Weekly Shale Drilling Permits for PA, OH, WV: Nov. 16-20

Last week Pennsylvania issued 11 new shale well drilling permits, all but one of them in the northeastern (dry gas) part of the state. Ohio issued one new permit, and West Virginia issued 2 new shale well permits.
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Weekly Shale Drilling Permits for PA, OH, WV: Nov. 9-13

An interesting week for permits. Last week Pennsylvania issued just 2 new shale well drilling permits after having issued 3 the week before (lowest numbers we’ve seen). Ohio, which has not issued many permits in recent months, was on fire last week with 17 new shale permits! West Virginia issued just 1 new shale well permit.
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Southwestern Completes Montage Merger, Now 3rd Largest M-U Co.

In August Southwestern Energy announced it is buying out and merging in Montage Resources in an all-stock deal (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). As of Friday Montage, which was itself a merger of two companies (Blue Ridge Mountain Resources and Eclipse Resources) is no more. Montage is now a part of Southwestern.
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Montage Resources Releases Last Quarterly Update – Merging Next Wk

After a shareholder vote scheduled for next Thursday, Nov. 12, Montage Resources will be no more. The company is selling itself to Southwestern Energy in an all-stock deal worth $857 million (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). Yesterday Montage issued what will be its very last quarterly update. What does the update show?
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Weekly Shale Drilling Permits for PA, OH, WV: Oct. 26-30

Last week Pennsylvania issued 16 new shale well drilling permits, and West Virginia issued 7 new shale well permits. Ohio issued no new shale permits last week.
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Southwestern Expects to Close on Montage Purchase Nov. 12

Southwestern Energy Company released its third-quarter 2020 update last Friday. The company previously announced it is buying out and merging in Marcellus/Utica driller Montage Resources. During the 3Q conference call, CEO Bill Way said the company expects to close on the deal immediately after Montage Resources shareholders vote on the deal November 12. Also from the 3Q update: Southwestern managed to reduce the cost of drilling for one of their PA Marcellus wells down to $491 per lateral foot!
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Marcellus/Utica Driller Stock Prices Trend Up with NatGas Price

We spotted a couple of stories, one in Barron’s the other in the Wall Street Journal, about the pickup in the futures price of natural gas over the past week, and how those recent gains have led to impressive gains in the share price for Marcellus/Utica drillers. Yesterday the NYMEX Henry Hub futures price closed up 4.11% to $2.74/Mcf. The rising tide lifts all boats.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 28 – Oct 2

Somebody lit a fire under drillers in Pennsylvania last week! Or maybe we should say a fire was lit under the PA Dept. of Environmental Protection (DEP). PA issued 35 new permits last week spread pretty much across the entire state–in the northeast, central, and southwest portions of the state. Ohio, once again, issued no new Utica permits last week. West Virginia issued a single new permit last week.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 21-25

An unusual situation for permits to drill new wells for last week. Pennsylvania only had 5 new permits while West Virginia had 12 new permits. It’s typically the other way around. Could this be the beginning of the effects from PA raising the permit fee from $5,000 to $12,500 per well? Maybe! Ohio had no new Utica permits issued last week. Drilling seems to have slowed in the Buckeye State.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 14-18

Last week Ohio finally broke the drought of not issuing permits for new shale wells in the Buckeye State. Finally! Last week Pennsylvania issued 13 new permits for wells on three well pads. Ohio issued 4 new permits for wells on two well pads. And West Virginia issued 1 new permit.
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Weekly Shale Drilling Permits for PA, OH, WV: Sep 7-11

For the third week in a row, both Pennsylvania and West Virginia issued permits to drill new shale wells last week, and Ohio did not. What’s up with Ohio? PA issued 13 new permits for wells on five well pads. WV issued 2 new permits on two different pads. PA’s new permits skewed toward the southwestern part of the state with 11 of the 13 permits issued (two in Bradford County in the northeast). The WV permits were both issued in Marshall County, located in the northern panhandle of the state.
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Southwestern Raises $502M to Pay Off Montage Debt

Last week we brought you the bombshell news that Southwestern Energy is buying out and merging in Montage Resources in an all-stock deal worth roughly $857 million (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). In a series of announcements yesterday, Southwestern said it has just finished raising $152 million from selling more stock, and is in the process of raising another $350 million from issuing new notes (debt, IOUs). The money raised ($502 million total) will be used to pay off debt owed by Montage.
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Southwestern Hits “Grand Slam” with Purchase of Montage Resources

Last week, in one of the biggest news stories (for us) so far this year, Southwestern Energy announced it is buying out and merging in Montage Resources (see Stop Press! Southwestern Energy Buying Montage Resources for $857M). The combined companies will create the third-largest (by acreage) Marcellus/Utica driller. Yet investors have pretty much yawned. The company’s stock went down after the announcement. According to one analyst, Southwestern’s purchase is a “grand slam” home run and investors should sit up and take notice.
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Stop Press! Southwestern Energy Buying Montage Resources for $857M

Holy smokes! We didn’t see this one coming. Just yesterday MDN brought you the second-quarter update from Montage Resources (see Montage Resources: 5 New OH Utica Wells, Profits Tumble in 2Q). Little did we know the company was in an advanced stage of negotiations to sell itself to Southwestern Energy. Perhaps “sell” isn’t quite the right word. The two companies are merging, with Southwestern taking over Montage, in an all-stock deal worth roughly $204.3 $857 million (NOTE: We amended this article after Raymond James calculated the deal to be worth a much higher amount, see our update below). The combination will create the third-largest (by acres leased) Marcellus/Utica driller with a combined 786,187 net acres.
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Southwestern 2Q – 2.2 Bcfe/d Production, $505/Ft Well Cost!

Southwestern Energy released its 2Q20 update on Friday. The company, with nearly a half-million acres under lease, drills solely in the Marcellus/Utica in two distinct regions: northeastern Pennsylvania and West Virginia. The NEPA operation targets dry gas. WV targets wet gas/NGLs. During 2Q, Southwestern drilled 80% of its new wells in the NEPA dry gas area. Southwestern drilled 30 new wells, completed/fracked 31 wells, and placed 31 wells online to sales last quarter. One of the eye-popping bits of news from the company update is that for one particular well they hit a super-low $505/lateral foot cost to drill the well–the lowest drilling cost we’ve seen by any M-U driller anywhere!
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Investors Love M-U Companies, Even Though Gas Price is Low

How does one make money in the natural gas market these days when the price of gas is at historic lows? One way is if an investor was fortunate enough to bet the price would go down. Those folks made money. The other way is to…invest in drillers? Yep. Even though low prices hurt drillers, investors still like the looks of what is on the horizon, especially for companies operating in the Marcellus/Utica. Example: The stock price for Range Resources and EQT is up over 30% each this year so far.
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