BP Says Demand for U.S. LNG has Recovered to Pre-Pandemic Levels

According to the president and CEO of BP Energy, one of BP’s largest North American subsidiaries, “Demand for gas to be liquefied and exported from the US has recovered beyond pre-pandemic levels to nearly its maximum capacity.” Whoa, who knew? We are far from being over and done with the COVID-19 pandemic, yet LNG demand is already back and has exceeded demand from before the pandemic. This is seriously good news for the Marcellus/Utica and the export of our molecules.
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Weekly Shale Drilling Permits for PA, OH, WV: Nov. 2-6

Last week Pennsylvania issued a paltry 3 new shale well drilling permits (lowest we’ve seen in months), Ohio issued a single new permit, and West Virginia issued 5 new shale well permits. All 3 PA permits were issued in Greene County. The OH permit was issued in Carroll County (bit of a surprise). And all 5 WV permits were issued in Tyler County.
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Anti Groups Ask PA to Reject Shell Cracker Air Permit Modification

Radical anti-fossil fuel groups have not given up hope they can somehow, at the last minute, block the $10 billion Shell ethane cracker plant (about a year from being completed) from ever starting up. Perhaps Biden’s “victory” has given them a little boost of irrational exuberance? In 2015 the Pennsylvania Dept. of Environmental Protection (DEP) issued an air permit for the cracker plant. Shell needs to tweak the permit with new information. Antis are asking PA to deny the new tweaks, claiming Shell wants to pollute the region even more. Shell says the tweaks reflect new realities, including LOWER emissions.
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ExxonMobil Deciding Fate of XTO Asset Value in 4Q

Last week ExxonMobil issued its third-quarter 2020 update. The company announced it is currently reviewing and making a decision about whether or not to write down (impair) the value of its North American dry gas assets–i.e. XTO Energy. If it writes down the value XTO assets, it will take a huge write-down in value (assets currently on the books at a value of $25-$30 billion).

NOTE: MDN revised this post on 11/9/20 to reflect new information. See an extended explanation below.
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Montage Resources Releases Last Quarterly Update – Merging Next Wk

After a shareholder vote scheduled for next Thursday, Nov. 12, Montage Resources will be no more. The company is selling itself to Southwestern Energy in an all-stock deal worth $857 million (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). Yesterday Montage issued what will be its very last quarterly update. What does the update show?
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Shale Gas Drillers in M-U Outshine Shale Oil Drillers Elsewhere

An article in yesterday’s Wall Street Journal says there is a “split reality” emerging for U.S. shale drillers. Shale oil drillers are struggling to survive, while shale gas drillers, particularly in the Marcellus/Utica, are slowly seeing signs of financial recovery. The upshot is that you should consider investing in shale gas drillers (and not shale oil drillers).
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Weekly Shale Drilling Permits for PA, OH, WV: Oct. 26-30

Last week Pennsylvania issued 16 new shale well drilling permits, and West Virginia issued 7 new shale well permits. Ohio issued no new shale permits last week.
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Southwestern Expects to Close on Montage Purchase Nov. 12

Southwestern Energy Company released its third-quarter 2020 update last Friday. The company previously announced it is buying out and merging in Marcellus/Utica driller Montage Resources. During the 3Q conference call, CEO Bill Way said the company expects to close on the deal immediately after Montage Resources shareholders vote on the deal November 12. Also from the 3Q update: Southwestern managed to reduce the cost of drilling for one of their PA Marcellus wells down to $491 per lateral foot!
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Cabot O&G 3Q: 2.4 Bcf/d, Drilled 13 Wells, Upper Marcellus Coming

Dan Dinges, CEO of Cabot Oil & Gas, said last week: “2020 has proven to be the most challenging year for natural gas prices in the last 25 years, resulting from a multi-year trend of overcapitalization of both oil and natural gas assets across our industry.” Indeed. The company released its third-quarter 2020 update on Friday and reported a net loss of $15 million, compared to net income of $90.4 million in 3Q19. This is the first quarterly net loss for Cabot in recent memory. Still, there was plenty of good news coming from the 3Q update…
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Range 3Q: $680M Loss, Shut-in Marcellus Prod, M&A Possibility?

Range Resources issued its third-quarter 2020 update on Friday. The company, the very first driller to sink a well in the Marcellus, lost $680 million in 3Q. Most of the loss was a one-time charge called “exit and termination” related to the company’s sale of their Louisiana Haynesville Shale assets in August. The update didn’t state how many new wells were drilled in the Marcellus, but it does say Range connected 19 new wells to sales in 3Q with plans to add another 7 wells to sales by the end of the year.
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FERC Says Gulfport Energy Can’t Cancel REX Pipeline Contracts

While Gulfport Energy (big Ohio Utica driller) hasn’t officially filed for bankruptcy, it’s certainly a possibility (see Gulfport Energy Misses Debt Payment, in “Restructuring” Talks). Rockies Express (REX) pipeline, as a preemptive measure to prevent Gulfport from using Chapter 11 as an excuse to break its contract, asked the Federal Energy Regulatory Commission (FERC) to issue an order that disallows Gulfport from breaking its REX contract should it file for bankruptcy.
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After Floating $350M in New Stock, EQT Floats $350M in New Bonds

Last week EQT Corporation announced a deal to buy Chevron’s considerable Marcellus/Utica assets (land and wells) for the lowball price of $735 million (see EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock). EQT also announced, on the same day, they are floating up to 23 million new shares of company stock to help pay the purchase price, hoping to raise ~$350 million. On Friday EQT announced it will float new bonds (debt) to raise another $350 million, also meant to help pay for the Chevron purchase.
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CNX 3Q Update: Not Interested in Selling to EQT, or Anyone Else

CNX Resources issued its third-quarter 2020 update yesterday. The company didn’t bother to issue the usual narrative describing what happened during 3Q. Instead, they simply pushed out the financials, a slide deck, and spoke to analysts on a conference call. What did we learn picking through the numbers and the conference call transcript? One thing we learned is that CNX has no interest in being merged with EQT, that’s for sure.
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Antero 3Q Update: Canceling 300 MMcf/d Pipe Capacity in 2021

Antero Resources, one of the largest drillers in the Marcellus/Utica, working primarily in West Virginia, issued its third-quarter 2020 update yesterday. The company lost $536 million due to a $749 million “unrealized commodity hedge movement in fair value.” High finance stuff. Production averaged 3.8 billion cubic feet equivalent per day (Bcfe/d), which includes a lot of liquids (NGLs).
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EQT Buys Chevron M-U Assets for $735M, Floats $350M in New Stock

Looks like the rumors were true, at least one of them. Yesterday EQT announced it has cut a deal to buy Chevron’s considerable Appalachian assets for $735 million. The Reuters rumor from September said EQT had offered $750 million (see Sources: EQT Offering $750M for Chevron’s Marcellus/Utica Assets). Also yesterday, EQT floated up to 23 million new shares of stock, on offer for $15.50 per share, attempting to raise ~$350 million to use toward the Chevron purchase.
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