Southwestern Energy Buys 2nd Haynesville Driller for $1.85B
Nearly two weeks ago MDN brought you the news that Southwestern Energy was in talks to buy a second (for them) Haynesville driller, GeoSouthern, for $1.7 billion (see Southwestern in Advanced Talks to Buy 2nd Haynesville Driller for $1.7B). Yesterday Southwestern announced it has struck a deal for $1.85 billion to buy GeoSouthern (technically a subsidiary called GEP Haynesville). When the deal is done, by the end of this year, GEP will add another 700 MMcf/d (million cubic feet per day) to Southwestern’s already hefty production. The new flows will boost Southwestern production to 4.7 Bcf/d (billion cubic feet per day). They will be within striking range of EQT. Might Southwestern overtake EQT as the largest natural gas producer in the country? It’s fun to ponder!
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While yesterday’s news that Southwestern Energy has brokered a deal to purchase a second Haynesville driller (see today’s lead story), Southwestern also issued its third quarter update yesterday. Let’s not overlook that important news! While Southwestern’s natural gas production continues to increase due to acquisitions, the big news (for us) is the drubbing the company took on hedges/derivatives. Southwestern lost $2 BILLION on bad hedges, leading to a quarterly net loss for shareholders of $1.86 billion. The company reported total production of 310 Bcfe (billion cubic feet), averaging 3.4 Bcfe per day.
In September a cabal of virulent anti-fossil fuel groups, including the Sierra Club, Clean Air Council, PennFuture, Earthworks, and Mountain Watershed Association (all of which hate oil and natural gas), launched their latest attack against the Pennsylvania oil and gas industry. The groups sent a request to the PA Dept. of Environmental Protection (DEP) lobbying for a dramatic increase in the amount of money drillers must post as a bond when drilling a new well. Unfortunately, the DEP listened and is acting on that request.
What the heck is going on? First, the EPA under Biden is making a massive power grab to control oil and gas drilling (in contravention to the U.S. Constitution) by issuing methane regulations and the oil and gas industry is just laying down and taking it, after opposing the very same thing under Obama in 2016 (see 
Two out-of-state Members of Congress, Rep. Dan Newhouse (Washington-04) and Rep. Yvette Herrell (New Mexico-02), both members of the Congressional Western Caucus, recently took a field trip to northeastern Pennsylvania to get a firsthand look at how Marcellus drillers and midstream companies get the job done. They came away thoroughly impressed, to the point they penned an editorial for a local newspaper that begins with this sentence: “Pennsylvania’s natural gas producers are providing safe, reliable, and affordable energy for the United States and setting an example for states across the country.”
Conservatives (including MDN) eagerly watch election results as they came in this past Tuesday night. Conservatives rightly anticipated the Virginia governor’s race would go to the Republican, Glenn Youngkin. Conservatives had hoped for a good showing in deeply blue New Jersey, with 1.1 million more registered Democrats than Republicans. We got much more than that! The odious leftist Democrat Phil Murphy ran for reelection for another four years in the Garden State. The unknown Republican running against him, Jack Ciattarelli, came within (under) 1% of the same number of votes as Murphy. Hopefully, Ciattarelli will demand a recount. The question is, did energy have anything to do with NJ’s vote, and if Ciattarelli pulls off an upset, what might that mean for pipeline projects canceled under Murphy?
OTHER U.S. REGIONS: Venture Global signs largest-ever supply deal to export LNG to China; Smaller oil firms pay top dollar for Permian land as large players cash out; California forced to embrace natural gas; Debated natural gas pipeline brings protestors to Springfield City Hall; NATIONAL: US LNG exports climb week over week; Biden should ‘back off’ anti-oil policies, Pioneer CEO says; U.S. shale producers signal more oil coming, as OPEC counts on restraint; Gas prices are sky high and Bank of America warns $120-a-barrel oil is on the way; INTERNATIONAL: OPEC+ rejects Biden plea.