Penn Virginia Finally Sells Itself, Denbury Buys for $1.7 Billion
Penn Virginia is an oil and gas driller headquartered in Radnor, PA (near Philadelphia). Although it’s based in the Keystone State, Penn Virginia has only a small presence in the Marcellus Shale–21,700 net acres with no drilled wells (at last check). They concentrate on oil drilling the Texas Eagle Ford Shale play. In July we told you the company is once again trying to sell itself (see Penn Virginia Puts Itself Up for Sale – Again). In September they added a new board member to help the process along (see Penn Virginia Hires New Board Member to Help Sell the Company). Looks like it worked. Penn Virginia is selling itself to driller Denbury for $1.7 billion.
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An important court case was decided on Friday in Pennsylvania Commonwealth Court that potentially impacts all shale drilling in the state. You will recall that seven selfish towns sued the state over the 2012 Act 13 law and it’s provision that would substitute a statewide, uniform and fair set of zoning ordinances for drilling in place of a patchwork, crazy quilt system of local ordinances for oil and gas drilling. Seven selfish towns (including Robinson Township) wanted their own ordinances and sued, ultimately winning at the Supreme Court (see 
Range Resources released its third quarter 2018 update earlier this week. The company shows making a $48.5 million profit for the quarter, verses losing $127.7 million in 3Q17. Quite a swing into the black! Some of the credit goes to Rover Pipeline. Range has reserved 400 million cubic feet per day (MMcf/d) on Rover, which is now up and running. Range is ramping up production and expects to use all of their 400 MMcf/d capacity by the end of 2018. Production in 3Q18 averaged a record high of 2.267 billion cubic feet equivalent per day (Bcfe/d), an increase of 14% compared to 3Q17.
We now have a date for when EQT (the driller) and EQT Midstream (the pipeline company) will split and become two separate, independent companies that will no doubt continue to work together, but will in fact be two companies. That date is November 12. In a pair of press releases issued yesterday, EQT outlined how the transition to two publicly traded companies, EQT Corporation (stock ticker EQT) and Equitrans Midstream Corporation (ticker ETRN) will happen. One of the releases names four new members for the EQT board once the split occurs, and reaffirms that current EQT CFO Robert McNally will stop “Acting” and become the full, official President & CEO of EQT.
EPA Chief Andrew Wheeler wasn’t the only speaker at yesterday’s Shale Insight event in Pittsburgh (see EPA Head Andrew Wheeler Addresses Shale Insight re “New EPA”). There were a number of other sessions addressing issues from the technical to the philosophical. A speaker from XTO Energy said the Utica Shale is only just getting started and the potential of the Utica “enormous.” A panel spoke to the critical nature of pipelines and addressed the issue of how we can better “tell our story” to the public with respect to pipelines. And another panel discussed whether and how natural gas development is affecting public health. Here’s a few select reports.
If we were ask you, “What is corporate social responsibility (CSR)–what does it mean?” How would you define it? We have to admit that when we first began to see CSR mentioned a few years ago, we were a bit confused by what it meant, largely because everyone defines it their own way. Here’s a real basic definition (the MDN definition) for CSR: Giving back. Giving back to a local community or to a larger sector of society with time, money and volunteers. Think of it as the “heart” of a company. Companies make money. It is increasingly expected those companies should be “good corporate citizens” and help out the people and areas where they make their money. Why do we mention it? Because companies in the shale industry are big into CSR. For example, Chevron (Pittsburgh) is funding a new Center for Corporate Social Responsibility at Waynesburg University with a $250,000 gift.
Gulfport Energy, an independent oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma, issued its third quarter operational (not financial) update yesterday. Gulfport is one of those companies that delivers its operational news first, and a few weeks later issues its financial news. Gulfport reports production continued to climb to new highs, averaging 1,427.5 million cubic feet equivalent (MMcfe) per day, a 7% increase over 2Q18 and 19% increase over 3Q17. Said another way, 1.43 Bcf/d.
After selling Rice Energy to EQT (see 
Diversified Gas & Oil continues its mission to buy as many non-shale (conventional) oil and gas wells as it can in the Appalachian Basin. In June, MDN brought you the exclusive news that Diversified had purchased EQT’s Huron Shale assets in Kentucky, Virginia and West Virginia for $575 million (see 
The Ohio Oil and Gas Association (OOGA) and St. Clairsville Area Chamber of Commerce sponsored an update on the Utica Shale and its impacts in southeastern Ohio at a one-day event held yesterday at Belmont College. The upshot of the day seemed to be this: The Utica is still creating thousands of jobs, and still attracting millions of dollars in investment. Among the speakers were reps from both EQT and Ascent, who had some interesting comments about their respective operations. Question: Who do you think is the largest natural gas producer in Ohio today? One of the speakers made the surprise claim that her company is now the top producer in Ohio.
The expert analysts at RBN Energy have just published their “fourth and final” in a series of posts looking in detail at E&Ps (exploration & production companies, or “drillers”). One of the groups of E&Ps they examine are “gas-weighted” E&Ps–or drillers who mostly extract natural gas. In looking through the list, you immediately realize every one of them has operations in the Marcellus and/or Utica Shale region. Yes, a few also have operations in other plays, but they all have at least some operations here. The real value in the article is an accompanying spreadsheet comparing various financial metrics (apples to apples)–things like total revenue, lifting costs, production costs, and “pre-tax income,” meaning profitability. How do our drillers compare with each other?
On Sunday, what will be the tallest and heaviest piece of equipment that’s part of the mighty $6 billion Shell ethane cracker in Monaca (Beaver County), PA was hoisted into place. It’s called a “quench tower” and it looks like a humongous silo. It’s 300-feet high, which translates into about 30 stories. One of the world’s largest cranes had to be reserved a year ago in order to do the lifting. It took all day, but by 3:30 pm, the quench tower was standing upright–yet another monument to the power of the Marcellus Shale.
Antero Resources, one of the biggest drillers in the Marcellus/Utica, is the latest in a string of companies to shed its master limited partnership (MLP) structure. Antero uses an MLP for two different pipeline subsidiaries. The company announced yesterday that one of the subsidiaries will buy out the other, and then convert the merged entity into a corporation. The move simplifies Antero’s midstream operations. Here’s the details.