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“Rule of Capture” Briefs Filed w/PA Supreme Court in Briggs Case
In November the Pennsylvania Supreme Court agreed to hear a case, Briggs v. Southwestern Energy, that is hands-down the most important court case to ever happen regarding the Marcellus Shale in PA. And no, we’re not exaggerating. A blizzard of briefs by Southwestern and those supporting Southwestern were filed earlier this week.
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Yesterday CNX Resources, a Marcellus/Utica driller headquartered in Pittsburgh and concentrating on southwest PA, issued its fourth quarter and full year 2018 update, along with looking-ahead guidance for 2019. Like other M-U drillers we’ve recently chronicled, CNX is scaling back its budget for 2019–by 5-10%. But even spending less, the company says it will produce about 5% more gas in 2019.
Here’s an interesting twist on the theme of drillers shorting leaseholders out of royalty money. Usually such cases involve drillers claiming post-production deductions from landowner royalty checks. This time the landowner/rightsholder is Columbia Gas Transmission (pipeline company owned by midstream giant TransCanada), and the claim is that Southwestern Energy (driller) is not paying royalties for gas produced but not actually sold.
Hi-Crush Partners, a frack sand vendor, announced yesterday they’ve cut a long-term deal to supply Northern White frack sand, which comes from Wisconsin, to CNX Resources for fracking Marcellus and Utica wells. So why is that a big deal?
There’s just no getting around the obvious–that the shale industry is once again heading into something of a dip. We’re not just talking about shale oil drillers scaling back drilling new wells in places like Texas and North Dakota. We’re talking about big gas drillers in the Marcellus/Utica who are signaling that 2019 will see less spending and less drilling, although production won’t decline.
Westmoreland Gas, headquartered in Bridgeport, WV, was founded in August 2018 by two industry veterans, one with close ties to Mountain V Oil & Gas. According to a press release issued two days ago, Westmoreland closed on oil and gas assets in WV on Dec. 31, essentially launching the company.
We are positively bursting with news about EQT today. Yesterday EQT’s existing management issued plans for 2019 and the Rice brothers responded–by launching a proxy war to replace board members and top management. In addition, we unearthed news that the Rice boys held their meeting with EQT’s board on Jan. 15.
Another situation is brewing with Gulfport Energy not unlike the situation at EQT. One of (we’re pretty sure THE) largest shareholders in Gulfport, investment firm Firefly Value Partners, is not happy with either the board of directors or current management, saying very publicly (via a letter, below) that the current board lacks “necessary skills and experience” to turn the company’s poorly performing stock around. Ba boom!