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Gas Drillers Had Best Shareholder Returns in 2024; Investor Love
The experts at RBN Energy recently analyzed the Q3 2024 financial results for the gas-focused producers the company tracks (mainly Marcellus/Utica producers). The gas-weighted E&Ps RBN follows had the best total shareholder return performance of the three peer groups they tracked through the first nine months of 2024, with a median gain of 14%. On the high side, CNX Resources’ share price was amazing, up more than 60% for the first nine months of last year. On the other end, Coterra Energy’s share price lost value. Read More “Gas Drillers Had Best Shareholder Returns in 2024; Investor Love”
For the week of Jan 6 – 12, permits issued in the Marcellus/Utica to drill new shale wells remained healthy. There were 27 new permits issued last week, down three from 30 issued the week before. The Keystone State (PA) issued 13 new permits, with four going to Snyder Brothers in Armstrong County, four going to Coterra Energy in Susquehanna County (must be Coterra has restarted drilling), three for Infinity Natural Resources (INR) in Indiana County, and two for Range Resources in Washington County. 
According to an extensive report appearing on the World Oil website (and in the November issue of the magazine), multiple possible futures lie ahead for the Marcellus and Utica shales. So, which future will come to pass? Today, both industry and government see the Marcellus and Utica formations as tremendous opportunities for companies and state governments, with domestically produced energy, jobs, and a huge economic impact. 
There is an important development for landowners AND drillers in a class action case that began some seven years ago. A civil suit was brought by Harrison County oil and gas owners against Antero Resources Corp., claiming the company had deducted post-production costs from royalties not allowed under the leases they had signed. In 2022, the U.S. District Court for the Northern District of West Virginia ruled mostly in favor of the landowners. The District Court sent two certified questions to the state Supreme Court. The Supremes ruled on both issues in November. The court ruled that energy companies cannot deduct post-production costs without explicit lease language, favoring royalty owners over drillers. 
Antero Resources, which is 100% focused on the Marcellus/Utica with over 500,000 net acres under lease (and the largest M-U driller in West Virginia), issued its third quarter 2024 update yesterday. The company reports net production averaged 3.4 billion cubic feet equivalent per day (Bcfe/d) during 3Q24, a decrease of 2% year-over-year. Of the company’s 2024 production, liquids (NGLs) averaged 206 thousand barrels per day (MBbl/d), an increase of 2% from 3Q23. Natural gas production averaged 2.2 Bcf/d, down 4% from 3Q23. The company lost $20 million in 3Q24 versus making $17.8 million in profit in 3Q23. 
In 2024, natural gas prices have spent almost the entire year under $3.00 per Mcf (thousand cubic feet), including a few months under $2.00/Mcf. You would think such low prices would have a negative effect on the stock prices of publicly traded Marcellus/Utica gas producers. Not so! Stock prices for our drillers have remained “remarkably stable.” In fact, Antero Resources’ price is actually UP this year. Range Resources is flat for the year so far. Others, like EQT and Coterra Energy, are down just a smidge. Given the disadvantages of the M-U basin—primarily the lack of pipeline takeaway capacity and the long distance our molecules must travel to Gulf Coast LNG export facilities—it’s surprising that stock valuations for our drillers have not been negatively impacted. 
Feedgas flows from the Marcellus/Utica to the Cove Point LNG export facility located on the shore of Maryland fell to zero last Friday, Sept. 20. It was the start of the facility’s annual maintenance outage. The question is, how long will Cove Point be out of commission for liquefying and exporting LNG? According to Reuters, maintenance forcing the facility offline will last “for about three weeks.” Each year, the plant closure is a moving target and a guessing game about how long it will remain offline. Every day counts! 
WhiteHawk Energy, headquartered in Philadelphia and owning mineral and royalty interests for over 1 million gross unit acres with over 3,400 producing horizontal shale wells between the Marcellus and the Haynesville, announced yesterday the acquisition of additional Marcellus Shale natural gas mineral and royalty assets for an undisclosed amount. The deal added 435,000 gross unit acres across southwestern Pennsylvania and northern West Virginia. 
The Ohio Department of Natural Resources (ODNR) released production numbers for the second quarter of 2024 yesterday. The story the numbers tell continues to be about Utica oil, which continues to rise each quarter. Ohio’s total oil production during 2Q24 was 8.01 million barrels, up 23% from 2Q23’s 6.5 million barrels and up 11% from 1Q24’s 7.2 million barrels. The story of oil in the Buckeye State can’t be told apart from Encino Energy (EAP), which produced nearly half of all the state’s oil during 2Q24. As for natural gas production, it’s no surprise it went down slightly in 2Q24, given the current low price for gas. The state produced 526.6 Bcf in 2Q24, down 3.7% from 2Q23’s 547.0 Bcf, and down 1.4% from this year’s first quarter number of 534.0 Bcf. MDN pulled the numbers from the ODNR quarterly report and produced top 25 lists for both gas and oil wells.