Ascent Distros $12.5M to Unitholders; Performing Reverse Stock Split
We spotted an announcement from Ascent Resources that piqued our curiosity. Ascent, 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 (356,700 leased acres) and the 8th largest natural gas producer in the U.S. Yesterday, the company announced it is distributing $12.5 million to unitholders (shareholders) of the company next Monday. But the bigger news coming from the announcement is that Ascent will conduct a 1-for-100 reverse stock split, turning the 14.5 billion outstanding units (shares) of ownership into 145 million. Why?
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New shale permits issued for Aug 28 – Sep 3 in the Marcellus/Utica continued to decline. There were 13 new permits issued last week, down from 16 issued two weeks ago, and way down from the 27 issued three weeks ago. Last week’s permit tally included 8 new permits in Pennsylvania, 5 new permits in Ohio, and no new permits in West Virginia (WV has issued no permits in five of the last six weeks). Three drillers tied for the top recipient with a piddly 3 permits each: Chesapeake Energy, Snyder Brothers, and Southwestern Energy.
Folks new to the Marcellus/Utica may not know this, but Chesapeake Energy’s then-CEO Aubrey McClendon first “discovered” the Ohio Utica about 15 years ago. Under McClendon, Chesapeake spent over $2 billion acquiring rights to drill 1.3 million acres in Ohio–or roughly 5% of the state’s land area. McClendon pegged the value of the Utica for Ohio at half a trillion dollars. He famously said the Ohio Utica is “the biggest thing economically to hit Ohio, since maybe the plow.” McClendon was tossed out of the company he founded by corporate raider Carl Icahn, so he started a new company (to target the Ohio Utica) that eventually became Ascent Resources. Tragically, McClendon died in March 2016, so he never got to see his dream turn into reality (see 
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 (356,700 leased acres) and the 8th largest natural gas producer in the U.S. The company issued its second quarter 2023 update on Wednesday. Ascent’s net production averaged 2.1 Bcfe/d (billion cubic feet equivalent per day) during 2Q23, up 6% over 2Q22 but down from 2.2 Bcfe/d in 1Q23. The company made $250 million in profit during 2Q23, down just a bit from the $285 million it made in 2Q22.
The Ohio Dept. of Natural Resources (ODNR) recently released production numbers for the first quarter of 2023, and wow! What a surprise! Oil production in the northern Utica Shale skyrocketed, led by wells drilled by Encino Energy. According to an analysis by the Youngstown Business Journal, four shale wells drilled by Encino in Columbiana County have “shattered previous production figures in the county.” Adding up all oil production by all drillers, Encino had the most oil production in the state, with 53.7% of the total oil produced in the Utica/Point Pleasant during the first quarter. It certainly looks like Encino has cracked the oil code in the Buckeye State!