Epsilon Energy 1Q: Still Partners with Chesapeake in NEPA
From time to time we check in on Epsilon Energy, which concentrates most of its effort on the Marcellus in Susquehanna County, PA. Does Epsilon actually do any of its own drilling? No. They partner with (give money to) other companies, like Chesapeake Energy, and the other companies do the actual drilling. Epsilon, according to its website, owns ~4,000 net acres in the PA Marcellus. Epsilon issued its first-quarter 2020 update yesterday.
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A leftist anti-fossil group calling itself Protect PT, in Penn Township (Westmoreland County), PA, backed with big money from Big Green groups, has for years challenged Penn Township ordinances that allow Apex Energy and Huntley & Huntley (now Olympus Energy) to drill and operate shale wells. Protect PT has finally struck out, permanently, at the Pennsylvania Supreme Court.
ECA Marcellus Trust I announced yesterday that there will be no distribution (dividend) paid for investors for first-quarter 2020 because expenses exceeded net revenues. Who is ECA Marcellus?
Have Marcellus/Utica drillers learned their lesson about growth at any cost? It seems the answer to that is, YES! The price of natural gas has been low for a long time due to overproduction. You’ve often read here on MDN that gas prices will be “lower for longer.” And yet with the coronavirus pandemic and the crash in oil prices, the price of natgas has been (mostly) inching up–getting close to $2/Mcf (although it was down again yesterday, to $1.62/Mcf). Estimates for gas prices next year are trending to the $2.50-$2.75 range. Everyone is watching–will M-U and other gas-focused drillers restart big spending and more drilling?
Diversified Gas & Oil (DGO) continues its program of buying up mostly older conventional oil and gas wells in Appalachia. In April DGO cut a deal to buy 6,500 conventional wells spread across West Virginia, Kentucky, and Tennessee, along with a 4,700-mile gathering pipeline system located in WV, for $110 million (see 
Chesapeake Energy issued its first-quarter 2020 update yesterday–but not in the typical fashion. They filed the required Form 10-Q with the Securities and Exchange Commission and announced they will not hold a conference call or webcast to discuss anything with anyone. No wonder. The financials for the company are dreadful. Chesapeake lost (on paper) $8.3 billion in 1Q20 due to the writedown of assets (called an impairment). It was not an out-of-pocket-cash loss, thank God. Still, it was bad enough. The 10-Q said “management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern” and there is a “likelihood of a restructuring or reorganization.”
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 7th largest natural gas producer in the U.S. The company issued its first-quarter 2020 update last Friday. The company flew by producing 2 billion cubic feet equivalent per day (Bcfe/d) in 1Q, a new high.
Chesapeake Energy’s executives, including CEO Doug Lawler, have arguably made some bad decisions about the company–for years. The executives decided to convert Chessy from a gas-focused driller to an oil-focused driller, selling off its prized Utica Shale assets in Ohio to do so in 2018 (see 
Last Friday Gulfport Energy, the third-largest (by number wells drilled) producer in the Ohio Utica Shale (210,000 acres) which concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays, issued its first-quarter 2020 update. On paper, the company lost $517 million due to a one-time impairment charge (writing down of asset value) of $553 million. The company said on Friday it would “shut in a minimal amount production” over the next few months given the virus pandemic.
Harvest Oil & Gas completed a reverse stock split on Friday combining 10 shares of stock for one new share. Harvest’s drilling and assets are focused in Ohio, Pennsylvania, West Virginia, where they own/operate 9,787 conventional wells. The company cut a deal in March to sell off all of its Michigan assets. Who is Harvest?
Montage Resources, the new name for the merger of Eclipse Resources with Blue Ridge Mountain Resources a year ago, issued its first-quarter 2020 update on Friday. Montage drills exclusively in the Marcellus/Utica region. The company continues to trim its 2020 drilling budget, now down another 10% from just several weeks ago, to $130-$150 million.
During yesterday’s quarterly update and conference call with analysts, EQT CEO Toby Rice took the time to outline his company’s efforts to keep field workers safe during the COVID-19 coronavirus pandemic. Not unsurprisingly, the “young Turks” who now run the company are using technology to help protect employees and contractors. EQT is ahead of the curve (way ahead of the state Dept. of Environmental Protection) in its contact tracing system to protect workers.
Last December Chevron announced it was writing down the value of its Marcellus/Utica assets and putting those assets up for sale (see 
Add another 300 workers returned to work at the mighty Shell ethane cracker construction site in Beaver County, PA this past Monday. This follows the lifting of a ban on construction activities by Pennsylvania Gov. Tom Wolf. With the extra 300 workers back on the job, some 800 workers are now active at the site, just 10% of the 8,000 working on-site prior to the coronavirus pandemic lockdown.
In September 2017 to much fanfare, CSX (railroad company) announced the opening of its new Pittsburgh Intermodal Rail Terminal in McKees Rocks, PA. The new facility is a truck and railroad transloading facility connecting southwestern Pennsylvania to markets across the country and around the world. CSX said at the time, “The Pittsburgh intermodal terminal is the last key component of CSX’s National Gateway Initiative, an $850 million public-private partnership designed to create a highly efficient network of double-stack rail and intermodal terminals, connecting East Coast markets to consumers, manufacturers and businesses in the Midwest.” That was then, this is now.