EQT Issues List of Board Nominees; Adopts Universal Proxy Card
In the fight to control EQT, it appears like the momentum has just shifted in favor of EQT’s existing management. No more defense, EQT’s management team and board are now on offense. Yesterday the board and CEO Rob McNally released their list of proposed nominees to be voted on at the annual meeting in July. Three longtime members of the existing board including (surprisingly) board chairman Jim Rohr, will be out. Three new members have been named to replace them. Most important, in a bold move, EQT is adopting a “universal proxy card”–something advocated by Toby and Derek Rice in their attempt to replace the board. We explain this important development below…
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Chesapeake Energy CEO Doug Lawler continues his quest to transform what used to be the nation’s second largest natural gas producer into an oil company. Yesterday the company issued its first quarter 2019 update. From that update we learn that Chessy will pull money out of its Marcellus and Haynesville shale gas drilling programs, dropping from three to two rigs in the Marcellus and from two to one rigs in the Haynesville, in order to put more money, rigs, time and effort into the company’s Powder River Basin oil drilling program. We liken their pursuit of oil riches to trying to grab St. Elmo’s Fire–it appears, and as soon as you reach to grab it, it’s gone.
Whew, that was close. We’ve had a concern that if Chevron ended up buying Anadarko Petroleum (for Anadarko’s Permian Basin oil assets), it might lead to Chevron pulling back from their drilling program in the Marcellus/Utica (see 
Saudi Arabia is sniffing around the Marcellus Shale. Bloomberg reports that super secret talks are happening between Saudi Aramco (largest oil company in the world, owned by the Saudi government) and Equinor, which until recently was called Statoil. Equinor is majority-owned by the government of Norway. The Saudis are considering “buying a stake” in or possibly a joint venture with Equinor. It seems Norway is hesitant to hop into bed with the Saudis. We don’t blame them.
A Pennsylvania federal judge has ordered a former EQT employee to turn over his cell phone to EQT so they can have experts examine it for deleted text messages to Toby Rice and others helping him. You may recall EQT accused two fired workers of stealing company secrets and sharing those secrets with Toby and Derek Rice, who are trying to take over EQT (see 
The Pennsylvania Dept. of Environmental Protection (DEP) has just fined EQT $330,775 for erosion and sedimentation violations at two well sites in Forward Township, Allegheny County, PA. Water with sediment in it leaked from the well sites in early 2018, which sometimes happens. The reason for the stiff fine is that EQT failed to notify the DEP when it happened. If the DEP finds out via its own inspections first, the cost goes way up.
“In our exploration and production business, even though we achieved our highest ever average daily production rate this past quarter, we were expecting more. It’s a slight disappointment that we modestly lowered the midpoint of our production guidance to the low end of the range that we established last August.” So said National Fuel Gas Company (NFG) CEO Ron Tanski in talking about NFG’s Seneca Resources shale drilling subsidiary on a conference call last Friday.
Gulfport Energy, one of the biggest drillers in the Ohio Utica Shale (210,000 acres) with record production in the Utica last year, announced last week (as part of its first quarter update) it has sold a “small footprint” of Marcellus drilling rights on some of their Utica acreage in southeastern Ohio for $30 million. Gulfport concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays. Piecing together the company’s plans for this year, we’re calling 2019 the “Year of the DUC” for Gulfport.
Antero Resources, one of the biggest Marcellus/Utica drillers (pure play) released first quarter 2019 numbers yesterday. The Mariner East 2 (ME2) pipeline, which Antero uses to ship and sell natural gas liquids (NGLs) had a huge beneficial effect for the company. Antero’s production was massive: 3.1 billion cubic feet equivalent per day (Bcfe/d) in 1Q19, up an astonishing 30% from 1Q18. But here’s the kicker: Nearly one-third of Antero’s production (29%) was NGLs. Without ME2, that big number would have been a small fraction of Antero’s production.
This is a “man bites dog” kind of story. Typically when we read about drilling on Pennsylvania state-owned land, the drilling happens on private land adjacent to the state land with the lateral reaching under state land (leased for that purpose). This time we spotted a story about a new well due to be drilled this year in Elk County, PA that sits directly *on* state land, and will reach under private land!
CNX Resources released its first quarter 2019 update yesterday, which shows the company lost $87 million, as opposed to making $527 million in profit in 1Q18. Even so, CEO Nicholas DeIuliis announced the company is upping its drilling budget from the previously announced $700 million to instead spend $885 million, largely to drill more “deep dry” Utica wells. Go big or go home!
Fair or not, anything and everything that happens at EQT right now, which is under extreme pressure by the Rice brothers and several other large shareholders (see 
The money-making Marcellus machine known as Cabot Oil & Gas continues to crank out the hits. On Friday Cabot held a conference call to discuss the company’s first quarter 2019 performance. And wow! What a performance! The company made $308 million in net income/profit (up 141% from $128 million in 1Q18), and produced 2.3 billion cubic feet per day equivalent (Bcfe/d) of mostly Marcellus (little bit of Haynesville) gas, up 21% from 1Q18.