The Daily Digger

From the Pittsburgh Post-Gazette: Royalty checks that start to arrive when a gas company drills on your property can make for some very profitable envelopes in the mailbox. But the low natural gas prices that have disrupted industry balance sheets in recent months could start to cut into those checks.  Put it this way: "You could be having filet mignon when they're high, and Kraft macaroni & cheese when they're low," said Craig Tillotson, executive vice president of sales at the Downtown-based Hefren-Tillotson wealth management firm.  Mr. Tillotson is a wealth adviser whose expanding client base includes farmers and landowners signing lucrative leases for their mineral rights in the Marcellus Shale natural gas formation. So-called "shaleionaires" can take home millions of dollars by signing a lease, but they are now entering an unpredictable market that can cause royalty checks to fluctuate -- or stop altogether.  The lowest natural gas prices ...

From Reuters: NEW YORK, May 22 (Reuters Breakingviews) - Chesapeake Energy ( CHK.N ), the embattled U.S. natural gas producer, seems to have missed some of the lessons of Enron’s demise. There have been no allegations of fraud. But the U.S. gas firm’s vast trading operation, fondness for complicated holdings and relationships, and corporate generosity are among the traits that, in hindsight, should have invited greater scrutiny of Enron’s edifice.  Chesapeake is a force in the U.S. gas market. It owns real assets, and it is the second-largest producer in the United States, accounting for about 9 percent of gross domestic gas supply according to a recent company presentation. It is the most active driller of new U.S. wells, and has substantial proven and unproven reserves. Meanwhile, joint-venture partners including Total ( TOTF.PA ) of France and Norway’s Statoil ( STL.OL ) attest to the substance of the projects they are involved in.  By contrast, while Enron’s byzan...

From the Parkersburg News and Sentinel: Almost 500 people from multiple Ohio counties have signed a petition urging officials with the Wayne National Forest not to lease forest land for hydraulic fracturing, a controversial method for drawing oil and natural gas from underground shale deposits. Forest officials said recently the leasing is a possibility. It's the second time such an announcement has been made in eight months, with forest officials having backed off the idea the first time due to increased public interest and new information having been received about deep horizontal drilling. The idea is drawing criticism from some people, including Friendly resident Steve Pelsor, who was camping at the Leith Run Recreation Area within the 242,000 acre forest Monday. "I don't like the idea," Pelsor said. "I don't think they should disturb the national forest. Our forefathers gave it to us and you're disturbing a whole bunch of stuff, like the animals...

From John Hanger's Facts of the Day blog: Al Gore is wrong about a key energy and climate change issue.  I know that won't surprise all of my readers, while others will insist Gore is not wrong at all. Al Gore tweeted last night to support Vermont's ban of hydraulic fracturing.  http://t.co/42fwSUFw . Gore's embrace of Vermont matters, as he has the respect of millions, including me.  Those thinking otherwise misjudge our diverse nation. But, if his position wins the day, Gore would unintentionally increase carbon pollution, over the next 20 years, and would reverse the collapse in coal's electricity market share.  Indeed, Al Gore will find support for his proposal to ban fracking in some parts of coal country. Beyond causing more pollution and not less, banning hydraulic fracturing would also bring more hardship for Americans straining to pay bills and looking for jobs. To the affluent, energy savings matter not much. But to Pennsylvanians at or below the m...

From Energy Bulletin:One fact ought to tell you all you need to know about the risks faced by homeowners signing leases for natural gas drilling on their property: Wells Fargo & Company, both the  largest home mortgage lender in the United States  and a major lender to the country's second largest producer of natural gas,  Chesapeake Energy Corp. , refuses to make home loans for properties encumbered with natural gas drilling leases. This salient fact comes from  an article  (PDF) written for the  New York State Bar Association Journal  by attorney Elisabeth N. Radow. Written in the form of an even-tempered legal brief, Radow relates one astounding finding after another. Perhaps most relevant to homeowners who either have signed drilling leases or who may be asked to sign them in the future is this: "Signing a gas lease without lender consent is likely to constitute a mortgage default." You read that right. Default. Her conclusion stems from ...

From the Canton Repository's summary of Louisville's May 21 City Council Meeting: KEY ACTION   Approved a water-purchase agreement with Chesapeake Exploration through May 2017. DISCUSSION   Chesapeake will use the water in its search for natural gas and oil in the Utica shale formation. The city will bill Chesapeake at the rate of $5 per 1,000 gallons of either effluent, raw or potable water. In the event of drought, operational or mechanical failure, any unforeseen problem or emergency situation, the city may suspend service. Emergency passage allows the agreement to take effect immediately. Read the original article here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

From The Motley Fool: Despite having some of the best assets in the natural gas business, Chesapeake Energy(NYSE: CHK ) has become the poster child for the type of company that investors should give a wide berth. Among the problems that ail Chesapeake are very questionable corporate governance, large amounts of debt both on and off the balance sheet, strained liquidity, and murky accounting. No surprise then that the company's stock has fallen roughly 45 percent in the past six months. Chesapeake Energy, the second-biggest natural gas producer in the United States, now has one choice to survive...it will have to liquidate some of the juiciest energy assets in the country. That is where this story gets interesting for investors in the sector as its rivals look to scoop up some of Chesapeake's prime assets at a good price. In fact, industry analysts believe there are at least $25 billion in valuable acreage that Chesapeake owns that should find eager buyers. The company...