Appalachian Basin Upstream O&G Report: Less Drilling, EQT Rumors
Our good friend Charlie Schliebs, managing director of Stone Pier Capital, recently circulated a PowerPoint presentation/report from James Knobloch Petroleum Consultants that does an expert job at compiling current data and other valuable information on the status and trends for the oil and gas industry in the Appalachian Basin. Some of the juicy tidbits from the slide deck and accompanying commentary from Charlie: Drilling activity in the Marcellus/Utica *is* slowing down at the moment, but this downturn is different than previous downturns. Also, rumors are swirling about EQT. And, worries about competition coming from the Permian.
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EQT Corp. is offering to sublease “more space” at its downtown Pittsburgh headquarters building. Back in April, before the change in leadership at the top, EQT offered up to 46,000 square feet of space to lease at its massive 250,000 square foot building known as EQT Plaza, located at 625 Liberty Ave. (see 
Ever wonder how it feels to be “streamlined” (laid off, fired) to help the company’s “bottom line”? We can assure you, it feels lousy. It feels like the end of the world has just happened. The future is now uncertain. Will you have to sell the house? Pull the kids out of school? File for food stamps (something you’ve never had to do)? Those are some of the thoughts that are swirling through the heads of 196 soon-to-be former employees of EQT after the latest round of “streamlining” and “workforce reductions.”
EQT contracted two drilling rigs from Orion Drilling in 2014 that later, in 2015 and 2016, experienced trouble–like a 50,000-pound drilling block slamming to the ground kind of trouble. EQT canceled the contract and would no longer use the two rigs. Orion sued claiming breach of contract. A jury decided EQT was in the right by canceling the contract. Orion asked a judge to overturn the jury decision and order a new trial. Yesterday the judge refused, meaning the jury decision stands and Orion now owes EQT $2.8 million to cover EQT’s attorneys’ fees and costs. Ouch, that didn’t go as planned.
The Pittsburgh Business Times‘ ace report Paul Gough is reporting an exclusive: EQT is getting ready to fire (i.e. layoff) around 200 employees. “Multiple sources” have confirmed the plans to the PBT. Since the company employs around 800 employees, that represents 25% of the entire workforce. This comes on the heels of the company laying off over 100 people earlier this year, when the company was run by a different management team (see 
Toby Rice, CEO and president of EQT, and Clay Carrell, COO and EVP of Southwestern Energy, recently had a sit down discussion about the state of the shale industry in the Marcellus/Utica and its importance to the economy of West Virginia. The discussion happened at the recent West Virginia Chamber of Commerce Annual Meeting and Business Summit. One surprising revelation for us: Carrell said Southwestern now spends most of its money on WV drilling.
The new leadership at the top of EQT continues to have a major impact on the company and its relationship with landowners and (in this case) entire states. Last year EQT launched an effort to overturn WV’s Senate Bill (SB) 360 (see 
In February, prior to the July takover by Toby and Derek Rice, EQT filed lawsuits in both Pennsylvania and federal courts against two former employees it had fired, claiming the employees, before they were fired, had systematically copied confidential information from company computers and took it with them when they left (see 
In June MDN told you that the Cambridge (Massachusetts) Retirement System is not happy with their investment in EQT shares of stock, so they’re suing the company (see 
EQT’s new CEO Toby Rice made the rounds and conducted four town hall-style meetings with landowners (see 
Last week MDN told you that EQT CEO Toby Rice is conducting a series of four “town hall” style meetings with landowners in regions where the company drills (see 
For years MDN has observed that Cabot Oil & Gas is one of the few Marcellus/Utica drilling companies that can “spin straw into gold”–meaning it makes money on selling natural gas even when the price of that gas is in the basement (see 
Yesterday MDN told you that new EQT CEO Toby Rice is in the midst of conducting four “town hall” style meetings with landowners–two this week and two next week (see 
After a bruising proxy fight, Toby and Derek Rice (formerly from Rice Energy) won control of EQT, the largest natural gas-producing company in the U.S. (see 
Quick: Which company which recently had a board and upper management shakeup and focuses exclusively on Marcellus/Utica drilling is the #1 natural gas producer in the United States? That’s right, EQT. In a list of the top 40 natgas producers in the U.S. (full list below), it’s striking to note that eight of the top 10 are focused exclusively or primarily on the M-U.