With Condensate Near $0, Utica Drillers Shift Permits to Dry Gas

Last week MDN highlighted an article from the Pittsburgh Post-Gazette about the low low prices Marcellus/Utica condensate has fetched since the beginning of the year (see M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1). S&P Global is currently reporting prices for Utica condensate have not yet recovered, sometimes still dipping into negative territory. As a result, drillers are reducing their new permits and drilling in “wet gas” areas of the Utica and instead shifting gears to “dry gas” regions.
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Hearing Delayed for 2 New Injection Wells in Belmont County, OH

Last year MDN told you about New Jersey-based Omni Energy Group and their application to build two new injection wells in Belmont County, OH near St. Clairsville (see Belmont County Injection Well Plan Stirs Opposition from Coal Co.). The proposal set off a firestorm of opposition, including opposition from Robert Murray and the Murray Energy Corporation–a coal miner who doesn’t like fair competition from natural gas. The Ohio Dept. of Natural Resources (ODNR) was going to hold a virtual public meeting last Friday on Omni’s proposal–virtual because of the coronavirus. But at the last minute enemies of the injection well project, including Murray, convinced a Belmont County judge to put a temporary restraining order on the virtual meeting.
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Big Chesapeake Investor Hires Lawyers Ahead of “Restructuring”

In mid-March, MDN brought you the news that Chesapeake Energy had hired “restructuring advisers” to help the company navigate a $9 billion debt millstone hanging around its neck (see Chesapeake Energy Hires “Restructuring Advisers”). One of Chesapeake’s biggest investors is mutual-fund company Franklin Resources Inc., which owns over 12% of Chessy’s stock AND owns a lot of Chessy’s debt (notes). So Franklin sits on both sides of the aisle with Chesapeake–debt and equity. Franklin is not leaving Chesapeake’s “restructuring” to chance–whether it be bankruptcy or something else. According to a Wall Street Journal article, Franklin has hired lawyers to negotiate with Chesapeake ahead of any official restructuring announcement.
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Fed Court Case for Now-Defunct Constitution Pipe Put on Pause

In February Williams official gave up on building a long-delayed project to flow natural gas from northeastern Pennsylvania into central New York, called the Constitution Pipeline (see Sad Day: Williams Declares Constitution Pipeline Project Dead). We mourned the loss which hurt so deeply because it seemed the project was close to winning a federal court case against New York State, a case in which the Federal Energy Regulatory Commission (FERC) said NY had taken too long to reject Constitution, thereby forfeiting its right to have a say in where the pipeline gets built. NY took FERC to court (see NY DEC Will “Fight” FERC over Constitution Pipeline Decision). That case seemed to us to be close to resolution, but since Williams has decided to cancel the project, the court case is now “frozen” in time.
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CNX CEO Nick DeIuliis Takes Aim at Joe Biden in National Column

Nick DeIuliis

It’s an awesome thing to see the CEO of a major shale natural gas company stand up to the insanity that is the Democrat Party in the U.S. today. It’s gutsy. Business leaders often have strong political opinions, but they almost never share them out of fear for their own jobs–afraid of offending pimple-faced hedge fund investors who dot the financial landscape today. Not CNX Resources CEO Nick DeIuliis. He’s fearless and we wish we had a hundred more like him! Nick, who is mild-mannered and does not like the spotlight, is stepping up to push back against those who would ban fracking–including presidential candidate Joe Biden. Nick recently published a national column in The Hill, a must-read inside the swamp of Washington, DC., calling out Biden for his horrible positions on fracking and oil/gas energy.
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Large Banks Get Ready to Seize U.S. Shale Company Assets

Reuters is reporting a disturbing allegation that Big Banks, including JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup, are each in the process of setting up shell companies that can own shale oil and gas assets. Why? Because of a coming wave of bankruptcies. The banks, with big loans to a number of oil companies, plan to take ownership of the companies or their assets (foreclosure) as repayment of the loans owed. In other words, Big Banks are planning to get into the oil and gas business as a form of self-defense, so they don’t take a bath on the value of the assets they’ve helped underwrite.
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OPEC+Russia+US Agree to 9.7M Bbl/d Oil Cut – Too Little Too Late

To say that history (in the world oil market) was made this past week is an understatement. The United States of America, under the direction of Donald J. Trump, threw in its lot with both Saudi Arabia and Russia in order to salvage a deal to cut oil production worldwide by 9.7 million barrels per day. The fact that Trump leaned on/cajoled/pressured the Saudis and Russians is not the historical part. What is history is that the U.S. itself pledged to cut a portion of its production in cooperation with those bad actors–a pledged to cut 300,000 bbl/d, because Mexico wouldn’t. We’ll explain.
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Shale Energy Stories of Interest: Mon, Apr 13, 2020

MARCELLUS/UTICA REGION: UGI Energy Services develops virtual food drives in partnership with area food banks; OTHER U.S. REGIONS: Texas Waha natgas forward prices to soar post coronavirus from negative now; Young shale CEO asks Texas to curb oil output as coronavirus cuts prices; Marathon will take frac holidays to cut spending; NATIONAL: Patterson-UTI Energy reports Mark Siegel, executive chairman, announces retirement plan; EIA’s weekly natural gas products provide timely natural gas information; Cliff’s edge a distant memory as rig count plummets ever lower, U.S. drops another 62 units; No resurrection for natural gas as storage, weather take down futures another notch ahead of Easter; Oligarchy and pestilence; Why are we destroying the economy for this?; Oil quotas and import fees? No, get America back to work; The biggest moves reverberating across oil, NGL and gas markets.
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