EQT 3Q Completed Wells & Production Drops, but Profits Rise
EQT faced some strong headwinds during the third quarter of 2022, but the company still came out on top. The headwinds included third-party (mainly pipeline) outages beyond EQT’s control, as well as droughts that decreased the volume of water the company could lay hands on for fracking. As a result, the company brought online to sales just 16 new wells instead of the 22 to 32 forecasted. Production slipped too, to 488 Bcfe (billion cubic feet equivalent), down 7% from last year’s 3Q. That 488 Bcfe calculates out to be 5.30 Bcfe/d. On the plus side, the company generated net income of $684 million in 3Q22 vs. losing $1.98 billion in 3Q21, and it generated free cash flow of $591 million.
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Antero Resources is one of the largest drillers in the Marcellus/Utica (with major assets in West Virginia). The company is the fifth largest natgas producer in the country and the second largest LNG exporter. Antero provided its third quarter 2022 update yesterday. Like other major M-U drillers, Antero had a great quarter financially. Antero’s 3Q22 net income was $560 million (adjusted net Income was $531 million), versus losing $549 million in 3Q21. Free cash flow was a whopping $797 million in 3Q. Antero produced an average of 3.2 billion cubic feet equivalent per day (Bcfe/d), including 171,000 barrels per day (Bbl/d) of liquids. That’s down just a hair from 3.247 Bcfe/d produced in 3Q21.
As we mentioned yesterday, House Bill (HB) 1059, legislation to provide $142 million annually in state tax credits for several purposes, including clean hydrogen hubs, use of natural gas, semiconductor manufacturing, and milk processors, was approved by a Senate committee and is on a fast track to becoming signed into law (see 
Yesterday, the Ohio Chamber of Commerce held its “Energy Supply Chain: Present & Future” conference at the Ohio Statehouse Atrium in Columbus. Participants and speakers included oil and natural gas producers, pipeline operators, policymakers, renewable companies, and more. Questions largely centered on the energy transition and how various resources fit into a so-called sustainable future. The upshot was that Ohio’s natural gas (mostly Utica, some Marcellus) is front and center as a driving force for Ohio energy, and the Ohio economy.
In 2021, the use of coal in the U.S. to fire power plants actually rose by 16% after it had declined steadily, year after year, from 2014 to 2020. The U.S. Energy Information Administration (EIA) expects coal used to fire power plants in the U.S. to decline again this year, even though the price of natural gas has doubled and tripled. Coal and natgas are typically interchangeable, and power generators use whichever costs less. But not, it seems, anymore.
Norwegian company DNV operates as a quality assurance and risk management company. It offers supply chain, data management, technical assurance, software, and advisory services. DNV recently published its annual Energy Transition Outlook 2022. DNV’s predictions are somewhat shocking. The company is a global warming Kool-Aid drinker, believing we’ll all toast if we don’t “transition” away from burning fossil energy by 2050. Yet DNV’s report shows it thinks by 2050, the U.S. and Canada will still be 66% powered by fossil energy, primarily natural gas.
U.S. Senator Joe Manchin, Democrat from West Virginia, ended his political future when he sold out the country by voting in favor of the misnamed Inflation Reduction Act (IRA), which is actually a mini-Green New Deal bill (see 
Another weak and pathetic number of new shale drilling permits were issued for the week of Oct. 17-23 in the Marcellus/Utica. Pennsylvania had only 10 new permits, with six of them going to Range Resources in Beaver County. Ohio had just one new permit, for Southwestern Energy in Monroe County. And West Virginia had a big, fat, goose egg. No new permits. Bummer.
MARCELLUS/UTICA REGION: CNX Natural Gas funds 3 local volunteer fire departments; OTHER U.S. REGIONS: Permian oil drilling nowhere near being exhausted; QatarEnergy, ExxonMobil to independently market Golden Pass LNG; NATIONAL: White House eyes expanding northeast diesel reserve; Asset-backed bonds lure shale sector away from bank loans; Biden demands oil companies help bring relief at the pump; INTERNATIONAL: Norway now comfortably Europe’s top gas supplier; Saudi Aramco creates $1.5B energy transition fund.