MDN Upstream Index (MUI) – Jan 9, 2023
The most recent day of active trading was Fri., Jan. 6, 2023. The numbers below reflect Friday’s closing numbers.
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Other Stories of Interest: Mon, Jan 9, 2023
MARCELLUS/UTICA REGION: Coterra Energy has strong FCF generation and LNG opportunity; OTHER U.S. REGIONS: Louisiana, Texas to gain thousands of energy jobs at start of 2023; NATIONAL: Shale worker pay growth slows; Oil posts steep weekly loss amid demand uncertainty; Wood Mackenzie: 2023 could be CCUS breakout year; 2022 saw the second highest oil production in U.S. history.
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Antero Resources | Doddridge County | Energy Companies | Harrison County | Industrywide Issues | Lease & Royalty Payments | Litigation | West Virginia
4th Circuit Rules Antero CAN Deduct Some Royalty Expenses in WV
A group of landowners in Harrison and Doddridge counties (in West Virginia) sued Antero Resources, claiming the company had deducted post-production costs from royalties not allowed under the leases they had signed. Last year, the U.S. District Court for the Northern District of West Virginia ruled mostly in favor of the landowners. Antero appealed the case to the U.S. Court of Appeals for the Fourth Circuit (4th Circuit). Yesterday, the judges of the 4th Circuit issued their ruling (full copy below). Nobody got everything they wanted–we’d call it a split decision. However, Antero did win the right to make deductions in certain circumstances.1/10/23 UPDATE: We’ve added some expert commentary on this case from the legal beagles of Babst Calland. See below.
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Antero Midstream | Doddridge County | Energy Services | Industrywide Issues | Litigation | Wastewater | West Virginia
Antero Midstream Wins $248M Lawsuit Against Veolia re WV Plant
Antero Midstream hired Veolia Water Technologies to build and operate a state-of-the-art frack wastewater recycling facility in Doddridge County, WV, which began operations in 2017 (see Antero’s $275M WV Wastewater Recycling Facility Ready to Launch). The Clearwater Treatment Facility can process up to 60,000 barrels of wastewater per day, separating water, salt, and radioactive particles. Less than two years after it began operation, Antero suddenly shuttered the plant (see Antero Idles WV Frack Wastewater Plant Launched 2 Years Ago). What we didn’t know until now is that a lawsuit ensued between Antero Midstream and Veolia over the shuttered plant.
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NYMEX Natural Gas Price Nosedives – Price Hits New One-Year Low
The “front month” (Feb. 2023) NYMEX Henry Hub price for natural gas took another nosedive yesterday, hitting its lowest price ($3.72/MMBtu) since Jan. 4, 2022. Why the drop? Weather, or course. But also expectations. Natural gas commodities trading is a strange art. The U.S. Energy Information Administration (EIA) reported yesterday that withdrawal from underground gas inventories was 221 billion cubic feet (Bcf) over the past week. The five-year average for the same period is 98 Bcf. Holy smokes! That’s a HUGE drawdown. And yet the market went the other way and crashed the price–because traders expected the drawdown to be even bigger–around 240 Bcf.
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Leftist Radicals Mount Attack to Block TVA’s Planned Gas Plants
The Tennessee Valley Authority (TVA) is a federally-owned electric utility corporation in the U.S. TVA’s service area covers all of Tennessee, portions of Alabama, Mississippi, and Kentucky, and small areas of Georgia, North Carolina, and Virginia. TVA is the sixth-largest power supplier and the largest public utility in the country. In December 2021, MDN told you that TVA is spending over $1 billion to replace six coal-fired plants with natgas-fired turbines (see TVA Investing $1B to Build New Natgas-Fired Electric Plants). In December 2022, TVA recommended moving forward with replacing one of the six–a coal-fired plant located near Cumberland City, Tennessee–with a natural gas combined-cycle power plant (see TVA Recommends Replacing Cumberland Coal Plant w/Natural Gas). Right on cue, a group of rabid radicals is pressuring the Bidenistas to shut down TVA’s plan to build gas-fired power plants.
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Market for Certified Responsible Natural Gas is Not a Slam Dunk
Most of the public and many of the private companies that drill in the Marcellus and Utica for natural gas either already have been, or are pursuing, certification of their operations as being “responsible.” Three primary standards authorities currently exist–MiQ, Project Canary, and Equitable Origin–to certify that a company’s natural gas was extracted and pipelined with low methane emissions. There’s even a fourth certification scheme underway by Williams, Coterra Energy, and Dominion Energy (see Williams, Coterra, Dominion Partner on Certified Low-Emission Gas). Here’s a question: With all of this certified responsible gas being produced, is there actually a market for it?
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Antero Resources | Apex Energy | Armstrong County | Ascent Resources | Encino Energy | Energy Companies | EQT Corp | Greene County (PA) | Harrison County | INR/Infinity Natural Resources | Monongalia County | Northeast Natural Energy | Ohio | Pennsylvania | Pennsylvania General Energy | Repsol | Tioga County (PA) | Tyler County | Weekly Permits | West Virginia | Westmoreland County | Wetzel County
38 New Shale Well Permits Issued for PA-OH-WV Dec 19-Jan 1
We’re catching up the permit report for the past two weeks (since we were off all of last week). Permits issued for Dec. 19 through Jan. 1 in the Marcellus/Utica included 19 new permits in Pennsylvania, 7 new permits in Ohio, and 12 new permits in West Virginia.
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MDN Upstream Index (MUI) – Jan 6, 2023
The most recent day of active trading was Thurs., Jan. 5, 2023. The numbers below reflect yesterday’s closing numbers.
This daily post contains a series of charts representing a stock index composed of 10 publicly-traded drilling companies with major operations in the Marcellus/Utica region. The MDN Upstream Index (MUI) reflects the combined value for one share of stock each for Antero Resources (AR); Chesapeake Energy (CHK); CNX Resources (CNX); Coterra Energy (CTRA); Epsilon Energy (EPSN); EQT Corp (EQT); Gulfport Energy (GPOR); National Fuel Gas Co. (NFG); Range Resources (RRC); and Southwestern Energy (SWN). The chart above shows performance over the past 30 days. Charts for other time periods and a listing for the most recent daily performance of each stock are listed below.
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Other Stories of Interest: Fri, Jan 6, 2023
NATIONAL: Biden snookers Joe Manchin again; E&Ps’ investment likely to accelerate in 2023 after steady rise through 2022; Pulling America back from the precipice; Senate Democrats look for staffers to probe fossil fuels; Biden touts drained emergency oil reserves as top 2022 accomplishment; INTERNATIONAL: Global natural gas balances to remain tight until 2026.
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Regulation | Statewide WV | Tug Hill Operating | West Virginia
EQT $5.2B Deal to Buy Tug Hill Extended Additional Year to Close
Last September, EQT Corporation announced it is buying privately-owned Tug Hill Operating’s West Virginia shale assets for $5.2 billion (see Confirmed: EQT Buys Tug Hill’s THQ Appalachia for $5.2 Billion). The deal adds 90,000 acres and 800 MMcf/d (million cubic feet per day) of production to EQT’s existing, massive, portfolio. But then the Bidenistas at the Federal Trade Commission (FTC) got involved, slowing down the deal (see Bidenistas at FTC Probing EQT Deal to Buy Tug Hill’s WV Assets). Because of the FTC dragging its feet, EQT and Tug Hill recently renegotiated the timeline, adding a full year.
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PIOGA Petitions PUC to Reconsider Regulating Some Gathering Pipes
Yesterday MDN brought you the news that the Pennsylvania Public Utility Commission (PUC) held a hearing in December to explain new regulations coming from the PUC, based on directives from the federal Pipeline and Hazardous Materials Safety Administration (PHMSA), to begin regulating previously unregulated natural gas gathering pipelines (see PA PUC Explains Federal Power Grab in Regulating Gathering Pipes). What we didn’t know yesterday (but do today) is that the Pennsylvania Independent Oil & Gas Association (PIOGA) had filed a petition with the PUC in early December asking the PUC to reconsider its claim that it needs to regulate the smallest gathering pipes.
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Utica Driller EOG Makes Big Mistake Joining UN Emissions Program
Why would a major oil and gas driller decide to cede control of the future of its company to a group of international leftists hellbent on destroying fossil energy? The answer eludes us, but it has just happened with a second Marcellus/Utica driller: EOG Resources. Yesterday, EOG announced it has joined the UN’s Oil & Gas Methane Partnership 2.0 (OGMP 2.0). Support for OGMP 2.0 is growing in the natgas marketplace in the U.S. We previously told you that Cheniere Energy’s LNG export plants are seeking certification under OGMP 2.0 (see Cheniere LNG Makes Huge Mistake Joining UN Emissions Program). We also told you about Pioneer Natural Resources, Devon Energy, and ConocoPhillips joining the program (see U.N. Tries to Control Oil & Gas Worldwide via Emissions Reporting).
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EQT Eliminates ~9,000 Natural Gas-Powered Pneumatic Devices
A pneumatic controller. Credit: Miguel Otárola/CPR News Yesterday EQT announced it had completed spending $28 million to dump ALL of its natural gas-powered pneumatic devices–almost 9,000 of them. The pneumatic controllers were replaced or retrofitted on all EQT production locations and compressor stations. At EQT, natural gas-powered pneumatic devices were the source of 39% of the company’s 2021 Production segment Scope 1 greenhouse gas (GHG) emissions. Those stray emissions are now eliminated. So what are pneumatic devices, and why is this a big deal?
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S&P Sees “Headwinds” for Expanded NatGas Production in 2023
S&P Global Commodity Insights published an analysis article speculating on the overall level of natural gas production we can expect to see in the U.S. in 2023. According to S&P’s analysts, weaker prices for the NYMEX Henry Hub futures price expected this year, along with recent weakness in the internal rate of return (IRR) for companies, are combining to lower the amount of growth in natgas production we might otherwise have experienced. S&P isn’t saying we’ll go backward–with less production. It’s saying production won’t grow as much as it could have if not for these negative factors.
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Willie Phillips Takes Over as Acting FERC Chairman, Dick Glick Gone
Finally! Richard “Dick” Glick is no longer a Federal Energy Regulatory Commission (FERC) commissioner. He is also no longer Chairman of this key agency that has the power to block new pipeline projects. We’ve complained about Glick, a former wind lobbyist, for years–pretty much since Donald Trump nominated him to serve at the behest of Chuck Schumer (see Dems Pick Wind Lobbyist for FERC Appointment). We can count on one hand the number of new gas pipeline projects Glick voted to approve. Thank God he’s gone (don’t let the door hit you on the way out). The new Acting Chairman is Biden’s swamp-dweller Willie Phillips (see Senate Confirms D.C. Swamp-Dwelling Democrat Lawyer to FERC).
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