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Weekly Shale Drilling Permits for PA, OH, WV: Nov. 9-13
An interesting week for permits. Last week Pennsylvania issued just 2 new shale well drilling permits after having issued 3 the week before (lowest numbers we’ve seen). Ohio, which has not issued many permits in recent months, was on fire last week with 17 new shale permits! West Virginia issued just 1 new shale well permit.
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We hoped it wouldn’t happen, but warned you it might when Gulfport Energy announced several weeks ago it had missed a debt payment and was in “restructuring” talks (see 
EOG Resources, one of the largest oil and gas drillers in the U.S. (with operations in Trinidad and China too) has just sold *all* of its Marcellus assets located in Bradford County, PA to (we’ll tell you below, MDN has the exclusive on this) for $130 million. EOG has now left the M-U building.
In August Southwestern Energy announced it is buying out and merging in Montage Resources in an all-stock deal (see 
When a pipeline company considers whether or not to build a new pipeline, the company conducts an “open season”–a time when drillers (producers) can sign long-term contracts to use capacity along the pipeline. Such contracts guarantee pipeline companies will be able to make back the considerable amount of money they have to spend to build the pipeline. What happens when a driller that signed to a 10- or 20-year contract goes bankrupt? Or what happens if a contract will force a driller into bankruptcy? Can such a contract be canceled?
In line with a rise of COVID-19 cases in the general population throughout the state of Pennsylvania (and elsewhere), workers at the Shell ethane cracker site in Monaca, PA (near Pittsburgh) have seen a big jump in active coronavirus cases. As of yesterday, the number of active cases stood at 39. Wednesday the number was 31. Shell says most if not all of the cases are coming from offsite and onsite transmission among the 7,000 active workers is not a factor in the rising number.
Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its third-quarter 2020 update yesterday. Ascent reports it shut-in 210 million cubic feet per day (MMcf/d) of production, but still managed to produce 2 billion cubic feet per day (Bcf/d) during 3Q.
Yesterday Pittsburgh Business Times‘ ace reporter Paul Gough got EQT CEO Toby Rice to open up and talk about the company’s recently announced deal to buy Chevron’s considerable Marcellus/Utica assets (see 
EQT CEO Toby Rice has been positively chatty lately. He gave a great interview to the Pittsburgh Business Times revealing his thinking with respect to the recently announced Chevron deal (see today’s lead story). He also spoke to Bloomberg reporters. Rice shared his views on further consolidation in the M-U sector. He indicated EQT is still in the hunt for a deal with CNX and possibly other M-U drillers.
Epsilon Energy concentrates most of its effort on the Marcellus in Susquehanna County, PA. Epsilon doesn’t actually do any of its own drilling. The company partners with (gives money to) other companies, like Chesapeake Energy, and the other company does the drilling. Epsilon, according to its website, owns ~4,000 net acres in the PA Marcellus. They also own assets in Oklahoma’s Anadarko Basin. On Tuesday Epsilon issued its third-quarter 2020 update, showing a bump up in revenue to $5.8 million in 3Q20 (vs. $5.2 million in 3Q19).
According to the president and CEO of BP Energy, one of BP’s largest North American subsidiaries, “Demand for gas to be liquefied and exported from the US has recovered beyond pre-pandemic levels to nearly its maximum capacity.” Whoa, who knew? We are far from being over and done with the COVID-19 pandemic, yet LNG demand is already back and has exceeded demand from before the pandemic. This is seriously good news for the Marcellus/Utica and the export of our molecules.
Radical anti-fossil fuel groups have not given up hope they can somehow, at the last minute, block the $10 billion Shell ethane cracker plant (about a year from being completed) from ever starting up. Perhaps Biden’s “victory” has given them a little boost of irrational exuberance? In 2015 the Pennsylvania Dept. of Environmental Protection (DEP) issued an air permit for the cracker plant. Shell needs to tweak the permit with new information. Antis are asking PA to deny the new tweaks, claiming Shell wants to pollute the region even more. Shell says the tweaks reflect new realities, including LOWER emissions.