NatGas-Powered WATT Fuel Cells Provided to 500 West Virginia Homes
A fuel cell manufacturer located in Westmoreland County, PA–WATT Fuel Cell–disclosed in 2022 that its biggest investor is EQT Corporation (see EQT Invests in Fuel Cell Co. – Foresees Future Market for NatGas). WATT Fuel Cell manufactures Solid Oxide Fuel Cell (“SOFC”) stacks and systems that operate on common, readily available fuels such as natural gas and propane. Instead of burning and combusting natural gas (or propane), those fuel sources are subjected to an electrochemical process that produces electricity (see this post for a description of the process: SWPA NatGas Fuel Cell Backed by EQT Wins Product Certification). WATT is ready to go mainstream. The company is distributing 500 of its units to customers of Hope Gas, a West Virginia-based natural gas utility.
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New shale permits issued for Jun 26 – Jul 2 in the Marcellus/Utica saw a dramatic increase, thanks to a bump in Pennsylvania’s numbers. There were 39 new permits issued last week, way up from 11 issued the previous week. Last week’s permit tally included 30 new permits in Pennsylvania, 8 new permits in Ohio, and just 1 new permit in West Virginia. Coterra Energy scored the most new permits with a whopping 12 issued in Susquehanna County, PA (for two well pads). Range Resources had the second most new permits, with 7 permits issued in Washington County, PA (for one pad).
For individuals, discretionary income is what’s left after you pay your taxes and fixed costs like housing, food, and clothing. For shale drillers, the equivalent to discretionary income is cash flow from operating activities (CFOA), which is the net income a company generates adjusted for non-cash expenses like depreciation and stock-based compensation, and for changes in working capital. Drillers can use their extra cash to grow production by spending more for drilling new wells (capital expenditures or capex). Or drillers can send some of the extra cash back to investors via share buybacks and dividends. How did Marcellus/Utica drillers spend their CFOA during the first quarter of 2023?
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 
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).