5th Circuit Lets Gulfport Cancel Pipeline Contract via Bankruptcy
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 Gulfport Energy Looks to Cancel Pipeline Contracts via Bankruptcy). Earlier this week, the U.S. Court of Appeals for the Fifth Circuit (5th Circuit) overruled FERC and gave Gulfport a get-out-pipeline-contracts-free-by-declaring-bankruptcy card. It’s good for Gulfport but really bad for the entire pipeline industry.
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For the week of July 4-10, the three Marcellus/Utica states issued 37 permits to drill new shale wells. Pennsylvania led the way, as it typically does, by issuing 25 new permits. Three PA drillers tied with six permits each, all six (in each case) on the same pad: Olympus Energy in Allegheny County, Repsol in Bradford County, and Clean Energy Exploration in Tioga County. Ohio issued five new permits, with four going to Encino Energy for a single pad in Carroll County. West Virginia issued seven new permits, all of them to Antero Resources in Doddridge County but spread across three pads.
Wow! What a difference two years can make. At the dawn of the pandemic, the share price for publicly traded oil and gas stocks (in particular Marcellus/Utica drillers) was in the basement. With the pandemic now in the rearview mirror (we hope), and demand increasing for both oil and natural gas, the price of oil and gas has skyrocketed, and along with it, O&G companies are raking in the cash. How are M-U drillers using their newfound piles of cash to compensate investors?
Sources whispering to Bloomberg say that Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), is having exploratory talks with Encino Energy about selling itself to/merging with Encino. In March the rumor mill said Gulfport was in talks to sell itself to Ascent Resources (see 
Daniel Sherwood takes a look at various metrics for Marcellus/Utica drillers in the latest edition of the TCF Upstream Monthly. Sherwood uses production trends, well efficiencies, and portfolio decline rates to compare and contrast M-U drillers. In the June issue (full copy below), Sherwood finds that CNX Resources and Chesapeake Energy are “leading,” Gulfport Energy and National Fuel Gas (i.e. Seneca Resources) are “underperforming,” and Coterra Energy (formerly Cabot Oil & Gas) is “improving.”
We spotted a story on The Motley Fool investor’s website yesterday noting that several Marcellus/Utica publicly-traded drillers saw “double-digit” increases in their share price just yesterday, for a single day. The article highlights both Range Resources and Southwestern Energy. We started nosing around to see how the stock price for all of the big publicly-traded M-U drillers has performed this year, from the beginning of the year. It was an eye-opener. ALL of them are up from the beginning of the year. Most are up at least 75% in value since Jan. 1. A few have doubled in value, now up more than 100% since Jan. 1. We have the list below for how each one performed. Welcome to the bull market in oil and gas!
One of the hottest of the hot sectors in which to invest (right now) is shale energy. That’s according to multiple sources, including a veteran finance writer, investor, engineer, and researcher. In an article appearing on the OilPrice.com website, Alex Kimani talks up mid-cap energy stocks as outperforming the supermajors. Among two of Kimani’s top three picks are two Marcellus/Utica drillers, who are having a stellar year in stock performance. We went looking for the stock performance of other M-U drillers too. We have a list to share showing just how much each driller’s share price has increased this year.
According to RBN Energy, 2021 was the most profitable year in at least the last two decades for oil and gas producers (i.e. drillers). Oil and gas producers reported income two-thirds higher than the previous peak in 2014, when commodity prices were significantly higher. There’s every indication that 2022 will be even better for the bottom line of O&G companies. What about Marcellus/Utica drillers? Yep, they’re on the list of phenomenal results too.
We recently received a couple of recent issues of a monthly news/analysis newsletter from 
As we were researching background for our lead story today of a potential Gulfport Energy/Ascent Resources merger, we discovered we never reported on Gulport’s fourth quarter and full-year 2021 results. In 4Q21 Gulfport’s production was 1.07 billion cubic feet equivalent per day (Bcfe/d), virtually the same as 4Q20. Gulfport’s production numbers include both the Ohio Utica and the other play where Gulfport drills, the Oklahoma SCOOP. For the full year, Gulfport produced an even 1.0 Bcfe/d on average in 2021, versus 1.04 Bcfe/d in 2020–down just a tad.