EQT Elects to Take $196M Bird-in-Hand Payment from Equitrans/MVP
Ever hear the old saying, “A bird in the hand is worth two in the bush?” That seems to be the philosophy for EQT Corporation with respect to the compensation it will receive from Equitrans Midstream’s Mountain Valley Pipeline (MVP) project. Newer readers may not know this, but back in 2018 EQT spun off its pipeline division into a brand new, standalone company, renamed Equitrans Midstream (see It’s Here! EQT Midstream Division Now Split into Standalone Co.). So-called activist investors pressured EQT to split the company in two to “unlock value” in each company–the upstream/drilling company now called EQT, and the midstream/pipeline company now called Equitrans. As part of the split, EQT and Equitrans hammered out a deal to compensate EQT for the value that the previously jointly-owned MVP project will (when up and running) provide. EQT could either (a) take $250 million in discounts from MVP for transporting its natural gas over a two-year period, or (b) take a one-time cash payment of $196 million. EQT just selected option B.
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American Energy Partners, Inc. (AEPT), based in Allentown, PA, is a small but diversified company. They have their fingers in a number of different oil and gas pies, including subsidiaries in drilling, remediation, water, valuation services, and education. Add one more to the list: radioactive waste. AEPT recently announced it has purchased Austin Master Services, a company that services the Marcellus/Utica industry (and other industries) with radiological waste management solutions, including remediation, decontamination & decommissioning (D&D), and transport.
In June the Pennsylvania Dept. of Environmental Protection’s (DEP) Environmental Quality Board (EQB) adopted an onerous new regulation that supposedly will capture every last molecule of stray methane that leaks from shale drilling operations (see 
God help you if you are a midstream company that has to wade through the mountain of federal regulations and codes generated by agencies including the Federal Energy Regulatory Commission (FERC), and are subject to those agencies’ arbitrary decisions on what they will and won’t enforce. In what amounts to a game of Simon Says, FERC has just fined M3 Ohio Gathering, Utica East Ohio Midstream, and UEOM NGL Pipelines–all three either current or former owners of two tiny NGL pipelines that flow propane and ethane from the Scio (Ohio) fractionation plant–$30,000 for not filling out a particular form over a six-year period. Thirty grand for a paperwork violation. It is, according to lawyers who watch these things, an escalation, an “aggressive expansion of enforcement” on the part of FERC.
Not all that long ago Cabot Oil & Gas (now Coterra Energy), Southwestern Energy, BKV Corporation, and Diversified Energy were all pure play drillers focused just on the Marcellus and/or Utica Shales. Today all of them own assets in other basins in addition to the M-U. However, the very first company to sink a Marcellus well (back in 2004), Range Resources, has gone the other way. Range used to own assets outside of the M-U but has, for over two years, been a pure play driller laser-focused on only the M-U. According to CEO Jeff Ventura, Range plans to keep it that way–laser-focused focused on the M-U.
MARCELLUS/UTICA REGION: PWT applauds Pennsylvania legislature, governor for lowering corp income tax; OTHER U.S. REGIONS: RGGI update: Virginia and RGGI; NATIONAL: If Biden were serious about energy policy…; Joe Biden’s blame in the energy crisis; The DOE’s intent to eliminate non-condensing furnaces; Biden’s 51 years of bad blood with Big Oil; INTERNATIONAL: The energy crisis will deepen; Europe’s natural-gas crisis is worse than it looks; What happens if Germany’s Russian gas flows stop; Exit, pursued by a bear.