CNX Unloads Non-Op Oil & Gas Assets in Appalachia for $125M
Very quietly, without issuing a press release, CNX Resources, headquartered in Canonsburg, PA (near Pittsburgh), filed a Form 8-K with the Securities and Exchange Commission to say that on June 15, the company entered into a “definitive purchase sales agreement” to sell various non-operated producing oil and gas assets primarily located in the Appalachian basin to a third party for $125 million. And that’s about the sum total of what we know.
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In October 2021, Cimarex Energy, a Permian driller, and Cabot Oil & Gas, a Pennsylvania Marcellus driller, merged and renamed the company to Coterra Energy (see 
For individuals, discretionary income is what’s left after you pay your taxes and fixed costs like housing, food, and clothing. For shale drillers, the equivalent to discretionary income is cash flow from operating activities (CFOA), which is the net income a company generates adjusted for non-cash expenses like depreciation and stock-based compensation, and for changes in working capital. Drillers can use their extra cash to grow production by spending more for drilling new wells (capital expenditures or capex). Or drillers can send some of the extra cash back to investors via share buybacks and dividends. How did Marcellus/Utica drillers spend their CFOA during the first quarter of 2023?
New shale permits issued for Jun 5-11 in the Marcellus/Utica last week dipped a bit from the previous week. There were 20 new permits issued, down from 25 issued the previous week. Last week’s permit tally included 6 new permits for Pennsylvania, 8 new permits for Ohio, and 6 new permits in West Virginia. Ascent Resources scored the most new permits with 8 issued in the Ohio Utica, spread across three counties. Chesapeake Energy had the second most new permits with 6 permits issued in the PA Marcellus across two counties.
The Ohio Dept. of Natural Resources (ODNR) recently released production numbers for the first quarter of 2023, and wow! What a surprise! Oil production in the northern Utica Shale skyrocketed, led by wells drilled by Encino Energy. According to an analysis by the Youngstown Business Journal, four shale wells drilled by Encino in Columbiana County have “shattered previous production figures in the county.” Adding up all oil production by all drillers, Encino had the most oil production in the state, with 53.7% of the total oil produced in the Utica/Point Pleasant during the first quarter. It certainly looks like Encino has cracked the oil code in the Buckeye State!
Two major Marcellus/Utica drillers–Seneca Resources and Northeast Natural Energy (NNE)–have joined the CG Hub, the world’s first commodities trading platform focused exclusively on certified natural gas and certified natural gas certificates. Seneca and Northeast now provide access to a combined 1+ billion cubic feet per day (Bcf/d) of certified natural gas to traders via the CG Hub.
Last Thursday around 30-40 environmental activists (anti-fossil fuelers), along with a handful of local residents, rallied in Beaver, PA, before showing up for the Beaver County Commission regular meeting. The protesters, who want the Shell ethane cracker plant shut down, vented their concerns about the plant to county commissioners. The three county commissioners listened while antis vented for more than an hour (they should receive hazard pay). The problem is, the protesters were in the wrong venue.
Looks like Shell’s new CEO, Wael Sawan, is capable of rational thought, unlike his predecessor, Ben van Beurden. Previous CEO van Beurden had set the company on the suicidal path of reducing oil and gas drilling in favor of investing in renewable energy. It turns out that’s not making any money for the company. So at an investor meeting this week, Sawan is going to unveil a new strategy–back to more drilling for oil and gas and less dithering with renewables, according to Reuters. In addition, super-secret sources whispering to Bloomberg say that Sawan is trying to cut more deals with China and India to sell more LNG. Sawan “sees a long-term role for natural gas in the world’s energy mix” and Shell is going to help meet that need.
Last week MDN brought you the news that Northeast Natural Energy (NNE) has begun to drill a geothermal and carbon capture and sequestration (CCS) data collection well as part of a study being conducted by West Virginia University and the U.S. Dept. of Energy (see 
It’s possible to track which institutional investors (big investors like BlackRock) are buying or selling shares in various companies by reviewing Securities and Exchange Commission (SEC) Form 13F filings. S&P Global Market Intelligence performed a 13F review of which companies bought, and which sold (and how much) shares of stocks for shale gas drillers during the first quarter of 2023. The topmost active shale gas driller having its stock purchased by institutional investors was Comstock Resources, which drills exclusively in the Haynesville Shale. The reason Comstock came out on top, postulates S&P, is because the Haynesville is located close to the Gulf Coast and LNG export plants. However, it was the rest of the list that interested us.
An advisory note from Citi analyst Paul Diamond, picked up by the Seeking Alpha investor website, says U.S. natural gas producers are “primed for a wave of consolidation” in the medium term. Near the top of the list of potential takeover targets is, according to Diamond, Southwestern Energy, which had concentrated mainly on the Marcellus/Utica region until 2021, when it went wandering into Haynesville drilling. Who might be interested in buying Southwestern?
Last December, Rice Acquisition Corp II, a special purpose acquisition company (SPAC) started by the Rice brothers (Danny, Toby, and Derek), announced a deal to acquire NET Power–an electric power developer with revolutionary new technology to capture every last molecule of carbon dioxide from natural gas-fired power plants (see 
Marcellus driller Northeast Natural Energy (NNE) has begun to drill a geothermal and carbon capture and sequestration (CCS) data collection well, all the way down to 15,000 below the surface (see