Shale Gas Drillers in M-U Outshine Shale Oil Drillers Elsewhere
An article in yesterday’s Wall Street Journal says there is a “split reality” emerging for U.S. shale drillers. Shale oil drillers are struggling to survive, while shale gas drillers, particularly in the Marcellus/Utica, are slowly seeing signs of financial recovery. The upshot is that you should consider investing in shale gas drillers (and not shale oil drillers).
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Last week Pennsylvania issued 16 new shale well drilling permits, and West Virginia issued 7 new shale well permits. Ohio issued no new shale permits last week.
OTHER U.S. REGIONS: Pro-industry Republican holds lead in Texas oil commission race; Permian drilling slowdown fuels bullish turn for West Texas spot gas market; Mid-con is now a premium market for natural gas and NGLs; NATIONAL: December natural gas futures stumble amid higher temperatures, election uncertainty; Natural gas refuse trucks versus battery electric…what’s more green?; INTERNATIONAL: France’s Engie backs out of U.S. LNG deal; OPEC members’ net oil export revenue in 2020 expected to drop to lowest level since 2002; Natural gas demand will grow beyond 2035: Gazprom official.
In July, when Dominion Energy announced it had decided to exit the natural gas pipeline business by selling it to Warren Buffett and cancel the much-needed Atlantic Coast Pipeline project, the company said it would retain a 50% ownership in its Cove Point LNG export facility and sell a 25% interest to Buffett’s company (see 
Southwestern Energy Company released its third-quarter 2020 update last Friday. The company previously announced it is buying out and merging in Marcellus/Utica driller Montage Resources. During the 3Q conference call, CEO Bill Way said the company expects to close on the deal immediately after Montage Resources shareholders vote on the deal November 12. Also from the 3Q update: Southwestern managed to reduce the cost of drilling for one of their PA Marcellus wells down to $491 per lateral foot!
In August Pennsylvania hiked its permit fee to drill a new shale well to be the most expensive of any state in the country, from $5,000 to $12,500 (see 
“It’s dangerous! It’s a killer! It will flow evil, nasty fracked gas! It’ll explode and kill everyone within a mile, and if it doesn’t explode, emissions from the plant will poison everyone around it anyway!” Those are the faux arguments used by radicals in Weymouth, Massachusetts to smear a compressor station built by Enbridge. All of those arguments have just magically disappeared. The price tag to make it happen? Enbridge will pay $10 million now, and $28 million later, for a grand total of $38 million.
The New Jersey Highlands Water Protection and Planning Council (“Highlands Council”) is a regional planning agency that works in partnership with municipalities and counties in the Highlands Region to help them implement the state’s 2004 Highlands Water Protection and Planning Act (the Highlands Act). The Highlands Council has just given its blessing for a Tennesee Gas Pipeline (TGP) compressor station in Passaic County, NJ, near the border with Westchester, NY.
We’re speechless (which doesn’t happen often). The liberal, anti-shale Democrats who write and manage the Pittsburgh Post-Gazette have endorsed Donald J. Trump for president! They had plenty of criticism for Trump in their lukewarm “endorsement,” but the fact they did endorse Trump is, well, big news. The Post-Gazette editors, who haven’t endorsed a Republican for president since 1972, say “Mr. Biden is too old for the job, and fragile.” We agree.
Dan Dinges, CEO of Cabot Oil & Gas, said last week: “2020 has proven to be the most challenging year for natural gas prices in the last 25 years, resulting from a multi-year trend of overcapitalization of both oil and natural gas assets across our industry.” Indeed. The company released its third-quarter 2020 update on Friday and reported a net loss of $15 million, compared to net income of $90.4 million in 3Q19. This is the first quarterly net loss for Cabot in recent memory. Still, there was plenty of good news coming from the 3Q update…
Range Resources issued its third-quarter 2020 update on Friday. The company, the very first driller to sink a well in the Marcellus, lost $680 million in 3Q. Most of the loss was a one-time charge called “exit and termination” related to the company’s sale of their Louisiana Haynesville Shale assets in August. The update didn’t state how many new wells were drilled in the Marcellus, but it does say Range connected 19 new wells to sales in 3Q with plans to add another 7 wells to sales by the end of the year.
While Gulfport Energy (big Ohio Utica driller) hasn’t officially filed for bankruptcy, it’s certainly a possibility (see 
The bad blood between Energy Transfer (ET) and the Pennsylvania Dept. of Environmental Protection (DEP) continues. ET’s Sunoco Pipeline subsidiary is desperately trying to complete the Mariner East 2X pipeline from eastern Ohio through to Marcus Hook near Philadelphia. A recent drilling mud spill in Marsh Creek State Park prompted the DEP to demand Sunoco change the route for ME2X (which was less than 60 days from being done) to a new route around the State Park (see 
It’s all starting to come undone for FirstEnergy Corporation. Last week two of Ohio’s three largest cities sued to block annual $150 million payments to FirstEnergy’s Energy Harbor subsidiary on the basis those payments are ill-gotten gain, the result of FirstEnergy bribing government officials to pass House Bill 6 (HB 6) and keep it passed (see 
Last week EQT Corporation announced a deal to buy Chevron’s considerable Marcellus/Utica assets (land and wells) for the lowball price of $735 million (see