Reasonable

Aubrey McClendon’s announced retirement from Chesapeake Energy Corp., the company he helped to found and then grow into an unconventional natural gas behemoth, may end one point of controversy for the debt-ridden operator, but it won’t solve many of the financial problems ahead, pundits said last week.

Energy analysts and the market weighed in Wednesday on the news that natural gas pioneer and industry cheerleader Aubrey K. McClendon, co-founder, CEO and president of Chesapeake Energy Corp., is retiring effective April 1. His departure would end one point of controversy, but it won’t solve the problems facing the producer, according to some.

Three key lawmakers in New York say one month isn’t long enough for the state Department of Environmental Conservation (DEC) to receive public comments on proposed rules governing high-volume hydraulic fracturing (HVHF), and they are asking the agency for an extension.

The Boulder County, CO, planning commission on Tuesday proposed to offer exploration and production (E&P) operators an option of expedited oil and natural gas drilling permits in return for meeting stricter environmental standards. An industry association spokesman told NGI’s Shale Daily they favored existing state mechanisms over the county proposal.

Agreements between two oil and gas producers and a small Front Range Colorado town have added to the state’s rules covering hydraulic fracturing and depend solely on the state for enforcement. Memoranda of understanding (MOU) inked separately by Encana Oil & Gas Co. and Anadarko Petroleum Corp. with the city of Erie, CO, include several best management practices mutually agreed to with city officials and incorporated into state permitting requirements for new wells.

Directors of Australia-based Eureka Energy Ltd. have rejected a proposal from Fort Worth-based Lonestar Resources Inc. for Eureka to acquire Lonestar for scrip consideration. Eureka said it had expected to reject the proposal when it was received last week. “Nevertheless, over the weekend the company pursued discussions with Lonestar with the objective of securing a proposal on more favorable terms,” Eureka said. “The parties were unable to agree on terms, and consequently Lonestar has withdrawn the proposal.” An offer by Australia’s Aurora Oil & Gas Ltd. to acquire Eureka expires Friday (see Shale Daily, June 11). Both Aurora and Eureka have assets in the Eagle Ford Shale of South Texas, as does Lonestar. On Wednesday Eureka said “it is reasonable to accept” the Aurora offer after previously recommending that shareholders reject it.

In its final rule to eliminate harmful air pollution from oil and natural gas production, the U.S. Environmental Protection Agency (EPA) granted the energy industry a “reasonable” time to meet its requirements, extending the deadline for full compliance from two months to two-and-a-half years. The extension was in keeping with the Obama administration’s recent embrace of unconventional resources, particularly shale gas.

“It would be reasonable” for the Federal Energy Regulatory Commission (FERC) to weigh the public interest of new liquefied natural gas (LNG) export facilities when considering applications, but it might not take that step with applications to modify existing LNG facilities for exportation, according to FERC Commissioner John Norris. Adapting existing facilities “involves minor modifications,” Norris said during testimony before the Senate Energy and Natural Resources Committee, which is considering his renomination to FERC. The committee also heard testimony from Tony Clark, who currently is chairman of the North Dakota Public Service Commission and is being considered to replace former FERC Commissioner Marc Spitzer; Adam Sieminski, chief energy economist for Deutsche Bank, who has been nominated to be Energy Information Administration administrator; and Marcilynn Burke, deputy director for policy and programs at the Bureau of Land Management, who has been nominated to be an assistant secretary of the Department of the Interior.

More than 35,000 manufacturing jobs could be created in Louisiana thanks to affordable supplies of natural gas from shale plays, American Chemistry Council (ACC) CEO Cal Dooley said.