Rice Energy Adding $65M to Utica Drilling Budget in 2016
Rice Energy, a young company headed by relatively young leaders (the Rice boys), continues to impress with their latest quarterly update, for 2Q16. Net production for Rice hit a record 758 million cubic feet equivalent per day (MMcfe/d), which is a 43% increase over 2Q15 and a 12% increase over 1Q16. As CEO Dan Rice said, “We had a remarkable quarter, marked by several notable achievements, including record-low development costs and lease operating expenses, record-high production and midstream throughput volumes, and we turned to sales a company-record 18 operated wells in April.” Rice continues to focus completely on the Marcellus and Utica region, a “pure play” company. Because they’ve lowered costs, Rice is adding another $65 million to their Utica drilling budget in 2016. Cool. About the only bad news from yesterday’s quarterly update is that the company lost $138.7 million in 2Q16, versus losing $63.5 million in 2Q15. But keep an eye out. The Rice boys are bound to turn the financials around. Here’s the update, with details on what Rice accomplished in both the Marcellus and Utica in 2Q16…
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Noble Energy, a driller with a significant presence in the Marcellus but with a bigger presence in other shale plays, (and operations in other countries and offshore), announced in February that of the four shale plays they operate in onshore in the U.S.–the DJ Basin, Eagle Ford, Delaware and Marcellus–in 2016 they plan to focus on the first three and scale back in the Marcellus, limiting their Marcellus activity to completing previously drilled wells (see 
We found this story amusing. A group of 40 anti-fossil fuel nutters met at the Towamensing Township fire hall Tuesday night to “hone their arguments and strategies on how to derail or at least delay construction” of the $1.2 billion PennEast Pipeline. Why is that amusing? Because if the media is reporting there were 40 there, that means there were really 20-25. And when you read the story, you get the distinct impression that a very small group of hardened anti-fossil fuelers move these meetings around–it’s the same small group–and that their movement to stop PennEast is dying. Rapidly. Here’s the latest evidence…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: TransCanada chooses growth over fiscal discipline; Kennametal cutting 1K jobs due to drilling slowdown; crude-by-rail volumes dropping; Magellan merging with Tellurian; AEP industrial sales own on restrained shale development; and more!
The answer to the question posed in the headline of this article, asking where drillers are starting to drill again now that they are starting to drill again, is–it depends on the driller. There is no particular geography in the Marcellus/Utica, nor is there a preference for a given layer (Marcellus or Utica) across the major players. Each of them is following their own strategy. Here’s a rundown for several major players and their strategies…
We will confess it up front: We voted for Donald Trump in the primary. We think he stands the best chance of defeating Hillary Clinton. Clinton would, in our opinion, be very bad for the oil and gas industry (as well as bad for the country in general). To each his own, right? We will not extensively cover the election–that’s already being done everywhere else. Most everyone has a strong opinion one way or the other. Trump has given some bang-up speeches supporting the fossil fuel industry (see 
Antero Resources, one of the biggest drillers in the Marcellus, released their second quarter 2016 update yesterday. Antero has one of, if not THE best, hedging programs in the entire Marcellus/Utica region. Hedging means they get a higher price for selling their gas than just about anyone else through prearranged financial/trading contracts. But Antero’s famed hedging program wasn’t enough to keep the company from losing $596 million in 2Q16. By comparison, Antero lost $145 million in 2Q15. However, it wasn’t all doom and gloom. Antero’s production was up a healthy 19% in 2Q16–to an average 1.762 billion cubic feet per day (or 1,762 MMcf/d, a new record for the company). If you mix in oil, natural gas liquids and hedging, Antero got $3.95 per thousand cubic feet (Mcf) for their hydrocarbons, while the actual spot sale price averaged $1.93/Mcf–which shows just how savvy Antero’s hedging program is. Lately the company has been snapping up more Marcellus acreage, mostly in WV (see 
Rex Energy released their second quarter 2016 update yesterday. While production was up a small 2% over the same period last year, both operating revenue and profits were down. Operating revenue in 2Q15 was $35.8 million, revenue in 2Q16 was $31.2 million. The good news is that the bleeding is slowing. In 2Q15 Rex lost $153 million, while in 2Q16 Rex lost $55 million. At least it’s heading in the right direction. In Rex’s Moraine East Area (Butler County, PA) Rex drilled 5 gross (1.8 net) wells in 2Q16. Due to a delay in a gathering line, Rex did not (as previously expected) put the 4-well Fleeger II well pad online last quarter. In Rex’s Warrior North Area (Carroll County, OH), Rex placed the 3-well Goebeler pad and the 2-well Perry pad online. Below is the full update…
Stone Energy, an independent oil and natural gas exploration and production company (E&P) headquartered in Lafayette, Louisiana drills mainly in the Gulf of Mexico but also has a presence in the Marcellus/Utica Shale with 
In July Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in Ohio, released their operational update but not their financial update (see 
Midstream giant Williams released their second quarter 2016 financial and operating update on Monday. After the deal by Energy Transfer Partners to buy Williams fell apart, some stockholders in Williams were waiting (agitating) to see what new strategy or direction the company might take. However, the “new” strategy is to keep doing what they’ve always done, according to CEO Alan Armstrong. What do we glean from the Williams 2Q16 update? For one thing, they lost $90 million in the second quarter, versus making $300 million in profit in 2Q15. That’s not so good. However, there are some promising projects on the way for Williams, including the Constitution Pipeline (once the courts slap New York around and force the state allow it), and the Atlantic Sunrise project in PA. Atlantic Sunrise is an expansion of one of the largest interstate pipeline systems in the country–the mighty Transcontinental Gas Pipeline (Transco). Below is the update from Williams, along with links to a transcript of their quarterly earnings phone call with analysts, and a link to their latest PowerPoint slide deck. We’ve also included analysis from Bloomberg on Williams’ “everything old is new again” strategy…
One of NGI’s ace reporters, Carolyn Davis, got her hands on a new report/survey conducted by Evercore ISI that looks at attitudes and behaviors of displaced workers in the oil and gas industry. The results are quite interesting. You may recall that something like 300,000+ o&g workers were laid off over the past several years. Many of them worked for oilfield services companies (OFS), like Halliburton, Baker Hughes and Schlumberger. In fact, our back-of-the-envelope tally says the vast majority of those layoffs came from just a handful of companies, namely those three. The Evercore survey found that many (most?) workers are not returning to the oil and gas industry, now that hiring has begun again. And that’s a problem. It means that there aren’t enough bodies to do the work. It seems the laid-off workers didn’t appreciate getting canned, tossed overboard like a piece of trash at the first sign of trouble–and many of them have gotten jobs in other industries. Who can blame them?! Here’s a few highlights from the survey…
For some time now we’ve been tracking progress with an LNG export plant planned for the eastern shore of Nova Scotia, the Bear Head LNG project. Of all the Canadian LNG export projects that will export Marcellus gas, Bear Head seems to have the most momentum. The project has received most (if not all) of the necessary permits it needs to proceed. The most recent regulatory hurdle was a greenhouse gas approval from Nova Scotia, issued in July (see