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Briefs -- EnLink Midstream, Ohio Lawsuit, Frack Ban, Chesapeake

EnLink Midstream Partners LP plans to construct the Greater Chickadee crude oil gathering project in Upton and Midland counties in Texas to serve Permian Basin producers. The partnership said it would invest $70-80 million to build the system, which would include more than 150 miles of high- and low-pressure pipelines to transport oil to major market outlets and other hub centers in the Midland, TX, area. The project also includes central tank batteries and pump, truck injection and storage stations. The initial phase is expected to be operational in the second half of this year with full service expected in early 2017. Greater Chickadee, supported by long-term, fee-based agreements, includes about 35,000 dedicated acres in Upton County where current output is .more than 10,000 b/d. Last November, an EnLink unit agreed to pay $40 million to Apache Corp. to acquire full ownership of their jointly owned Deadwood natural gas processing facility in the Permian (see Shale DailyNov. 17, 2015).

Ohio Attorney General Mike DeWine has filed a lawsuit against Ben W. Lupo, who was sentenced to 28 months in federal prison in 2014 and ordered to pay a $25,000 fine for directing his employees to dump tens of thousands of gallons of oilfield waste down a storm drain in Youngstown, OH, that emptied into a major river. The lawsuit, filed in Mahoning County Common Pleas Court, seeks to recover financial penalties from Lupo along with two of his former companies and three of his former employees. Lupo's sentence brought an end to an investigation that began in February 2013 after inspectors at the Ohio Department of Natural Resources received an anonymous tip about the dumping, which took place at the headquarters of several companies owned by Lupo, including D&L Energy Inc. and Hardrock Excavating LLC (see Shale DailyAug. 6, 2014). Regulators discovered that Lupo had ordered his employees to dump the waste down the storm drain on dozens of occasions.

A coalition of environmental advocacy groups has delivered more than 90,000 petitions to the Democratic National Committee demanding that a ban on "fracking" be included in the party platform. It's unclear exactly if the groups want all forms of well stimulation banned or the technology that generally applies to unconventional shale wells. The groups did not specify in a press release issued this week, but they alluded to a ban on high-volume hydraulic fracturing. Petitions were collected and delivered by staunch oil and gas industry opponents, such as Food & Water Watch, MoveOn.org and 350.org, among several others. They said the Democratic party has been "complicit in the U.S. fracking boom which is poisoning communities and our climate." They also said "a massive anti-fracking protest" is planned for Philadelphia on July 24, a day before the Democratic National Convention begins. Vermont Sen. Bernie Sanders has called for a ban on horizontal hydraulic fracturing during his time in office and during his presidential campaign, but the party's presumptive presidential nominee, Hillary Clinton, has identified natural gas as a bridge fuel and has said she favors robust regulation of the extraction industry (see Shale DailyApril 15).

S&P Global Ratings has reduced Chesapeake Energy Corp.'s corporate credit rating to "SD" from "CCC," citing an over-leveraged capital structure with "potential liquidity issues in the near term" because of total 2017 maturities and a "likely" put totaling $1.5 billion. Chesapeake, the No. 2 natural gas producer in the United States, has or plans to exchange portions of its debt maturing or putable in 2018, 2019, 2021, 2022 and 2038. The downgrades reflect an assessment that the debt for equity exchange was "distressed...based on the holders receiving less than the original promised amount, and our view that the company is holding an unsustainable capital structure and is facing a potential sharp liquidity contraction next year." Chesapeake has about $1.5 billion maturing or putable in 2017. The recovery ratings on Chesapeake's notes remain "6," indicating an expectation of "negligible (0-10%) in the event of a payment default." There is a "high likelihood" for additional "sub-par exchanges," S&P said.

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