Antero 2Q: $523M Loss on Derivatives; Longest Marcellus Lateral
Antero Resources, which drills almost exclusively in the West Virginia Marcellus/Utica, issued its second quarter 2021 update yesterday. Antero is the third-largest natural gas producer in the U.S. and the second-largest NGL producer. Big company. Important company. Antero is one of the best hedgers (preselling production at a set price) in the business. However, like EQT (see today’s lead story), Antero fumbled with a derivatives bet in 2Q and ended up posting a $523 million loss for 2Q21, versus losing $463 million in 2Q20. On the positive side, Antero generated $105 million in free cash flow during 2Q21.
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As they have done in the past few quarters, CNX Resources again issued a quarterly update without an accompanying summary/overview. We have the raw numbers (below), and we have excerpts from the conference call with analysts. One observation from the numbers: It seems major M-U drillers collectively went over the derivatives cliff in 2Q21. CNX, like Antero and EQT (see those stories in today’s update) posted a 2Q loss of $354 million based on a derivatives loss of $539 million. The company did manage to generate free cash flow of $117 million and pay down another $89 million in debt.
Seneca Resources, the drilling arm of utility giant National Fuel Gas Company, is conducting its first experiment with electric fracking. We’re aware of at least three other Marcellus/Utica drillers that currently use electric fracking: Range Resources, CNX Resources, and Olympus Energy (former Huntley & Huntley). Seneca, like Range, will use U.S. Well Services to provide e-fracking. Seneca is conducting a field trial for a 6-well pad in Lycoming County, PA.
It seems to be the season of not only second quarter updates, but also 2020 ESG (environmental, social, governance) updates, often referred to as corporate sustainability or social responsibility reports. There are half a dozen different phrases and terms used to describe the same thing. Yesterday Equitrans Midstream Corporation (the former EQT Midstream) issued its 2021 Corporate Sustainability Report, covering activity for the calendar year 2020.
The latest weekly Enverus U.S. rig count shows total rigs in use retreating just a bit. For the week ending July 28, the rig count stood at 599, down 5 rigs from last week’s post-pandemic high of 604 (see 
OTHER U.S. REGIONS: Tellurian finalizes offtake agreements for first phase of Driftwood LNG; NATIONAL: Former natural gas exec weighs climate controversy; DUC clock ticks on cheap production: low-cost cash flow won’t last; Critical U.S. pipelines remain stopped, as Russian pipelines are greenlighted; Hijacking natural gas #1 (video); INTERNATIONAL: Big Oil shows confidence that big profits era is back.
On Tuesday the U.S. Energy Information Administration reported that due to rising spot demand in both the winter and summer months from Asia and Europe, and lower natural gas prices here in the U.S. versus the price elsewhere, LNG exports in the U.S. hit record hights for the first half of this year. That’s good news for Marcellus/Utica drillers and landowners. LNG exports jumped to an average of 9.6 billion cubic feet per day (Bcf/d) between January and June 2021, up by 42% compared with the first half of 2020.
Yesterday pipeline giant Williams released its 2020 Sustainability Report, which is another name for ESG (environmental, social, and governance). The company says it will be net carbon zero by 2050, but in the meantime, they will meet other important targets long before that date. While it would be easy to dismiss this report as yet another 126-page manifesto in gobbledegook aimed at placating the global warming gods, when we began to dig into the report we found some interesting bits of information and statistics.
Every now and again we’ll pick up and run a press release from a company looking to sell something to the M-U energy space. This is one of those times. We spotted a release from a company that has launched an online platform used by natural gas buyers to manage their purchases (i.e. trades). Mickey is an online commodities trading platform that connects buyers and sellers of natural gas (in addition to other commodities). Mickey’s platform enables domestic natural gas buyers to source supplies from small-to-medium-sized producers in the U.S. The platform currently offers energy supply sourcing in New York, Ohio, and Pennsylvania–with plans to expand over time.
Range Resources, the very first company to sink a Marcellus Shale well (back in 2004), reported on second quarter results earlier this week. Range produced an average of 2.10 billion cubic feet equivalent per day (Bcfe/d) in 2Q, of which 31% was “liquids” or NGLs, like ethane and propane. In fact, Range’s NGL production was in the limelight, earning the company its highest price for NGLs ($27.92 per barrel) since 2014. However, even with the boost in NGL prices, the company still lost $156 million for the quarter, which is down slightly from losing $168 million in 2Q20. The company reports generating “significant” free cash flow.
In June MDN brought you the news that three Democrat judges on the U.S. Court of Appeals for the D.C. Circuit overturned a Federal Energy Regulatory Commission (FERC) approval for a long-completed and flowing natural gas pipeline in the St. Louis area that flows Marcellus/Utica gas to residents, businesses, and electric generating plants throughout the region (see 
In May MDN brought you the news that Ohio mineral rights owner Gateway Royalty was sounding the alarm over a new bill quickly advancing in the Ohio legislature. House Bill (HB) 152 would use forced pooling if 65% of a proposed unit’s landowners are leased (too low a bar) and also would force the landowner to accept a 12.5% royalty and force them to accept post-production deductions with royalties in some cases potentially going down to nothing (see