production, and if gas prices rise, it has the potential to produce even more gas in the future. The company is the largest leaseholder in both the Utica, at 1 million net acres, and the Marcellus, at 1.8 million net acres. If gas prices are high enough, Chesapeake has plenty of room to expand its drilling budget and increase its production.
Range Resources, which was the top producer in the Marcellus last year, also has a large acreage position in the play. The company has 700,000 net acres in the Marcellus as well as another 231,000 net acres in its Southern Appalachia division. Overall, the company believes it controls 54 Tcfe of resource potential in its acreage just in the Atlantic potion of the country. As one of the lowest-cost producers of natural gas in the country, Range can profit even in a low-price environment.
Knowing that we have a larger supply of natural gas is great; however, it won’t do a whole lot for profits if prices don’t head higher. The good news here is that more demand is on the way. Overall, there should be enough room so that everyone can profit as more natural gas comes out of the ground.
One area to watch is liquefied natural gas exports. Currently, Cheniere Energy is first in line to begin exporting natural gas. Its Sabine Pass terminal is scheduled to come online in 2015. There’s a boatload of projects in various stages of the approval process that would like to join Cheniere.
The problem here is that chemical companies such as Dow Chemical have vowed to vigorously fight an increase in natural gas exports. With more than $4 billion in projects coming online over the next few years that use natural gas as a feedstock, you can understand why the company wants the
From: http://www.dailyfinance.com/2013/04/14/the-us-natural-gas-supply-just-got-26-larger/
By Business Wirevia The Motley Fool
Filed under: Investing
Range Announces First Quarter Production Results
Production Grows 34% Quarter Over Quarter
FORT WORTH, Texas–(BUSINESS WIRE)– RANGE RESOURCES CORPORATION (NYSE: RRC) today announced that its first quarter 2013 production volumes reached a record high of 876 Mmcfe per day, a 34% increase over the prior-year quarter. Production was 79% natural gas, 14% natural gas liquids (“NGLs”) and 7% crude oil and condensate. Year-over-year oil and condensate production increased 52%, NGL production rose 22%, while natural gas production increased 34%. The record production was driven by the continued success of the Company’s drilling program primarily in the Marcellus Shale. First quarter production of 876 Mmcfe per day exceeded the high end of guidance of 845 – 850 Mmcfe per day due to the timing of turning wells to production.
The Company also announced its preliminary first quarter 2013 natural gas, NGLs and oil price realizations (including the impact of cash-settled hedges and derivative settlements which would correspond to analysts’ estimates) averaged $5.06 per mcfe, a 3% decrease from the prior-year period. Production and preliminary realized prices by each commodity for the first quarter were: natural gas – 689 Mmcf per day ($4.09 per mcf), NGLs – 20,994 barrels per day ($35.29 per barrel) and crude oil and condensate – 10,141 barrels per day ($85.46 per barrel). Third-party transportation, gathering and compression fees are expected to average approximately $0.80 per mcfe for the first quarter due to added transportation costs applicable to higher than expected production volumes from the Marcellus Shale.
Commenting on the announcement, Jeff Ventura, Range’s President and CEO, said, “We are off to a terrific start with our first quarter production results. We are well on track to achieve our production growth target of 20% to 25% for 2013. More importantly, we believe that we have line-of-sight production growth of 20% to 25% for many years. This growth will be led by our approximately one million net acre leasehold position in Pennsylvania. The strong growth, coupled with high returns, low cost and low reinvestment risk will drive substantial per share value for years to come.”
The information in this release is unaudited. Final results, including final first quarter 2013 product price realizations (including the impact of cash-settled hedges and derivative settlements) and costs will be provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 currently planned to be filed with Securities and Exchange Commission by the end of April 2013.
From: http://www.dailyfinance.com/2013/04/11/range-announces-first-quarter-production-results/
By Matt DiLallo, The Motley Fool
Filed under: Investing
Every so often you’re introduced to a company that’s doing something unique. It’s blazing new trails to form an industry that’s solving a real problem. What’s even better is that the problem that’s being solved involves a multibillion dollar industry that’s still just getting started.
You see, the energy industry has an image problem because it has a water problem. The industry requires millions of gallons of water to frack one oil and gas well. Once produced, that water represents a fairly significant environmental risk, which is one reason why so many people are opposed to fracking in the first place.
Heckmann enters the equation as the environmental services company that offers a full-cycle solution for the management of water. It has the plan, and the assets to help mitigate many of the risks involved in fracking. As you take a look at the chart below, notice how Heckmann handles the water from delivery to disposal:
Source: Heckmann investor presentation
What differentiates Heckmann, and is also the driving force behind my personal investment, is the company’s strength in recycling that leads to less disposal. Before we tackle the all-important recycling component of Heckmann’s solution, let’s drill down a bit into looking at disposal wells.
In the slide above you’ll notice that Heckmann owns 46 wastewater disposal wells. Disposal wells have come under increasing scrutiny of late because it’s suspected that they are behind increased seismic activity. That’s a real problem for the industry, and the evidence is compelling. For example, one area that’s seen increased seismic activity is Ohio which would seem to correspond to the increased activity of the Utica Shale.
While the data is by no means conclusive, it is a risk that bears watching. A variety of companies are drilling these disposal wells, with master limited partnerships like Crosstex Energy being one of the many to watch. The company owns an interest in seven disposal wells in Ohio and West Virginia with another well coming on line soon. These wells are designed to simply dispose of the wastewater. Even if the wells prove not to be the cause, the business of owning disposal wells could be tougher to grow because of the perceived risk.
Not only are there increased risks but this wastewater disposal infrastructure doesn’t come cheap. SandRidge Energy , for example, has spent more than $450 million to build out a disposal system in the Mississippian Lime formation. The company has constructed 700 miles of pipeline and has 116 active disposal wells.
Heckmann, however, takes a different approach with a renewed focus on recycling the produced water. It owns an interest in a Marcellus Shale wastewater recycling facility and it’s in the process of expanding its treatment and recycling capabilities so that less produced water is being disposed of and more is being reused. While few would believe that the fracking process can become greener, that’s exactly what Heckmann is trying to accomplish.
As it works
Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
MarkWest Energy Partners Announces Release Date for First Quarter 2013 Financial Results
DENVER–(BUSINESS WIRE)– MarkWest Energy Partners, L.P. (NYS: MWE) will announce first quarter 2013 financial results after market close on Wednesday, May 8, 2013, and will host a conference call to discuss the results at 12:00 p.m. ET on Thursday, May 9, 2013.
The conference call can be accessed by dialing (800) 475-0218 (passcode “MarkWest”) or via webcast by accessing the “Investor Relations” page of the MarkWest website at www.markwest.com.
A replay of the conference call will be accessible on the MarkWest website or by dialing (888) 402-8736 (no passcode required).
MarkWest Energy Partners, L.P. is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the gathering and transportation of crude oil. MarkWest has a leading presence in many unconventional gas plays including the Marcellus Shale, Utica Shale, Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formation.
This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although MarkWest believes that the expectations reflected in the forward-looking statements are reasonable, MarkWest can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed with the SEC, including MarkWest’s Annual Report on Form 10-K for the year ended December 31, 2012. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” MarkWest does not undertake any duty to update any forward-looking statement except as required by law.
MarkWest Energy Partners, L.P.
Frank Semple, 866-858-0482
Chairman, President & CEO
or
Nancy Buese, 866-858-0482
Senior VP & CFO
or
Josh Hallenbeck, 866-858-0482
VP of Finance & Treasurer
investorrelations@markwest.com
KEYWORDS: United States North America Colorado
INDUSTRY KEYWORDS:
The article MarkWest Energy …read more
Source: FULL ARTICLE at DailyFinance
By Raphael Bostic, Contributor Did you happen to notice the stories a few weeks ago about the pact between environmentalists and industry on fracking guidelines?(http://www.csmonitor.com/Environment/Energy-Voices/2013/0321/Energy-firms-environmentalists-agree-on-fracking-standards ) They reported on a new mutually agreed upon set of voluntary standards for “responsible” extraction of oil and gas from the Marcellus Shale formation in the Appalachians. …read more
Source: FULL ARTICLE at Forbes Latest
By Business Wirevia The Motley Fool
Filed under: Investing
Range Announces Redemption Notice of 7.25% Senior Subordinated Notes Due 2018
FORT WORTH, Texas–(BUSINESS WIRE)– RANGE RESOURCES CORPORATION (NYSE: RRC) announced today that it has called for redemption all $250 million in outstanding principal of its 7.25% Senior Subordinated Notes due 2018 (CUSIP No. 75281AAJ8) at a price of 103.625% of the unpaid principal amount plus accrued interest. The notes will be redeemed on May 2, 2013. Call notices for this issue were sent by The Bank of New York Mellon Trust Company, N.A., the trustee for the notes, to all noteholders.
RANGE RESOURCES CORPORATION (NYSE: RRC) is one of the leading independent oil and natural gas producers in the US. Its operations are primarily focused in the Marcellus Shale in Appalachia and liquids-rich areas of the Southwest. The Company is the largest natural gas liquid producer in Appalachia. The Company pursues an organic growth strategy at low finding costs by targeting the highest rate of return projects within its large inventory of low risk, development drilling opportunities. The Company is headquartered in Fort Worth, Texas. More information about Range can be found at www.rangeresources.com and www.myrangeresources.com.
Range Resources Corporation
Investor Contacts:
Rodney Waller, 817-869-4258
Senior Vice President
or
David Amend, 817-869-4266
Investor Relations Manager
or
Laith Sando, 817-869-4267
Research Manager
or
Michael Freeman, 817-869-4264
Financial Analyst
or
Media Contact:
Matt Pitzarella, 724-873-3224
Director of Corporate Communications
KEYWORDS: United States North America Texas
INDUSTRY KEYWORDS:
The article Range Announces Redemption Notice of 7.25% Senior Subordinated Notes Due 2018 originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
WPX Energy to Host May 2 Webcast
TULSA, Okla.–(BUSINESS WIRE)– WPX Energy (NYS: WPX) plans to report its first-quarter 2013 financial and production results before the market opens on Thursday, May 2.
Management will discuss the results and provide an update on the company’s operations during a webcast starting at 10 a.m. Eastern on the same day. Participants are encouraged to access the event and the corresponding slides at www.wpxenergy.com.
A limited number of phone lines also will be available at (866) 515-2907. International callers should dial (617) 399-5121. The conference identification code for both phone numbers is 99483783.
A replay of the first-quarter webcast will be available on WPX‘s website for one year following the event. Interviews with WPX‘s management about the company’s strengths, innovations and efficiencies also are available at www.wpxenergy.com.
About WPX Energy, Inc.
WPX Energy is an exploration and production company focused on developing its significant oil and gas reserves, particularly in the liquids-rich Piceance Basin, the Bakken and Three Forks oil shales and the Marcellus Shale. WPX also has domestic operations in the San Juan and Powder River basins, as well as a 69 percent interest in Apco Oil and Gas International. Go to http://www.wpxenergy.com/investors.aspx to join our e-mail list.
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the …read more
Source: FULL ARTICLE at DailyFinance
By Tyler Crowe, The Motley Fool
Filed under: Investing
Several major integrated oil and gas companies are in a rough spot — they just can’t seem to meet production goals. In 2013, ExxonMobil expects total production to decline by about 1%, and it isn’t the only one hurting. The one distinct advantage these big oil companies have is a mountain of cash to buy a company or two. It is the fastest way to get a boost in production without rolling the dice on a new speculative play.
The one risk a company has with an acquisition is that it could overpay for the asset, and then the production gains would be offset by the price tag. Let’s take a look at a simple calculation that can help evaluate the value of a company, and then see what natural gas companies could be had for a deep discount.
Getting bang for your buck
While there are certainly some very complicated methods for evaluating an energy company, a quick and dirty method is to see how the enterprise value of the company (all equity and debt minus cash) compares to the total proved reserves on the company’s books. For example, when BHP Billiton bought independent gas company Petrohawk back in 2011, it paid $12.1 billion for a company that had 3.4 trillion cubic feet of natural gas in proven reserves. This means that the company paid about $3.55 per thousand cubic feet of natural gas for the company’s reserves. Based on an S&P Capital IQ screen of exploration and production companies with a total enterprise value of $1 billion-$15 billion, an average company in this space would have an enterprise value per thousand cubic feet equivalent of $6.65. So based on this metric, its seems as though BHP got a pretty good deal.
Since oil and gas price spreads have deviated so far from a BTU-equivalency basis, its not as effective to use this metric when evaluating oil-heavy companies. If you want to do your own calculations, be sure to use per-barrel oil equivalency for oil-heavy companies. Also, If you want to see a couple liquids-heavy assets that could be acquisition targets, click here. Based on this calculation, here are three natural gas companies trading at a deep discount:
Ultra Petroleum
Ultra certainly hasn’t seen any love lately. Natural gas prices have fallen, and so has the share price of Ultra. Despite being one of the low-cost producers in the space, Ultra has an enterprise value per thousand cubic feet equivalent of about $1.67. Not only is the company valued much lower than its peers, but it’s value is less than half of what a thousand cubic feet of natural gas trades for at the Henry Hub spot price.
What is even more surprising about this low price tag is that the company may be sitting on much, much more gas than what is on its proven reserves. The company has just barely begun to tap its 260,000 acres in the Marcellus Shale, …read more
Source: FULL ARTICLE at DailyFinance
By Aimee Duffy, The Motley Fool
Filed under: Investing
The Energy Information Administration, or EIA, announced earlier this week that there were only 367 miles of natural gas pipelines built across the U.S. last year. As demand for natural gas climbs, keeping up our infrastructure is incredibly important. Today I’ll take a closer look at what investors really need to pay attention to when it comes to building out our pipeline network.
A brief construction history
Over the past 15 years, we’ve built a considerable amount of natural gas pipeline. Construction really dropped off last year, however, after a massive build out in 2008 and 2009:
Source: EIA
In 2011, we spent nearly $10 billion adding just shy of 2,500 miles of new pipeline. With the exception of six projects smaller than 100 miles each, that construction occurred outside of the Northeast region.
Though we built less than 400 miles of pipeline in 2012, most of that construction was in the Northeast, a region that is particularly wanting for infrastructure as production booms in the Marcellus Shale.
The more important number
This year, the EIA expects operators to bring on line more than 1,000 miles of natural gas pipeline projects. More importantly, capacity additions should reach 15 billion cubic feet per day, after failing to crack 5 bcfd in 2012.
It is important to distinguish between capacity and miles when we attempt to reconcile this construction growth. Capacity can be added by increasing pressure at compressor stations, or more obviously, by using bigger pipes. Taking a look at our next two charts really hammers home this point.
First we have the number of miles constructed in the Northeast from 1997 to proposed miles in 2015:
Source: EIA
Far and away the biggest growth year was 1999. Now let’s look at capacity additions over the same period:
Source: EIA
Right away the difference is striking. There is very little correspondence between miles constructed and capacity added. The easiest comparison to make is between 2012 and 2013. Construction miles in the Northeast are expected to increase slightly this year, but capacity will jump through the roof.
Why this matters
Our world is full of numbers, but not all of them matter. In the pipeline game, capacity and connections to valuable markets are much more important than mileage.
Take for example, Enterprise Products Partners‘ ATEX Express pipeline. It’s a long line that will travel from the Marcellus Shale down to the Gulf Coast, and it will certainly increase the company’s overall mileage statistics, but that doesn’t matter at all. What matters is that it will add 190,000 barrels per day of capacity to a region that desperately needs it. Chesapeake Energy has gone on record saying that it will not increase its liquids production in the Marcellus until this pipe comes on line. Range Resources is also counting on the project to deliver production to the Gulf.
Foolish takeaway
Whether or not …read more
Source: FULL ARTICLE at DailyFinance
By Aimee Duffy, The Motley Fool
Filed under: Investing
Last week, the Energy Information Administration, or EIA, reported that Pennsylvania‘s natural gas production climbed an astounding 69% between 2011 and 2012. The state sits above the Marcellus Shale, and exploiting that formation has likely catapulted Pennsylvania into the ranks of the top five natural gas producing states. Let’s take a closer look at this story, and what opportunities it may provide for investors.
Rapid growth
Pennsylvania‘s transformation from gasless laggard to methane monster happened seemingly overnight. In 2008, the state produced less than 1 billion cubic feet per day (bcfd) of natural gas. That was the first year producers started drilling horizontal wells in meaningful numbers. The results are impressive:
Source: EIA
In a mere four years, Pennsylvania‘s natural gas production has climbed from 1.0 bcfd to reach 6.1 bcfd in 2012. You can see how much of an impact shale drilling has had, given the rapid decline of non-horizontal wells in blue, and the corresponding rise of horizontal wells in brown.
Perhaps the more important take away from the graph above, is that this growth came at a time when drilling slowed overall. Between 2011 and 2012, there were about 750 fewer wells drilled, yet production increased 69% over that same period. Let’s take a look at how this happened, and at two key opportunities that came out of it for investors.
Fewer rigs, but more gas?
There are two reasons that drilling rig counts dropped but production increased. The first is that because of a lack of pipeline capacity in the Marcellus, many rigs were drilled and never turned on. Capacity grew in 2012, and will grow even more in 2013, and again in 2014. This will allow producers to move more gas, which should drive the price up, much the way additional pipeline capacity in Texas has boosted the price of oil.
The second reason is that producers are much more efficient at drilling wells now. Improved techniques contribute to not only shorter drilling times, but higher production rates per well. The average horizontal well drilled in the Marcellus costs about $3 million-$4 million. Obviously, any company that improves drilling efficiency has the opportunity to cut costs as well.
Companies to consider
Given what we know about what is behind the growth in Pennsylvania, it makes sense to search for pipeline operators and efficient drillers in the Marcellus Shale. Here are four companies to get your research started:
By Alex Planes, The Motley Fool
Filed under: Investing
Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Chesapeake Energy fit the bill? Let’s take a look at what its recent results tell us about its potential for future gains.
What we’re looking for
The graphs you’re about to see tell Chesapeake’s story, and we’ll be grading the quality of that story in several ways:
What the numbers tell you
Now, let’s take a look at Chesapeake’s key statistics:
CHK Total Return Price data by YCharts
|
Passing Criteria |
3-Year* Change |
Grade |
|---|---|---|
|
Revenue growth > 30% |
59.9% |
Pass |
|
Improving profit margin |
130.5% |
Pass |
|
Free cash flow growth > Net income growth |
165.5% vs. 83.9% |
Pass |
|
Improving EPS |
84.7% |
Pass |
|
Stock growth + 15% < EPS growth |
(19.3%) vs. 84.7% |
Pass |
Source: YCharts. * Period begins at end of Q4 2009.
CHK Return on Equity data by YCharts
|
Passing Criteria |
3-Year* Change |
Grade |
|---|---|---|
|
Improving return on equity |
86.7% |
Pass |
|
Declining debt to equity |
(29.2%) |
Pass |
|
Dividend growth > 25% |
16.7% |
Fail |
|
Free cash flow payout ratio < 50% |
4.2% |
Pass |
Source: YCharts. * Period begins at end of Q4 2009.
How we got here and where we’re going
I have to admit to surprise at Chesapeake’s near-flawless performance. With a free cash flow payout ratio this low, there’s easily room to push the dividend higher and earn a perfect score — but there are a few major roadblocks that might prevent Chesapeake from making progress on these metrics through the rest of 2013. Let’s take a look at what Chesapeake faces this year as it struggles to regain profitability (positive momentum from a big 2009 hole notwithstanding).
It’s been half a year since I examined Chesapeake with two fellow Fools, and as the lone dissenter in our decision to place an outperform call on its stock, I’ve watched with some interest as Chesapeake’s struggled to regain the ground it’s lost since 2008. The company’s planned asset sales were already well-known at the time, and those have pushed free cash flow up quite a bit in the latter half of 2012. This year, we’ve already seen Sinopec pick up some of Chesapeake’s Mississippi Lime assets at fire-sale prices, which doesn’t say much for either the value of the rest of Chesapeake’s assets or for the wisdom of its earlier acquisition strategy.
Further sales now run the risk of reversing cash flow gains as the company may need to divest its more productive assets. A sale of Marcellus Shale leases, as my fellow Fool Arjun Sreekumar points out, …read more
Source: FULL ARTICLE at DailyFinance
By Tyler Crowe and Aimee Duffy, The Motley Fool
Filed under: Investing
With so many moving parts to big integrated oil and gas companies, it can be hard to see what makes them tick. A decent indication of what they are about is shown by how the company expects to grow production, and this is why Fool.com contributor Tyler Crowe thinks Chevron is the leader of the pack. With a strong push into production in the Permian Basin and Marcellus Shale in the U.S., courting Venezuela to increase its footprint in the oil giant’s reserves, and betting on the success of liquefied natural gas in the Asia-Pacific region, Chevron is pursuing stabler endeavors than some other oil and gas majors.
Today, Tyler talks with fellow Fool contributor Aimee Duffy about how these prospects could provide a solid growth strategy for a company that is looking to increase its production by 20% in the next four years.
There are many different ways to play the energy sector, and The Motley Fool’s analysts have uncovered an under-the-radar company that’s dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: “The Only Energy Stock You’ll Ever Need.” Don’t miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report — it’s totally free.
The article Is Chevron the Best in Big Oil? originally appeared on Fool.com.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. you can follow them both on Fool.com under the handles TMFAimeeD and TMFDirtyBird, respectively.
The Motley Fool recommends Chevron and Total. The Motley Fool owns shares of Apache. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Source: FULL ARTICLE at DailyFinance
By Business Wirevia The Motley Fool
Filed under: Investing
MarkWest Utica EMG Announces Definitive Agreements with PDC Energy and Provides Update to Utica Development Plans
DENVER–(BUSINESS WIRE)– MarkWest Utica EMG, L.L.C. (MarkWest Utica EMG), a joint venture between MarkWest Energy Partners, L.P. (NYS: MWE) (MarkWest) and The Energy and Minerals Group (EMG), today announced definitive agreements with PDC Energy, Inc. (NAS: PDCE) (PDC) to provide gathering, processing, fractionation, and marketing services in the Utica Shale.
MarkWest Utica EMG expects to begin gathering and processing PDC‘s liquids-rich gas production from Guernsey County, Ohio by the end of the second quarter of 2013. Initial production from PDC‘s Utica operations will be processed at the Cadiz complex located in Harrison County, Ohio. In the second half of 2013, PDC‘s gas will be transported via MarkWest Utica EMG’s high-pressure rich-gas header system to the Seneca complex located in Noble County, Ohio for processing. In addition to developing high-quality gathering and processing infrastructure on behalf of PDC, during the first quarter of 2014 MarkWest Utica EMG and MarkWest are expected to complete the installation of 100,000 barrels per day of C2+ fractionation capacity in Harrison County, Ohio that will include extensive marketing access by truck, rail, and pipeline. When completed, MarkWest Utica EMG and MarkWest will have the largest processing and fractionation capacity in the Utica Shale. The fractionation facility will also be connected by an NGL pipeline to MarkWest’s extensive NGL infrastructure in the Marcellus Shale and to its Houston, Pennsylvania complex, the largest fractionation and marketing facility in the Northeast. The large-scale and fully-integrated midstream system will provide significant flexibility and redundancy for PDC and other producer customers operating in the core liquids-rich area of the Utica Shale.
In just over nine months, MarkWest Utica EMG has announced long-term, fee-based agreements with four major producers operating in the core of the hydrocarbon-rich area located in the southern portion of the Utica Shale play including Gulfport Energy Corporation (Gulfport), Antero Resources (Antero), Rex Energy Corporation (Rex), and PDC. These producers will have access to MarkWest Utica EMG’s fully-integrated midstream system extending throughout a multi-county area in eastern Ohio. MarkWest Utica EMG currently has 60 MMcf/d of refrigeration processing capacity available at the Cadiz complex and, during the second quarter of 2013, will begin operation of its 125 MMcf/d Cadiz I cryogenic processing facility. The 185 MMcf/d of combined processing capacity at the Cadiz complex is expected to provide the needed capacity to support the 2013 drilling plans of anchor tenants Gulfport and Antero, in addition to Rex, PDC and other producer customers. MarkWest Utica EMG expects …read more
Source: FULL ARTICLE at DailyFinance
By Matt DiLallo, The Motley Fool
Filed under: Investing
We are in the midst of an energy revolution like we never dreamed possible. Trapped beneath our great country are vast oil and gas resources that we’re still learning how to access. Our oil and gas production is expected to grow rapidly over the coming decade; as it does, three tiny energy companies have the potential for very big futures.
Just the Bakken, please
Weighing in at an enterprise value just shy of $4 billion, Kodiak Oil & Gas is the largest company on this list but a real runt when compared to more well-known energy companies. The company is almost solely focused on oil and gas production in the Bakken, which has helped it to grow its production at an unbelievable rate. In fact, from 2011 to 2012 it grew production by a staggering 270% and it’s projected to double production again this year. To get there, the company is planning to spend nearly $750 million to drill 75 new wells.
With an inventory of more than 950 future wells, Kodiak still has a huge growth runway ahead. This is especially true when you consider the company currently has just 125 wells. With its shares up more than 300% over the past five years, its returns over the next five could be even better. If you want to invest in the growth of the Bakken, Kodiak is certainly worth a deeper look.
I’ll take the Marcellus, with a side of Utica
If you thought Kodiak was small, tiny Rex Energy weighs in at an enterprise value of just over a billion dollars. Don’t let its small size fool you: This energy underdog could grow up to be a top dog someday. Its operations are mainly focused on the Marcellus Shale, with emerging growth coming from the Utica Shale. Since 2009 the company has grown its production by a compound annual rate of 50%.
Rex is planning to spend about $250 million to grow production over the next year and expects to see those funds to yield a 30%-40% boost in production. The big story here is that the growth will be in the all-important liquids department — overall liquids growth will come in at 70%, with oil and condensate growth coming in at 55% of that. If you want to stake your claim to the potential growth in the Marcellus and Utica, then Rex Energy is a name you want to get to know.
I want it all, and I want the Eagle Ford too!
The final name on my list is Magnum Hunter Resources . With an enterprise value of around $1.5 billion, it’s around the same size as Rex, however, there’s a much bigger story at Magnum Hunter. What’s intriguing here is the company has acreage in the Bakken like Kodiak, and has its own Marcellus and Utica Shale positions like Rex, but it really goes over the top with further diversification …read more
Source: FULL ARTICLE at DailyFinance
By Arjun Sreekumar, The Motley Fool
Filed under: Investing
Following a recent joint venture agreement with Chinese oil company Sinopec , Chesapeake Energy is back to contemplating which asset it will part with next, as the company seeks to plug a sizable funding gap.
Last month, the ailing natural gas producer announced that it would sell half its interest in some 850,000 of its net leasehold acres in the Mississippi Lime to Sinopec. The metrics of the deal came as a major disappointment, with Chesapeake set to receive less than $2,400 per acre for its assets – less than a third of what the company said the land was worth in a presentation last year.
With that deal wrapped up, Chesapeake is hoping for more favorable terms on future asset sales. The company’s onerous debt situation, which has pushed its cost of capital higher, makes it all the more urgent to whittle down its funding gap as quickly as possible.
Looking ahead, Chesapeake could sell parts of its undeveloped acreage in plays such as the Eagle Ford, the Utica, the Marcellus, the Haynesville, and the Powder River/DJ Basin. Let’s take a closer look at which of these assets might be next to go.
Potential gassy assets up for sale
Analysts at JP Morgan upgraded Chesapeake in January, suggesting that the company may have another major asset sale opportunity “up its sleeve.” In a research note, the bank highlighted the company’s Marcellus and Haynesville assets as prime candidates for divestiture.
In the gassy Haynesville Shale play of northwest Louisiana and East Texas, Chesapeake holds the title of largest leaseholder, with roughly 530,000 net acres, of which 195,000 net acres are prospective for the Bossier Shale, a formation that lies directly above the Haynesville.
And in the Marcellus Shale, Chesapeake is also the largest leasehold owner with 1.8 million net acres under its belt. The majority of this acreage – about 1.5 million – is in the northern dry gas portion of the play, while the remaining acreage is in the southern “wet gas” portion of the play. The company currently has five rigs operating in the dry gas portion and three rigs operating in the wet gas portion.
Experts think Marcellus assets next to go
In considering future asset sales, it would make more sense for Chesapeake to part with a large block of undeveloped acreage, since selling producing acreage by itself would not only lead to a sharp reduction in cash flow, but also wouldn’t be accretive to multiples, according to a recent note by TPH Energy Research.
Given these criteria, TPH analysts believe the Marcellus is likely to be the next gassy asset to go. They estimate that Chesapeake’s acreage in the Marcellus could fetch $8 billion before tax or $6.4 billion after tax. While this would cover the company’s funding gap for the year, it would have negative consequences for Chesapeake’s cash flow and aggregate production.
TPH estimates that a sale of Chesapeake’s Marcellus assets would lower 2013 cash flow by …read more
Source: FULL ARTICLE at DailyFinance