Marcellus/Utica Drillers’ Stock Prices Near/At Historic Lows

The value of a company’s stock price is important, for a variety of reasons. The stock price reflects investor confidence in whether the company can earn its keep and grow profits in the future. A higher stock price wards off takeovers. Upper management gets a raise. And the company can borrow money when it needs to at reasonable interest rates. All sorts of reasons why the stock price is important. Unfortunately for top drillers in the Marcellus/Utica, their stock prices have tanked. As a group, and individually, the stock price is either near or even at the lowest it’s *ever been.* Let that sink in.
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Antero Resources: Layoffs & Spending Cuts Ahead in 2020

Antero Resources, one of the biggest Marcellus/Utica drillers (with major operations in West Virginia) released its fourth-quarter and full-year 2019 update yesterday, along with hosting a conference call to discuss what investors can expect for 2020. There are loads of important details to share. Production was up 19% in 2019 over 2018. The company lost $482 million in 4Q19, compared to a $122 million loss in 4Q18. However, $463 million of the loss was an impairment charge (write-down) of Antero’s ownership interest in its midstream subsidiary (i.e. paper loss). Looking forward to 2020, the company plans to cut spending by 10% this year (spending $1.15 billion) and plans to make some layoffs. Antero plans to drill 95-100 wells and complete 120-130 wells this year.
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S&P Downgrades Credit Rating for Six Big Marcellus/Utica Drillers

click for larger version

Large Marcellus/Utica drillers continue to take it on the chin in the financial markets. The stock prices for almost all M-U drillers have tanked, and now (at least for some of them), their credit ratings have been downgraded too. Standard & Poor’s Global Ratings recently downgraded the credit rating for six of the biggest M-U drillers…
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Debunking the Divestment Meme: NY Teachers Invest $1M in Antero

We’ve reported on the divestment meme for years–the effort by anti-fossil fuel radicals to force banks and investment firms to withdraw funding and refuse to invest in (or lend money to) any company that produces “fossil fuels.” Most recently Jim Cramer from CNBC’s “Mad Money” said, “I’m done with fossil fuels. They’re done. They’re just done.” (see Jim Cramer Succumbs to the Dark Side – “Done with Fossil Fuels”) Cramer’s words seem to echo the sentiment of many in mainstream media. And yet…and yet, we have evidence that divestment is NOT happening. Not anywhere near the level anti-fossil fuelers would have you believe.
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Big M-U Drillers Slash 2020 Spending a Collective 25%

For months MDN has brought you bits and pieces of news from individual drillers, detailing plans to cut back on spending for new drilling in the Marcellus/Utica in 2020. It’s not just happening in the M-U–it’s happening across the country. The experts at RBN Energy have a terrific new post that pulls information about major drillers scaling back into one place. They analyze spending by three different groups of drillers: oil-focused, diversified, and gas-focused drillers. In the third category, all but one of the gas-focused drillers have major operations in the M-U. The stats are sobering. As a collective group, M-U gas drillers have pledged to cut their 2020 budgets 25% from the already-lower spending that happened this year. Ouch.
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Antero Puts $1B M-U Assets for Sale; Shaves $350M from Midstream

Antero Resources is working hard to get the company on sound financial footing. That’s the message we took away from an announcement on Monday from the company that says (a) they’ve asked for and received a break in midstream (pipeline) prices from their own subsidiary, Antero Midstream, and (b) they’re putting some of their considerable Marcellus/Utica assets up for sale, hoping to raise upward of $1 billion.
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IEEFA Report Says Marcellus/Utica Drillers in Financial Trouble

Masquerading as a nonpartisan, independent nonprofit, the Institute for Energy Economics and Financial Analysis (IEEFA) reportedly “conducts research and analyses on financial and economic issues related to energy and the environment.” The Institute’s stated mission is “to accelerate the transition to a diverse, sustainable and profitable energy economy.” In other words, they’re anti-fossil fuels. We spotted an article appearing on OilPrice.com that quotes a new “study” issued by IEEFA. The article opens by saying, “drillers in Appalachia are in particularly bad shape.” Is it true? Is the end near? Is it a shalepocalypse?
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Antero Resources 3Q – Production Record High, Spending Record Low

Antero Resources, one of the biggest and best “pure play” drillers focused on the Marcellus/Utica (with major operations in West Virginia), released their third quarter update yesterday. The company reports producing an amazing 3.37 billion cubic feet equivalent per day (Bcfe/d) of natural gas production (32% liquids), while spending just $290 million to do it–the lowest quarterly spend since the company went public in 2013. On the down side, the company reported a $150 million net loss, but that’s mainly because of a one-time “impairment charge,” meaning it was a paper loss, not a cash out-of-pocket loss.
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Antero Resources Works Hard to Improve West Virginia’s Roads

The shale industry often gets a bad reputation for poor conditions along roadways where they operate–especially in West Virginia. In April, West Virginia Gov. Jim Justice, who is pro-coal (because much of his personal fortune comes from coal), took a swipe at shale drillers claiming shale is responsible for the poor condition of roadways in the Mountain State (see WV Gov. Justice Blames Shale for Bad Roads, Wants Higher Taxes). However, the fact is the oil and gas industry has spent $110 million on secondary road repairs and improvements in just last five years (see Oil & Gas Industry has Already Spent $110M Fixing WV’s Bad Roads).
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Antero Idles WV Frack Wastewater Plant Launched 2 Years Ago

Antero Clearwater Treatment Facility – Pennsboro, WV (click for larger version)

Ace reporter Paul Gough at the Pittsburgh Business Times is reporting an exclusive: Antero Resources, which built and launched an innovative frack wastewater recycling facility in Doddridge County, WV less than two years ago at a cost of $300 million, has idled the plant and is considering selling it. Say what?
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M-U Companies Dominate Top 10 NatGas Producers in 2019

Quick: Which company which recently had a board and upper management shakeup and focuses exclusively on Marcellus/Utica drilling is the #1 natural gas producer in the United States? That’s right, EQT. In a list of the top 40 natgas producers in the U.S. (full list below), it’s striking to note that eight of the top 10 are focused exclusively or primarily on the M-U.
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LNG Virtual Pipe Co Stabilis Buys/Merges in American Electric

Stabilis Energy, based in Houston, TX, offers a complete range of fully integrated LNG fueling solutions from LNG production to LNG distribution and technical support across North America. Stabilis has just bought out and merged in another company, American Electric Technologies. And believe it or not, there IS a Marcellus/Utica tie-in.
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Antero Wins $96M Lawsuit Against DC Utility for Not Buying Gas

In 2016 WGL Midstream became an investor/joint venture partner in the Stonewall Gathering System, a system which gathers Antero Resources’ natural gas from several West Virginia counties (see M3’s Stonewall Gathering System in WV Gets New Investor/Partner). WGL Midstream is a subsidiary of Washington Gas Light Co., a utility servicing the Washington, D.C. area.
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Ohio Appeals Court Upholds Antero’s Right to Use Forced Pooling

The legal beagles at Vorys represented Antero Resources in a recently-decided case with far-reaching implications for Ohio drillers and landowners. The Vorys team won the case. As with most lawsuits, this one is complicated and gets in the weeds. The short short version is that under an original lease signed years ago, a landowner and drilling company (at that time) removed a section of the lease that allows the landowner’s property to be pooled (called “unitized” in Ohio) with other properties.
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