Coterra Energy (Cabot O&G) | Education | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County | Wyoming County (PA)
Texas, New Mexico, Okla. Travel to PA Marcellus to Get Educated
This is quite a turnabout. George Mitchell pioneered how to combine horizontal drilling with hydraulic fracturing in the Texas Barnett Shale 25 years ago, giving birth to the miracle of modern-day “fracking.” Drillers throughout the southwest, in Texas, New Mexico, and Oklahoma, experimented and blazed a trail for the rest of the country (and world) to follow. Yet now, representatives from those three southwestern states have traveled to northeastern Pennsylvania and the Marcellus to learn a thing or two that we have figured out and do better.
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After several weeks of anemic permit numbers for Pennsylvania, last week PA came roaring back by issuing 30 permits to drill new shale wells. Some 12 of those permits went to Coterra Energy for two pads in Susquehanna County. EQT (aka Rice Drilling) received six permits for a single pad in Greene County, and Chesapeake Energy also received six permits split between two pads–one pad in Bradford County and the other in Lycoming County.
Coterra Energy was formed by the merger of Cabot Oil & Gas (Marcellus gas driller) with Cimarex Energy (Permian gas driller) last October (see 
Coterra Energy, formed last October when Cabot Oil & Gas merged with Cimarex Energy, issued its second quarter update yesterday. The company made $1.2 billion in profit last quarter, versus making just $30 million a year ago. Natural gas production in the Marcellus stayed pretty much even at 2.22 Bcf/d. The company generated over $1 billion in free cash flowing during 2Q–one of the highest, if not the highest, we’ve seen. Coterra uses its free cash flow to issue dividends, buy back shares, and retire debt sooner.
Pennsylvania State Police are investigating the vandalism and theft of copper from a Coterra Energy well pad on Stockholm Road in Rush Township in Susquehanna County, PA, sometime between July 8 and 14. The case appears to be your garden-variety case of lowlifes stealing copper to resell it (a “crime of opportunity”), and not some sort of statement by environmental wackos. But, one never knows with wackos…
Wow! What a difference two years can make. At the dawn of the pandemic, the share price for publicly traded oil and gas stocks (in particular Marcellus/Utica drillers) was in the basement. With the pandemic now in the rearview mirror (we hope), and demand increasing for both oil and natural gas, the price of oil and gas has skyrocketed, and along with it, O&G companies are raking in the cash. How are M-U drillers using their newfound piles of cash to compensate investors?
The Pennsylvania Environmental Hearing Board (EHB) is a special court set up in PA to hear appeals of decisions made by the PA Dept. of Environmental Protection (DEP). In February 2021, a landowner (three people living at the same address) in Susquehanna County, PA, filed a lawsuit with the EHB against the DEP and Coterra Energy (formerly known as Cabot Oil & Gas) alleging Coterra’s drilling program nearby had led to polluting their water well. As of last week, the case was dismissed and the Pittsburgh attorney for the landowner (for the first time ever) was sanctioned by the EHB.
Each quarter NGI (
Daniel Sherwood takes a look at various metrics for Marcellus/Utica drillers in the latest edition of the TCF Upstream Monthly. Sherwood uses production trends, well efficiencies, and portfolio decline rates to compare and contrast M-U drillers. In the June issue (full copy below), Sherwood finds that CNX Resources and Chesapeake Energy are “leading,” Gulfport Energy and National Fuel Gas (i.e. Seneca Resources) are “underperforming,” and Coterra Energy (formerly Cabot Oil & Gas) is “improving.”
David Taylor, president and CEO of the Pennsylvania Manufacturers’ Association, was one of the featured speakers at yesterday’s Think About Energy Briefing held in Berks County, PA. Taylor said if PA and federal legislators commit to a pro-growth agenda, PA could become the country’s No. 1 natural gas-producing state. Right now that honor belongs to Texas, which produces enormous amounts of associated natural gas. In 2021, #1 Texas produced 9.4 Tcf (trillion cubic feet) of natural gas, while #2 PA produced 7.7 Tcf. Taylor’s statement is not unthinkable. PA *could* one day eclipse TX natgas production.
We spotted a story on The Motley Fool investor’s website yesterday noting that several Marcellus/Utica publicly-traded drillers saw “double-digit” increases in their share price just yesterday, for a single day. The article highlights both Range Resources and Southwestern Energy. We started nosing around to see how the stock price for all of the big publicly-traded M-U drillers has performed this year, from the beginning of the year. It was an eye-opener. ALL of them are up from the beginning of the year. Most are up at least 75% in value since Jan. 1. A few have doubled in value, now up more than 100% since Jan. 1. We have the list below for how each one performed. Welcome to the bull market in oil and gas!