EQT Looks to “Graduate from” (Exit) Huron Shale “Prep School”
Looks like EQT, the largest natural gas-producer in the U.S., is graduating from prep school. That is, EQT is about to sell all of its remaining assets in the Huron Shale play. The Huron is located mainly in West Virginia and Kentucky, also poking up into Ohio and traveling along the edge of Virginia. Most of EQT’s considerable Huron assets (some 12,000 wells) are located in Kentucky. From what we can tell, most of those wells are conventional. That is, not horizontal wells but vertical. The Huron was EQT’s early experiment in shale before shale was “a thing.” EQT played around in the Huron to learn how to drill in shale. According to former CEO Steve Schlotterbeck, “the Huron play was like prep school for us.” Last Thursday EQT filed a Form 8-K with the Securities and Exchange Commission advertising the news they have plans to sell their Huron assets–not only the wells but the pipeline system that connects the wells…
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Last year when EQT bought out and merged in Rice Energy, it became the largest natural gas-producing company in the United States (see 
Last week MDN told you about the ongoing vendetta by a few anti parents in the Mars School District (half hour from Pittsburgh, in Butler County) and their Big Green accomplices. They suffered a major court defeat (see 
The average worker who works for producers (i.e. drillers) in the Pennsylvania Marcellus makes among the highest average salaries of any industry in the state. Looking at six of the state’s top Marcellus drillers, the average worker made $113,610 last year! That’s an average taken from workers at CNX Resources, Range Resources, Chesapeake Energy, Southwestern Energy, EQT and Cabot Oil & Gas. We hasten to add not “all workers” but “average” or “median” workers–meaning there are people who make below that number and people who make well above that number. It also means the majority of Marcellus workers in those companies made at least $100,000 per year. Those working for oilfield services (OFS) companies like Halliburton, Baker Hughes and others didn’t fare quite as well, making an average of $52,000-$80,000 per year. Still, hey, it ain’t bad money! Here’s a look at the average wage for top Marcellus drillers and the OFS companies that serve them…
On Wednesday, Pennsylvania Commonwealth Court (an appeals court) heard oral arguments over how to prove whether contaminants in the soil have moved into groundwater. The case dates back to 2014 when the PA Dept. of Environmental Protection (DEP) slapped EQT with a $4.53 million fine for a leaky wastewater impoundment in Tioga County (see 
This is a story that continues to bug us. The state of Pennsylvania, specifically the Dept. of Conservation and Natural Resources (DCNR), is grabbing money that we think belongs to private landowners. The DCNR has been, for years, claimed that under a centuries-old law that the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see 
EQT, now the largest natural gas-producing company operating in the United States (since its acquisition of Rice Energy in 2017) issued its first quarter 2018 update yesterday. Among the flood of news coming from the update: EQT lost $1.6 billion in 1Q18, versus making a $164 million profit in 1Q17. But the big loss was not money out of pocket–it was a paper loss, mostly due to “writing down” the value of assets in the Permian (Texas) and Huron (Kentucky) shale plays. EQT is ending its flirtation with the Texas Permian, selling its Permian assets for a minuscule $64 million. The company refused to talk about whether or not they plan to sell or keep the Huron assets. Most of EQT’s drilling remains Marcellus Shale-focused. In 1Q18 EQT drilled 24 Marcellus wells, 2 Upper Devonian wells, and 6 Ohio Utica wells. Kind of funny (for us) was the way acting CEO David Porges described the current situation he finds himself in. Porges was CEO of EQT until early 2017 when Steve Schlotterbeck took over as CEO (groomed by Porges for the job). Porges has been Executive Chairman of the board since that time. But Schlotterbeck suddenly resigned in March when the board refused to pay him what other top energy CEOs make (see 
As EQT gets ready to split the company into two companies later this year, the midstream (pipeline & processing plants) portion of the company yesterday announced a complicated “drop down” deal to streamline the midstream operation. The short version is this: EQT has midstream assets spread throughout three companies on paper–EQT Midstream Partners, EQT GP Holdings, and Rice Midstream Partners. Yesterday the company announced all three are being merged under one umbrella–EQT Midstream Partners. As you’ll read in the EQT announcement, the entire deal is complex–with various entities buying assets from the others. One of the more interesting aspects of the deal is that EQT Midstream is buying EQT’s (the driller’s) Olympus Gathering System and EQT’s 75% interest in the Strike Force Gathering System. EQT Midstream is also buying out Gulfport Energy’s 25% interest in Strike Force, meaning EQT Midstream will now own 100% of Strike Force–a gathering pipeline system in the dry gas Utica covering 98,000 acres in Belmont and Monroe counties, in Ohio. Here’s the news that EQT is getting its midstream ducks in a row…
We’ve written a number of posts over the years about the ongoing, sometimes quiet sometimes not, civil war between Pennsylvania landowners and some (not all) drillers who use inflated post-production deductions to pad their own bottom lines, leaving landowners with peanuts–sometimes with no royalties at all (see 
Earlier this year the West Virginia legislature passed Senate Bill (SB) 360, which Gov. Jim Justice subsequently signed into law (see 
A debate is playing out in West Pike Run Township in Washington County, PA (near Pittsburgh) that we find interesting. A quick PA history lesson: Back in 2012 PA passed the Act 13 law to update oil and gas regulations to account for shale drilling. One of the updates was a uniform set of zoning requirements to protect residents and the environment. Unfortunately, seven selfish townships sued and eventually won (at the PA Supreme Court) challenging those regulations. So PA towns won the right to impose restrictions on drilling activities. In West Pike Run, the debate is over “setbacks”–how far does a well have to be from nearby structures, like homes and barns and businesses. State law imposes a minimum of 500 feet from the wellhead to an “occupied” structure–and 300 feet from the well to a body of water. In West Pike Run, antis want to up that number to 1,000 feet, which would effectively prevent any more drilling by EQT, the primary driller in the township. The town recently held a hearing on the proposed 1,000 foot setback, a hearing which has been continued to a future meeting on April 16…