At the Well Weekly (v.5.15.2020)

Oil + Gas Update - Texas Supremes Address ORRIs, PA Supremes Poised to Decide O+G Lease-Busting Case, and Army Corps NWP Goes Down.

After a few weeks off we're back at the well. The rig count declined since our last report along with natural gas prices even though oil prices rebounded. In pipeline news, a federal judge knocked out an Army Corps nationwide permit for pipeline projects, causing considerable uncertainty for many pipeline projects until the appeal process plays out, while NY and NJ (not surprisingly) denied water quality certifications for a Transco pipeline expansion project. In Appalachia, lease expiration issues emerged as the Pennsylvania Supreme Court agreed to hear a case involving oil and gas lease abandonment/expiration followed by a Superior Court decision rejecting a lease-busting attempt by lessors who ratified their lease. In other news, the Texas Supreme Court addressed the interplay between overrides and the rule against perpetuities.

Here's a roundup of the last several weeks...

Rig Counts, Spot Prices + Oil Prices

  • Rigs: National (-339); Marcellus (30); Utica/Point Pleasant (8)

  • § Brent Crude: +$33.97/bbl

  • § West Texas Intermediate: +$31.97/bbl

  • § NYMEX: June 2020 @ -$1.616/MMBtu.

  • Spot Prices: Henry Hub (-$1.56/MMBtu); Dominion South (-$1.18/MMBtu); Tenn. Zone 4 (-$1.07/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): FERC denied rehearing requests by environmental groups challenging the PA-DE expansion project.

  • Atlantic Coast (W. Va. to Va. and NC): Nothing new to report.

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

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

  • Empire Pipeline (NY to PA): National Fuel Gas and its sub Empire Pipeline filed their brief in the Second Circuit regarding Section 401 certifications (see below for more details).

  • Leidy South - Benton Loop Expansion (PA): Nothing new to report.

  • Mariner East (Western PA to Eastern PA): Nothing new to report.

  • Mountaineer XPress (WV): Nothing new to report.

  • Mountain Valley Pipeline (Northern WV to Southern Va. and NC): The Mountain Valley Pipeline is still targeting a completion date of late this year despite the setback regarding the Army Corps nationwide permit.

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

  • NFG (PA): Nothing new to report.

  • NFG FM100 Project (NC PA to Transco): Nothing new to report.

  • Northeast Supply Enhancement Project (NJ/NY): NY and NJ both denied a Section 401 water quality certification for the $1 billion Transco Northeast Supply Enhancement Project sponsored by Williams.

  • Northern Access (NW PA to Western NY): Nothing new to report.

  • Norther Supply Access Project (Appalachia to Gulf Coast): FERC approved a partial vacancy of a 2016 authorization granted to Texas Gas Transmission for a natural gas pipeline expansion after Texas Gas filed a motion requesting the vacancy for part of its Northern Supply Access Project to flow gas from the Marcellus shale in Appalachia south towards the Gulf coast. Most of the construction has been finished but Texas Gas has been unable to market the remaining 96mn cf/d of unsubscribed capacity after a previously contracted shipper filed for bankruptcy. The company will no longer construct part of its initial request because of the unsubscribed capacity.

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

  • Regional Energy Access (NE PA to PA/NJ): Nothing new to report.