Interview with CNX CEO Nick DeIuliis (Part 4) – Pipes, ESG, Politics
Last week MDN editor Jim Willis had the privilege and honor of a (remote) sitdown interview with Nick DeIuliis, the CEO of CNX Resources, one of the major producers in the Marcellus/Utica. This is the fourth and final installment of that interview. In today’s portion of the interview, Jim and Nick discussing CNX’s midstream assets, pipeline takeaway capacity in the M-U, ESG, the SEC, and politics. It’s a fascinating end to an enlightening discussion.
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EQT Corporation, the biggest natural gas producer in the United States (and a pureplay Marcellus/Utica driller), issued its second quarter 2022 update yesterday. The company raked in $550 million in free cash flow during 2Q and produced 5.5 Bcf/d (billion cubic feet per day) of natural gas. But don’t look for EQT to increase production any time soon–not until (says top management) it can get more of its molecules to markets outside of the M-U. The company’s answer to moving more molecules is to try and expand LNG exports from the East Coast.
Antero Resources, one of the largest drillers in the Marcellus/Utica (with major assets in West Virginia), the fifth largest natgas producer in the country and the second largest LNG exporter, issued its second quarter 2022 update yesterday. During 2Q, Antero placed a new compressor station online in West Virginia, boosting Marcellus gas flows by 160 MMcf/d (million cubic feet per day). The new Castle Peak compressor station will be expanded to 240 MMcf/d in 2023. Antero generated $664 million in free cash flow and $765 million in net income during 2Q. Big company. Important company.
Diversified Energy (sadly) continues to expand outside the Marcellus/Utica region. Yesterday the company announced it is paying $240 million to buy some of ConocoPhillips’ upstream assets in Oklahoma and Texas. The assets include roughly 1,500 wells spanning 250,000 acres. Diversified, which now owns approximately 8 million acres of leases with close to 70,000 (mostly) conventional oil and gas wells used to be solely focused on the Appalachian region–until last year.
In early 2013 the Pittsburgh International Airport and Allegheny County, PA, signed a deal with CONSOL Energy (now CNX Resources) to lease 9,000 acres surrounding the airport for natural gas drilling (see 
For the week of July 18-24, the three Marcellus/Utica states issued just 16 permits to drill new shale wells, down from 43 the prior week. Pennsylvania and West Virginia both issued eight new permits each. Ohio issued a big, fat, goose egg. PA issued three permits each to Greylock Energy (Green County) and Pennsylvania General Energy (Tioga County), and one each to EQT and Seneca Resources. WV issued four permits each to Jay-Bee Oil & Gas (Tyler County) and Tug Hill Operating (Wetzel County).
Diversified Energy is growing again. In February, Diversified bought out and merged in well-plugging company Next LVL Energy, headquartered in the Pittsburgh area (see 
Range Resources, the very first company to sink a Marcellus Shale well back in 2004, issued its annual 2021-2022 Corporate Sustainability Report yesterday. “Sustainability” is Range’s terminology for ESG, or environmental, social, and governance. A couple of notable observations in this latest report: (1) Range has doubled its methane monitoring inspection system using LDAR from four times a year to eight times a year; and (2) Range has the lowest methane intensity, or percentage of methane emissions, in the entire Appalachian basin–according to a third party evaluator.
Oil and gas giant BP recently released its annual Statistical Review of World Energy–the 71st edition (full copy below). Among the interesting findings in BP’s analysis of global energy last year: Fossil fuels–coal, natural gas and oil–accounted for 82% of primary energy use worldwide last year, down from 83% in 2019 and 85% five years ago. The report doesn’t disclose what percentage of world energy use comes from so-called renewables, wind and solar. We suspect it remains at around 3-4% as in years past. Meaning the legacy media narrative of renewables saving the world is once again exposed as horse manure.
Range Resources delivered its second quarter 2022 update yesterday. The company made an amazing $453 million in profit during 2Q. On a conference call with analysts, CEO Jeff Ventura wasted no time in delivering a shot across the bow of the Bidenistas, saying, “Energy policy will need to be rooted in market realities. If infrastructure projects, namely pipelines and LNG terminals are not prioritized and given a reasonable regulatory review, then I believe it’s simply impossible to meet the growing global demand for reliable, safe and affordable fuels.” Ba-boom! On the wonkish side, Range’s top driller, Dennis Degner, discussed the company’s strategy of drilling new wells on existing pads. Sometimes Range returns to the same pad three times. A three-peat!
In April, CNX Resources announced it had signed a contract extension with Evolution Well Services to use Evolution’s 100% natural gas-fueled electric pressure pumping equipment for another four years (see 
Pennsylvania Attorney General Josh Shapiro, who is running for governor of the Keystone State, has once again targeted a shale energy company in his zeal to prove he despises the Marcellus even more than current Gov. Tom Wolf does (burnishing his credentials with the environmental left who makes up his base). Yesterday Shapiro’s office issued a press release announcing that the Big Man has bullied Southeast Directional Drilling, a subcontractor of National Fuel Gas Supply Corporation (i.e. Seneca Resources), into pleading guilty to spilling nontoxic drilling mud into a creek so small it doesn’t have a name. Southeast will have to pay a $15,000 fine.