12 New Shale Well Permits Issued for PA-OH-WV Jun 17 – 23
We didn’t bring you the latest permit numbers on Friday because the Pennsylvania Dept. of Environmental Protection’s report website was down (again, for the umpteenth time). The site was back online this morning, so we ran our weekly query and discovered PA issued a whopping three permits for the week of June 17-23, all of them issued to Coterra Energy in (gasp) the township of Dimock! Yes, drilling in Dimock is back. Love it! In addition, Ohio issued nine new permits, with seven going to Encino Energy for oil drilling in Guernsey and Harrison counties. Ohio also issued two permits to Ascent Resources in Jefferson County. West Virginia issued no new shale permits for that period.
Read More “12 New Shale Well Permits Issued for PA-OH-WV Jun 17 – 23”
Coterra Energy CEO Tom Jorden sat for an interview with Jim Cramer on CNBC’s Mad Money program Tuesday evening. During the interview, Jorden had an interesting comment and insight that has the power to change the natural gas market. Jorden said that data center operators (big computer server facilities) may cut supply agreements directly with natural gas companies to meet the growing power demands of the artificial intelligence boom. And it may happen a lot sooner than you think.
While oil-focused and large diversified drillers in the U.S. made healthy profits during the first quarter of this year (January through March), such was not the case for natural gas-focused drillers. RBN Energy tracks 43 exploration and production (E&P) companies that are publicly traded and reports of those 43 that the 16 oil-focused and 15 diversified E&Ps were solidly profitable in 1Q24, earning $20.65/boe (barrels of oil equivalent) and $18.49/boe, respectively. However, the 12 gas-focused E&Ps were “under siege,” posting a loss of $1.65/boe.
Coterra Energy announced a large layoff of employees at its GDS (GasSearch Drilling Services) Marcellus operation yesterday. GDS was founded in 2006 as a subsidiary of Cabot Oil & Gas (now Coterra Energy). GDS is based in South Montrose, PA, and provides services including pad site development, impoundment construction, water hauling, trucking, light equipment rental, and roustabout services supporting Coterra’s natural gas drilling. GDS employs approximately 170 people in Susquehanna County at various locations. Yesterday, 55 GDS employees got a pink slip.
In October 2020, a law firm filed a lawsuit on behalf of several Cabot Oil & Gas shareholders against Cabot (now Coterra Energy), claiming the company “had inadequate environmental controls and procedures and/or failed to properly mitigate known issues related to those controls and procedures,” and that the company “failed to fix faulty gas wells which polluted Pennsylvania’s water supplies through stray gas migration” (see 
Coterra Energy, formed by the merger of Cabot Oil & Gas (drills for natural gas in the Marcellus) and Cimarex Energy (drills for oil in the Permian and Anadarko basins), issued its first quarter 2024 update on Friday. The company turned in respectable financial numbers, making a profit of $352 million in 1Q24, albeit down 48% from the $677 million it made in 1Q23. The company produced 2.31 Bcf/d (billion cubic feet per day) in the PA Marcellus during 1Q24, up 8% from 2.13 Bcf/d in 1Q23. However, the money it received for its natgas production dropped like a rock. The average sale price for its gas in 1Q24 was $2.20/Mcf, down 41% from $3.71/Mcf in 1Q23. No wonder the company has pivoted to spend more time and money on oil drilling rather than gas drilling.
Earlier this week, MDN told you that EQT, the country’s largest natural gas producer, had implemented an immediate cutback on natural gas production of 1 billion cubic feet per day (see 
Our worst fears about the merger between Cabot Oil & Gas and Cimarex Energy to form Coterra Energy have come to pass. We said from the beginning that the new company would use the Marcellus as a “cash cow” to fund more oil drilling. That’s now happening. Yes, the price of natural gas (especially in northeastern Pennsylvania, where Coterra drills) is in the basement. We understand it’s not all that profitable to sink money into more gas production right now. However, Coterra announced on Friday during its fourth quarter and full-year 2023 update that in 2024, the company will slash spending on new drilling in the Marcellus by 55% (dropping $460 million) and that production will drop by an estimated 6% in the Marcellus.
From time to time, we bring you news of the latest merger and acquisition (M&A) deals happening, especially the deals that impact the Marcellus/Utica. Often, we don’t highlight large M&A deals if they are exclusively between companies operating in other shale plays and regions. One of those deals we ignored was announced on Monday, a proposed merger between publicly-traded Diamondback Energy, which wants to buy privately held Endeavor Energy Resources for $26 billion. Both companies operate in the Permian Basin of Texas and New Mexico. The question floating around the O&G space is, who’s left to buy and merge after all of the M&As happening over the past year or so? It’s a pretty short list. One of the companies on that list (with significant Permian acreage, in addition to Marcellus acreage) is Coterra Energy.