by Geoff Kelly
The Minard Run Oil Company, based in Bradford, Pennsylvania, claims to be the oldest family-owned and -operated independent oil producer in the United States. Founded in 1875 by Pennsylvania Senator Lewis Emery, Jr., the company today is run by four of his great-grandchildren and one of his great-great-grandchildren.
In mid-March, Minard purchased 415 natural gas wells in the Finger Lakes from Chesapeake Energy, the nation’s second-largest producer of natural gas—at least for now. Chesapeake, formed in 1989, enjoys none of Minard’s stability: The company has been beleaguered by criticism of its corporate governance, the shenanigans of CEO Aubrey MacLendon (thoroughly documented by Jeff Goodell in Rolling Stone), and a business plan that has left it severely short of cash—perhaps $10 billion short this year alone. The company’s stock price has fallen 50 percent in the last year. How bad is the company’s management? This week, New York State Comptroller Thomas DiNapoli, who heads that state’s pension fund, recommended that Chesapeake’s stockholders refuse to renew the terms of two incumbent board members, saying it was a “necessary first step toward reconstituting a board that is currently entrenched and unaccountable to shareholders.” Corporate raider Carl Icahn, who is circling around the company, has indicated that he thinks the company’s problems are largely the result of poor management at the top.
The sale of Chesapeake’s New York assets to Minard is no doubt part of an effort to meet the cash shortfall. Minard’s new real estate interests, meantime, have augmented the company’s interest in the future of gas well drilling in New York State, especially the future of horizontal, deep-well, hydraulic fracturing, which is the subject of a state review.
Which may help to explain why James J. Macfarlane, Minard’s vice president for exploration, acquisitions, and operations, met recently with Republican State Senator Mark Grisanti, according to a staffer. Also meeting with Grisanti: Brad Gill, executive director of the Independent Oil and Gas Association on New York, or IOGA; Stephen W. Rhoads, manager of state government relations, Appalachia Region, for Shell Energy; and Daniel M. Krainin, an attorney in the New York office of the law firm Beveridge & Diamond, which specializes in environmental and land use law. Macfarlane and Rhoads are both board members of IOGA.
Grisanti, who is chair of the Senate’s Environmental Conservation Committee, has been in a crucible of pressure from both industry-funded proponents of horizontal fracking and environmental activists opposed to the practice. So far, he has declined to take a public position on whether the state ought to permit fracking, preferring to wait until the New York State Department of Environmental Conservation completes its review of the permitting and regulatory scheme it released last year.blog comments powered by Disqus
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