Oil + Gas Update - De Facto Taking of a Coal Estate in PA, Recording Overrides in Ohio, and Preferential Rights of Working-Interest Co-Tenants in Texas.
Oil prices climbed since our last report while natural gas spot and contract prices dipped alongside a drop in the rig count. The pipeline scene was relatively quiet. In Appalachia court news, the Commonwealth Court concluded that PennDOT's activities that cut off all surface access resulted in a de facto taking of the underlying coal estate while an Ohio federal judge concluded that assignments of overrides are subject to recording statutes. In other regions, parties to a lease must share production costs charged by the lessee's unaffiliated drilling contractor, BLM failed to account for climate change when issuing oil and gas permits, and a working-interest co-tenant who didn't sign a JOA couldn't exercise preferential rights under the JOA to purchase other working interests.
Here's your week in review...
Rig Counts, Spot Prices + Oil Prices
Rigs: National (-1006); Marcellus (65); Utica/Point Pleasant (15)
Brent Crude: +$68.61/bbl
West Texas Intermediate: +$60.83/bbl
NYMEX: The April 2019 Contract expired @ -$2.82/MMBtu. The May 2019 Contract opened @ -$2.719/MMBtu.
Spot Prices: Henry Hub (-$2.66/MMBtu); Dominion South (+$2.41/MMBtu); Tenn. Zone 4 (-$2.36/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 various pipeline projects in Appalachia:
Adelphia Project (Greater Philadelphia Region): Nothing new to report.
Atlantic Coast (W. Va. to Va. and NC): Duke Energy, sponsor of Atlantic Coast Pipeline, says the company needs a "Plan B" if the project fails. Meanwhile, activities have been using single-engine aircraft and drones to search for regulatory violations during pipeline construction activities.
Atlantic Sunrise (Northeastern PA to SE Pennsylvania): Contractors sued Williams for unpaid work on the Atlantic Sunrise Pipeline project.
Constitution (Northeastern PA to NY): Nothing new to report.
Empire Pipeline (NY to PA): Nothing new to report.
Leidy South - Benton Loop Expansion (PA): Nothing new to report.
Mariner East (Western PA to Eastern PA): Partially in response to safety concerns regarding Mariner East pipelines, several legislators introduced a bill to prevent DEP and the PUC from issuing new permits for pipeline construction.
Mountaineer XPress (WV): Nothing new to report.
Mountain Valley Pipeline (Northern WV to Southern Va. and NC): Nothing new to report.
NEXUS (Ohio to Michigan): Nothing new to report.
NFG FM100 Project (NC PA to Transco): Nothing new to report.
Northern Access (NW PA to Western NY): Nothing new to report.
PennEast (PA to Central Jersey): Nothing new to report.
Regional Energy Access (NE PA to PA/NJ): Nothing new to report.
Rover (OH, WV, PA to Michigan): Rover received the green light for tree-clearing activities on several parcels to address environmental and safety concerns associated with soils surrounding parts of the pipeline susceptible to slips (see below for case details).
TransCanada Eastern Panhandle Project (PA to WV): Nothing new to report.
Headlines & Holdings - Appalachia
Rover Pipeline Secures Right to Clear Trees to Prevent Slips. A federal judge in Ohio authorized tree-clearing activities on the pipeline route to address environmental damage and safety issues associated with soil surrounding portions of the pipeline susceptible to slips. Rover Pipeline LLC v. Kanzigg, --- F. Supp. 3d ---, No. 2:17-CV-105, 20