Rice Energy Prime Prospect for M&A Buyout?
One of the lowest cost producers that gets some of the highest prices for its natural gas in the Marcellus/Utica is Rice Energy. The difference between what it costs Rice to produce gas ($0.90/thousand cubic feet, or Mcf) verses what they sell it for (an average $3.12/Mcf) means Rice makes a whopping 247% internal rate of return, or IRR–which is THE most profitable driller among 10 of the largest Marcellus/Utica drillers surveyed (see today’s companion post on Hedging Gas Prices in the Marcellus/Utica). The Rice boys’ stellar performance has not gone unnoticed by analysts at investment and research firms. In fact, one such analyst, from Wolfe Research, says Rice “could be” a target for takeover/buyout by a larger competitor. Which competitor? Let’s name names…
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In January, three liberal Democrat county commissioners from Fayette County, WV, with the backing and help of the radical WV Mountain Party, voted to ban injection wells in the county (see 
Kudos to EQT for being a good corporate citizen. EQT, through its charitable subsidiary the EQT Foundation, doled out $1.3 million to 43 non-profit organizations located in Pennsylvania, West Virginia and Kentucky during the first half of 2016. During one of the worst downturns in the oil and gas industry in a generation. The Foundation, established in 2003, has donated a cumulative $37 million since it was founded. Astonishing! Here is a partial list of the very-worthy organizations receiving money in 1H16…
The answer to the question posed in the headline of this article, asking where drillers are starting to drill again now that they are starting to drill again, is–it depends on the driller. There is no particular geography in the Marcellus/Utica, nor is there a preference for a given layer (Marcellus or Utica) across the major players. Each of them is following their own strategy. Here’s a rundown for several major players and their strategies…
As you have no doubt noticed, we are in the midst of quarterly reports season. Public companies (those with stocks) must file quarterly financial reports with the Securities and Exchange Commission. Along with those filings comes a version of the same news constructed for consumption by investors and the general public. The overall “feel” of reports coming from most Marcellus/Utica drillers has been upbeat. The obvious trend is that the big drillers–EQT, Cabot, Southwestern, others–plan to drill more wells in 2Q16 than originally forecast. However, given the recent severe downturn, most drillers are sounding notes of caution as a balance to the good news that more drilling is on the way. Perhaps “cautiously optimistic” is the best way to put it…
EQT, one of the big Marcellus/Utica drillers, with its headquarters in Pittsburgh, released an interesting second quarter 2016 update yesterday. Along with the update came a quarterly conference call with analysts. You may recall that the Utica Shale play previously turned the head of EQT (see 
In May MDN told you that EQT, a major Marcellus (and Utica) driller based in Pittsburgh, had cut a deal to purchase all of Norwegian Statoil’s Marcellus assets in West Virginia (see 
Another day, another attack on natural gas by the radicals of the Sierra Club. In this case, the Virginia chapter of the Sierra Club found a retired geologist they could buy, er, a, hire to write a report slamming the Mountain Valley Pipeline, a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. The pipeline is due to be built by EQT, NextEra Energy and several other partners. The geologist who sold himself out to the Sierra Club says the pipeline would run through a “karst” area–an area of sinkholes and caves–and building the pipeline could potentially damage the water aquifer in that area. Below is a news report and a copy of the sham report released by the Virginia Sierra Clubbers…
A few days ago MDN told you how proud we are of the Marcellus/Utica industry for stepping up the plate and donating money (and time) to assist flood victims in West Virginia (see 
In January, three liberal Democrat county commissioners from Fayette County, WV, with the backing and help of the radical WV Mountain Party, voted to ban injection wells in the county (see 
Two weeks ago MDN told you that Rice Energy had offered a “stalking horse” bid of $200 million for the shale assets of now-bankrupt coal company Alpha Natural Resources (see