Southwestern Energy Reduces Methane Leaks, WITHOUT Onerous Regs
The debate rages, both nationally and on the state level (in Pennsylvania, anyway) about the best way to reduce fugitive methane. That is, to stop methane from leaking out of pipes and into the atmosphere where it supposedly contributes to mythical man-made global warming. Leaving aside the nonsensical global warming stuff, it’s in the best interests of any producer (or pipeline company) to ensure no methane molecules leak out of the system. It’s the stuff they extract and sell! They don’t want their inventory flying away into heaven. The debate is how best to ensure less methane leaks. On one side you have the typical Big Government types that want to regulate everything, down to the type of equipment you use to detect leaks and the methods for fixing it. We have nothing against common sense regulations, but as everyone knows, government tends to screw things up, rather than fix things. On the other side you have drillers and midstream companies who content “just give us a standard and let us figure out how best to meet that standard.” Case in point is Southwestern Energy. Southwestern launched a leak detection and fixing program five years ago–and has dramatically cut the amount of methane leaking from its operations. Southwestern, and others, show us the way it should be done, WITHOUT needing onerous regulations from the federal government or from the regulation-happy PA Gov. Tom Wolf…
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Yesterday we brought you the “Top 10” drillers in southwestern Pennsylvania, as ranked by the number of permits issued (see 
When a driller sinks a hole in the ground looking for one hydrocarbon–like natural gas–other hydrocarbons also come out of the ground. Sometimes its oil. Sometimes condensate. Sometimes natural gas liquids (NGLs), including ethane, propane, butane, pentane, etc. In northeast and central Pennsylvania where the Marcellus Shale is prolific, most of what comes out of the ground is just methane–or natural gas. However, in the southwestern portion of PA, and in the northern panhandle of WV and on into eastern OH, it’s a different story. They are considered “wet gas” areas because (depending on the county) the wells are prolific NGL producers. Most NGLs, like propane, fetch much higher prices than plain old methane. Typically ethane is the NGL that mostly comes out of the ground, but for many drillers ethane can’t (yet) be sold, so it’s considered a “waste” product, mixed into the methane stream to get rid of it. But that’s changing. There are now pipelines to carry ethane to facilities in both Philadelphia and to a cracker plant in Canada. There’s even a pipeline for ethane (and other NGLs) that goes all the way to the Gulf Coast (ATEX, Appalachia to Texas). Some of the largest Marcellus/Utica drillers now have markets for their NGLs, so they are ramping up production and selling more NGLs. In fact, six of the eight largest M-U drillers increased their NGL production in the second quarter of 2017 compared to 2Q16. Which six increased, and which two decreased NGL production last quarter?…
It’s not often these days we come across a story that mentions a new lease signed, and the amount of money paid as a signing bonus. Such is the case in Ohio County, WV. The Wheeling Park High School has just signed a lease with Southwestern Energy for $3,500 per acre for 66 acres–giving the school district $231,000 of newly found revenue, thanks to the Marcellus/Utica industry. No drilling equipment will be placed on or near school property. When the drilling eventually happens UNDER the school, and the wells begin to flow, Wheeling Park High School will then get more revenue–18% royalties on all gas produced…
Of the three Marcellus/Utica producing states–Pennsylvania, Ohio and West Virginia–only WV reports well production on an annual basis. Not frequent enough! In July WV published production numbers for 2016. The exciting news is that on average, initial production (IP) of Marcellus/Utica shale wells surged 20% over 2015. IP is the amount of gas (or oil or NGLs) flowing from a well. However, when you dig into the numbers, you learn that IP rates did not go up universally across the state. Some counties had big increases, other counties went the other way. The same with drillers. Some drillers (like Antero) saw a big bump up in average IP rates. Other’s (like Southwestern Energy) saw a dip in IP rates from 2015 to 2016…
Southwestern Energy, a huge driller which operates mainly in the Marcellus/Utica region, is losing its chief financial officer, Craig Owen, to a “non-competing” driller, Rosehill Resources. Rosehill drills in Texas and New Mexico, focusing on the giant Permian Basin oil play. Apparently Rosehill made Owen an offer he couldn’t refuse. We certainly don’t take this as bad news for Southwestern–other than losing a talented bean counter. It’s not an indication of problems at Southwestern–just somebody furthering his career. You can’t fault Owen for that. Meanwhile, Southwestern has hung out the “help wanted” sign for a new CFO, in case you know of someone…
Earlier this week MDN brought you the latest quarterly update from Southwestern Energy (see 
The sharp folks over at the Pittsburgh Business Times have been looking through data from the Pennsylvania Department of Environmental Protection (DEP) and have compiled a list of 20 drillers who have at least a dozen shale wells in the southwest PA region. And they ranked them from lowest to highest. We’ve grabbed the list below. The interesting thing for MDN is that there is one name in the list not familiar to us, and we’ve been watching this space since 2009. Always fun to learn something new. Here’s the list of southwest PA’s “Top 20” Marcellus drillers…
In September, MDN brought you research on 10 of the largest Marcellus/Utica drillers that have “hedged” their 2017 production (see