Chesapeake 1Q: $764M Net Loss, $532M FCF, 13 Rigs Drilled 41 Wells
Yesterday Chesapeake Energy Corporation issued its first quarter 2022 update. At a high level, the company generated just over $3 billion in revenue during 1Q with $1.7 billion in operating expenses. However, the company lost $2.1 billion on derivatives and hedges (bad bets on the price of oil and gas), leading to a net loss of $764 million for the quarter. Chesapeake managed to generate $532 million in free cash flow during the quarter. Of the company’s three main operational areas–the Marcellus, the Haynesville, and the Eagle Ford–the Marcellus still gets the most love with the most wells drilled and most money spent. But not by much. The company’s new Haynesville assets are seeing a huge investment and will likely overtake the Marcellus at some point.
Read More “Chesapeake 1Q: $764M Net Loss, $532M FCF, 13 Rigs Drilled 41 Wells”
Wow! This is getting interesting…and scary. The NYMEX futures price of natural gas for the current “front month” contract soared another 37 cents yesterday to close at $8.78 per MMBtu. Another 14-year high. It certainly looks as though the price will soon blow by $9/MMBtu. One expert says “we feel we easily can go over $10 in prompt-month [pricing] over the next several weeks.” Yikes! What’s causing this massive spike?
In March the Pennsylvania Environmental Quality Board (EQB), a sub-agency of the Dept. of Environmental Protection (DEP), approved a final version of onerous new regulations that supposedly will capture every last molecule of stray methane that leaks from shale and conventional drilling operations (see 
The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) has, for years, claimed that under a centuries-old law the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see 
Somehow the memo hasn’t yet reached the White House that the radical left base of Joe Biden’s supporters, the small minority of wackos who actually run the show, have turned their back on and now oppose carbon capture and storage (CCS) because it is a “distraction” from achieving renewable nirvana (see 
MARCELLUS/UTICA REGION: NY gas drillers slam pipeline operator’s obstruction; NATIONAL: U.S. shale cash flow about to wipe out a decade worth of losses; US weekly LNG exports up by two LNG carriers; INTERNATIONAL: Equinor dishes out over $2 billion in oil drilling contracts; Germany ramps up capacity for LNG imports to replace Russian gas; Europe’s quest to replace Russian gas faces plenty of hurdles.
Kimmeridge, a so-called “activist investment firm” that focuses on pressuring oil and gas exploration and production companies, told Reuters on Wednesday it has built a “stake” in Chesapeake Energy and has “started talks with the management team on changes to boost its value.” How much of a stake? A piddly 1.6% of outstanding shares. Hey Kimmeridge–go suck renewable wind.
Yesterday MDN told you we would likely see the front-month NYMEX natural gas contract settle above $8/MMBtu by the end of yesterday (see 
Energy Transfer, one of the biggest pipeline and midstream companies in the U.S., issued its quarterly update yesterday. Of particular interest to us was the honorable mention the Mariner Easter (ME) project received. Construction of the final phase of the Mariner East project was completed in 1Q22, bringing Energy Transfer’s total NGL capacity on the Mariner East pipeline system to more than 365,000 barrels per day, including ethane. NGLs, including those flowing through the ME system, along with LNG, were the two dominant themes running through yesterday’s update.
Pennsylvania State Sen. Gene Yaw has been a champion in the fight to defeat Gov. Tom Wolf’s hideous carbon tax, otherwise known as the Regional Greenhouse Gas Initiative (RGGI). Wolf is trying to force PA to join over the objections of a majority of state legislators. In his latest missive about RGGI, Yaw connects some dots that need to be connected–between Russian money funding Big Green groups, and the groups using that money to lobby, influence, and litigate in an effort to force PA to join RGGI. It’s an effort to force PA to use less fossil energy. Clearly, RGGI is anti-fossil fuel. We would argue, as does Yaw in this excellent editorial below, that RGGI is also anti-American.
Diversified Energy CEO Rusty Hutson and his wife Kimberly Hutson, both natives of West Virginia, recently donated $1.8 million to West Virginia University to help fund an experiential learning program, a nursing initiative, and neuroscience care at the university. We have chronicled a number of generous donations by Marcellus/Utica companies and their foundations. However, this has to be the single largest donation by an individual connected to the industry that we’ve seen, to date.
