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29 New Shale Well Permits Issued for PA-OH-WV Feb 20-26
New shale permits issued for Feb. 20-26 in the Marcellus/Utica slide lower last week. There were 29 new permits issued in total last week (down from 35 the week before), including 24 new permits for Pennsylvania, no new permits for Ohio, and five new permits issued in West Virginia. Last week the top receiver of new permits by far was the largest natural gas driller in the country, EQT Corporation, with 20 new permits split between Greene and Washington counties in southwestern PA.
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Range Resources Corporation, the very first driller to sink a Marcellus shale well back in 2004 in western Pennsylvania, issued its fourth quarter and full-year 2022 update yesterday. During 2022, Range generated record cash flow from operations of $1.9 billion and produced an average of 2.1 billion cubic feet equivalent per day (Bcf/d) of natural gas. The company spent $492 million on drilling in 2022. Of keen interest to us was a response by Range’s CEO about the rumors that Pioneer Natural Resources is interested in buying or merging with Range.
The rumor mill kicked into overdrive on Friday when Bloomberg published an article saying Pioneer Natural Resources Co., one the largest independent oil producers in the U.S., is considering (negotiating for) an acquisition of Marcellus driller Range Resources Corp., according to “people familiar with the matter.” Range was the very first company to drill a Marcellus shale well back in 2004 in western Pennsylvania. By the end of Friday, Pioneer issued an abrupt statement saying it “is not contemplating a significant business combination or other acquisition transaction.” It wasn’t an outright denial that such talks are taking place. Range could not be reached for comment.
Anti-drillers, with the assistance of biased “news” publications like the Pittsburgh Post-Gazette, continually make false accusations against the shale industry in the southwestern Pennsylvania area, alleging that fracking is the cause of rare forms of cancer in children (see 
What a difference three years can make! Three years ago, Henry Hub prices were hovering around $2 per thousand cubic feet (Mcf). Stock valuations for Marcellus/Utica drillers were majorly depressed (down 80-90% from previous highs), and gas producers were struggling. Fast forward to today. Balance sheets and earnings statements are through the roof. Most experts believe $4-$5/Mcf gas is sustainable–at least for the next X years. What does the future look like for M-U drillers? What are the risks? And can we keep the current bright outlook going?
Being a “pure-play” or “single play” (as the Brits call it) shale driller has its advantages. It also, in a changing world, can have its risks, or disadvantages. That is the point made in a new analysis by global research and consultancy Wood Mackenzie. Wood specializes in doling out advice on oil, gas, LNG, power, renewables, chemicals, and metals & mining. In an excellent article delving into the advantages and disadvantages of being a pure-play driller, Wood makes the following observation: “Five US operators – EQT, Pioneer, Antero, Diamondback and Range – have amassed single-basin positions on a global scale.” Yeah, three of the five are M-U pure-play drillers, and the assets they have “amassed” rival (produce more) than many of the Majors’ non-shale assets. It is a truly amazing feat.