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25 New Shale Well Permits Issued for PA-OH-WV May 29-Jun 4
New shale permits issued for May 29-Jun 4 in the Marcellus/Utica finally went higher again last week. There were 25 new permits issued, up from the dismal 8 new permits issued the previous week. Last week’s permit tally included 13 new permits for Pennsylvania, 6 new permits for Ohio, and 6 new permits in West Virginia. EQT scored the most new permits with 7 issued in Greene County, PA. Close behind in the #2 position was Antero Resources, with 6 new permits issued in Ritchie County, WV.
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It’s possible to track which institutional investors (big investors like BlackRock) are buying or selling shares in various companies by reviewing Securities and Exchange Commission (SEC) Form 13F filings. S&P Global Market Intelligence performed a 13F review of which companies bought, and which sold (and how much) shares of stocks for shale gas drillers during the first quarter of 2023. The topmost active shale gas driller having its stock purchased by institutional investors was Comstock Resources, which drills exclusively in the Haynesville Shale. The reason Comstock came out on top, postulates S&P, is because the Haynesville is located close to the Gulf Coast and LNG export plants. However, it was the rest of the list that interested us.
The weather has been fantastic for those of us living in the northeastern U.S. over the past few weeks. Clear blue skies (when they aren’t clouded with wildfire smoke from Canada), really warm temperatures, and absolutely no rain to spoil outdoor activities. Here in the Binghamton, NY area, we went from a surplus of rain and swollen rivers and lakes just a month ago to a rain deficit today. Lawns and fields and beginning to turn brown. Hey, we’re not complaining! But we do need some rain. The lack of rain in the Susquehanna River Basin has triggered water withdrawal restrictions for 42 oil and gas drillers and four other large water users (46 in all) by the Susquehanna River Basin Commission (SRBC). In many cases, the SRBC order is to “cease withdrawal.”
It’s been a wild ride for shale energy companies from the beginning of the shale revolution around 20 years ago. Here in the Marcellus/Utica, the very first Marcellus well was sunk by Range Resources in 2004. Until a few years ago, most shale drillers were not profitable, eating through investors’ money like candy. Just before the beginning of the pandemic, shale drillers got the “free cash flow” religion and began to pull back on new drilling in favor of profitability for shareholders. The pandemic, followed by Russia’s war against Ukraine, added new market gyrations. Bottom line: Last year, shale oil and gas drillers saw historic revenues and profitability. This year, the bottom is dropping out once again…
Last November, MDN told you about a lawsuit filed by a family in Washington County, PA, against Chevron (now EQT) for drilling and fracking done in 2011-2012 near the family’s home (see 
Investors in shale oil and gas companies suffered for years with little or no returns for the money they invested. Five of eight large Marcellus/Utica drillers saw their share prices decrease by an astonishing 85% or more from 2008 to 2019 (see 
We are currently in the latest quarterly update season. In fact, we are about done with quarterly updates for the first quarter. Most (if not all) of the publicly traded Marcellus/Utica drillers have turned in their quarterly updates, as well as gas drillers from other plays (like the Haynesville). If you review the statements made by U.S. gas drillers in this latest round of updates, you’ll find the sentiment expressed that although we’re currently in the price basement for natural gas, most drillers don’t think it’s going last long. They think low prices for natgas are short-lived and that a rebound awaits us in 2024.
Last September, EQT Corporation announced it is buying privately-owned Tug Hill Operating’s West Virginia shale assets for $5.2 billion (see 
EQT Corporation, the largest natural gas producer in the U.S., issued its first quarter 2023 update yesterday. The company reported a profit of $1.2 billion in net income during 1Q23 versus losing $1.5 billion in the same quarter a year ago. That’s nearly a $3 billion swing in one year! The company generated $774 million in free cash flow in 1Q. Production was 459 Bcfe (billion cubic feet equivalent) for the quarter, which works out to be 5.1 Bcfe/d, down 7% from last year’s 1Q, which was 492 Bcfe (or 5.47 Bcfe/d).
Free cash flow (FCF) refers to a company’s available cash repaid to creditors and as dividends and interest to investors. Companies typically use FCF to buy back shares of stock, pay fatter dividends, or pay off creditors. When the price of natural gas went through the roof last year, natural gas drillers were rolling in the FCF. Now with natgas commodity prices in the basement, FCF money has been wiped off the table. How much? For six large natural gas-focused drillers (five of them focused on the Marcellus/Utica, one on the Haynesville), some $8 billion of FCF is “now off the table” according to an article by Bloomberg.