Stop Press! Southwestern Energy Buying Montage Resources for $857M
Holy smokes! We didn’t see this one coming. Just yesterday MDN brought you the second-quarter update from Montage Resources (see Montage Resources: 5 New OH Utica Wells, Profits Tumble in 2Q). Little did we know the company was in an advanced stage of negotiations to sell itself to Southwestern Energy. Perhaps “sell” isn’t quite the right word. The two companies are merging, with Southwestern taking over Montage, in an all-stock deal worth roughly $204.3 $857 million (NOTE: We amended this article after Raymond James calculated the deal to be worth a much higher amount, see our update below). The combination will create the third-largest (by acres leased) Marcellus/Utica driller with a combined 786,187 net acres.
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Democrat governors across the country are now mimicking the example set by the dictator of New York, Gov. Andrew Cuomo. Cuomo abuses state power to reject fossil fuel projects (unconstitutional in our opinion), telling NY’s state environmental agency to reject all new pipelines. Roy Cooper, governor of North Carolina, is the latest Cuomo wannabe. Cooper instructed his state’s environmental agency, the Dept. of Environmental Quality (DEQ), to reject permits for Equitrans’ proposed Mountain Valley Pipeline (MVP) Southgate project. Which the DEQ did yesterday. The agency tried to disguise the rejection using lame excuses, but the reason for the rejection was politics, plain and simple.
Underground horizontal directional drilling (HDD) for the Mariner East 2 pipelines (two of them, 2 and 2X) have a history of springing leaks. They’re called “inadvertent returns”–when you drill horizontally underground for a pipeline and the drilling mud you put down the hole pops up in a place it’s not supposed to. The good news is that the drilling mud is non-toxic, the same stuff used in toothpaste. The bad news is that it can overwhelm little fishies and other aquatic life and kill (suffocate) them. ME2X drilling had another such incident earlier this week–in Chester County, PA.
In June, Antero Resources, one of the biggest (and best) Marcellus/Utica pure play drillers concentrating most of their drilling in West Virginia, sold an overriding royalty interest (ORRI) in all of their wells for $402 million (see 
Our favorite government agency, the U.S. Energy Information Administration (EIA), is singing a different tune than it did less than two months ago. In late June, EIA published a post discussing the drastic drop in U.S. LNG (liquefied natural gas) exports, saying a recovery to pre-COVID levels would not happen until sometime next year (see 
Permits to drill new shale wells in the Keystone State (Pennsylvania) remain brisk. Two weeks ago PA issued 32 new permits. Last week PA issued another 30 permits. That’s 62 new permits in two weeks! Ohio issued no new shale drilling permits last week (disappointingly), and West Virginia issued six new permits last week.
MARCELLUS/UTICA REGION: State grant aiding students at Utica Shale Academy and Southern Local; New poll shows majority of Pennsylvanians oppose fracking; OTHER U.S. REGIONS: Pipeline doubts put Bakken shale reboot on hold; NATIONAL: Winter demand, slumping production to boost Henry Hub prices in coming months; Oxy struggles to cope with the impacts of its acquisition of Anadarko; Oil up on upbeat Aramco and US virus easing signs; What will it take for cities to get rid of natural gas?; INTERNATIONAL: Canada’s overseas propane exports come at the expense of the U.S.; Chevron’s interest in giant gas field led to $5 billion bid for Noble Energy.