Cabot O&G 3Q18: Production 2 Bcf/d, $122M Profit

Although Cabot Oil & Gas extracts natural gas from an area of Pennsylvania where gas fetches some of the lowest prices in the country, the company is making money hand over fist. The company made $122 million in profit during 3Q18 and estimates it will generate “free cash flow” (money in the bank) in the range of $650 million to $700 million in 2019. Cabot has moved from growth for growth’s sake to steady growth and higher dividends. A key part of their growth is the addition of new pipelines.
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Southwestern Energy 3Q18: Production 2.8 Bcf/d, $29M Loss

Southwestern Energy’s third quarter 2018 update on Friday showed the company hitting a new record-high for production. While Cabot Oil & Gas’ production is 100% natural gas (dry gas at that), Southwestern has a mix. The jump in production–to an average of 2.77 billion cubic feet equivalent per day (Bcfe/d)–is largely due to an increase in wet gas (NGL) production. CEO Bill Way said he expects “liquids production” will represent one-third of the revenue the company receives in 2018. Although Way says the company experienced an “outstanding quarter both financially and operationally,” we do have to point out they lost $29 million during 3Q18.
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Penn Virginia Finally Sells Itself, Denbury Buys for $1.7 Billion

Penn Virginia is an oil and gas driller headquartered in Radnor, PA (near Philadelphia). Although it’s based in the Keystone State, Penn Virginia has only a small presence in the Marcellus Shale–21,700 net acres with no drilled wells (at last check). They concentrate on oil drilling the Texas Eagle Ford Shale play. In July we told you the company is once again trying to sell itself (see Penn Virginia Puts Itself Up for Sale – Again). In September they added a new board member to help the process along (see Penn Virginia Hires New Board Member to Help Sell the Company). Looks like it worked. Penn Virginia is selling itself to driller Denbury for $1.7 billion.
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PA Antis Suffer Crushing Defeat in SWPA Zoning Case re ERA

An important court case was decided on Friday in Pennsylvania Commonwealth Court that potentially impacts all shale drilling in the state. You will recall that seven selfish towns sued the state over the 2012 Act 13 law and it’s provision that would substitute a statewide, uniform and fair set of zoning ordinances for drilling in place of a patchwork, crazy quilt system of local ordinances for oil and gas drilling. Seven selfish towns (including Robinson Township) wanted their own ordinances and sued, ultimately winning at the Supreme Court (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). Since winning the “Robinson” case, antis have used local ordinances to try and block or greatly restrict drilling. But sometimes a town uses the Act 13 decision to allow drilling in more places. Antis don’t like it, but last Friday’s decision ratifies you can’t take one (restricting drilling) without the other (not restricting drilling), if that’s what a town wants to do.
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More of NEXUS Pipe Goes Online, FERC Approves Compressors

In early October NEXUS Pipeline, a $2.6 billion, 255-mile interstate pipeline that runs from Ohio into Michigan, received permission from the Federal Energy Regulatory Commission to begin partial operation (see Yes! NEXUS Pipeline OK’d by FERC to Begin Service). NEXUS is flowing close to 1 billion cubic feet (Bcf) per day out of an eventual 1.5 Bcf/d capacity. Last week NEXUS asked FERC for an OK to start up service at two more compressor stations–one in Medina County, the other Sandusky County. On Friday, FERC said OK.
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Westmoreland Gas-Fired Plant Begins Testing, Online in Dec.

In August 2016, energy giant Tenaska (headquartered in Omaha, NE) broke ground to build a 925-megawatt natural gas-fueled power plant in South Huntingdon (Westmoreland County), PA (see Groundbreaking for Tenaska Marcellus-Fired Electric Plant in SWPA). The Tenaska Westmoreland Generating Station is costing ~$780 million to build. We have super good news to report about the project. The plant is now fully built and is actively testing, with a target startup date of Dec. 1.
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Energy Stories of Interest: Mon, Oct 29, 2018

The “best of the rest”–stories that caught MDN’s eye that you may be interested in reading: Pittsburgh mayor dismisses facts, science in speech to fracking protesters; Susquehanna County produces more than 4% of U.S. natural gas!; Rabbittransit switching to natural gas for buses at Gettysburg; The plantation politics of the William Penn Foundation; Mostly outside groups pour $13.8M into redistricting proposal in Michigan; Wyoming watching Colorado’s anti-fracking ballot issue; The market for oil country tubular goods (OCTG) heats up; FERC HDD guidance – your input needed; Third quarter oil and gas deals hit $123 billion; Can U.S. gas demand keep up with surging production?; UK natural gas fracking paused following ‘Red Event’: Cuadrilla; Renewable energy, Russian natural gas and the lesson of January 2006.
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