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Weekly Shale Drilling Permits for PA, OH, WV: Dec 14-18
Last week Pennsylvania issued 25 new shale well drilling permits in both northeast and southwest PA, although most of the permits for SWPA. Ohio issued 4 new shale well permits, all of them to the same company (Encino Energy) and the same well pad (in Harrison County). West Virginia issued 6 new shale well permits, one in Lewis County and the rest in Tyler County.
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Capital expense (capex) investments made by drillers in the Marcellus/Utica during the third quarter of 2020 were the lowest in at least six years according to a new report (full copy below) from the Institute for Energy Economics and Financial Analysis (IEEFA). The report looks at nine of the top drillers in the M-U and finds collectively they cut capex investment by more than one-third in 3Q20 over 3Q19. And yet those same nine collectively spent a half-billion dollars more during 3Q on drilling and building projects than they earned in revenue from selling oil and gas. That’s troubling.
In June 2019 the Cambridge (Massachusetts) Retirement System sued EQT claiming EQT’s executives had made false and misleading statements about their 2017 purchase of Rice Energy–claims about cost efficiencies that never materialized, and claims about the location of Rice leases that were not as close to EQT’s acreage as claimed (see 
Yesterday Pittsburgh Business Times‘ ace reporter Paul Gough got EQT CEO Toby Rice to open up and talk about the company’s recently announced deal to buy Chevron’s considerable Marcellus/Utica assets (see 
EQT CEO Toby Rice has been positively chatty lately. He gave a great interview to the Pittsburgh Business Times revealing his thinking with respect to the recently announced Chevron deal (see today’s lead story). He also spoke to Bloomberg reporters. Rice shared his views on further consolidation in the M-U sector. He indicated EQT is still in the hunt for a deal with CNX and possibly other M-U drillers.
An article in yesterday’s Wall Street Journal says there is a “split reality” emerging for U.S. shale drillers. Shale oil drillers are struggling to survive, while shale gas drillers, particularly in the Marcellus/Utica, are slowly seeing signs of financial recovery. The upshot is that you should consider investing in shale gas drillers (and not shale oil drillers).
Last week EQT Corporation announced a deal to buy Chevron’s considerable Marcellus/Utica assets (land and wells) for the lowball price of $735 million (see 
Looks like the rumors were true, at least one of them. Yesterday EQT announced it has cut a deal to buy Chevron’s considerable Appalachian assets for $735 million. The Reuters rumor from September said EQT had offered $750 million (see 
We don’t know how Pittsburgh Business Times ace reporter Paul Gough does it. Yesterday we told you Gough had gotten CNX CEO Nick DeIuliis to, in a roundabout way, discuss the rumor that EQT has floated a takeover offer to his company (see