Coterra 4Q Update: Marcellus Production Down, Profits Up
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%.
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New shale permits issued for Feb. 13-19 in the Marcellus/Utica remained elevated last week. There were 35 new permits issued in total last week (down slightly from 40 the week before), including 27 new permits for Pennsylvania, three new permits for Ohio, and five permits issued in West Virginia. Last week the top receiver of new permits was Coterra Energy, with 13 new permits for Susquehanna County, PA. The number two permittee was Apex Energy with five permits in Westmoreland County, PA.
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?
Yesterday MDN brought you the great news that Coterra Energy (formerly Cabot Oil & Gas) would be allowed to restart drilling in a nine-square-mile area in Dimock, PA (Susquehanna County) following a “no contest” plea deal with PA’s bullying Attorney General, Josh Shapiro, on a misdemeanor charge (see 
For all of you Paul Harvey fans (God rest his soul), this is, “The Rest of the Story.” Two weeks ago, Pennsylvania Attorney General Josh Shapiro, about to become Governor on Jan. 1 (a bona fide tragedy), made a big splash by announcing he had finally bullied Coterra Energy, the former Cabot Oil & Gas, into taking a plea deal in the infamous Dimock, PA case of methane migration into a few water wells (see 
It appears that Williams (pipeline company) and Coterra Energy (driller), along with end-customer Dominion Energy (local gas utility) have developed their own “responsible gas” certification scheme apart from the three such schemes widely used by many Marcellus/Utica drillers currently. In an announcement yesterday, Williams said the deal struck with Coterra and Dominion establishes “the industry’s first next generation natural gas certification process across all segments of the value chain from production through gathering and transmission with deliveries through 2023.”
The partisan bully Josh Shapiro, far-left Attorney General in Pennsylvania (who is becoming Governor on Jan. 1, to PA’s shame), has claimed victory in converting what was at best an accident into a crime against Coterra Energy (née Cabot Oil & Gas). Yesterday in a courtroom in Susquehanna County, PA, Coterra plead “no contest” to a single misdemeanor charge Shapiro ginned up against the company over stray methane in a few water wells in Dimock, PA going back 14 years. It is a horrible miscarriage of justice. We wouldn’t blame Coterra if they NEVER drill another well in the state.