Ascent Resources Buying Back $25 Million of Its Own Units (Stock)
Corporations have two primary ways of enriching the owners (shareholders): issuing periodic dividends (cash payments) to shareholders or buying back shares, which reduces the number of outstanding shares, thereby increasing the value of each share (which can be sold for a higher profit). How do privately held companies like Ascent Resources make their owners/investors richer? Pretty much the same way. Ascent issued a press release yesterday to announce it is conducting an “unmodified reverse Dutch auction” to buy back shares (units, in the case of Ascent). The company will spend up to $25 million to buy back units. Our question is, why is Ascent doing this now? Read More “Ascent Resources Buying Back $25 Million of Its Own Units (Stock)”
For the week of Dec 2 – 8, permits issued in the Marcellus/Utica bounced back nicely. There were 28 new permits issued last week, more than doubling the 12 issued the week before (and matching the 28 issued three weeks ago). The Keystone State (PA) issued 18 new permits, with eight going to EQT spread across three counties: Jefferson, Lycoming, and Washington. Chesapeake Energy (now Expand Energy) received four permits, all of them in northeastern PA’s Wyoming County. CNX Resource scooped up two permits, both in Westmoreland County. The final four permits were singles issued to Blackhill Energy (Bradford County), XPR Resources (Centre County), Inflection Energy (Lycoming County), and Olympus Energy (Allegheny County). 
Ascent Resources, founded as American Energy Partners by gas legend Aubrey McClendon, is a privately held company focusing 100% on the Ohio Utica Shale. Ascent, headquartered in Oklahoma City, OK, is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its third quarter 2024 update last week. The company produced 2,075 MMcfe/d (2.08 Bcfe/d), down 4% from 2,165 MMcfe/d (2.16 Bcfe/d) produced in 3Q23. Ascent pivoted to produce more liquids, including oil and NGLs, with an emphasis on producing more NGLs during 3Q24. According to the update, the company plans to continue its liquids focus in the fourth quarter. 
We’re not high finance people (nor are we lawyers), but we do the best we can to explain financial (and legal) news that impacts companies and individuals in the Marcellus/Utica. Yesterday, Ascent Resources, a privately held company focusing 100% on the Ohio Utica Shale, announced it is floating new unsecured notes that mature in 2032 to purchase and payoff already-existing unsecured notes that were due to be paid (“maturing”) in 2026. We call them IOUs. Ascent is hoping to raise $600 million by selling the new notes. 
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.
There’s just no way to sugarcoat the fact that the low low price for natural gas is having an impact on shale drillers in the Marcellus/Utica. According to an analyst with RBN Energy, a price plunge to near the $2/MMBtu level in early 2023 “crippled” financial results for the companies RBN monitors that are gas-focused (namely M-U companies). However, most producers on the RBN list have remained in the black through spending less and cutting back on production. Down but far from out. How did the major M-U companies that are publicly traded perform in 2Q24? We have the numbers below. 
Ascent Resources, founded as American Energy Partners by gas legend Aubrey McClendon, is a privately held company focusing 100% on the Ohio Utica Shale. Ascent, headquartered in Oklahoma City, OK, is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its second quarter 2024 update on Wednesday. The company posted a 5% increase in net production to 2,190 MMcfe/d (2.19 Bcfe/d) compared to a year ago. Ascent is pivoting to produce more liquids, including oil and NGLs — although the emphasis is on producing more NGLs.