Appalachia

An affiliate of Chesapeake Energy Corp. is being sued by the U.S. government for failing to pay taxes in 2001 through 2003. Chesapeake Appalachia LLC is the successor company of Triana Energy Inc., which Chesapeake purchased in 2005 as part of a transaction with Columbia Natural Resources LLC. The deal gave Chesapeake entry into the relatively unexplored Marcellus Shale, with acreage in Pennsylvania, West Virginia, Ohio, New York and Kentucky. According to a complaint filed in U.S. District Court for the Southern District of West Virginia, the United States assessed taxes against Triana in 2001 through 2003 for a total of $431,988, which as of May 17 it “has failed, neglected or refused to pay” (U.S. District Court for the Southern District of West Virginia at Charleston, No. 2:13-cv-11988). Federal officials are seeking the tax assessment and statutory additions accrued.

Now that it’s getting out of the local distribution company (LDC) business, Appalachia-focused EQT Corp. will have more time and money to devote to the Marcellus Shale, America’s emerging natural gas breadbasket.

A West Virginia city in the Marcellus Shale has enacted a 6% business and occupation (B&O) tax on natural gas companies operating within the city limits, reportedly to raise revenue to fix roads and bridges that could be damaged by drilling there.

Enterprise Products Partners LP is holding a binding open commitment period through Sept. 27 for capacity on the Appalachia-to-Texas (Atex Express) pipeline. The 1,230-mile system will deliver ethane from the Marcellus and Utica shale areas of Pennsylvania, West Virginia and Ohio to Mont Belvieu, TX (see Shale Daily, Jan. 5). “While the long-term commitments we already have are more than sufficient to proceed with the development of Atex Express pipeline, we continue to receive steady interest from other producers seeking long-term transportation capacity,” said Jim Teague, chief operating officer of Enterprise’s general partner. For information contact Russ Kovin at (713)381-7925, or rkovin@eprod.com.

The Pennsylvania Department of Environmental Protection (DEP) has notified Cabot Oil & Gas Corp. that the company has satisfied the terms of a 2010 settlement and may resume hydraulic fracturing (fracking) and completion activities at seven Marcellus Shale natural gas wells in Dimock Township. However, the producer is still barred from drilling new wells in the area.

Pennsylvania Gov. Tom Corbett said there was a better than 50% chance that a subsidiary of Royal Dutch Shell plc will build an ethane cracker in Beaver County, and he said more work is necessary to make the facility a reality.

Pennsylvania Gov. Tom Corbett said Friday the state has appealed to the state Supreme Court a ruling by the Commonwealth Court that struck down portions of Act 13, the state’s new omnibus Marcellus Shale law.

In a 4-3 decision on Thursday, the Pennsylvania Commonwealth Court ruled that portions of Act 13, the state’s new omnibus Marcellus Shale law, were “unconstitutional, null and void” on the grounds that its limits on local zoning violate municipalities’ right to substantive due process.

Penn Virginia Corp. (PVA) on Tuesday agreed to sell “substantially all” of its gassy Appalachian Basin portfolio, except the Marcellus Shale assets, to help fund development in the oily Eagle Ford Shale in South Texas.