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29 New Shale Well Permits Issued for PA-OH-WV Feb 20-26
New shale permits issued for Feb. 20-26 in the Marcellus/Utica slide lower last week. There were 29 new permits issued in total last week (down from 35 the week before), including 24 new permits for Pennsylvania, no new permits for Ohio, and five new permits issued in West Virginia. Last week the top receiver of new permits by far was the largest natural gas driller in the country, EQT Corporation, with 20 new permits split between Greene and Washington counties in southwestern PA.
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CNX Resources CEO Nick DeIuliis is on a mission to reduce the number of outstanding shares of his company’s stock by buying back shares. The aim is to return value to shareholders. When a company buys back shares, it reduces the overall number of outstanding shares, which boosts the price for the remaining shares. In effect, DeIuliis is causing share prices to rise, putting money (and profits) into the pockets of shareholders. Since the third quarter of 2020, CNX has repurchased and retired 24% of the company’s outstanding shares of stock–one of the four top companies in the S&P 500 to do so.
And so begins the quarterly earnings report season. Yesterday CNX Resources issued its fourth quarter and full-year 2022 update. The company doubled its profits in 4Q22, making $1.2 billion, versus a profit of $630 million in 4Q21. However, as big as the profit was in 4Q, CNX still lost $142 million for the entire year–mainly due to $2.6 billion in losses on derivatives for the year. CNX generated $270 million in free cash flow for 4Q and cumulatively generated $707 million of free cash flow for the entire year. Production took a hit, down to 1.53 MMcfe/d (million cubic feet equivalent per day), compared to 1.72 MMcfe/d in 4Q21. The stated reason for the drop in production was a bad well and the cold snap (freeze-offs) during 4Q.
Earlier this week, MDN brought you news of a new vision from CNX Resources CEO Nick DeIuliis called “Appalachia First” (see 
CNX Resources President and CEO Nick DeIuliis has done it again. This morning CNX launched “Appalachia First,” the company’s vision for the future which draws on CNX’s regional leadership, core operational strengths, and an innovative business model. What is Appalachia First? In a nutshell, the strategy as outlined by CNX is to extract and KEEPING/USING natural gas right in our own region, making the Marcellus/Utica (i.e. Appalachia) the economic and jobs hub of the entire country. It’s brilliant!
Gas-focused drillers in the U.S. tracked by RBN Energy (most of them with major operations in the Marcellus/Utica region) had a stellar third quarter financially. The group of 11 publicly-traded drillers that RBN tracks tripled their earnings on average, and cash flows were up 150% over the same quarter last year. EQT Corp., now helmed by Toby Rice, was the most profitable company on the list, earning $2.6 billion in Q3 while generating $3.1 billion in cash flow. What about the others?
The Pennsylvania Dept. of Environmental Protection (DEP) announced that CNX Resources has paid two civil penalty assessments totaling $200,000 for violations at two different well sites in Richhill Township, Greene County. According to the civil penalty assessment paperwork, CNX spilled “production fluids” (wastewater, drilling mud, etc.) and didn’t clean it up quickly enough. Tallying all of the spills, CNX inadvertently spilled 2,170 gallons of production fluid at two sites, and ended up removing roughly 3,400 tons of “contaminated” soil.
CNX Resources has done it again. Earlier this week CNX announced a deal to provide “abated” methane to New Frontier Aerospace, Inc. (NFA) to fuel NFA’s soon-coming hypersonic passenger jets. The NFA concept is beyond cool. The jets will take off and land vertically, fly at 5,000 miles per hour, covering up to 8,000 miles in just two hours. How about a trip from New York City to London in a little over 40 minutes?!
We continue to be impressed with CNX Resources and its CEO Nick DeIuliis. CNX and the CNX Foundation are having a huge impact on the southwestern Pennsylvania (and tri-state) region where the company operates. In the past, we’ve told you about CNX and the work it is doing supporting underserved communities and populations in the tri-state region with $30 million in donations (see