Gulfport 3Q16 Fin. Update: $157M Loss, 6 Utica Rigs Coming in 2017
In mid-October Gulfport Energy was one of the first out of the gate with information on the third quarter (see Gulfport 3Q16 Operations Update: Production Up 13%, Prices Up Too). However, that was only an operational report, and not the fuller, financial report. On Wednesday Gulfport delivered the full package/update. As we previously noted, natural gas production was up nicely. But a fuller reading of the numbers in this report shows that, like other Utica/Marcellus producers, both oil and natural gas liquids (NGL) production was down year over year for Gulfport. This confirms media reports we’ve noticed over the past few months (see Shift in Utica Drilling – from Wet Gas to Dry Gas and Why Utica Drillers are Moving from Wet Gas to Dry Gas). One reason to separate operational from financial updates is because the news in the financial update is typically not so good, while operational news typically is good. Once again we see that pattern. Gulfport lost $157 million in 3Q16–but that’s a big improvement from the $388 million loss in 3Q15. Here’s the fuller, financial update from Gulfport, including the news that the company plans to begin 2017 by running six rigs in the dry gas Utica…
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Carrizo Oil & Gas, a Houston-based driller, actively drills in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, and until mid-year in 2015, they did have an active drilling program in the Ohio Utica and Pennsylvania Marcellus. No more. They haven’t drilled in Appalachia since 3Q15. According to Carrizo’s latest quarterly update for 3Q16, that (sad) state of affairs continues…
Magnum Hunter Resources Corporation (MHR), a driller 100% focused on the Marcellus/Utica emerged from bankruptcy in May, less than five months after filing (see 
This is an important story for both drillers and rig workers, potentially answering the question of who can and can’t be sued if something goes wrong when drilling a well. In 2006 Atlas Resources leased land in Greene County, PA to drill shale wells. In 2007 Atlas hired Gene D. Yost & Son, Inc. to drill wells for Atlas, including on the land leased in Greene County. Yost was the subcontractor, employing people to do the work using Yost’s equipment. As workers were removing drill pipe, preparing to shut in the well, there was an accident which appears to be operator error. One man, Rock A. Doman, was killed. The Doman family later filed a wrongful death lawsuit against Atlas Energy for negligence. After years of litigation and court findings, an appeals court ruled last week that Atlas is, in fact, a “statutory employer” under PA law, meaning they are immune from such lawsuits. That is, because Atlas hired another company for that company’s services, they (Atlas) cannot be held responsible for what the company they hired theoretically did or did not do. In this case, Yost’s “negligence” (if indeed there was any negligence) is not transferable to Atlas…
Yesterday one of our favorite drillers in both the Utica and Marcellus, Rice Energy, released their third quarter 2016 update. It can be summarized in one, short phrase: “Everything that should be up is up.” Production is up for the quarter–by a big 23%. Net income is up, by 40%. The company’s line of credit is up to $1 billion (was $875 million). In addition, during 3Q16 Rice floated new stock to help them buy Vantage Energy, for a whopping $2.7 billion. Also during 3Q16 Rice drilled and completed 10 new Marcellus wells, along with drilling and completing 2 Utica wells. In addition they brought another 11 Utica wells online. There’s lots happening at Rice Energy. Here’s the update…
EXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out in March, has pretty much abandoned the Marcellus at this point (see 
Coming on the big news yesterday that CONSOL Energy is calling it splitsville with Noble Energy on their 2/3 of a million acres joint venture in the Marcellus (see 
As we pointed out yesterday in our story about CONSOL Energy and Noble Energy deciding to end their Marcellus joint venture (see 
On Monday, October 24, 2016, the Third Circuit Court of Appeals (in Western Pennsylvania) ruled that Marcellus driller ECA (Energy Corporation of America) did not prove a need for a new trial in the case it previously lost. Pennsylvania landowners sued ECA in federal court beginning in 2010, saying their royalty checks were shorted because ECA was improperly deducting post-production costs. Sound familiar? In February 2013 a federal judge upheld a split decision that said most of what ECA was deducting was OK, but the one thing they can’t deduct from royalty checks are charges for interstate pipeline transmission (for the full story, read our post 
One MDN’s favorite Marcellus drillers, Cabot Oil & Gas, released their third quarter 2016 update on Friday. Production once again set a new record with Cabot producing 144.4 billion cubic feet (Bcf) of natural gas in 3Q16 (up from 133 in 3Q15). The number of wells drilled decreased from 27 new wells drilled in 3Q15 to 11 new wells drilled in 3Q16. However, Cabot has/had plenty of drilled but uncompleted wells (DUCs). In 3Q15 Cabot completed 21 wells and in 3Q16 they completed 23 wells. Once again the company treaded water financial, losing $10 million in 3Q16 (down from losing $15.5M in 3Q15). Frankly, $10M is chump change in the o&g business. The biggest news (for us) in the Cabot update from Friday is their strategy announcement. It can be summed up in one slide from their analyst presentation (see it below) which is titled: INFRASTRUCTURE UPDATE: 2018 IS AN INFLECTION YEAR FOR CABOT. On that slide is a list of six infrastructure projects that are critical to the future of Cabot–all of them expected to go online in 2018. Yes, the Constitution Pipeline is one of the six. Can you guess the others?…
EQT issued its third quarter 2016 update yesterday. The company reports losing money on its drilling operations ($22 million), but making money on midstream operations ($133 million), so they ended the quarter in the black. Highlights include production zooming up 26% higher over the same period last year. EQT drilled 24 wells in 3Q16, which breaks down as 21 Marcellus wells, 2 Upper Devonian wells and 1 Utica well. However, the biggest news coming from yesterday’s update came from the analyst phone call when EQT president Steve Schlotterbeck said, “We continue to make solid progress on both the cost and recovery efforts and we’re encouraged that the Deep Utica can compete with or surpass our core Marcellus economics in the near future.” That is, although they just got done drilling a bunch of Marcellus wells, it is the Utica that has turned EQT’s head in a major way. Why? Schlotterbeck also said he thinks Utica drilling will end up costing the company half as much as Marcellus drilling (due to higher production in Utica wells). The company sees itself as primarily a Utica driller in the not-too-distant future. Here’s the update, along with a select portion of yesterday’s analyst phone call…