Manufacturers’ Assoc. Says PA Could Eclipse TX to Become #1 in Gas
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.
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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!
Just last week MDN told you we will, from now on, bring you new permit data for the previous week on Fridays. Yet here it is Thursday and we’re sharing the permit data for last week. What gives? MDN and its author, Jim Willis, are taking a break Friday (tomorrow) and next Monday for the Memorial Day holiday. Well, we’re taking Monday off for the holiday. We’re taking Friday off because there’s a wedding in Jim’s family this weekend. There are preparations to make, and celebrations to partake in. So we’re bringing you the permit data today, on Thursday. Speaking of which, there were 24 new permits issued last week, with 14 of them going to Pennsylvania, seven to Ohio, and three to West Virginia. We break it down below.
Coterra Energy, the new name for the merged Cabot Oil & Gas and Cimarex Energy, issued its first quarter 2022 update yesterday. Like other large Marcellus/Utica drillers, Coterra lost a bunch of money on derivatives (bad bets on the future price of oil and gas). However, unlike other large M-U drillers, Coterra still made money in 1Q22–a LOT of money. The company made $608 million in 1Q22 vs. making $126 million in 1Q21–nearly 5X as much. How? The price of natgas nearly doubled over the past year, that’s how. Coterra generated a massive $961 million in free cash flow, returning most of it to shareholders via dividends ($0.60 per share) and stock buybacks.
One of the hottest of the hot sectors in which to invest (right now) is shale energy. That’s according to multiple sources, including a veteran finance writer, investor, engineer, and researcher. In an article appearing on the OilPrice.com website, Alex Kimani talks up mid-cap energy stocks as outperforming the supermajors. Among two of Kimani’s top three picks are two Marcellus/Utica drillers, who are having a stellar year in stock performance. We went looking for the stock performance of other M-U drillers too. We have a list to share showing just how much each driller’s share price has increased this year.
According to RBN Energy, 2021 was the most profitable year in at least the last two decades for oil and gas producers (i.e. drillers). Oil and gas producers reported income two-thirds higher than the previous peak in 2014, when commodity prices were significantly higher. There’s every indication that 2022 will be even better for the bottom line of O&G companies. What about Marcellus/Utica drillers? Yep, they’re on the list of phenomenal results too.
According to Reuters, at least a dozen U.S. shale gas executives met yesterday in Houston, TX, with European energy officials to discuss expanding U.S. fuel supplies to Europe. Among those in the meeting were “top executives” from Chesapeake Energy, Coterra Energy (formerly Cabot Oil & Gas), and EQT Corp., the largest natural gas producer in the U.S. Individual meetings are planned between the execs and representatives from Latvia, Estonia, and Slovakia. It seems that Europe has finally opened its eyes (and its mind) to the benefits of American natural gas.
Coterra Energy (formerly Cabot Oil & Gas) remains one of our favorite Marcellus/Utica drillers. We personally know some of the great people who work there. We’ll never forget having a private tour of a drill site in Susquehanna County, PA by Coterra’s chief Marcellus driller, Buddy Wylie. During the tour, Buddy waxed eloquent on mud logging, showing us rock chips under a microscope. Seeing a drilling operation up close, understanding how wells are planned a year or more in advance, coordinating all of the logistics (when the sand needs to arrive, pipe inventory, trucks to move equipment, backhoes to get the pad ready, etc.) it dawned on us, this stuff really is rocket science! The smart folks at Coterra have done it again–more rocket science. This time they’ve developed a new method for predicting natural gas and oil reservoirs.