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10 New Shale Well Permits Issued for PA-OH-WV Aug 7 – 13
New shale permits issued for Aug 7 – 13 in the Marcellus/Utica crashed for a second week in a row. There were 10 new permits issued last week, down 14 issued the previous week (half of the 29 issued three weeks ago). Last week’s permit tally included 10 new permits in Pennsylvania, no new permits in Ohio, and no new permits in West Virginia (third week in a row for WV). The top permittee for the week was Chesapeake Energy, receiving 6 permits–4 in Bradford County and 2 in Susquehanna County.
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Last September, EQT Corporation announced it was buying privately-owned Tug Hill Operating’s West Virginia shale assets for $5.2 billion (see 
Folks new to the Marcellus/Utica may not know this, but Chesapeake Energy’s then-CEO Aubrey McClendon first “discovered” the Ohio Utica about 15 years ago. Under McClendon, Chesapeake spent over $2 billion acquiring rights to drill 1.3 million acres in Ohio–or roughly 5% of the state’s land area. McClendon pegged the value of the Utica for Ohio at half a trillion dollars. He famously said the Ohio Utica is “the biggest thing economically to hit Ohio, since maybe the plow.” McClendon was tossed out of the company he founded by corporate raider Carl Icahn, so he started a new company (to target the Ohio Utica) that eventually became Ascent Resources. Tragically, McClendon died in March 2016, so he never got to see his dream turn into reality (see 
Chesapeake Energy has cut a deal to sell the third and final portion of its remaining Eagle Ford assets to SilverBow Resources for $700 million. The deal includes approximately 42,000 net acres and approximately 540 wells in the condensate-rich portion of Chessy’s Eagle Ford asset located in Dimmit and Webb counties (in Texas), along with related property, plant, and equipment. In 2018 Chesapeake, under the direction of then-CEO Doug Lawler, purchased 420,000 net acres in the Eagle Ford shale and Austin Chalk formations in Texas from WildHorse Resource Development Corp for $4 billion (see 
ECA Marcellus Trust I, the royalty interest holder in some of the wells drilled and maintained by Greylock Energy in Greene County, PA, announced it would issue no payout to unitholders for 2Q23. The company paid out 4.3 cents per unit in 1Q23; 12.4 cents per unit in 4Q22; and 18 cents per unit in 3Q22. The company continues to hold back some profits ($90,000 in 2Q23) to build a cash reserve for “future known, anticipated or contingent expenses or liabilities.” Consequently, ECA will not pay anything to unitholders for 2Q.
Epsilon Energy, a relatively small company, used to concentrate most of its effort on developing Marcellus Shale wells. However, over the past year, the company has expanded into other plays and now owns assets in the Anadarko (Oklahoma and Texas) and the Permian (Texas and New Mexico). The company, which is traded publicly, issued a quarterly update last week. In a first (that we’ve noticed), Seeking Alpha listened in and provided a transcription of the company’s conference call with analysts. During the Q&A portion of the call, Epsilon CEO Jason Stabell said the netback price the company gets for its production in the Marcellus during the summer is “gnarly.” During 2Q23, Epsilon received an average of $1.35/Mcf for its produced gas.
Banpu is Thailand’s largest coal mining company. However, it is looking to reduce the amount of revenue it derives from coal from around 66% today to 50% by 2025. One of the ways Banpu is accomplishing that objective is by investing in American shale gas, American gas-fired power plants, and now, American carbon capture and sequestration (CCS). Banpu partners with Kalnin Ventures and operates BKV Corporation (Banpu Kalnin Ventures), the American arm of Banpu (96% owned by Banpu). Over the past seven years, BKV has become one of the top 20 gas-weighted natural gas producers in the U.S.
Ascent Resources, founded as American Energy Partners by gas legend Aubrey McClendon, is a privately held company focusing 100% on the Ohio Utica Shale. Ascent, headquartered in Oklahoma City, OK, is Ohio’s largest natural gas producer (356,700 leased acres) and the 8th largest natural gas producer in the U.S. The company issued its second quarter 2023 update on Wednesday. Ascent’s net production averaged 2.1 Bcfe/d (billion cubic feet equivalent per day) during 2Q23, up 6% over 2Q22 but down from 2.2 Bcfe/d in 1Q23. The company made $250 million in profit during 2Q23, down just a bit from the $285 million it made in 2Q22.
Coterra Energy, formed in 2021 by the merger of Permian oil driller Cimarex Energy and Marcellus gas driller Cabot Oil & Gas, issued its second quarter 2023 update yesterday. The company made far less profit in 2Q23 than it did one year ago, in line with other big Marcellus/Utica drillers. Coterra made $209 million in profit for 2Q23, versus $1.2 billion in 2Q22. Why the drop in profit? The crashing price of natural gas over the past eight months or so. Coterra received an average of $5.54/Mcf (before hedges) for its Marcellus gas in 2Q22, and $1.78/Mcf in 2Q23, a drop of 68%. Ouch. During a conference call with analysts, company management floated a potential plan to free up around $200 million from Marcellus operations in 2024 and reallocate it to other plays (the Permian or the Anadarko) by continuing to run just two rigs and one frac crew in the Marcellus.
Greylock Energy is headquartered in Charleston, WV, with offices in West Virginia, Pennsylvania, Utah, and Wyoming and operations scattered throughout Appalachia and the Rockies. The company’s assets comprise more than 1.19 million acres, about 6,700 wells, including the operation of 4,000 wells throughout Appalachia (shale and conventional) and 2,600 miles of pipeline. Grelock has contracted with a company called Tachyus (headquartered in Houston, TX) to use its cloud-based greenhouse gas tracking and reporting service called Aurion. The purpose is, of course, to lower Greylock’s carbon and fugitive methane footprint–and to prove that it has lowered it.
There is trouble brewing along the Gulf Coast between Venture Global LNG and its biggest customers: BP, Shell, Edison International (an Italian utility company), Repsol, and GALP Energia (a Portuguese energy company). Venture Global is building the Calcasieu Pass LNG export facility in southwestern Louisiana’s Cameron Parish, less than 50 miles south of Lake Charles. While Venture Global is still working on completing Calcasieu Pass, it has, so far, shipped some 177 cargoes of LNG, much of that during the mega-high prices of last year when the Russia/Ukraine war was at its peak. Yet none of those cargoes went to the facility’s contracted customers, causing trouble.
Southwestern Energy, with major assets in the Marcellus/Utica and Louisiana Haynesville, issued its second quarter 2023 update late last week. The company generated $231 million in net income for the quarter versus profiting $1.2 billion in 2Q22. Like other gas drillers, the price of natural gas dropping into the basement over the past eight months or so has caused profits to slide. But hey, they’re still in the black! Southwestern reported total net production of 423 Bcfe (billion cubic feet equivalent), or 4.6 Bcfe per day, including 4.0 Bcf per day of gas and 106 MBbls (thousand barrels) per day of liquids (86% natgas, 12% NGLs, 2% oil). Southwestern invested $595 million of capital, drilled 38 wells, completed 46 wells, and placed 50 wells online to sales, including 28 in the Marcellus/Utica and 22 in the Haynesville.
In 2020, EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), sold *all* of its Marcellus assets, which were located in Bradford County, PA, to Tilden Resources for $130 million (see 
National Fuel Gas Company (NFG), headquartered in Buffalo, NY, is the parent company for Marcellus/Utica driller Seneca Resources and the parent of midstream company Empire Pipeline. Yesterday, NFG issued its latest quarterly update. NFG operates on a weird fiscal year system. This latest update is for the company’s third quarter, which would be everybody else’s second quarter update. NFG said it plans to “further moderate” its Seneca drilling activity as it shifts to slower production growth in the “low single-digit” range.