Marcellus Shale Strategic Analysis
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Transcript of Marcellus Shale Strategic Analysis
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Marcellus Shale Strategic Analysis
May 17, 2010
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Tasking Companies involved in MS/ possible end-users
Possible strategic partners
Analysis of PA regulations regarding compression
Standards:Operating PressuresPipeline flowsFracturing practices
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Methodology (cont’d)Identify companies involved
Open SourceSpecialized databases
Compare companies involved w/ other shale playsIndicates strength in industry
Identify compressor MFR’sProfile
Identify Compressor MFR’s association in MS
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Methodology (cont’d)
Marcellus Other Shale
CompressorMFRs
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Key Finding: Top Players1. Chesapeake Energy 2. Range Resources3. Seneca Resource /EOG4. Statoil5. Atlas Energy6. EQT Corp7. Chief Oil & Gas8. XTO Energy9. EXCO Energy10. Talisman/Fortuna11. Cabot12. East Resources
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Low Hanging Fruit
(See Matrix Cover Sheet/Matrix Overview)
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Strategic ProfileMFR compressor packages
Associations w/ MS
Other shale plays
Revenues $5 M – $25M
Not teamed w/ Ariel
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Company Rankings1. Dearing Compressor & Pump2. Kinglsy Compression3. Sullivan Palatek4. Rix Industries5. McClung Energy Services6. Titan Compressor Systems7. Big Gas Compression8. ACI9. Brahma10. Compass Compression11. Natural Gas Compression Systems12. UE Compression13. Natural Gas Services Group
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Dearing CompressorRevenue: $20 – 50 million
Employees: 93 w/ plans to add
Shale Affiliation: Marcellus
Products: GE, Gardner Denver, Ariel, Reliance
Location: Ohio
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Kingsly CompressionRevenue: $10 million
Employees: 40 (2 branches)
Shale Affiliation: Unknown, actively marketing
Products: Ariel, Cummins, Ingersoll Rand, Quincy
Location: Ohio/Pennsylvania
End Users: EQT, Chesapeake, Range Resources
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Sullivan PalatekRevenue: $23 million
Employees: 90 (last reported)
Shale Affiliation: Barnett Shale and Marcellus Shale
Products: OEM
Location: Indiana
Partner: Union Drilling
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The Hanover CompanyPurchased by Exterran
Other Exterran Compression DistributorsGlobal Compression Universal CompressionWeatherford International
Ariel
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Compressions Systems IncHeadquarters: Midland, TX
Locations: Midwest
Shale Affiliations: Likely
Products: Ariel, GE Gemini
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State ManagementDecentralized, unorganized
No comprehensive overview
No method for sharing w/ connected states
Priorities:Water managementEnvironmental degradationConstruction codesReclamation
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Future State IssuesSeverance tax
Increasing bond limitsSingle - $2,500Multiple - $25,000
“Disaster Watch”Fracturing
Home water well exploded by gas fracking in Dimock, PA. Source:
http://beavercountyblue.files.wordpress.com/2010/02/dimock-well-explosion-photo1.jpg
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FracturingHorizontal wells (60% will increase)
Hydraulic dominant over airGreater access/Higher ROI$3.5 million per rig750 – 2500 psigMore accident prone
Vertical wells (40% will decrease)Limited access/Lower ROI$255 K50 – 350 psigEasier accident containment
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Compressor RegulationsPennsylvania
None
OhioNone
West VirginiaNone
New York>125 psig requires
permit
= Good Faith Agreement
*intervene only if problems
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Brownie Points - NGV Louisiana Act 469
Tax credit increases 20 to 50% on conversions $3000 for direct buy Payroll tax credit for workers
NAT GAS Act 2009 Sponsored by Rep. Dan Boren (D-OK), John Larson (D-CT)
AT&T Investing USD $565 M in natural gas hybrids 15K vehicles in the next 10 years
Congressional Natural Gas Caucus First hearing 10/2009
Tennessee Gas PipelineDominion Keystone Pipeline
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Brownie Points (cont’d)
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Wiki Tour
http://marcellusshale.wikispaces.com
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Thank You
Questions?
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Contact Information
Kathleen [email protected]
Zach [email protected]
Sladjana [email protected]
Casey [email protected]