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18 New Shale Well Permits Issued for PA-OH-WV Apr 24-30
New shale permits issued for Apr. 24-30 in the Marcellus/Utica fell from the prior week. There were 18 new permits issued last week, down from 25 in the prior week. Last week’s tally included 8 new permits for Pennsylvania, 4 new permits for Ohio, and 6 new permits in West Virginia. Last week the top receiver of new permits was Antero Resources, with 6 permits issued in Tyler County, WV. EQT (Rice Drilling) was second-highest, with 4 permits issued in Greene County, PA.
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The sharp analysts at RBN Energy have sifted through the announcements and “guidance” statements from 42 of the country’s major publicly-traded oil and natural gas drillers for 2023. Among them are 11 gas-focused drillers, nine of which have operations in the Marcellus/Utica region. Looking at the list of 11 gas-focused drillers, RBN finds production will be just about the same in 2023 as it was in 2022–projecting a dip of 1% this year. The analysis also finds collectively that the 11 gas-focused drillers will spend around 9% more on drilling this year due to Bidenflation. Spending more to produce the same–not a winning formula for a politician to run on.
Coterra Energy, the new name for the former Cabot Oil & Gas that merged with oil driller Cimarex Energy, issued its fourth quarter and full-year 2022 update yesterday. Coterra’s natgas program is focused on drilling in Susquehanna County in northeastern Pennsylvania. A couple of things stood out for us from the update. First, Coterra’s Marcellus production dropped in 2022. During 4Q21, Coterra produced an average of 2.5 Bcf/d (billion cubic feet per day) of natural gas in the Marcellus, versus producing 2.1 Bcf/d in 4Q22–down 14%. For the full year, Coterra produced an average of 2.3 Bcf/d in 2021 and 2.2 Bcf/d in 2022–down 6%.
The difference between the Susquehanna River Basin Commission (SRBC) and the Delaware River Basin Commission (DRBC) is stark. The former is well-run and rational, the latter is disorganized and irrational. At least with respect to fracking. Over the weekend, the SRBC published a notice in the Pennsylvania Bulletin to announce that during the month of January, the agency approved 38 requests for daily water use on shale well pads in the SRBC’s jurisdictional territory in Pennsylvania, totaling some 233.5 million gallons. Put another way, this is a handy list of where drilling will soon happen in northeastern PA.
What a difference three years can make! Three years ago, Henry Hub prices were hovering around $2 per thousand cubic feet (Mcf). Stock valuations for Marcellus/Utica drillers were majorly depressed (down 80-90% from previous highs), and gas producers were struggling. Fast forward to today. Balance sheets and earnings statements are through the roof. Most experts believe $4-$5/Mcf gas is sustainable–at least for the next X years. What does the future look like for M-U drillers? What are the risks? And can we keep the current bright outlook going?