M-U’s Biggest Drillers Increase NGL Production for Extra Money
When a driller sinks a hole in the ground looking for one hydrocarbon–like natural gas–other hydrocarbons also come out of the ground. Sometimes its oil. Sometimes condensate. Sometimes natural gas liquids (NGLs), including ethane, propane, butane, pentane, etc. In northeast and central Pennsylvania where the Marcellus Shale is prolific, most of what comes out of the ground is just methane–or natural gas. However, in the southwestern portion of PA, and in the northern panhandle of WV and on into eastern OH, it’s a different story. They are considered “wet gas” areas because (depending on the county) the wells are prolific NGL producers. Most NGLs, like propane, fetch much higher prices than plain old methane. Typically ethane is the NGL that mostly comes out of the ground, but for many drillers ethane can’t (yet) be sold, so it’s considered a “waste” product, mixed into the methane stream to get rid of it. But that’s changing. There are now pipelines to carry ethane to facilities in both Philadelphia and to a cracker plant in Canada. There’s even a pipeline for ethane (and other NGLs) that goes all the way to the Gulf Coast (ATEX, Appalachia to Texas). Some of the largest Marcellus/Utica drillers now have markets for their NGLs, so they are ramping up production and selling more NGLs. In fact, six of the eight largest M-U drillers increased their NGL production in the second quarter of 2017 compared to 2Q16. Which six increased, and which two decreased NGL production last quarter?…
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Gulfport Energy, which is the second most active driller in the Ohio Utica, behind Chesapeake Energy, has (so far) drilled 303 Utica wells and owns 211,000 acres of leases in the Buckeye State. Gulfport, which drills mainly in the Utica (but also the SCOOP, in Oklahoma) reported their second quarter 2017 production numbers on July 31 (see 
In early June, MDN brought you the news that officials with Ascent Resources (formerly American Energy Partners) and Chesapeake Energy said their respective companies are putting a renewed focus on Jefferson County, OH in the coming months (see 
According to an article appearing on Forbes, “The sell-off of oil and gas exploration and production stocks has been brutal. Exchange-traded funds that specialize in the sector have fallen around 10% to 20% this year, versus an 8% uptick in the market overall.” Why? Low oil prices. Several analysts are quoted as saying the market is “ripe” for some companies to sell themselves. In a companion story today, we covered one such rumor–that Penn Virginia Energy is shopping itself. An analyst with Williams Capital Group has offered up a list of five such companies he believes may be next. Note we said “may.” There’s lots of hedging in this prediction. This is one analyst, albeit an experience analyst, spitballing about what “may” happen. The final entry in his list of five companies that “may” get sold this year is none other than Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company that is a “top 5” driller in the Ohio Utica Shale. One alternative to selling itself, according to the analyst, is that Gulfport could sell it’s 24% interest in oilfield services company Mammoth Energy Services…
Sheesh, it seems like we just got done yesterday with reporting quarterly earnings/operations updates. And here we are again. Like the old Dunkin Donuts commercial where the guy who makes the donuts runs into himself coming and going making the donuts. First out of the gate in the Marcellus/Utica is Gulfport Energy, reporting their first quarter 2017 numbers. And the numbers for Gulfport look pretty darned good–at least operationally. Gulfport didn’t report their financials yesterday. On the operations front, production zoomed up 23% to 849.6 million cubic feet equivalent (MMcfe) per day in 1Q17 vs 1Q16–the vast majority of which came from the Utica Shale. The other interesting news is that Gulfport realized an average sale price of $3.98 per thousand cubic feet (Mcf) for the gas they sold. Below is the update along with a recent PowerPoint slide deck with some great slides…
In the closing days of 2016, Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company (“driller”) that is a “top 5” driller in the Ohio Utica Shale, announced that its chief financial officer (CFO) has up and left. Just like that. Aaron Gaydosik, Gulfport CFO, is leaving “to pursue an external opportunity.” While defections in the top ranks of big drillers like Gulfport are not unheard of, they do give investors the jitters. And it makes one wonder what’s going on at the company, given that Gaydosik had only been in that job for the past 2.5 years. Was he pushed out? Did he find a better gig? Inquiring minds want to know…
As we previously noted, last week the Bureau of Land Management (BLM) proceeded with an online auction for BLM-controlled land in Ohio’s Wayne National Forest (see 
Last week MDN told you about Gulfport Energy’s deal to buy 85,000 acres of leases with 48 horizontal wells in Oklahoma’s SCOOP shale play in a $1.85 billion deal (see 
Earlier this week we ran the news that Canadian pipeline giant TransCanada’s plan to radically lower the cost to pipe natural gas from the western regions of Canada to the eastern part of the country, in an effort to undercut Marcellus/Utica gas from flooding into the region, failed (see