Cabot O&G 3Q: 2.4 Bcf/d, Drilled 13 Wells, Upper Marcellus Coming
Dan Dinges, CEO of Cabot Oil & Gas, said last week: “2020 has proven to be the most challenging year for natural gas prices in the last 25 years, resulting from a multi-year trend of overcapitalization of both oil and natural gas assets across our industry.” Indeed. The company released its third-quarter 2020 update on Friday and reported a net loss of $15 million, compared to net income of $90.4 million in 3Q19. This is the first quarterly net loss for Cabot in recent memory. Still, there was plenty of good news coming from the 3Q update…
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Only Pennsylvania issued permits to drill new shale wells last week in the Appalachian region. Neither Ohio nor West Virginia issued any new drilling permits from Oct. 5-9. In PA, some 20 permits were issued in both the northeast and southwest parts of the state.
We spotted a couple of stories, one in Barron’s the other in the Wall Street Journal, about the pickup in the futures price of natural gas over the past week, and how those recent gains have led to impressive gains in the share price for Marcellus/Utica drillers. Yesterday the NYMEX Henry Hub futures price closed up 4.11% to $2.74/Mcf. The rising tide lifts all boats.
Here we go again. Just last week we told you that a New York City law firm couldn’t find enough interest to make a class action lawsuit against Cabot Oil & Gas using a sham indictment from the highly political Pennsylvania Attorney General’s office, so the law firm pulled the plug on the case (see 
Cabot Oil & Gas issued an operational update yesterday to announce that because of persistently low prices for natgas, as of Sept. 18 the company curtailed approximately 372 million cubic feet equivalent per day (MMcfe/d) of gross production to finish out the last 13 days of the quarter. After that?
Cabot Oil & Gas issued its 2Q20 update on Friday. CEO Dan Dinges said natural gas prices hit a historic low in 2Q (lowest since 1995), but he thinks the price will improve “this winter.” Although the price Cabot got for its gas last quarter ($1.52/Mcf) was 33% lower than a year ago, the company still made a profit. Cabot netted $30 million in 2Q, vs. netting $181 million a year ago. The company drilled 14 new shale wells, completed/fracked 31 wells, and placed 25 new wells online last quarter. They produced an average of 2.2 Bcf/d of natural gas.
How does one make money in the natural gas market these days when the price of gas is at historic lows? One way is if an investor was fortunate enough to bet the price would go down. Those folks made money. The other way is to…invest in drillers? Yep. Even though low prices hurt drillers, investors still like the looks of what is on the horizon, especially for companies operating in the Marcellus/Utica. Example: The stock price for Range Resources and EQT is up over 30% each this year so far.
A warning right up front: This post is speculation and rumor. As you know if you’ve read MDN (or any other media source covering oil and gas in the past two weeks), on June 28 Chesapeake Energy filed for Chapter 11 bankruptcy (see 
In the American system of justice, when someone is accused of committing a crime, they are presumed innocent under the law until it is proven, in a court of law, they have committed said crime. But when a defendant, someone accused of committing a crime, is a fossil fuel company, that defendant is automatically presumed to be guilty. There is no presumption of innocence. That’s what is happening to Cabot Oil & Gas.
Earlier this week Pennsylvania Attorney General Josh Shapiro announced an indictment of Cabot Oil & Gas for allegations of methane migration going back more than a decade (see 
A word you will likely see a lot more of in quarterly updates by oil and gas drillers across the country is the word “impairment.” It’s an accounting term that means the value of an asset (leased acreage or wells) is adjusted, down, to reflect a company’s best guess as to how much revenue that asset can generate. We wrote about impairments back in 2015 (see 
The door has been closed on “Dimock” (in Susquehanna County, PA) for years. Dimock, you may recall, was made famous by Josh Fox’s so-called documentaries Gasland and Gasland 2, aired endlessly on HBO. His allegations about fracking malfeasance by Cabot Oil & Gas were completely debunked in a real documentary called