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20 New Shale Well Permits Issued for PA-OH-WV Dec 5-11
Last week (Dec. 5-11), the number of permits issued to drill new shale wells in the Marcellus/Utica dropped by one to 20 from the prior week’s 21. Pennsylvania came back to life with 14 new permits. Ohio and West Virginia both issued just three new shale permits.
Read More “20 New Shale Well Permits Issued for PA-OH-WV Dec 5-11”
Gas-focused drillers in the U.S. tracked by RBN Energy (most of them with major operations in the Marcellus/Utica region) had a stellar third quarter financially. The group of 11 publicly-traded drillers that RBN tracks tripled their earnings on average, and cash flows were up 150% over the same quarter last year. EQT Corp., now helmed by Toby Rice, was the most profitable company on the list, earning $2.6 billion in Q3 while generating $3.1 billion in cash flow. What about the others?
Expectations play a big role in investing. The financial markets do a lot of anticipating and forecasting and guessing about where a company or entire sector is heading. Such is the game being played right now with expectations for Marcellus/Utica shale gas companies and their forthcoming third quarter financial updates. Given the high price of natural gas during 3Q22, analysts expect shale gas companies to be swimming in free cash flow. The natural follow-on question is, what will they do with all of that extra cash?
Drillers (exploration and production companies, or E&Ps) were thrilled with record-high earnings and cash flow in the second quarter of this year. Soaring commodity prices and “strict financial discipline” on the part of oil and gas drillers resulted in pre-tax operating earnings and cash flows surging by 29% and 22%, respectively, from 1Q22. And 1Q22 was up too! So what did drillers, especially drillers in the Marcellus/Utica, do with all that extra cash? Did they pay down debt? Buy back shares of company stock? Issue higher dividends? Something else?
Seneca Resources, a 100% subsidiary and the drilling arm of National Fuel Gas Company, announced on Tuesday that the company has achieved an “A” certification grade under the MiQ Standard for Methane Emissions Performance (MiQ Standard), the highest available certification level MiQ awards, for all of the company’s 1+ billion cubic feet per day (Bcf/d) of natural gas production in the Marcellus/Utica. Seneca can now claim it produces responsible gas and the molecules can be traded/bundled on the MiQ Digital Registry.
National Fuel Gas Company (NFG), the parent company for Seneca Resources and Empire Pipeline, recently issued its latest update for the quarter ending June 30 (NFG’s third fiscal quarter, everyone else’s second quarter). NFG is a truly integrated company, including drilling, pipelines, and a utility company serving end-user customers. The company made $108 million in profit for the quarter, mostly driven by its upstream (drilling) unit Seneca Resources. In fact, upstream/drilling represented half (50%) of NFG’s revenues in 3Q22.