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At the Well Weekly (v.11.16.2018)

Oil + Gas Update - Natural Gas Prices Rally and Drop.


Natural gas prices spiked across all indices since our last report followed swiftly by a drop, but they are still holding up alongside falling oil prices and a steady rig count. The pipeline scene is relatively quiet. In Appalachia court news, the Commonwealth Court held that township-sponsored roadwork conducted with oil and gas operators resulting in increased runoff onto landowner property violated state and local storm water requirements and caused damage that the township should pay. In other news, the crabbing industry sued several majors in California for climate change damages, a federal judge in California blocked off-shore drilling permits, and a Texas appellate court held that assignments of mineral interests involve possessory interests subject to a trespass to try title action.


Have a great Thanksgiving. Here's your week in review...


Rig Counts, Spot Prices + Oil Prices


  • Rigs: National (+1082); Marcellus (+58); Utica/Point Pleasant (-17)


  • Brent Crude: -$67.66/bbl


  • West Texas Intermediate: -$57.53/bbl


  • NYMEX: December 2018 Contract +4.837/MMBtu.


  • Spot Prices: Henry Hub (+$4.59/MMBtu); Dominion South (+$4.40/MMBtu); Tenn. Zone 4 (+$4.49/MMBtu)


("+" or "-" or blank denotes increase, decrease, or flat. )


WOPL - Appalachia


In our new section, WOPL ("waiting on pipelines"), we provide the latest news on the status of pipeline projects in Appalachia:


  • Atlantic Coast (W. Va. to Va. and NC): Land-clearing is underway in Cumberland County Va. North Carolina lawmakers voted Wednesday to hire private investigators to look into whether Gov. Roy Cooper’s administration improperly issued a state permit to the Atlantic Coast Pipeline this year on condition of securing a $57.8 million contribution from the energy consortium that’s building the natural gas pipeline. State utility commissions urged FERC to rethink initial shipping rates to avoid overcharges by several pipeline projects, including Atlantic Coast.


  • Atlantic Sunrise (Northeastern PA to SE Pennsylvania): Nothing new since our last report.


  • Constitution (Northeastern PA to NY): Nothing new since our last report.


  • Mariner East 2 (Western PA to Eastern PA): Nothing new since our last report.


  • Mountain Valley Pipeline (Northern WV to Southern Va.): Nothing new since our last report.


  • NEXUS (Ohio to Michigan): Nothing new since our last report.


  • PennEast (PA to Central Jersey): Nothing new since our last report.


  • Rover (OH, WV, PA to Michigan): Nothing new since our last report.


Headlines & Holdings - Appalachia


  • Climate Change Suit Against Majors May Resurface. The City of New York urged the Second Circuit to revive a lawsuit against Exxon, BP, and others to pay for costs of infrastructure damage resulting from climate change. City of New York v. BP PLC et al., No. 18-2188 (2d Cir., November 9, 2018).


  • Township Liable for Roadwork in Violation of SWPA and E&S Regulations. Commonwealth Court recently concluded that a township is responsible for damages in connection with road work conducted per agreement with the Township by oil and gas operators for increased runoff that flowed onto an adjacent landowner’s property, holding that the road work constituted the “alteration or development of land which may affect storm water runoff characteristics” in violation of SWMA and that the township did not obtain required E&S stream-crossings permits under Chapters 102 and 105. Cogan House Township v. Lenhart, --- A.3d ---, No. 1899 C.D. 2017 (Pa. Cmwlth., Nov. 15, 2018).


Headlines & Holdings - Beyond Appalachia


  • Federal Court in California Blocks Approval for Offshore Drilling Permits. A federal court in California held that the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement met their obligations under NEPA in preparing the environmental assessment for off-shore drilling activities but failed to consult with state and federal agencies as required by the Endangered Species Act and Coastal Zone Management Act before issuing the environmental assessment and therefore could not approve offshore drilling permits. Environmental Defense Center et al. v. Bureau of Ocean Energy Management , --- F. Supp. 3d ---, 2018 WL 5919096, No. 2:16-cv-08418 (C.D. Cal., Nov. 9, 2018).


  • Crabbing Industry Sues Majors over Climate Change. The crabbing industry in California and Oregon sued major energy companies in California state court, alleging that climate change resulting from off-shore energy production activities caused crabbers to shut down their off-shore operations. Pacific Coast Federation of Fishermen’s Associations Inc. v. Chevron Corp., No. CGC-18-571285 (pending).


  • TX Court of Appeals Says Trespass to Try Title is Proper Action for Dispute Over Assignment of Mineral Interests. A court of appeal is Texas concluded that a dispute over an assignment of mineral interests involves ownership of the possessory interest in the mineral estates and therefore the proper and mandatory vehicle for resolving those claims is a trespass to try title action. M & M Resources, Inc. and Energy Land Resources v. DSTJ, LLP, DSTJ Corporation and Milestone Operating, Inc., --- S.W.3d ---, No. 09-18-00083-CV (Tex. App., Nov. 15, 2018).