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M-U Investors Continue to Press for Limits on New Drilling
Most Marcellus/Utica shale drillers are making money hand over fist. At least they’re making money if you don’t count certain losses from hedges. The financial numbers are heading in the right direction, for the most part. And investors are happy, rewarding M-U drillers by buying shares of stock at ever-higher prices. However, those same investors *don’t* want to see M-U drillers expand their drilling programs beyond what it takes to maintain current levels of production. Investors want the free cash flow being generated by M-U drillers to be given to investors in the form of either dividends or stock buybacks–not by expanding and drilling more.
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Last week Philadelphia lawyer Dan Markind, a real estate and corporate attorney who speaks and writes widely on the Marcellus, showed a connection between the developing situation of Russia invading Ukraine, and the Marcellus/Utica (see 
A new study published by the America Gas Association (AGA) details how America’s natural gas, natural gas utilities, and delivery infrastructure will be *essential* to meeting our nation’s greenhouse gas emissions reduction goals, including achieving net-zero emissions. Natural gas is used by some 187 million Americans each and every day. The AGA study (full copy below) outlines several scenarios and technology opportunities available to help the country reach mythical net-zero emissions by 2050. Natural gas plays a starring role!
NATIONAL: Electric vehicles and hybrids surpass 10% of U.S. light-duty vehicle sales; Big oil isn’t losing any sleep over the EV revolution; Everything you need to know about CO2 and carbon capture; INTERNATIONAL: Cuadrilla ordered to plug and abandon shale gas fracking wells in Lancashire; Clean Energy and Enbridge partner to make CNG available to UPS Canada; Cargoes of American ‘freedom gas’ help Europe stay warm amid Russian cutbacks.
ECA Marcellus Trust I, traded over-the-counter on the pink sheets, canceled distributions (dividends) to investors for the first three quarters of 2020 due to the pandemic and the crash in oil and gas prices. The company restarted paying dividends in 4Q20–a grand total of 9/10ths of one penny per unit. In 1Q21 ECA increased its distribution to 3.1 cents per unit. In 2Q21, ECA decreased the payout again, down to 2.8 cents per unit. In 3Q21 ECA hiked the quarterly dividend all the way to 7.6 cents per unit. The company announced yesterday for 4Q21 it will nearly double the payout to 13.6 cents per unit.
Most of our coverage about pipelines is for large interstate pipelines, or perhaps large regional gathering pipeline systems. Every now and again we’ll bring you news about a “last mile” LDC (local distribution company) pipeline–the pipes utility companies install and maintain to run gas to homes and businesses. We have a story of that sort for you today. Dominion Energy, a huge utility company that used to be in the pipeline business (but sold its pipeline business to Warren Buffett a few years ago) wants to install a new 760-foot pipeline under the Blue Ridge Parkway (managed by the National Park Service) in North Carolina.
On Monday the U.S.-EU Energy Council held a meeting in Washington chaired by U.S. Secretary of State Antony Blinken, U.S. Secretary of Energy Jennifer M. Granholm, EU High Representative/Vice President Josep Borrell Fontelles, and European Energy Commissioner Kadri Simson. There was some talk about natural gas and ensuring sufficient supplies for Europe, especially with Russia’s Vladimir Putin threatening to shut off half of Europe’s supplies over Ukraine. There was plenty of blah blah blah talk about a “clean and just energy transition” to so-called renewables. Whatever. It was a forum held after the official meeting that caught our attention. Duncan Wood, Ph.D., Vice President for Strategy & New Initiatives at the Wilson Center made a statement with great insight about the U.S.’s potential role in supplying natural gas to the world via LNG.
My how the mighty permit count has fallen. Three weeks ago there were 
Tilden Marcellus LLC, a Canonsburg, Pa.-based oil and gas company, filed for chapter 11 protection last Friday in the Bankruptcy Court for the Western District of Pennsylvania. Tilden is a “sister company” to Rockdale Marcellus. You may recall Rockdale went through bankruptcy last year, resulting in the sale of substantially all of its assets (in Pennsylvania) to Repsol for $220 million in cash (see 
Last June, Range Resources announced it had joined the Project Canary TrustWell™ Responsible Gas Program (see 
We’re not quite sure what to think of this. The West Virginia State Legislature passed House Bill (HB) 2581 on the last day of the annual WV legislative session in April 2021. HB 2581 required the State Tax Commissioner to develop a revised methodology to value oil and natural gas properties for the purposes of assessing property taxes. The State Tax Department submitted an emergency rule over the summer that was, quite frankly, a mess. The rule created a complex system that is currently mired in controversy with both drillers and landowners confused about how much of a tax bill they will owe this year. The legislature is doing it again.
Pennsylvania has already received the first $25 million payment from the so-called infrastructure bill, a down payment on what will eventually be $330.6 million (see 
According to S&P Global Platts, spot gas prices across the northeast and Appalachia were “trading sharply lower Feb. 7.” It is, says Platts, “a dynamic that could continue into the second week of February, as stronger regional gas production and higher temperature forecasts loosen supply and demand fundamentals.” How much lower are prices trading? The Eastern Gas South trading hub (formerly Dominion South) fell by almost $1/MMBtu yesterday. The Columbia Gas, Appalachia trading hub fell more than $1.