M-U Production Slides as Regional Cash Prices Sink Below $1/MMBtu
In September, production from the Marcellus and Utica shales averaged just under 35.1 Bcf/d — down from a nearly two-year high at 35.3 Bcf/d in August, according to data from S&P Global Commodity Insights. Over the past three years, producers in the Marcellus/Utica have dialed back output in September. Why? Cooling temperatures that lead to falling gas demand which further leads to a crash in gas prices. How bad is the gas price crash? The Eastern Gas South trading hub near Pittsburgh, considered the benchmark for the M-U, saw cash prices trading around $0.80/MMBtu yesterday. Yes, 80 cents! The October gas contract at Eastern Gas South recently settled as low as $0.99/MMBtu. Ouch.
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According to a recent analysis by Enverus Intelligence Research, the cost of supply for North American shale producers is expected to continue rising. The remaining top-tier shale drilling inventory across North America *could be* in shorter supply than previously estimated, says Enverus. Rampant cost inflation from the Bidenistas and declining well productivity across the U.S. shale patch are making drilling wells much more expensive. What about the situation here in the Marcellus/Utica?
In an administration full of destructive regulatory actions and legislation targeting fossil energy for extinction, the so-called Inflation Reduction Act (IRA) stands out as one of the worst. The IRA was made possible by a traitorous vote by West Virginia Democrat U.S. Senator Joe Manchin (see 
Reporters like to portray themselves as truth-tellers who hold the powerful accountable. In reality, many of them are hired guns who publish propaganda under the guise of doing journalism. For example, did you know that the Associated Press takes in millions of dollars from philanthropies — the Hewlett Foundation, Walton Family Foundation, and others — to fund “reporting” (i.e., propaganda) on climate change, such as stories that this summer’s heat wave is due to man-made global warming? The good news is that a growing number of Americans are abandoning legacy media like the AP for better sources of information.
New shale permits issued for Sep 18 – 24 in the Marcellus/Utica were roughly the same as the prior week. There were 21 new permits issued last week, down 1 from permits issued two weeks ago. Last week’s permit tally included 11 new permits in Pennsylvania, 4 new permits in Ohio, and 6 new permits in West Virginia. Three companies tied for top permittee last week: PennEnergy Resources with 5 permits in Butler County, PA; CNX Resources with 5 permits in Washington County, PA; and Southwestern Energy with 5 permits spread between Wetzel and Ohio counties in WV.
MARCELLUS/UTICA REGION: Why West Virginia really turned on Manchin; OTHER U.S. REGIONS: Where does DeSantis stand on the issue of fracking in Florida?; Cummins tests new natural gas engine in California; Jackson Hole’s EV buses poster child for energy transition failure; NATIONAL: Oil is near $100 and shale isn’t coming to the rescue; US natural gas: Hot weather helped, but winter a wildcard; INTERNATIONAL: Aramco to buy $500MM stake in MidOcean, eyeing global LNG; Japan LNG stocks drop to lowest since end-Jan 2021.