Montage Resources Trims Another $45M Off 2020 Capex Budget
In February Montage Resources said in 2020 it will increase production approximately 6% over 2019 while slicing its capital expenditure budget by 44%, to $190-$210 million for the year (see Montage Resources 2020 Sneak Preview: More OH Marcellus Drilling). That was BC, before coronavirus. It’s now AD, after (oil price) disaster, and the company has just announced it will decrease capex spending by another $45 million. To be fair, the company does not specifically blame either the coronavirus or the oil price shock for its actions. In a statement, the company says it continues to “monitor market conditions” and adjust accordingly. However, there is a big change in drilling strategy coming…
Read More “Montage Resources Trims Another $45M Off 2020 Capex Budget”
This is truly disappointing. A few weeks ago we told you that Pennsylvania Commonwealth Court ruled a long-running lawsuit involving Grant Township (Indiana County, PA) will continue on through the court system (see 
Diversified Gas & Oil owns close to 8 million acres of leases with some 60,000 (mostly) conventional oil and gas wells. Their focus has been to acquire quality production and cash flow–regardless of the well or commodity type (gas or oil)–in the Appalachian Basin. They currently have over 400 Marcellus/Utica shale wells in their portfolio too. When a gas or oil well quits producing, it needs to be plugged. We were aware of deals Diversified has cut with both Pennsylvania and West Virginia to plug old, non-producing wells (see 
We’ve been following the story of whether or not work on the Mariner East 2 pipeline project in Pennsylvania can continue during the current lockdown and order issued by Gov. Tom Wolf to cease all “non-life-sustaining” activity, including construction work on pipelines not yet in service (see 
What a change just a few weeks (and a pandemic and oil price crash) can bring! One month ago MDN brought you the sobering news that the stock prices for most Marcellus/Utica companies had sunk to new lows (see 
MARCELLUS/UTICA REGION: Chevron – which is leaving the region – donates $260K to food banks, first responders; Shell’s workforce, construction drastically cut at Beaver County site; Dominion Energy will hold virtual annual meeting in 2020; NATIONAL: Democratic National Committee embraces green new deal; When and how will oil prices recover?; Economic crisis is no reason to push bad policy on the oil sector; INTERNATIONAL: Oil below $20 will wipe over 10% off many exporting countries’ GDP.
Pennsylvania House Bill (HB) 1100, aimed at attracting new petrochemical investment to the state, was passed by the PA House and Senate earlier this year. The bill provides a tax incentive for companies to build NEW plants in the state that use Marcellus methane gas. HB 1100 was finally delivered to the desk of Gov. Tom Wolf last week (see 
The confusion over whether or not the Mariner East 2 (ME2) pipeline project has (a) shut down all construction, except certain tidying up aspects at certain locations, or (b) has permission by the state to keep on building, is still not 100% settled. On Monday we told you that ME2 construction was in the process of ceasing under orders issued by Gov. Wolf (see 
The Energy Equipment and Infrastructure Alliance (EEIA), a non-profit representing people and businesses who work in the energy infrastructure supply chain, filed an “amicus curiae” (friend of the court) brief in support of PennEast Pipeline’s request to get the U.S. Supreme Court. PennEast has asked the Supremes to overturn a lower court decision that allows states like New Jersey to usurp federal authority by blocking PennEast, a FERC-approved pipeline.
If there’s a silver lining in this tragic COVID-19 coronavirus crisis, this may be it: Radicals who want to deny everyone the right to use fossil fuels with their unending campaigns of protests and legal actions are pretty much stopped in their tracks. They can no longer make mischief to block pipelines and shale drilling and the use of natural gas by ordinary citizens (via municipal bans). The virus has stopped most court cases, public hearings, and even the right to assemble and protest. Antis are apoplectic and scared that pipeline and drilling projects will get approved and move forward because antis can’t bully public officials and courts into bending to their twisted anti-fossil fuel views.
OPEC, the Organization of the Petroleum Exporting Countries, is a pact of colluding oil-producing companies that act to artificially lower or raise the price of oil around the world based on how much the colluders are willing to pump. OPEC is the antithesis of free trade. But it does serve a purpose that (unfortunately) all oil drillers, including U.S. drillers, depend on–keeping prices high enough to be profitable. OPEC added Russia in a loose confederation for the past three years or so, something referred to as OPEC+. But then Russia recently told Saudi Arabia, the main OPEC player, to kiss off and left the OPEC+ fold, preferring to pump as much oil as they can. Saudi Arabia responded by increasing its production too, to drive prices into the basement, causing Russia (and U.S. shale drillers) pain.
A week ago we brought you the story that predicted the price of oil would go from the $30/barrel range down to the $20/barrel range–something almost unthinkable. And then it happened within a few days! Now we’re reading of warnings from Barclays, one of the biggest banks in the world, that the price of oil may go as low as (GASP) $10/barrel. At that price, there’s maybe one producer in the world that can still make at least some money–Saudi Arabia. Everyone else would be upside down and heading for bankruptcy court.
Midstream (pipeline) giant Williams issued a press release last Friday to say they’ve just swallowed a poison pill. They don’t put it in those exact terms, but that’s what it’s called. The company’s board has adopted a “limited duration stockholder rights agreement.” Why? To fend off potential hostile takeover attempts from those who would buy up a significant number of shares of stock while the company’s share price is down due to the worldwide stock market crash over COVID-19 coronavirus concerns. Williams is not for sale and the company is certainly not to be found on the discount rack.
Encino Acquisition Partners (aka Encino Energy) bought all of Chesapeake Energy’s Ohio assets for $2 billion in 2018 (see