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35 New Shale Well Permits Issued for PA-OH-WV Apr 25-May 1
Last week Pennsylvania issued 16 new shale well permits. EQT led the way with ten permits, all of them for wells in Greene County. You just HAVE to read the names of the wells (below). After getting skunked for two weeks in a row, Ohio finally issued permits once again last week–ten of them. Ascent Resources scored six permits, mostly in Belmont County. Encino Energy had four permits, all in Carroll County. Finally, West Virginia had nine permits. Antero Resources scored seven of the nine (six in Wetzel County), and Southwestern took the remaining two permits (both in Marshall County).
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An article in the Pittsburgh Post-Gazette highlights and focuses on the financial performance for four of the Marcellus/Utica’s largest publicly-traded companies, including EQT Corp., Antero Resources, Range Resources, and CNX Resources, during first quarter 2022. Even though the price natural gas is fetching is higher than it’s been in 14 years, M-U drillers are losing money. Why? Hedges and derivatives–bad bets on where the price of gas would go and locking in prices much lower than what the market currently supports.
Nicor Gas, a local distribution company (LDC), otherwise known as a natural gas utility company, is headquartered in Naperville, Illinois–a suburb of Chicago. Nicor Gas is the largest natural gas distribution company in Illinois, serving more than two million customers in a service territory that encompasses most of the northern third of Illinois, excluding the city of Chicago. Two days ago Nicor announced it had signed a deal with ENGIE Energy Marketing NA to buy “responsibly sourced” natural gas for its customers.
One of the hottest of the hot sectors in which to invest (right now) is shale energy. That’s according to multiple sources, including a veteran finance writer, investor, engineer, and researcher. In an article appearing on the OilPrice.com website, Alex Kimani talks up mid-cap energy stocks as outperforming the supermajors. Among two of Kimani’s top three picks are two Marcellus/Utica drillers, who are having a stellar year in stock performance. We went looking for the stock performance of other M-U drillers too. We have a list to share showing just how much each driller’s share price has increased this year.
According to RBN Energy, 2021 was the most profitable year in at least the last two decades for oil and gas producers (i.e. drillers). Oil and gas producers reported income two-thirds higher than the previous peak in 2014, when commodity prices were significantly higher. There’s every indication that 2022 will be even better for the bottom line of O&G companies. What about Marcellus/Utica drillers? Yep, they’re on the list of phenomenal results too.
According to S&P Global, shale gas producers behaved themselves during the fourth quarter of 2021 and didn’t, even as the price of gas went sky high, do anything more than maintain current production. Gas drillers kept spending in check, didn’t do any more drilling than was necessary to maintain production, and plowed free cash flow back into dividends and stock buybacks. The result? Investors loved it and share prices soared.
Using investment capital from Preferred Capital Securities, WhiteHawk Energy is buying mineral and royalty rights in southwestern Pennsylvania, primarily in Washington and Green counties, for $52.5 million. The assets include production and cash flow from over 950 horizontal Marcellus Shale wells. The wells are operated by EQT, CNX Resources, and Range Resources.
Range Resources, the very first company to sink a Marcellus well back in 2004, issued its fourth quarter and full-year 2021 update yesterday. The update includes a preview of what’s ahead for 2022. Among the blockbuster news is that after five years, Range, which has long specialized in drilling “wet gas” wells in southeastern Pennsylvania, is returning to northeastern PA this year to drill some dry gas wells. Why? The economics are there, says Dennis Degner, Range’s COO and top driller.