Epsilon 2Q – PA Production & Revenue Down Due to Low Gas Price
Epsilon Energy issued its second quarter 2024 update earlier this week. Epsilon, a relatively small company, used to concentrate most of its effort on developing Marcellus Shale wells. However, over the past few years, the company has expanded into other plays and now owns assets in the Anadarko (Oklahoma and Texas) and the Permian (Texas and New Mexico). Epsilon typically does not do its own drilling. The company joint venture partners with (gives money to) other companies, like Chesapeake Energy (in the Marcellus), and the other company does the drilling. For 2Q, Epsilon’s capital expenditures were $5.7 million, primarily related to work in Texas.
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Writing for Hart Energy’s Oil and Gas Investor magazine, author Nissa Darbonne penned a fabulous overview of the Utica, bringing us the history of oil drilling in Ohio (in the 1800s) all the way up to the present day and Encino Energy’s dominance in oil drilling in the Utica. The article includes details about Encino and other companies, including Infinity Natural Resources and EOG Resources. Yesterday, we brought you the story of oil giant EOG joining the Utica party (see 
Chesapeake Energy issued its second quarter 2024 update yesterday. Due to the low price of natural gas, Chesapeake promised (in 1Q) that it would curtail roughly 25% of its production. The company kept its word. Chessy’s 2Q production was 24.9% lower than the same period in 2023. Production was 2.745 Bcfe/d in 2Q24 versus 3.653 Bcfe/d in 2Q23. Interestingly, the company’s production was ALL (100%) natural gas — no oil and no NGLs were produced last quarter. Chessy lost $227 million last quarter versus making $391 million in profit in 2Q23. The company used an average of eight rigs to drill 30 wells and place four wells on production. It built an inventory of five drilled but uncompleted wells (DUCs) and 24 deferred turn-in-lines (TILs). Chesapeake is currently operating seven rigs and two completion crews, having dropped a rig in the Marcellus in July.
For the week of July 15 – 21, a total of 14 permits were issued to drill new shale wells in Marcellus/Utica. Pennsylvania issued six new permits, split two each for INR, Chesapeake Energy, and Olympus Energy. Ohio issued eight new permits, all of them to Encino Energy split between two counties. West Virginia issued no new permits last week.
Three weeks ago, 31 new permits were issued to drill in the entire Marcellus/Utica region. Two weeks ago, the number dropped (dramatically) to just seven new permits. And then last week, the number of permits issued soared once again — all the way up to 46. Bam! We just kicked it up a notch. Seneca Resources took the top spot for new permits, receiving a total of nine permits, all in Tioga County, PA. Chesapeake Energy and Antero Resources tied for second place with seven new permits each, with Chessy’s permits coming in Bradford County, PA, and Antero’s in Doddridge County, WV. Coming in third was Jay-Bee Oil & Gas with six permits issued in Pleasants County, WV. State by state, PA issued 24 new permits, OH issued 9, and WV issued 13 permits.
Chesapeake Energy has gone through some major changes over the past four years. In June of 2020, Chessy declared bankruptcy (see 
While oil-focused and large diversified drillers in the U.S. made healthy profits during the first quarter of this year (January through March), such was not the case for natural gas-focused drillers. RBN Energy tracks 43 exploration and production (E&P) companies that are publicly traded and reports of those 43 that the 16 oil-focused and 15 diversified E&Ps were solidly profitable in 1Q24, earning $20.65/boe (barrels of oil equivalent) and $18.49/boe, respectively. However, the 12 gas-focused E&Ps were “under siege,” posting a loss of $1.65/boe.
Yesterday, MDN brought you the news that Chesapeake Energy, with its headquarters in Oklahoma City, OK, had begun a round of layoffs, supposedly (according to Chesapeake) due to the company divesting from Eagle Ford oil assets (see 
The ghost of Doug “the ax” Lawler is once again roaming the halls of Chesapeake Energy (see