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Weekly Shale Drilling Permits for PA, OH, WV: Sep 6-12
Last week Pennsylvania issued 18 permits for new shale well drilling scattered across the state. Ohio (for the eighth week in a row) did not issue any new shale permits. Are we missing something with Ohio? Are they late in updating their online database? West Virginia issued 2 permits for new shale well drilling last week.
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During the second quarter (May through June), ten of the largest oil and gas producers covered by S&P Global Market Intelligence saw their NGL (natural gas liquids) revenues grow substantially from the same period a year ago. Those ten companies, half of them drillers in the Marcellus/Utica region, saw NGL prices increase from 104% to as high as 261%. The extra money from NGLs made what turned out to be a down quarter financial-wise (because of bad bets on hedges) better than it would have otherwise been.
When CNX Resources issued its second quarter update in July, the company revealed that it is not only “net carbon zero” right now, it has been that way–actually net carbon negative, pulling more CO2 out of the atmosphere than it puts in–since 2016 (see 
As they have done in the past few quarters, CNX Resources again issued a quarterly update without an accompanying summary/overview. We have the raw numbers (below), and we have excerpts from the conference call with analysts. One observation from the numbers: It seems major M-U drillers collectively went over the derivatives cliff in 2Q21. CNX, like Antero and EQT (see those stories in today’s update) posted a 2Q loss of $354 million based on a derivatives loss of $539 million. The company did manage to generate free cash flow of $117 million and pay down another $89 million in debt.
Expectations coming from Wall Street are that pure-play drillers, like many in the Marcellus/Utica, will show a turnaround in their financials for the second quarter of 2021. According to S&P, investors took drillers at their word last year that they won’t “drill baby drill” the way they have in years gone by. The stock prices of nearly all major M-U drillers have soared over the past 12 months as a result. The biggest turnaround has been Antero Resources. Its stock price is up nearly 400% over the past 12 months! Range Resources’ stock price is up 140%.
You can’t miss all the chit-chat coming from the oil and gas industry (particularly drillers) about being “net carbon zero” by such-and-such a date–typically by 2025. Or maybe 2030. CNX Resources, an independent natural gas driller (and midstream company) based in Pittsburgh, released its annual corporate social responsibility (CSR) report for 2020 yesterday. CNX continues to walk the talk when it comes to ESG (environmental, social, governance)–one of the few (only?) companies to do so. Get this: CNX has been net carbon *negative* (pulling CO2 out of the atmosphere) for its Scope 1 and 2 operations since 2016! It is the only E&P we’re aware of that can make that claim. Everyone else is still trying to get to net carbon zero, let alone net carbon negative as CNX has done.
In April, CNX Resources Corp. announced instead of just blowing smoke about ESG (environmental, social, governance) with pretty slide shows and hoopla, they would donate $30 million to local, underserved communities and populations in the tri-state region (see 
RBN Energy is a fountain of great information about the oil and gas sector. Headed by industry icon Rusty Braziel, RBN tracks and reports on a number of O&G companies. One of the best features of their information service is tracking the performance of three groups of publicly-traded O&G companies: Oil-Weighted E&Ps, Diversified E&Ps, and Gas-Weighted E&Ps. That last group, the gas-focused companies, is a list of 10 E&Ps. Only two of the ten don’t have any operations in the Marcellus/Utica–all the rest do. RBN has just published a post about the financial performance in 1Q21 for all three groups. The numbers are very encouraging.
NGL (natural gas liquid) revenues for U.S. drillers soared in the first quarter of 2021–up 100% (i.e. doubled) over the same quarter in 2020, which was the quarter when COVID-19 began to seep into the public consciousness. In particular international demand for U.S. liquefied petroleum gas (LPG, or propane) helped propel NGL revenues higher in 1Q21. Guess which company posted the highest year-over-year increases for both NGL prices and revenues?
M&A, or mergers & acquisitions, is on everyone’s mind in the oil and gas industry. Particularly in the Marcellus/Utica region. EQT, under the leadership of Toby Rice, already the largest natural gas producer in the country, has been on the prowl. In the past eight months EQT has picked up all of Chevron’s M-U assets (see 
One of the criticisms often leveled against the shale industry is that shale drillers have destroyed shareholder value (the price of company stock) over the past decade or so (see