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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Williams & Cabot Help Bring NatGas to Rural NEPA Community

This is one of those “feel good” stories. Going back to 2012, a number of officials in Wyoming County and the borough of Tunkhannock began to dream about connecting the borough to locally extracted Marcellus Shale gas. Among those who helped turn the dream into reality were Williams (the pipeline company) and Cabot Oil & Gas (shale driller). Thanks to the efforts of all involved, Tunkhannock eventually received state-backed funding to build “phase one” of the project (see PA Approves $2.4M Project to Run NatGas Pipes in Wyoming County). Phase one is now ready to go live.
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Cabot: Spending Up (Some) in 2019, Spending Down (Big) in 2020

Cabot Oil & Gas is the only Marcellus/Utica driller that is profitable quarter after quarter and year after year. So the market pays attention to what Cabot does, because they’ve figured out how to make money in a low commodity price environment. Last Friday Cabot released second quarter numbers. CEO Dan Dinges talked about the balance of 2019 and even a bit about what to expect in 2020.
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Capturing the Interest of the Next Generation to Work in PA Shale

The best teachers (people) and the best teacher (method of instruction) have the same thing in common: Hands on. As in tactile, doing stuff, rather than sitting in a chair attempting to learn by information dumping. Particularly with elementary-age kiddies. Cabot Oil & Gas and Southwestern Energy recently sponsored the annual Vehicular Career Day where 400 fifth graders from school districts across Susquehanna County climbed into big rigs, buses, and emergency vehicles. The shale industry was well-represented. Needless to say, the kids loved it.
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Cabot O&G Having a Tough Time Filling Open Jobs in NEPA

Several members of the Marcellus Shale industry spoke at a meeting of the Williamsport/Lycoming Chamber of Commerce yesterday, including MDN friend George Stark from Cabot Oil & Gas. George is director of external affairs. At the meeting he said the Marcellus industry has made tremendous strides in the last 10 years and will be around for decades to come. He said, “It’s booming in our area.” George also said Cabot is having trouble filling vacant jobs.
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Cabot O&G 1Q19: Production Skyrockets 21%, $308M Free Cash Flow

The money-making Marcellus machine known as Cabot Oil & Gas continues to crank out the hits. On Friday Cabot held a conference call to discuss the company’s first quarter 2019 performance. And wow! What a performance! The company made $308 million in net income/profit (up 141% from $128 million in 1Q18), and produced 2.3 billion cubic feet per day equivalent (Bcfe/d) of mostly Marcellus (little bit of Haynesville) gas, up 21% from 1Q18.
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Cabot Settles Overtime Work Lawsuit by 80 PA Workers for $3.56M

A second lawsuit we’re reporting on today that had previously slipped by our usually good radar. A former Cabot Oil & Gas employee filed a lawsuit in October 2017 alleging that he and a number of other “employees” had been stiffed out of overtime payments by Cabot–that Cabot had treated them as independent contractors rather than as employees. The lawsuit was granted class certification.
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Are Marcellus/Utica Shale Drillers Financially Healthy?

We read on a regular basis in mainstream media that shale companies spend more money than they bring in, and that investors are growing tired of pumping money into companies without a return on their investment. We’ve recently noticed a renewed commitment on the part of major drillers to get their financial houses in order–spend less and drill less in order to make more money.¬†We spotted an article by Reuters on the “shale drillers aren’t profitable/healthy” meme which got us investigating the financial health (or lack thereof) for Marcellus/Utica drillers. What we found may interest you.
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Dimock, PA Landowners Paid $5K/Mo by Green Groups to Bash Cabot

A startling revelation came from yesterday’s court hearing in the tiny village of Montrose, PA. Some of the landowners from Dimock, PA who have traveled around the country claiming their water had been contaminated by Cabot Oil & Gas (remember the fraud “documentary” called Gasland?) were actually paid up to $5,000 *per month* by green groups to spread their lies.
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Cabot “Making Offers” to OH Landowners; New Well in Richland Co.

Ohio’s gas counties – click for larger version

We spotted an article about a landowner meeting held last week in Ashland County, Ohio. In the meeting, lawyers advised landowners to hold off on signing a standard lease agreement with Cabot Oil & Gas for $25 per acre with 12.5% royalties. Those offers, from what we are able to determine, were sent a year ago. Since that time Cabot has drilled at least three (possibly four) wells targeting the Knox Formation in Ashland County (see Cabot O&G Fracks Its First OH Knox Well, Drilling 3rd OH Well). A fourth (possibly fifth) well is about to be drilled in neighboring Richland County. Lawyers are telling landowners who haven’t yet signed it’s prudent to hold off and see how these initial test wells perform. We have details about the recent landowner meeting, along with details about a new Cabot well being drilled in Richland County, below.
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Price of NatGas Doubles in NEPA – Thanks to Atlantic Sunrise Pipe

The evidence continues to pour in that the addition of Williams’ Atlantic Sunrise Pipeline, a 200-mile greenfield pipeline from northeastern to southeastern PA where it joins the Transco Pipeline, is having a dramatic and ongoing effect on natural gas prices in northeastern PA. As in, the price drillers get for their gas has doubled. Atlantic Sunrise went online in early October (see FERC Approves Atlantic Sunrise for Startup! Pipe Opens Sat. Oct. 6). The main shipper on Atlantic Sunrise is Cabot Oil & Gas. But Cabot isn’t the only shipper, and not the only beneficiary, of higher prices. Seneca Resources and Range Resources are also shipping gas on Atlantic Sunrise, and reaping the price benefits.
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Cabot O&G 3Q18: Production 2 Bcf/d, $122M Profit

Although Cabot Oil & Gas extracts natural gas from an area of Pennsylvania where gas fetches some of the lowest prices in the country, the company is making money hand over fist. The company made $122 million in profit during 3Q18 and estimates it will generate “free cash flow” (money in the bank) in the range of $650 million to $700 million in 2019. Cabot has moved from growth for growth’s sake to steady growth and higher dividends. A key part of their growth is the addition of new pipelines.
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By the Numbers – Revenue & Profitability for M-U Drillers

The expert analysts at RBN Energy have just published their “fourth and final” in a series of posts looking in detail at E&Ps (exploration & production companies, or “drillers”). One of the groups of E&Ps they examine are “gas-weighted” E&Ps–or drillers who mostly extract natural gas. In looking through the list, you immediately realize every one of them has operations in the Marcellus and/or Utica Shale region. Yes, a few also have operations in other plays, but they all have at least some operations here. The real value in the article is an accompanying spreadsheet comparing various financial metrics (apples to apples)–things like total revenue, lifting costs, production costs, and “pre-tax income,” meaning profitability. How do our drillers compare with each other?
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Cabot, Seneca Resources Grab 100% of New Transco Leidy Expansion

Williams is expanding its mighty, 10,500-mile Transcontinental Gas Pipe Line Co (Transco), again. Sometime this month Williams will prefile a request with the Federal Energy Regulatory Commission for the Leidy South expansion project. The new project will bump up “compression” (either build new compressors or refit existing compressors) and build new “looping” pipeline in Pennsylvania, in order to increase capacity of Transco in the northeast Marcellus region by another 580 million cubic feet per day (MMcf/d).
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