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The Huge Turnaround & Bright Outlook for M-U Stock Prices

What a difference three years can make! Three years ago, Henry Hub prices were hovering around $2 per thousand cubic feet (Mcf). Stock valuations for Marcellus/Utica drillers were majorly depressed (down 80-90% from previous highs), and gas producers were struggling. Fast forward to today. Balance sheets and earnings statements are through the roof. Most experts believe $4-$5/Mcf gas is sustainable–at least for the next X years. What does the future look like for M-U drillers? What are the risks? And can we keep the current bright outlook going?
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32 New Shale Well Permits Issued for PA-OH-WV Dec 12-18

Last week (Dec. 12-18), the number of permits issued to drill new shale wells in the Marcellus/Utica bumped up nicely to 32, up from the prior week’s 20. Both Pennsylvania and Ohio issued 16 new shale permits each. West Virginia got skunked and issued none.
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Zacks Tells Investors to Keep an Eye on These 3 M-U Producers

Zacks is one of the top investment research firms focusing on stock research, analysis, and recommendations. A new alert issued by Zacks says natural gas is “significantly healthier this year than last year,” and because of that, it’s “high time for energy investors” to keep an eye on three natural gas producers in particular. They all happen to be top Marcellus/Utica gas producers. The names of the three drillers will not surprise you.
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SRBC Approves 2M Gallons/Day of Water Withdrawals for PA Fracking

Unlike the Delaware River Basin Commission (DRBC), which gets the creepy crawlies at the mere mention of the word “fracking,” the Susquehanna River Basin Commission (SRBC) has been dealing with fracking and water requests for use in fracking for more than a decade. Somehow the SRBC, a quasi-governmental agency (as is the DRBC), manages to allow fracking, and there are NO negative impacts on local water and NO negative impact on the Susquehanna River and its tributaries. Must be the people who run the SRBC are just more talented than those who run the DRBC.
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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.
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Marcellus/Utica Drillers (All Gas Drillers) Had Fantastic 3Q22

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?
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43 New Shale Well Permits Issued for PA-OH-WV Oct 31-Nov 6

New shale permits issued in the Marcellus/Utica came roaring back during the week of Oct. 31 through Nov. 6. Both Pennsylvania and Ohio issued 13 new permits during that week. But what’s this? West Virginia issued a whopping 17 new permits! The prior week WV issued only a single new permit.
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28 New Shale Well Permits Issued for PA-OH-WV Oct 24-30

Something of an improvement from last week’s new permits report when there were only 11 new permits. For the week of October 24-30, there were 28 new permits. But not because of the return of new permits in Pennsylvania. Instead, Ohio was the shining light. PA reported 11 new permits, all of them in Lycoming County, with seven going to Repsol and four going to Inflection Energy. Ohio issued 16 new permits, with Encino Energy grabbing six, Southwestern Energy getting five, and Ascent Energy receiving four. Finally, WV had a single new permit, for Tug Hill Operating (soon to be EQT), in Wetzel County.
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Southwestern 3Q – Production Up, Revenue Way Up, Added 31 Wells

Southwestern Energy, which along with EQT and Chesapeake Energy, is one of the three leading producers of natural gas in the U.S., issued its third quarter update last Friday. The company reported total net production of 443 Bcfe (billion cubic feet equivalent), or 4.8 Bcfe/d, including 4.2 Bcf/d of natural gas and 97,000 barrels per day (Bbls/d) of liquids. Southwestern invested $543 million of capital during 3Q and placed 31 wells online to sales, including 14 in the Marcellus/Utica and 17 in Haynesville. The company made $450 million in profit during 3Q22, versus losing $1.86 billion in the same quarter a year ago.
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11 New Shale Well Permits Issued for PA-OH-WV Oct 17-23

Another weak and pathetic number of new shale drilling permits were issued for the week of Oct. 17-23 in the Marcellus/Utica. Pennsylvania had only 10 new permits, with six of them going to Range Resources in Beaver County. Ohio had just one new permit, for Southwestern Energy in Monroe County. And West Virginia had a big, fat, goose egg. No new permits. Bummer.
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What Wall St. Expects to Hear from M-U Drillers in 3Q Updates

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?
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16 New Shale Well Permits Issued for PA-OH-WV Oct 10-16

Permits issued for new shale wells last week got a bit better from their pathetically low numbers. From Oct. 10-16 there were eight new permits issued in Pennsylvania, and four each issued in Ohio and West Virginia. All of the PA permits were issued in northeastern PA, with four going to BKV Operating (i.e. Banpu) in Wyoming County, two to Chesapeake in Bradford County, and two to Beech Resources in Lycoming County. Encino Energy scored all four permits for Ohio, all of them in Harrison County. In WV, Tug Hill (soon to be EQT) received three permits, and Southwestern Energy received one permit, all four in Marshall County.
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9 New Shale Well Permits Issued for PA-OH-WV Sep 26-Oct 2

Just nine new permits to drill shale wells were issued across the three Marcellus/Utica states for Sept. 26 to Oct. 2. Pennsylvania turned in the second week in a row of very low new permits–just three issued, all of them to different companies in different counties. Ohio issued just four new permits, with two of them going to Encino Energy in Carroll County. And West Virginia issued just two new permits, both to Southwestern Energy in Brooke County.
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30 New Shale Well Permits Issued for PA-OH-WV Sep 19-25

Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 30 new drilling permits, up from the 21 permits issued the week before. It was a reversal of what we typically see. Last week PA only issued four new permits, while WV issued 17 permits and OH issued nine permits. Usually, PA issues the most permits.
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21 New Shale Well Permits Issued for PA-OH-WV Sep 12-18

Last week the three states with active Marcellus/Utica drilling, Pennsylvania, Ohio, and West Virginia, issued a collective 21 new drilling permits, down from the 30 permits issued the week before, and down from the 40 permits issued the week before that. The trend is not our friend right now. PA issued 13 permits, and OH and WV issued four permits each.
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Natural Gas Marketed in North America Grows 2% in 2Q22

Each quarter NGI (Natural Gas Intelligence) runs the numbers and publishes a list of the top twenty-something natural gas marketers in the U.S. (in the case of 2Q22, the top 24). These are not necessarily the top producers of natural gas, although in some cases they are, but the top sellers (vendors, jobbers) of natural gas. NGI’s latest quarterly report for the second quarter of 2022 shows overall, the biggest sellers of natgas increased the amount of gas sold slightly (up 2%) compared with marketed gas from 2Q21.
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