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Weekly Shale Drilling Permits for PA, OH, WV: Aug 2-8
Last week only Pennsylvania issued permits to drill new shale wells. Both Ohio and West Virginia issued no new drilling permits. Summer doldrums? Some 8 of the 11 permits issued in PA were to Seneca Resources, all of them in Elk County, and 7 of the 8 were for the same well pad. The other 3 permits were issued to EQT in three different counties.
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Last Friday National Fuel Gas Company (NFG), the parent company for Seneca Resources and Empire Pipeline, issued its latest quarterly update for the quarter ending June 30 (NFG’s third fiscal quarter, everyone else’s second quarter). The exciting news from the update is that with two pipeline projects getting completed this year, Seneca Resources is ramping up its Marcellus/Utica drilling program to take advantage of selling more gas at higher prices.
Seneca Resources, the drilling arm of utility giant National Fuel Gas Company, is conducting its first experiment with electric fracking. We’re aware of at least three other Marcellus/Utica drillers that currently use electric fracking: Range Resources, CNX Resources, and Olympus Energy (former Huntley & Huntley). Seneca, like Range, will use U.S. Well Services to provide e-fracking. Seneca is conducting a field trial for a 6-well pad in Lycoming County, PA.
Expectations coming from Wall Street are that pure-play drillers, like many in the Marcellus/Utica, will show a turnaround in their financials for the second quarter of 2021. According to S&P, investors took drillers at their word last year that they won’t “drill baby drill” the way they have in years gone by. The stock prices of nearly all major M-U drillers have soared over the past 12 months as a result. The biggest turnaround has been Antero Resources. Its stock price is up nearly 400% over the past 12 months! Range Resources’ stock price is up 140%.
Seneca Resources Company, the exploration and production subsidiary of National Fuel Gas Company (NFG), is the latest company to jump on the ESG (environmental, social, governance) bandwagon. Seneca is partnering with NexTier Oilfield Solutions, an oilfield services company that fracks and completes wells for companies like Seneca, to study the carbon emissions that come from fracking shale wells.
RBN Energy is a fountain of great information about the oil and gas sector. Headed by industry icon Rusty Braziel, RBN tracks and reports on a number of O&G companies. One of the best features of their information service is tracking the performance of three groups of publicly-traded O&G companies: Oil-Weighted E&Ps, Diversified E&Ps, and Gas-Weighted E&Ps. That last group, the gas-focused companies, is a list of 10 E&Ps. Only two of the ten don’t have any operations in the Marcellus/Utica–all the rest do. RBN has just published a post about the financial performance in 1Q21 for all three groups. The numbers are very encouraging.
M&A, or mergers & acquisitions, is on everyone’s mind in the oil and gas industry. Particularly in the Marcellus/Utica region. EQT, under the leadership of Toby Rice, already the largest natural gas producer in the country, has been on the prowl. In the past eight months EQT has picked up all of Chevron’s M-U assets (see 
One of the criticisms often leveled against the shale industry is that shale drillers have destroyed shareholder value (the price of company stock) over the past decade or so (see 
Analysts with S&P Global Market Intelligence say that shale gas drillers in the Marcellus/Utica region have finally learned their lesson and are sticking to their promise to keep capital spending restrained this year–even with an increase in the price of gas. Both spending and rig counts are predicted to stay low this year as drillers work on boosting free cash flow and improving company share price.