Antero Res. Selling $250-$300M in New Notes to Pay Down Debt
Today is “notes” day on MDN. Yesterday three major Marcellus/Utica drillers, including Southwestern, Range, and the subject of this post–Antero Resources–all said they are issuing notes, or what we think of as IOUs (debt) in varying amounts. All of the notes issued are for the same reason–to pay down debt. Issue new debt to pay down old debt. Only in the world of high finance! For Antero, the company is issuing $250 million with an extra option to issue another $50 million, or $300 million total, potentially.
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Last week, in one of the biggest news stories (for us) so far this year, Southwestern Energy announced it is buying out and merging in Montage Resources (see 
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 actual drilling. Epsilon, according to its website, owns ~4,000 net acres in the PA Marcellus. They also own assets in Oklahoma’s Anadarko Basin. Last week the company issued its second-quarter 2020 update.
In June MDN told you that a New York City law firm was “investigating” Cabot Oil & Gas with an eye to filing a class action lawsuit, on behalf of investors, over false allegations made by the Pennsylvania Attorney General who had filed felony charges against Cabot regarding a long-closed regulatory issue in Dimock, PA (see 
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 second-quarter 2020 update yesterday. The company added another 25 wells to production in 2Q and produced 2.1 billion cubic feet equivalent per day (Bcfe/d), a new company high. Unfortunately, the financial picture was not as rosy…
Holy smokes! We didn’t see this one coming. Just yesterday MDN brought you the second-quarter update from Montage Resources (see 
In June, Antero Resources, one of the biggest (and best) Marcellus/Utica pure play drillers concentrating most of their drilling in West Virginia, sold an overriding royalty interest (ORRI) in all of their wells for $402 million (see 
Montage Resources, the new name for the merger of Eclipse Resources with Blue Ridge Mountain Resources which happened more than a year ago, issued its second-quarter 2020 update last week. Production for Montage in the Marcellus/Utica was up slightly (3%), to 551.7 MMcfe/d in 2Q. Profits, on the other hand, were way down. The company lost $68.9 million in 2Q20 versus making a $27.5 million profit in 2Q19. Low prices for natgas explain why.
Even though the price of natural gas selling at regional trading points like Dominion South has gone up, don’t expect more production in the Marcellus/Utica. Diversified Gas & Oil (DGO) CEO Rusty Hutson, in an interview with S&P Global Platts, said most of the larger drillers in the M-U will not increase production even with higher prices. The ones who will drill more are smaller companies leveraged to the hilt–they have to drill to keep the cash flow coming in.
Gulfport Energy, the third-largest (by number wells drilled) producer in the Ohio Utica Shale, issued its 2Q20 update yesterday. Back in June, the company said it would shut-in some of its production, delaying production until later this year (see 
Most of the layoffs during this particularly brutal (and historic) downturn in the oil and gas market have taken place in oilfield services companies like Halliburton, Baker Hughes and Sclumberger. But exploration & production companies are not immune. Chevron is laying off workers in their Marcellus/Utica operation because the company is selling all of its Appalachian assets and leaving the region (see 
Two big pieces of news coming from yesterday’s Range Resources 2Q update: (1) The company is not yet done with asset sales, including active discussions on selling its northeastern Pennsylvania leases/wells in Lycoming County; and (2) drilling costs averaged less than $600 per lateral foot last quarter–the lowest average in the Marcellus/Utica region.
Range Resources has cut a deal to sell its Haynesville Shale assets (220,000 acres plus the wells they’ve drilled since buying those assets) to Castleton Resources, a privately owned company majority-owned by Tokyo Gas, for $245 million (plus an extra $90 million, maybe, contingent on the price of gas). Range bought those assets in 2016 for $4.4 billion (see 
Cabot Oil & Gas issued its 2Q20 update on Friday. CEO Dan Dinges said natural gas prices hit a historic low in 2Q (lowest since 1995), but he thinks the price will improve “this winter.” Although the price Cabot got for its gas last quarter ($1.52/Mcf) was 33% lower than a year ago, the company still made a profit. Cabot netted $30 million in 2Q, vs. netting $181 million a year ago. The company drilled 14 new shale wells, completed/fracked 31 wells, and placed 25 new wells online last quarter. They produced an average of 2.2 Bcf/d of natural gas.