Which 5 Drillers Dominate in the Utica Shale?
Everyone loves a Top 5 or Top 10, including MDN. Who are the Top 5 drillers in the Utica Shale? It depends, of course, on your criteria for selecting such a list. One of MDN’s favorite writers on The Motley Fool website, Matt DiLallo, has just published what he calls “The 5 Companies Dominating the Utica Shale Play.” In other words, the Top 5 Utica drillers. Matt points out that in the span of five short years the Utica has become the nation’s second largest shale gas play, behind only the Marcellus. Matt uses a combination of acres-under-lease and number-of-wells-drilled to come up with his list of five drillers who are leading the charge in the Utica. It won’t surprise you to learn that Chesapeake Energy, which was the first company to drill in the Utica under then-CEO Aubrey McClendon, is head-and-shoulders above the rest as the #1 Dominator in the Utica. Some of the others in the Top 5 list may, however, surprise you. Here’s Matt’s excellent roundup of the Utica…
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There’s certainly more than one way to make money on fracking in the Marcellus/Utica. Billionaire hedge fund manager David Tepper (Appaloosa Management) has found such a way. Tepper knows a good company, or four, when he sees them. In the fourth quarter of 2015, when Marcellus/Utica company stocks were at one of their lowest points, Tepper loaded up, buying stock in four leading northeast drillers. Half a year later he turned around and sold that stock, for a 100%+ return on his investment. He doubled his money. Smart man. Which drillers’ stocks did Tepper buy and then sell?…
Antero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update yesterday. Antero has one of, if not THE best, hedging programs in the entire Marcellus/Utica region. Hedging means they get a higher price for selling their gas than just about anyone else through prearranged financial/trading contracts. But Antero’s famed hedging program wasn’t enough to keep the company from losing $596 million in 2Q16. By comparison, Antero lost $145 million in 2Q15. However, it wasn’t all doom and gloom. Antero’s production was up a healthy 19% in 2Q16–to an average 1.762 billion cubic feet per day (or 1,762 MMcf/d, a new record for the company). If you mix in oil, natural gas liquids and hedging, Antero got $3.95 per thousand cubic feet (Mcf) for their hydrocarbons, while the actual spot sale price averaged $1.93/Mcf–which shows just how savvy Antero’s hedging program is. Lately the company has been snapping up more Marcellus acreage, mostly in WV (see 
Norwegian oil giant Statoil, which is 67% owned by the country of Norway, was an early and big mover in leasing Marcellus and Utica Shale acreage, amassing a huge 665,000 acres. Over the past few years Statoil has been equally aggressive in divesting itself of its non-operated acreage (Statoil doesn’t do the drilling) in the northeast–in particular in West Virginia. This is about to get complicated, but we’ll try to make it understandable. A lot of Statoil’s acreage is in joint venture deals. In December 2014, Statoil sold some of its “working interest” in the Marcellus acreage it owns in WV and PA to Southwestern Energy for $394 million (see 
Antero Resources announced yesterday that the company has just cut a deal with Southwestern Energy to purchase 55,000 net acres located in Wetzel, Tyler and Doddridge Counties in West Virginia for $450 million. Antero says the acreage is in the “core” of the Marcellus and some 75% of the acreage also includes Utica Shale rights. The acreage Southwestern is selling is acreage they themselves bought in 2014 from Chesapeake Energy. Chessy originally signed the acreage with landowners for $5 per acre (peanuts). Southwestern paid Chesapeake $12,000 per acre (see 
Crestwood Equity Partners (nee Crestwood Midstream) issued its first quarter 2016 update last week. In April Crestwood announced that New York City utility giant Consolidated Edison Inc. has formed a 50/50 joint venture to purchase ownership of pipelines and storage facilities in the PA and NY Marcellus region (see