At the Well Weekly (v.3.29.2019)

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