Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Southwestern Energy | Susquehanna County
Briggs v SWN Rule of Capture/Trespass Court Case Resurrected
In January 2020, the Pennsylvania Supreme Court ruled in THE most consequential lawsuit for Marcellus Shale drilling we’ve seen, a case called Briggs v Southwestern Energy (see HUGE NEWS: PA Supreme Court Keeps ‘Rule of Capture’ for Fracking). The PA Supremes ruled in favor of Southwestern, retaining the “rule of capture” in the Keystone State. Little did we know, but in 2022, the Briggs filed a new lawsuit, call it “Briggs 2,” along the same lines, alleging that Southwestern’s drilling and fracking on a neighboring property has intruded (“trespassed”) under the property line and drained gas from the Briggs property. Here we go again…
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Two weeks ago, 18 new permits were issued to drill in the Marcellus/Utica region. Last week, May 27 – June 2, the number increased dramatically by 72% to 31 new permits. Most of the new permits came from two drillers. Range Resources scored the most with 11 new permits spread over two pads in Washington County, PA. EQT received nine new permits for a single pad in Wetzel County, WV. Chesapeake Energy received five new permits, all in Bradford County, PA. In fact, the rest of the new permits were all in PA, which handed out 22 new permits last week — a huge increase over the typical numbers for PA over the past few months.
Coterra Energy announced a large layoff of employees at its GDS (GasSearch Drilling Services) Marcellus operation yesterday. GDS was founded in 2006 as a subsidiary of Cabot Oil & Gas (now Coterra Energy). GDS is based in South Montrose, PA, and provides services including pad site development, impoundment construction, water hauling, trucking, light equipment rental, and roustabout services supporting Coterra’s natural gas drilling. GDS employs approximately 170 people in Susquehanna County at various locations. Yesterday, 55 GDS employees got a pink slip.
Epsilon Energy issued its first quarter 2024 update yesterday. Epsilon, a relatively small company, used to concentrate most of its effort on developing Marcellus Shale wells. However, over the past few years, the company has expanded into other plays and now owns assets in the Anadarko (Oklahoma and Texas) and the Permian (Texas and New Mexico). Epsilon typically does not do its own drilling. The company joint venture partners with (gives money to) other companies, like Chesapeake Energy (in the Marcellus), and the other company does the drilling. Epsilon’s capital expenditures were $21.4 million for the quarter ended March 31, 2024, primarily related to work in Texas and the completion of 7 gross (0.7 net) Marcellus wells in Susquehanna County, Pennsylvania.
In October 2020, a law firm filed a lawsuit on behalf of several Cabot Oil & Gas shareholders against Cabot (now Coterra Energy), claiming the company “had inadequate environmental controls and procedures and/or failed to properly mitigate known issues related to those controls and procedures,” and that the company “failed to fix faulty gas wells which polluted Pennsylvania’s water supplies through stray gas migration” (see 
Coterra Energy, formed by the merger of Cabot Oil & Gas (drills for natural gas in the Marcellus) and Cimarex Energy (drills for oil in the Permian and Anadarko basins), issued its first quarter 2024 update on Friday. The company turned in respectable financial numbers, making a profit of $352 million in 1Q24, albeit down 48% from the $677 million it made in 1Q23. The company produced 2.31 Bcf/d (billion cubic feet per day) in the PA Marcellus during 1Q24, up 8% from 2.13 Bcf/d in 1Q23. However, the money it received for its natgas production dropped like a rock. The average sale price for its gas in 1Q24 was $2.20/Mcf, down 41% from $3.71/Mcf in 1Q23. No wonder the company has pivoted to spend more time and money on oil drilling rather than gas drilling.
Pennsylvania State Senator Katie Muth’s attempt to block a proposed frack wastewater treatment plant in Dimock (hours away from her own district) has bombed out yet again. Muth tried to challenge and block a permit for the plant, an effort which was mostly rejected in court in June 2022 (see 
Over the past seven-plus years, BKV Corporation (Banpu Kalnin Ventures), the American arm of Banpu (96% owned by Banpu, Thailand’s largest coal mining company), has become one of the top 20 gas-weighted natural gas producers in the U.S. BKV originally entered the American shale sector by investing $500 million in 2016-2017 to buy existing Marcellus wells and acreage in northeast Pennsylvania. Then the company went wandering into other shale plays (see 
We tried to cram the gist of the news into the headline but found we could not. This is a big story, for multiple reasons. Most news outlets are reporting (and this is not incorrect) that EQT pulled off a big deal to divest a good chunk of its nonoperated assets (acreage and functioning wells in which EQT owns a minority stake) in northeastern Pennsylvania, trading those assets for 10,000 operated acres in Lycoming County, PA (in northeastern PA), plus 26,000 operated acres in Monroe County, OH, plus receiving $500 million cash, in a deal with Norway’s Equinor (formerly Statoil). EQT divesting from its nonop assets is a big deal. However, the bigger news, in our humble opinion, is that Equinor has (with this deal) completely exited all operated assets in U.S. shale. The company wants to keep its fingers in the U.S. shale pie, but only as a nonop operator — that is, investing in wells that other companies drill and maintain.
Pennsylvania’s Pipeline Investment Program (PIPE) grants cover part of the cost of building new natural gas pipelines to connect homes and businesses, typically in rural parts of the state, to homegrown Marcellus Shale gas supplies. We’ve written about many of the dozens of PIPE grant projects awarded over the years (
The highly functional and responsible Susquehanna River Basin Commission (SRBC), unlike its completely dysfunctional and irresponsible cousin, the Delaware River Basin Commission (DRBC), continues to support the shale energy industry by approving water withdrawals for responsible and safe shale drilling. Last Thursday, the SRBC approved 23 new water withdrawal requests within the basin, eight of them for water used in drilling and fracking shale wells in Pennsylvania. The Marcellus/Utica shale drillers receiving a green light from SRBC included Beech Resources, Chesapeake Energy, Greylock Energy, Seneca Resources, and Southwestern Energy.
Spanish energy giant Repsol, with around 214,000 net acres of leases in the Marcellus Shale, primarily located in northeastern Pennsylvania in Bradford, Susquehanna, and Tioga counties, issued the company’s fourth quarter and full-year 2023 update last week. Among the tidbits coming to light is a statement by Repsol management that the company plans to spend €$1 billion (US$1.083 billion) in the Marcellus over the next four years. Repsol loves the Marcellus!