A Basic Guide to Understanding “Impairments” for Marcellus/Utica

There is precisely one reporter at the usually anti-drilling Pittsburgh Post-Gazette, Anya Litvak, who writes objectively about the Marcellus/Utica and the oil and gas industry in general. Anya used to write for the Pittsburgh Business Times until the Post-Gazette snagged her away a few years ago. It’s our opinion that the Post-Gazette keeps Anya hidden under a bushel where her light doesn’t shine nearly as brightly as it used to. Anya has just written an excellent article about something MDN recently noticed when reviewing quarterly earnings updates–this business of “impairments” or writing down the value of o&g assets on paper. As we’ve noted for a number of the quarterly updates we have reported on for the second quarter, many (most) drillers are reevaluating their acreage in the Marcellus/Utica and, according to specified formulas tied to the price of natural gas and oil, determining those assets (leases and operating wells) are not worth as much now as they were just a few months or years ago–something called an impairment…

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