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FERC Approves MVP Southgate Request for 3-Yr Extension to Build

In July of this year, the Democrat Governor of North Carolina, Roy Cooper, sent a letter to the Federal Energy Regulatory Commission (FERC) asking the four commissioners to deny Mountain Valley Pipeline’s (MVP) request for a time extension to build the MVP Southgate expansion project into his state (see NC Leftist Gov. Cooper Asks FERC to Deny MVP Southgate More Time). A month later, 28 Democrats in the U.S. House did the same thing (see 28 U.S. House Democrats Ask FERC to Reject MVP Southgate Project). We’re happy to report FERC ignored them all and yesterday granted the Southgate project a three-year extension to build.
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EIA Dec DPR: Another Big Production Drop Coming in M-U, Haynesville

The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for December, issued Monday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for January will *decrease* production from the prior month of December. This is the sixth month in a row that EIA has predicted shale gas production will decrease for the combined seven plays. EIA says combined natgas production will slide by 200 MMcf/d (million cubic feet per day). The Marcellus/Utica, called “Appalachia” in the report, is predicted to decrease by 135 MMcf/d in January compared with December, the biggest decrease in gas production for any of the seven plays.
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Dead Cat Bounce Over: U.S. Rig Count Loses 3 @ 623, M-U Even @ 41

The slight rise in the national rig count, with the count going up by one or two rigs a week over the past five weeks (what we call a “dead cat bounce”), is over. The Baker Hughes U.S. rig count lost ground again last week. The count went from 626 active rigs two weeks ago down to 623 last week. The Marcellus/Utica stayed even at 41 active rigs last week.
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Oil & Gas Jobs Continue To Grow – Latest Numbers for PA, OH, WV

The Energy Workforce & Technology Council, based in Houston, TX, is the national trade association for the global energy technology and services sector. The Council reports jobs in the O&G sector increased in November, adding 1,286 jobs. The O&G industry employs 652,398 jobs across the country, just 54,130 jobs away from returning to pre-pandemic levels. And how much do those jobs pay? The average hourly earnings for frontline oil-and-gas workers rose 1.3% in October from the previous month to $44.11, according to a Labor Department report released last week.
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U.S. Rig Count Adds 1 @ 626, M-U Even @ 41 but PA Down 1, WV Up 1

The Baker Hughes U.S. rig count hit a new low for 2023 five weeks ago (see U.S. Rig Count Hits New 2023 Low – Loses 2 @ 616, M-U Even @ 40). Since then, the count has steadily added at least one rig each week and now stands at 626 active rigs as of Friday. The Marcellus/Utica stayed even at 41 active rigs last week. However, there was a change. Pennsylvania lost one rig, which West Virginia picked up.
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DUG Appalachia: Greylock Energy Plans to “Test Utica” in 2024

Greylock Energy is headquartered in Charleston, WV, with offices in West Virginia, Pennsylvania, Utah, and Wyoming and operations scattered throughout Appalachia and the Rockies. The company’s assets comprise more than 1.19 million acres, about 6,700 wells, including the operation of 4,000 wells throughout Appalachia (shale and conventional) and 2,600 miles of pipeline. Ryan Deaderick, executive vice president and COO of Greylock Energy, spoke to Hart Energy editorial director Jordan Blum on the sidelines of the recent Hart Energy DUG Appalachia conference in Pittsburgh. Deaderick said his company has expanded and added assets in the Rockies over the past 18 months. He said the company is “always looking for diversity of investment.”
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Northeast Natural Energy Marcellus Production Recertified by EO

In November 2021, Northeast Natural Energy (NNE), a West Virginia driller, announced all of its gas produced in West Virginia had achieved Equitable Origin’s EO100™ Standard for Responsible Energy Development (see WV Driller NNE 1st in Nation to Achieve Equitable Origin Gas Cert). NNE was the first driller in the world to obtain the EO certification. And now NNE is announcing another world first — EO has recertified all of NNE’s production and has done so with an “A” grade, EO’s highest grade for ESG performance awarded to date for any of the companies it has certified.
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WV’s Hope Gas Buys Southern Public, Adds 6,400 Customers

Hope Gas provides natural gas service to approximately 131,000 residential, industrial, and commercial customers in thirty-five West Virginia counties. In October, Hope closed on the acquisition of the West Virginia division of Peoples Gas for an undisclosed amount, giving the company another 13,000 customers (see Hope Gas Closes Acquisition of Peoples Gas WV – Adds 13K Customers). Hope is growing again! The company has just closed on a deal to buy Southern Public Service Company with another 6,400 customers across six WV counties.
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U.S. Rig Count Sees Small Increase – Adds 4 @ 622, M-U Adds 1 @ 40

The dead cat bounce bounced a little higher last week (i.e., the slight bounce a dead cat makes when it hits the ground). The rig count hit a new low for 2023 three weeks ago (see U.S. Rig Count Hits New 2023 Low – Loses 2 @ 616, M-U Even @ 40). Two weeks ago, the count increased by a measly two rigs from 616 to 618 (see U.S. Rig Count Small Increase – Adds 2 @ 618, M-U Loses 1 @ 39). Last week (as of last Wednesday), the count added another four rigs and now stands at 622. The Marcellus/Utica gained back one rig (in Pennsylvania) that it had lost the prior week (from Ohio) to hit 40 active rigs in the combined M-U.
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4th Circuit Allows EQT to Appeal WV Landowners Royalty Lawsuit

A lawsuit of interest for all landowners is playing out in West Virginia between a class of landowners and EQT Corporation, the largest natural gas producer in the country. We searched our extensive archives high and low and found no mention of this lawsuit! Somehow, it has escaped our attention — until now. As these cases often are, this one is long and complicated. However, the nub of the case, the essence of the dispute, is whether or not EQT can pay royalties to landowners based on the “raw” gas that comes out of the borehole (methane plus NGLs) or whether, as the plaintiffs argue, EQT should pay royalties based on the post-processed gas and NGLs (presumably at a much higher rate).
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Equinor Wins Refund of Gas Severance Tax Paid in WV for Two Years

Yesterday, the Intermediate Court of Appeals for West Virginia issued an opinion in a case that had (until now) escaped our radar. Equinor, Norway’s state-owned oil and gas company (previously known as Statoil), said it had overpaid its severance tax bill in West Virginia for the years 2014 and 2016. Equinor said WV miscalculated the value of propane, butane, ethane, and methane produced by the company. A WV judge agreed, also granting Equinor a further 15% safe harbor deduction for transportation and transmission costs.
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Joe Manchin Does Right Thing, Announces Retirement from Senate

Score one for the good guys! We (collectively in the Conservative movement) have defeated Joe Manchin (Democrat) and his potential run for another term as Senator from West Virginia. Manchin, in our opinion, lost the moral authority to run again when he sold out the country and his fellow West Virginians by voting to approve Joe Biden’s Green New Deal disaster, otherwise known as the Inflation Reduction Act (see Tragedy: Joe Manchin Caves & Agrees to Big Green Build Back Better). At that point, it was obvious Manchin could not be trusted and must go, and we have called for his ejection from office since that time. We’re more than happy to see it happen, given the damage the IRA has done and is doing to the natural gas industry (see Joe Manchin’s Green New Deal Cave Slaps O&G with Big Methane Tax).
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U.S. Supreme Court Refuses to Hear Antero’s WV Well Tax Case

In a court case that stretches back to 2019, Antero Resources, the biggest driller in West Virginia, challenged how its wells had been valued for tax purposes in Doddridge and Richie counties for 2016 and 2017. Antero said the combined value of its wells for those years should have been $1.488 billion. The state tax commissioner reckoned the value to be $1.513 billion. The controversy over well valuations, not only for Antero but other drillers, led to a reworking of how the state law values shale wells (see WV Supreme Court Tweaks Shale Well Property Tax Calculation). The controversy eventually led to a newly passed bill aimed at clearing up the fuzzy edges of how to interpret well valuations (see Bill to Fix WV NatGas Property Tax Rule Close – Will Gov Sign?). Gov. Jim Justice signed the bill (House Bill 4336) into law in March 2022. But there was still the matter of Antero’s valuations under the old rules…

UPDATE: There is an important update/correction listed below.
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U.S. Rig Count Hits New 2023 Low – Loses 7 @ 618, M-U Adds 1 @ 40

The U.S. rig count changed course again last week, dropping rigs after adding rigs (albeit anemically) for the prior three weeks in a row. The national rig count lost seven rigs last week — dropping to 618 active rigs — not only the lowest rig total this year but the lowest count since February 2022. The count in the Marcellus/Utica gained one rig and now stands at 40 active rigs. However, the mix changed. PA lost two rigs, going from 22 to 20 last week. Ohio picked them up, going from 10 to 12 active rigs. And WV picked up one rig after losing it the week before. WV now stands at 8 active rigs.
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Only One Project of $7B Hydrogen Hunger Games Brings H2 into Homes

Morgan O’Brien, CEO of Hope Gas

Of the dozens of projects spread across the seven regional hydrogen hub projects selected by the Bidenistas to receive $7 billion in taxpayer largesse, there is only one project (part of the Appalachian Regional Clean Hydrogen Hub (ARCH2) project) that actually brings hydrogen into people’s homes. That project is, according to Hope Gas CEO Morgan O’Brien, the project by Hope to distribute up to 5,300 WATT Fuel Cells to Hope Gas customers in West Virginia.
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Equitrans Says MVP Will Become One of Most Valuable Pipes in U.S.

Equitrans Midstream issued its third quarter update yesterday. As you might expect, there was much talk about completing the nearly-done Mountain Valley Pipeline (MVP) project. Near the top of Equitrans’ 3Q official update is this comment from CEO Thomas Karam: “Once in-service, there is little doubt MVP will be one of the most valuable pipelines in the U.S., directly connecting our country’s largest and lowest-cost natural gas resource and the rapidly growing demand of the mid-Atlantic and southeast markets.” MVP remains on track to be completed and online in 1Q24. We learned a few new details about MVP from the update. However, MVP wasn’t the only hot topic during yesterday’s update. We have new info about the Rager Mountain Natural Gas Storage Field incident, Ohio Valley Connector Expansion Project, and MVP Southgate.
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