Antero Resources | Chesapeake Energy | CNX Resources | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Gulfport Energy | Range Resources Corp | Seneca Resources | Southwestern Energy
Marcellus/Utica Drillers (All Gas Drillers) Had Fantastic 3Q22
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?
Read More “Marcellus/Utica Drillers (All Gas Drillers) Had Fantastic 3Q22”
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 
CNX Resources released its third quarter 2022 update late last week. The company lost $427 million in profit for the quarter versus losing $873 million in 3Q21. It generated $135 million in free cash flow. Total 3Q revenues of $476 million improved slightly year over year from the previous year’s $455 million. CNX sold its gas for an average of $3.25 per thousand cubic feet equivalent (Mcfe), up 10% from the year-ago figure of $2.96/Mcfe. Production costs were $1.64/Mcfe, up 6% from one year ago–due to inflation.
Expectations play a big role in investing. The financial markets do a lot of anticipating and forecasting and guessing about where a company or entire sector is heading. Such is the game being played right now with expectations for Marcellus/Utica shale gas companies and their forthcoming third quarter financial updates. Given the high price of natural gas during 3Q22, analysts expect shale gas companies to be swimming in free cash flow. The natural follow-on question is, what will they do with all of that extra cash?
Yesterday the Pennsylvania Independent Oil & Gas Association (PIOGA) held its annual Marcellus to Market conference at Hollywood Casino at The Meadows in Washington, PA. The event explored efforts to promote manufacturing in Pennsylvania, natural gas as a transportation fuel, the future of the long-rumored Appalachian Storage Hub, and the latest regarding pipelines and other means of delivering natural gas to market. A key focus for the event and topic for a panel discussion in the morning was workforce recruiting, development, and retention. MDN friend Charlie Schliebs, Chairman of the Energy Innovation Center Institute and Managing Director of Stone Pier Capital Advisors, moderated this lively panel.
In something of a shocker, EQT Corporation, the largest natural gas producer in the country with its headquarters (and most major drilling operations) in Pennsylvania, is throwing its weight and support behind a coalition in West Virginia to attract one of the so-called regional hydrogen hubs (worth $1 billion or more in taxpayer investment) to the Mountain State, not to the Keystone State. EQT is one of the main players in forming a new coalition called the Appalachian Regional Clean Hydrogen Hub (ARCH2). Other big energy companies supporting ARCH2 include Williams, Dominion Energy, CNX Resources, and New Fortress Energy (among many more).
Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 30 new drilling permits, down from the 40 permits issued the week before. PA roared back to life by issuing 21 of the 30 permits, with OH issuing just three and WV issuing six.
Drillers (exploration and production companies, or E&Ps) were thrilled with record-high earnings and cash flow in the second quarter of this year. Soaring commodity prices and “strict financial discipline” on the part of oil and gas drillers resulted in pre-tax operating earnings and cash flows surging by 29% and 22%, respectively, from 1Q22. And 1Q22 was up too! So what did drillers, especially drillers in the Marcellus/Utica, do with all that extra cash? Did they pay down debt? Buy back shares of company stock? Issue higher dividends? Something else?
In early 2013 the Pittsburgh International Airport and Allegheny County, PA, signed a deal with CONSOL Energy (now CNX Resources) to lease 9,000 acres surrounding the airport for natural gas drilling (see