One of the largest drillers in the Marcellus/Utica, Southwestern Energy, announced yesterday they’re borrowing $750 million in a three-year term loan–to pay off borrowed money. Yes, we know, it’s the American Way to borrow money to pay off other debts. Dave Ramsey wouldn’t be impressed–and neither are we. But that’s the way the game is played…
Read More “Southwestern Energy Borrows $750M to Pay Off Other Borrowed Money”
From time to time MDN notices and highlights “short selling” stories. What’s short selling? In essence, it’s when traders borrow and sell a stock so they can turn around and buy it back at a lower price, returning it to the party they “borrowed” it from, making a tidy profit. It is a trader betting that a stock’s price will go down and not up (see our explanation here: “Short Selling” – An Important Signal for Marcellus-Related Companies). On average, short selling of stocks for all companies in all industries is typically 5-6% of trading volume. Recently, oil and gas stocks, as an industry, have seen an average of 12% short selling of their stocks. When a company’s stock sees a spike in short selling, it’s a signal that “the market” believes that stock price is heading lower, which can mean trouble for the company. Southwestern Energy is the latest Marcellus/Utica driller to see a spike up in short selling of its stock. How much?…
Read More “Southwestern Energy’s Stock Sees Spike Up in Short Selling”
Yesterday Southwestern Energy Company, one of the the major players in the Marcellus Shale, posted its third quarter 2015 earnings and operational update. In many ways Southwestern is one of the most exciting companies drilling in the northeast. A year ago Southwestern purchased 413,000 acres and 435 operating and non-operating wells from Chesapeake Energy in the southwestern portion of the Marcellus for $5.4 billion (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Early this year they picked up 46,700 acres and 63 operational wells from WPX Energy in the northeastern part of the play for $300 million (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). Then the company did something virtually no other company has done in 2015–they INCREASED their drilling program in the Marcellus (see Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus). Has it paid off? Time will tell. We can tell you that the company is producing more natural gas than ever–130 billion cubic feet equivalent per day in the Marcellus/Utica. Put another way, that’s 1.4 Bcf/d, each and every day. We have plenty of details on their drilling program below. However, on the financial side, whereas the company made $211 million in net income in 3Q14, they lost $1.766 billion in 3Q15. That kind of bleeding will have to stop…
Read More “Southwestern Energy 3Q15: Production Up 27%, Net Loss of $1.8B”
There is no doubt the current stock market crash (what else can you call it?) has affected everyone and everything–including the Marcellus/Utica industry. Yesterday the price of West Texas Intermediate (WTI) crude oil closed the trading day at $38.24 per barrel–the lowest price since 2009 during the dark days of “the Great Recession”. Natural gas trading at the benchmark Henry Hub in southern Louisiana, often used as a proxy for all natural gas, closed at $2.64 per thousand cubic feet (Mcf). The Dow Jones Industrial average sunk another 588 points to close down more than 1,000 points in two trading sessions–last Friday and yesterday. At the beginning of trading yesterday, the DJIA experienced its biggest intraday (within a single day) loss ever–plunging more than 1,000 points as trading began. Thankfully it regained nearly half of that–but still, it was scary on many levels. All of that fear has affected all stocks, including the stock price for some of the biggest Marcellus/Utica drillers, who saw losses averaging 7-10% in a single day–yesterday…
Read More “Stock Prices Fall 7-10% in Single Day for Big Marcellus Drillers”
Southwestern Energy, one of the largest natural gas producers in the Marcellus Shale and the fourth largest natural gas producer in the Lower 48 States, issued their second quarter 2015 update yesterday. There is a lot to digest in this massive update. Southwestern, you may recall, added to their already-considerable northeastern Pennsylvania Marcellus holdings by purchasing WPX’s NEPA leases, wells and operations in a $300 million that closed in February of this year (see WPX Finalizes Sale of NEPA Marcellus Leases/Wells to Southwestern). So this 2Q15 update will be the first full quarter to include numbers from the WPX purchase. Late last year Southwestern picked up a massive amount of new acreage and already-drilled wells in the southwestern portion of the Marcellus–most of it in West Virginia–in a $5.375 billion deal with Chesapeake Energy (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Yes, Southwestern is serious about the Marcellus! What do the 2Q15 numbers for Southwestern show?…
Read More “Southwestern Energy 2Q15: Production Up 30%, Net Inc. Down 481%”
Southwestern Energy Company turned in their latest quarterly update yesterday (see our companion story today). Perhaps the biggest eye-opener for us is learning that Southwestern is now the fourth largest natural gas producer in the United States (lower 48 states). In addition to yesterday’s quarterly update, Southwestern released their latest PowerPoint presentation for analysts a couple of weeks ago. We have a copy of that presentation below along with our list of favorite slides. Lots of charts and graphs and yes, even useful information for landowners, investors, supply chain companies and competitors…
Read More “Southwestern Energy Slide Deck w/MDN’s Favorites Identified”
Representatives from a dozen far-left anti-fossil fuel groups sent a letter to Pennsylvania Gov. Tom Wolf on Tuesday asking him to illegally prevent drilling in the Loyalsock State Forest–where the mineral rights are owned by private individuals and not the state. Groups like PennFuture (most of whose employees now work in the Wolf Administration), the Sierra Clubbers and the League of [Liberal Democrat] Women Voters are signatories to the letter urging Wolf to wave his magic wand and prevent drilling in the Loyalsock. Of course their pleas and demands ignore the fact that drilling is already happening in many state forests–INCLUDING Loyalsock. Their objection is to the addition of more drilling in the Clarence Moore Lands area of the Loyalsock…
Read More “Antis Ask PA Gov Wolf to Stop New Drilling in Loyalsock Forest”
Southwestern Energy, one of the largest Marcellus Shale drillers, released their first quarter update last Thursday. Among the highlights: Record production for the company, including 113 billion cubic feet equivalent (Bcfe) in the Marcellus (83 Bcf in the northeast and 30 Bcf in the southwest). Similar to Cabot and other operators, Southwestern had record revenues in 1Q15–but income (profit) was way down due to low gas prices. Southwestern’s operating income for 1Q15 was $78 million, compared with $352 million in 1Q14–a 78% drop year over year. Southwestern placed 22 new wells online in production in the Marcellus during 1Q15. Below is the full update…
Read More “Southwestern Energy 1Q15: Record Production, but Profit Dives 78%”
Southwestern Energy held an analyst call last week to discuss their latest update for first quarter 2015. As with the Cabot transcript which we highlighted today, the Southwestern transcript is just jam-packed with details that will be of keen interest for investors, landowners–really anyone with an interest in Marcellus drilling in PA and WV and drilling done by Southwestern. We can’t bring you the whole transcript–so what we’ve done is highlight something that caught our interest: How Southwestern is driving down costs in their water operations, including an interesting twist on gathering lines…
Read More “Southwestern Energy’s Plan to Save $1M Per Well on Water Costs”
We’re passing along a bit of gossip–we call it gossip because we haven’t (yet) been able to verify it, but we believe it to be true. A long-time MDN reader wrote to tell us that he services most of the rigs operating in the Appalachian basin (Marcellus/Utica), and that Southwestern either has or is about to idle two rigs owned and operated by Precision Drilling in northeast PA: Rigs #538 and #539 in Bradford and Susquehanna counties. According to our source, the Bradford County rig was idled last week and the Susquehanna County rig will be idled this week. We don’t know if Southwestern has any remaining active rigs in northeastern PA owned by other companies.
UPDATE: Turns out Southwestern has no plans to scale back. The reason for idling the Precision Drilling rigs is because they plan to use their own rigs going forward. Another reader confirmed it and told MDN that the Precision Drilling rigs are being replaced with Desoto Drilling rigs #45 and #46. Southwestern owns Desoto. With activity in Arkansas slow (where the Desoto rigs had been located), it only makes sense!
Who were the top 5 natural gas producers in Pennsylvania for all of 2014? The names of the companies won’t surprise you if you’ve read MDN for any length of time. But the order of the list may surprise you, and the number of active wells for some of them likely will surprise you…
Read More “Envelope Please: Top 5 PA Marcellus Shale Gas Producers for 2014”
In February, West Virginia passed a new law “fixing” an old law. The old law, which was itself a new law just a few years ago, stipulated if oil and gas leases/operations change hands, the new owner must apply for permits to drill all over again, even if the previous owner had already been awarded those permits. This was a really big problem for Southwestern Energy that had just purchased $5 billion worth of leases and operations from Chesapeake Energy, most of it in WV. So the WV legislature passed, in record time, a law to fix the problem–and Gov. Earl Ray Tomblin signed it (see WV Gov Tomblin Signs “We Love You Southwestern” Bill into Law). And none too soon. We’re now six weeks later and Southwestern says they’re now “rigging up” and beginning to drill in WV, with plans to drill 50-70 wells this year in northern WV. Southwestern is very happy with WV’s quick action and is giving them a big, sloppy kiss right back…
Read More “SWN “Rigging Up” in WV, Plans to Drill 50-70 Wells in 2015″
Yesterday Southwestern Energy announced they’ve struck a deal to sell their local gathering pipeline network in Bradford and Lycoming counties in northeastern Pennsylvania for $500 million to the Texas-based Howard Midstream Energy Partners. From what we can tell, this is Howard’s first foray into the Marcellus–so welcome! The pipeline network includes approximately 100 miles of natgas gathering lines with ~600 million cubic feet per day of capacity. Southwestern plans to use the half bil to pay down a loan coming due in December 2016. Howard Energy says, in their version of the announcement, that they also have a handshake deal with Southwestern to construct and operate a new gathering system for Southwestern in Tioga County, PA…
Read More “Southwestern Sells Pipeline Gathering System in NEPA for $500M”
Southwestern Energy released their full year 2014, fourth quarter 2014 and preview of 2015 big kahuna update last Thursday. There is a LOT in there. With the purchase of 413,000 Marcellus/Utica Shale acres from Chesapeake along with a boatload of operating and partially-drilled wells, Southwestern is now one of the top 3 or 4 drillers in the Marcellus region (see Chesapeake Sells Close to 25% of Marcellus/Utica Operation). Even before adding the new acreage, Southwestern was going great guns last year. In 2014, Southwestern invested $695 million in Northeast Appalachia, which included $571 million to spud 99 operated wells. Southwestern’s net gas production from Northeast Appalachia was 254 Bcf in 2014, up 69% from 151 Bcf in 2013. Gross operated production in Northeast Appalachia was over 1.0 Bcf per day at the end of 2014 compared to approximately 700 MMcf per day at the end of 2013. They didn’t do much in Southwest Appalachia, as they call it (which means SW PA, WV & eastern OH). That will change this year–dramatically. Spending last year for the NE Marcellus was $695 million. This year it will be $700 million. Spending last year in the SW Marcellus was $4 million. This year? They’re going to spend big money on their newly acquired acreage from Chesapeake: $520 million. Southwestern is whacking their spending in other shale plays like the Fayettville–cutting it in half–so they can invest in the Marcellus…
Read More “Southwestern Energy: Great 2014, Even Better 2015 On the Way”
It’s lights out for Marcellus drilling in both Lackawanna and Luzerne counties in northeastern Pennsylvania. Lackawanna and Luzerne are otherwise known and Scranton and Wilkes-Barre, respectively. But it’s not because of the two large cities located in those counties that Marcellus drilling will not be done (there are plenty of rural locations in each). It’s because there’s no gas in the shale layer to be had in those counties–at least not in quantities that are commercially profitable. Over the past five years seven different wells have been drilled in both counties (or very close by in neighboring Columbia County). The seventh and final well, drilled by WPX Energy, has just been plugged and abandoned…
Read More “Lights Out for Marcellus Drilling in Lackawanna/Luzerne Counties”
Southwestern Energy is one of the few exploration and production (E&P) companies that is bucking the trend. Most E&Ps are slashing their 2015 drilling budgets by a third or more. Not Southwestern. They recently closed on the purchase of a massive 413,000 Marcellus Shale acres, mostly in West Virginia, from Chesapeake Energy (see Chesapeake Using $1B from Southwestern Deal to Buy Back Stock). Southwestern paid $5.375 billion. Rather than pull back on spending, in December the company announced it would double its investment in drilling for the northeast (see Southwestern Energy on a Tear – Doubles Marcellus Budget for 2015). We picked up a few more details on Southwestern’s plans for 2015, which include drilling 70 wells in northern WV…
Read More “Southwestern’s Contrarian Plan: Double Down on Drilling in the Marcellus”