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WV Supreme Court Delivers Major Decision on O&G Severance Tax
The West Virginia Supreme Court of Appeals ruled in favor of Equinor USA Onshore Properties Inc. (formerly Statoil) in a multi-million dollar tax dispute last Friday. The case has major implications for how the state calculates severance taxes for natural gas liquids. The decision reversed an intermediate court’s procedural dismissal, entitling Equinor to over $19 million in tax refunds for the years 2014, 2015, 2016, 2018, and 2019. The dispute centered on the definition of “gross proceeds” and the timeliness of administrative appeals in a years-long battle with the West Virginia tax commissioner. Read More “WV Supreme Court Delivers Major Decision on O&G Severance Tax”
Norway’s Equinor (formerly Statoil) is expanding its U.S. shale gas footprint, specifically targeting the Marcellus Shale to increase “portfolio longevity.” This strategic move is part of a broader global reshuffling in which Equinor is divesting from mature assets in regions such as Azerbaijan and Nigeria to reinvest in high-growth areas. The U.S. remains Equinor’s largest international development hub, and the company aims to boost non-Norwegian production to 900,000 barrels per day by 2030. By focusing on non-operated positions in Appalachia and the Gulf of Mexico, Equinor is “high-grading” its portfolio to relocate capital toward more sustainable, long-term production assets. 
In 2015, a group of landowners in northeastern Pennsylvania who had leased their land for fracking filed a lawsuit against Chesapeake Energy, Anadarko, Statoil (now Equinor), Mitsui E&P, and Access Midstream (later bought by Williams), alleging the companies had improperly deducted post-production costs (e.g., gas gathering and transportation expenses) from royalties owed to the landowners in breach of their respective leases. The lawsuit also alleged collusion and conspiracy to defraud the landowners (antitrust violations). The lawsuit was on hold for many years while other lawsuits played out. In 2024, a federal court in Scranton unpaused the lawsuit, and the judge ruled, tossing out the landowners’ royalty claims (see 
We’ve been pretty hard on Equinor since 2018 when Statoil changed its name to Equinor, apparently ashamed of being associated with the term oil (see 
Enverus Intelligence Research (EIR), a subsidiary of Enverus, issued a summary of the fourth quarter and full-year 2024 upstream M&A (mergers and acquisitions) activity yesterday. Two of the top five M&A deals include deals in the Marcellus/Utica. Coming in at #3 on the list was EQT’s sale of non-operated assets to Equinor for $1.25 billion in October (see 
MDN first reported on a lawsuit by a group of Wyoming County, PA, landowners back in January 2019 (see 
As part of its third quarter update, EQT Corporation, now the second-largest natural gas producer in the U.S., dropped the bombshell that it has completely divested from the remaining non-operated wells it owns in northeastern Pennsylvania, selling the assets to Norwegian company Equinor (formerly known as Statoil) for $1.25 billion. You may recall in April, EQT did a deal with Equinor to swap land in Pennsylvania and Ohio, plus receiving $500 million from Equinor to sweeten the pot (see 
The Ohio Department of Natural Resources (ODNR) released production numbers for the second quarter of 2024 yesterday. The story the numbers tell continues to be about Utica oil, which continues to rise each quarter. Ohio’s total oil production during 2Q24 was 8.01 million barrels, up 23% from 2Q23’s 6.5 million barrels and up 11% from 1Q24’s 7.2 million barrels. The story of oil in the Buckeye State can’t be told apart from Encino Energy (EAP), which produced nearly half of all the state’s oil during 2Q24. As for natural gas production, it’s no surprise it went down slightly in 2Q24, given the current low price for gas. The state produced 526.6 Bcf in 2Q24, down 3.7% from 2Q23’s 547.0 Bcf, and down 1.4% from this year’s first quarter number of 534.0 Bcf. MDN pulled the numbers from the ODNR quarterly report and produced top 25 lists for both gas and oil wells.
In April, EQT Corporation and Equinor (formerly known as Statoil) announced a deal to swap land in Pennsylvania and Ohio (see 
We tried to cram the gist of the news into the headline but found we could not. This is a big story, for multiple reasons. Most news outlets are reporting (and this is not incorrect) that EQT pulled off a big deal to divest a good chunk of its nonoperated assets (acreage and functioning wells in which EQT owns a minority stake) in northeastern Pennsylvania, trading those assets for 10,000 operated acres in Lycoming County, PA (in northeastern PA), plus 26,000 operated acres in Monroe County, OH, plus receiving $500 million cash, in a deal with Norway’s Equinor (formerly Statoil). EQT divesting from its nonop assets is a big deal. However, the bigger news, in our humble opinion, is that Equinor has (with this deal) completely exited all operated assets in U.S. shale. The company wants to keep its fingers in the U.S. shale pie, but only as a nonop operator — that is, investing in wells that other companies drill and maintain.
Yesterday, the Intermediate Court of Appeals for West Virginia issued an opinion in a case that had (until now) escaped our radar. Equinor, Norway’s state-owned oil and gas company (previously known as Statoil), said it had overpaid its severance tax bill in West Virginia for the years 2014 and 2016. Equinor said WV miscalculated the value of propane, butane, ethane, and methane produced by the company. A WV judge agreed, also granting Equinor a further 15% safe harbor deduction for transportation and transmission costs.
We continue to monitor the price of natural gas, which has remained mired in the mid-$2 range for months on end. Every time it seems like it might make a run for $3, the price slides–as it did yesterday (down $0.12 to close at $2.73). We spotted two somewhat contradictory stories about the price of gas, both published by Reuters. One story is about a prediction from Bank of America, which said in a note that if we have a mild winter (as some are predicting), it’s quite possible the price of natgas will crash below $2 during the first quarter of 2024.
New shale permits issued for Aug 14 – 20 in the Marcellus/Utica finally turned around. There were 27 new permits issued last week, way up from the 10 issued the prior week. Last week’s permit tally included 21 new permits in Pennsylvania, 2 new permits in Ohio, and 4 new permits in West Virginia (after no permits in WV for three weeks in a row). The top permittee for the week, for the second week in a row, was Chesapeake Energy, receiving 6 permits–5 in Bradford County and 1 in Susquehanna County.