Cabot 1Q21 Financials Stellar; CEO “Hacked Off” re Stock Price
Cabot Oil & Gas is and has been (for years) one of the premier drillers in the Marcellus Shale. Cabot concentrates their drilling in one location in northeastern Pennsylvania: Susquehanna County. Cabot has lower costs to drill than almost any other driller. They also turn a profit year after year, unlike many other drillers. During 1Q21 Cabot made $126 million in net income, versus $54 million in 1Q20. Yet the company’s stock price continues to languish, something that has CEO Dan Dinges “hacked off.”
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Southwestern Energy, a pure-play Marcellus/Utica driller with 786,000 net acres and operations in all three M-U states (concentrates on drilling in WV and northeastern PA) issued its first-quarter 2021 update last Friday. The company made $80 million in net income during 1Q21, versus losing $1.5 billion in 1Q20. Southwestern produced 3 billion cubic feet equivalent per day (Bcfe/d) during 1Q21, of which 2.4 Bcf/d was gas and the rest (103,000 barrels per day) was liquids.
Here’s an interesting lawsuit in Pennsylvania with potential ramifications for both landowners and drillers. In 2013 a landowner in Warren County, PA filed a lawsuit against Mitch-Well Energy claiming the company had abandoned its leases (and its rights) by not producing marketable quantities of natural gas from several conventional wells. The company had also not paid a required annual fee in lieu of production royalties. For 18 years! Several lower courts ruled in favor of the landowner. Last week the PA “Supreme” Court (we use that term loosely) reversed the lower court rulings and said in this case, not producing gas for 18 years and not making any payments to the landowners during that time is not (yet) enough to claim the energy company has abandoned its lease rights.
The experts at RBN Energy continue their series of blog posts about pipelines that flow Marcellus/Utica gas to other regions with a look at two pipelines that connect directly to Canada: Tennessee Gas Pipeline and Empire Pipeline. In this post we learn that natural gas flows from the M-U over this past weekend hit a new record high of 17.3 billion cubic feet per day (Bcf/d). We also learn M-U pipelines flowed an average of 16.7 Bcf/d in April–an all-time high for any month! The problem is we’re now maxed out and need more pipelines.
If the Federal Energy Regulatory Commission (FERC) thinks it is going to change the rules for how it approves existing, already-filed applications for pipelines, it needs to think again. That’s according to a group of both Republican and Democrat U.S. Senators who sent a warning letter to FERC last week. The Senators say FERC has no right to change the rules part of the way through the game, which is exactly what FERC, under Chairman Richard “Dick” Glick, is threatening to do.
Global warming nutters have convinced themselves that in order to prevent a global catastrophe, all fossil fuels (including natural gas) must be abandoned and never used again. It’s a lunatic notion, demonstrably so. The thinking is that hydrogen will replace natural gas and be burned in its place. The nutters further demand hydrogen be produced by “green” methods, namely using electricity from solar and wind to split water into hydrogen and oxygen. The problem is, it’s EXPENSIVE. Prohibitively so. There’s a better solution: Split the hydrogen out of methane (natural gas).
MARCELLUS/UTICA REGION: A project to plug 1,600 wells is almost ready to launch, and has been for six years; OTHER U.S. REGIONS: Texas upstream oil and natural gas sector continues to add jobs; NATIONAL: Federal bullying threatens small oil and gas producers; Let’s work for science with integrity: Steve Koonin’s new book “Unsettled”; INTERNATIONAL: China’s debt-trap diplomacy.
MDN was the only news source to openly criticize Chesapeake Energy CEO Doug Lawler’s purchase of Eagle Ford oil assets in 2018 for $4 billion (see 
Diversified Gas & Oil (DGO) owns close to 8 million acres of leases with some 60,000 (mostly) conventional oil and gas wells (with over 400 Marcellus/Utica shale wells)–all of it in the Appalachian Basin. DGO is expanding. Earlier today the company announced it has cut a deal to buy ~780 net operated wells and leases in the Cotton Valley/Haynesville region of Lousiana for $135 million.
Antero Resources, which drills almost exclusively in the West Virginia Marcellus/Utica, issued its first-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 also one of the best hedgers (preselling production at a set price) in the business. During 1Q21 Antero averaged $4.03 per Mcfe (thousand cubic feet equivalent)–which was $1.34/Mcfe *above* the average NYMEX futures price in 1Q21.
As they have done in the past few quarters, CNX Resources once 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. It was comments made during the conference call that seems to have irked the liberals who operate mainstream media. Bloomberg wrote an entire article about CNX’s quarterly update that didn’t contain any information about the company’s financial and operational performance. Instead, Bloomberg focused on truth-to-power comments by a CNX top manager who said most ESG goals are “the epitome of flawed corporate governance.” We couldn’t agree more!
Radicalized groups including the New Jersey Sierra Club and the Pinelands Preservation Alliance tried their best to abuse the court system to overturn permits to build a 28-mile natural gas pipeline project called the Southern Reliability Link (SRL) pipeline project. They have (we’re happy to report) failed. SRL will connect to New Jersey Natural Gas’ (NJNG) distribution system serving customers in Ocean, Burlington and Monmouth counties (in NJ) to provide backup for hundreds of thousands of NJ residents who lost access to natural gas following Super Storm Sandy. The NJ Superior Court’s Appellate Division dismissed appeals by the radicals to overturn state-issued permits for the project.
As we reported last week, after four months of steady increases in the U.S. rig count, the Enverus rig count “took a step back” with a decrease (see 