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16 New Shale Well Permits Issued for PA-OH-WV May 13 – 19
Permits issued in the Marcellus/Utica continue to bounce up and down. One month ago, there were 26 new permits in the M-U for a one-week period. Three weeks ago, 16 new permits were issued. Two weeks ago, just ten new permits were issued. And last week, May 13-19, the number increased to 16, but only because of Pennsylvania. Range Resources scored seven new permits in PA last week, all in Washington County. EQT (and its subsidiary Rice Drilling) received six new permits last week, mostly in Fayette County, PA (with one in Washington County, PA). Southwestern Energy received three permits to drill in Brooke County, WV. Ohio issued no new permits last week.
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Back in the summer of 2020, MDN told you about a lawsuit brought by an Ohio rights owner called TERA, an organization that owns the royalty rights for a number of leases with wells in Belmont County, OH, drilled by different producers, suing the producers for drilling into the Point Pleasant shale layer when the lease only mentions the Utica layer (see 
The merger of EQT Corporation and Equitrans Midstream into a single company took one giant leap forward on Wednesday when the Hart-Scott-Rodino (HSR) Antitrust Act waiting period expired. In November 2018, under intense pressure from activist investors, EQT split itself into two companies: EQT Corporation and Equitrans Midstream (see 
A group of landowners in Belmont County, OH, filed a lawsuit against Rice Drilling (now EQT Corporation) in July 2021, alleging the company had shorted them on royalty payments by (a) selling the gas extracted to an affiliated (instead of unaffiliated) third party, and (b) deducting post-production costs specifically disallowed under the signed contract. Several landowners who are part of what was originally known as the Smith-Goshen Landowners Group have requested a federal court in Ohio to elevate the lawsuit to class-action status.
EQT Corporation, the largest natural gas producer in the U.S. (100% focused on the Marcellus/Utica), released its first quarter 2024 update yesterday. The company produced 5.87 Bcf/d (billion cubic feet per day) of natural gas in 1Q. Executives said they will continue the current curtailment (reduction) of 1 Bcf/d, in place since late February, until at least the end of May. A major focus of CEO Toby Rice’s comments is the coming demand for natgas from gas-fired power plants in the Southeastern U.S. Among the bigger pieces of news is that once EQT buys out and merges back in Equitrans (which it used to own), EQT plans to expand the Equitrans-owned Mountain Valley Pipeline (MVP) by another 0.5 Bcf/d.
Following yesterday’s conference call with analysts to discuss EQT’s first quarter performance, CEO Toby Rice appeared on CNBC to answer questions (watch the segment below). As he did during the quarterly update call, Rice once again zeroed in on new demand markets coming from gas-fired power plants in the Southeastern U.S. He also said the market is currently oversupplied with natural gas, but he sees two catalysts to help lower the excess gas in inventory: hot summer weather and gas-fired powergen. And the powergen doesn’t just come from homes running AC to keep cool. He’s talking about new data centers appearing that operate artificial intelligence and need huge new amounts of electricity to operate all those computers.
Last Wednesday, EQT Corporation held its annual shareholders meeting. These sorts of meetings are typically short and sweet, as was EQT’s meeting last week. Ahead of annual meetings, various resolutions are circulated for shareholders to vote on (by proxy before the meeting). There were three such resolutions on EQT’s agenda this year: Election of board members, hiring an accounting firm to do an independent audit, and executive compensation for 2023 (last year). In the bowels of the paperwork, we discovered that EQT CEO Toby Rice was being paid $10.6 million for his work last year, reckoned as $1 dollar in salary plus $9.6 million in shares of EQT stock and $1 million in incentive compensation. Rice’s compensation last year is actually down from 2022 ($11.6 million) and 2021 ($16.9 million).
We tried to cram the gist of the news into the headline but found we could not. This is a big story, for multiple reasons. Most news outlets are reporting (and this is not incorrect) that EQT pulled off a big deal to divest a good chunk of its nonoperated assets (acreage and functioning wells in which EQT owns a minority stake) in northeastern Pennsylvania, trading those assets for 10,000 operated acres in Lycoming County, PA (in northeastern PA), plus 26,000 operated acres in Monroe County, OH, plus receiving $500 million cash, in a deal with Norway’s Equinor (formerly Statoil). EQT divesting from its nonop assets is a big deal. However, the bigger news, in our humble opinion, is that Equinor has (with this deal) completely exited all operated assets in U.S. shale. The company wants to keep its fingers in the U.S. shale pie, but only as a nonop operator — that is, investing in wells that other companies drill and maintain.
MDN is not a stock-picking service, but we spotted an interesting article appearing on the Seeking Alpha investor’s website about where to invest now so that when the price of natural gas eventually rebounds (and with it, lifts the stock price of gas producers), investors can make money. The investor/writer, who is a nuclear power engineer by training, proposes the theory that investing in the Marcellus/Utica is a better choice than investing in other gas plays because (a) our drillers have lower breakeven costs and (b) some of our drillers also produce NGLs, which fetch more money than methane.