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16 New Shale Well Permits Issued for PA-OH-WV Aug 21 – 27
New shale permits issued for Aug 21 – 27 in the Marcellus/Utica decreased once again. Up down, up down, up down. That’s what it feels like. There were 16 new permits issued last week, down nearly half from the 27 issued the prior week. Last week’s permit tally included 11 new permits in Pennsylvania, 5 new permits in Ohio, and no new permits in West Virginia (WV has issued no permits in four of the last five weeks). The top permittee for the week, for the third week in a row, was Chesapeake Energy, receiving 5 permits–1 in Bradford County and 4 in Sullivan County.
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Is there now a truce in the long-running dispute between Epsilon Energy and Chesapeake Energy over drilling new wells in Susquehanna County, PA? Perhaps! Yesterday, Epsilon, a small publicly-traded energy company that joint venture partners with (gives money to) other companies, like Chesapeake Energy, with the other company doing the drilling, announced that “the operator of our upstream assets in the Marcellus recently notified us of near-term drilling plans on our acreage.” While not named, the “operator” must be Chessy. Epsilon has an ongoing lawsuit against Chesapeake for refusing to drill new wells on its jv acreage.
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 
Chesapeake Energy has cut a deal to sell the third and final portion of its remaining Eagle Ford assets to SilverBow Resources for $700 million. The deal includes approximately 42,000 net acres and approximately 540 wells in the condensate-rich portion of Chessy’s Eagle Ford asset located in Dimmit and Webb counties (in Texas), along with related property, plant, and equipment. In 2018 Chesapeake, under the direction of then-CEO Doug Lawler, purchased 420,000 net acres in the Eagle Ford shale and Austin Chalk formations in Texas from WildHorse Resource Development Corp for $4 billion (see 
Chesapeake Energy Corporation, the country’s third largest publicly-traded natural gas producer, issued its second quarter 2023 update yesterday. The company reports a profit of $391 million in net income during 2Q23, down from $1.2 billion in 2Q22. The drop was due to lower gas prices and less production. Second quarter net production was 3,653 MMcfe per day (or 3.7 Bcfe/d, 96% natural gas, and 4% liquids), down 11% from 4,125 MMcfe per day in 2Q22. In the Marcellus, the company drilled three of the five fastest wells in company history, including the fastest well, a 10,383-foot lateral, to a total depth of 17,083 feet in less than eight days.
Two years ago, Chesapeake Energy announced that it would seek responsible gas certification from two organizations–Equitable Origin (EO) and MiQ–to certify the production of its natural gas produced in both its Marcellus and Haynesville operations (see 
In 2021, U.S. District Judge Lee H. Rosenthal, Chief Judge for the Southern District of Texas, approved deals for Chesapeake Energy to pay $6.25 million to class members of the three royalty lawsuits brought by Pennsylvania landowners (roughly 15,000 class members) and another $2.9 million to the lawyers involved (see 
For individuals, discretionary income is what’s left after you pay your taxes and fixed costs like housing, food, and clothing. For shale drillers, the equivalent to discretionary income is cash flow from operating activities (CFOA), which is the net income a company generates adjusted for non-cash expenses like depreciation and stock-based compensation, and for changes in working capital. Drillers can use their extra cash to grow production by spending more for drilling new wells (capital expenditures or capex). Or drillers can send some of the extra cash back to investors via share buybacks and dividends. How did Marcellus/Utica drillers spend their CFOA during the first quarter of 2023?