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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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 
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 
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 
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.
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.
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.