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40 New Shale Well Permits Issued for PA-OH-WV Feb 6-12
New shale permits issued for Feb. 5-12 in the Marcellus/Utica increased nicely last week. There were 40 new permits issued in total last week, including 25 new permits for Pennsylvania, 11 new permits for Ohio, and four permits issued in West Virginia. The week before, there were only 26 new permits issued. Last week the top receiver of new permits was Seneca Resources, with six new permits for Tioga County, PA. Coterra Energy received five permits for Susquehanna County, PA. In Ohio, Encino Energy and Ascent Resources both received four new permits–in Carroll and Harrison counties, respectively.
Read More “40 New Shale Well Permits Issued for PA-OH-WV Feb 6-12”
John Reinhart is the former President and CEO of M-U driller Montage Resources Corporation before that company was gobbled up by Southwestern Energy in 2020 (see 
What a difference three years can make! Three years ago, Henry Hub prices were hovering around $2 per thousand cubic feet (Mcf). Stock valuations for Marcellus/Utica drillers were majorly depressed (down 80-90% from previous highs), and gas producers were struggling. Fast forward to today. Balance sheets and earnings statements are through the roof. Most experts believe $4-$5/Mcf gas is sustainable–at least for the next X years. What does the future look like for M-U drillers? What are the risks? And can we keep the current bright outlook going?
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May 2021 with a new board and new top management. By September of last year, rumors began circulating that the company was shopping itself for sale (see 
Expectations play a big role in investing. The financial markets do a lot of anticipating and forecasting and guessing about where a company or entire sector is heading. Such is the game being played right now with expectations for Marcellus/Utica shale gas companies and their forthcoming third quarter financial updates. Given the high price of natural gas during 3Q22, analysts expect shale gas companies to be swimming in free cash flow. The natural follow-on question is, what will they do with all of that extra cash?
Drillers (exploration and production companies, or E&Ps) were thrilled with record-high earnings and cash flow in the second quarter of this year. Soaring commodity prices and “strict financial discipline” on the part of oil and gas drillers resulted in pre-tax operating earnings and cash flows surging by 29% and 22%, respectively, from 1Q22. And 1Q22 was up too! So what did drillers, especially drillers in the Marcellus/Utica, do with all that extra cash? Did they pay down debt? Buy back shares of company stock? Issue higher dividends? Something else?
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May 2021 with a new board and new top management. By September of last year, the rumors began circulating that the company was shopping itself for sale (see 
Gulfport Energy has successfully wiggled out of legally-signed and binding long-term contracts with multiple pipeline companies, including deals that move Marcellus/Utica gas through the Rover and Rockies Express (REX) pipelines. In 2020 the Federal Energy Regulatory Commission (FERC) told Gulfport a very loud NO in breaking those contracts (see