Diversified Buys 900 EQT Wells (67 Shale Wells) for $125M
Diversified Gas & Oil (DGO) continues its program of buying up mostly older conventional oil and gas wells in Appalachia. In April DGO cut a deal to buy 6,500 conventional wells spread across West Virginia, Kentucky, and Tennessee, along with a 4,700-mile gathering pipeline system located in WV, for $110 million (see Diversified Deal to Pick Up Another 6,500 O&G Wells in WV, KY, TN). DGO has done it again, this time buying 900 wells from EQT located mostly in West Virginia. The deal also includes 67 shale wells in Pennsylvania.
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A relatively short pipeline project to flow water from the Susquehanna River in Tunkhannock (Wyoming County), PA to a water impoundment about seven miles away, began construction in February 2019 (see 
In May 2016, a landowner in Wayne County, PA filed a lawsuit against the Delaware River Basin Commission (DRBC) asking a judge to declare that the DRBC does not have jurisdiction to prevent the construction of a natural gas well (see 
A tiny 2.1-mile pipeline looping project in western Massachusetts has been fought tooth and nail for over two years by anti-fossil fuel zealots. The Federal Energy Regulatory Commission (FERC) approved the project, subsequently refused to “rehear” its decision, and now Big Green groups (with loads of money) have colluded to sue FERC in federal court in an attempt to emasculate the agency because it won’t consider mythical man-made global warming when approving projects like this one.
For the past two weeks, MDN has brought you a new shale drilling permits issued report on Wednesdays. We fully intended to do so again today–except the Ohio Dept. of Natural Resources (ODNR) website is down with no estimates for when it will be back online. We have PA and WV numbers, but are holding the report back until we can get OH numbers too. In lieu of the report today, we have an article we spotted comparing PA’s permits issued in April of this year compared to last year–noting new permits have decreased by 46% year over year.
It becomes more obvious every day that the rank and file (even the leaders) of trade unions are breaking with their Democrat Party bosses over issues like insane taxes on natural gas. The divide is particularly acute in blue states like Pennsylvania, which voted for Donald Trump in 2016 and likely will again in 2020 because the Dems keep shooting themselves in the head with stupid taxes and regulations that kill jobs. The PA AFL-CIO issued a statement yesterday thanking the PA Air Quality Technical Advisory Committee, part of the Dept. of Environmental Protection, for listening to the union’s concerns about Gov. Wolf’s proposed carbon tax at a recent hearing.
MARCELLUS/UTICA REGION: Encino Energy supports 630 frontline workers; Wolf’s severance tax proposal is not a COVID-19 cure-all; OTHER U.S. REGIONS: Top US gas basin for LNG exports set for potential 20% output decline; NATIONAL: EIA sees natural gas prices stiffening this year, HH to average $2.89 in 2021; US LNG feedgas deliveries drop to lowest level since October 2019; Factors influencing U.S. LNG offtaker decisions to lift vs. cancel cargoes; Energy Spectrum closes $969M midstream fund.
Chesapeake Energy issued its first-quarter 2020 update yesterday–but not in the typical fashion. They filed the required Form 10-Q with the Securities and Exchange Commission and announced they will not hold a conference call or webcast to discuss anything with anyone. No wonder. The financials for the company are dreadful. Chesapeake lost (on paper) $8.3 billion in 1Q20 due to the writedown of assets (called an impairment). It was not an out-of-pocket-cash loss, thank God. Still, it was bad enough. The 10-Q said “management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern” and there is a “likelihood of a restructuring or reorganization.”
Energy Transfer (ET), one of the largest midstream (pipeline) companies in the U.S., is making another major cut in its 2020 capital budget. The company released its first-quarter update yesterday indicating it will cut spending this year by “at least” another $400 million, with a potential extra $300-$400 million cut later in the year. So spending may dip by most of billion dollars extra during 2020.
Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer and the 7th largest natural gas producer in the U.S. The company issued its first-quarter 2020 update last Friday. The company flew by producing 2 billion cubic feet equivalent per day (Bcfe/d) in 1Q, a new high.
New Fortress Energy, which focuses on producing, exporting, transporting, and importing (in other countries) LNG marches to the beat of a different drummer. The company recently issued its first-quarter 2020 update. On a conference call with analysts, New Fortress founder and CEO (and billionaire) Wed Edens said his company hasn’t applied for nor accepted any government money re the COVID-19 pandemic. They also haven’t laid anyone off. In fact, New Fortress boosted the salaries of frontline fuel workers by 50% for the months of April and May in recognition of the jobs they are doing and the risks they face during the pandemic.
LNG Limited (LNGL), based in Australia, has been working on a couple of North American LNG export projects over the past half-decade or more. One of them, Magnolia LNG, is located in Louisiana will potentially export M-U molecules. Magnolia has all of its permits and is ready to build–if someone has the money to build it. It won’t be LNGL. The company recently imploded and ended up in the hands of a bankruptcy administrator who is now selling off the assets.
The Trump Administration recently fixed a problem with the recently enacted CARES Act (Coronavirus Aid, Relief, and Economic Security Act) that will close an oversight preventing some oil and gas companies from using the program. Anti-fossil fuel haters who want to punish oil and gas companies are now hopping mad that Trump “bailed out” oil and gas companies.
Chesapeake Energy’s executives, including CEO Doug Lawler, have arguably made some bad decisions about the company–for years. The executives decided to convert Chessy from a gas-focused driller to an oil-focused driller, selling off its prized Utica Shale assets in Ohio to do so in 2018 (see