Appalachian Basin Real Estate Conference Coming Dec 11-12 in WV
One of the privileges of writing about the Marcellus/Utica industry is the occasional opportunity to attend worthwhile events and connect with the terrific people who work in this industry. Shale Insight (last week in Pittsburgh) was one of those events. MDN editor Jim Willis will attend another such event in a few weeks: Midstream PA 2019. Joe Barone, founder of Shale Directories, is the guy behind Midstream PA and similar events. Joe always puts on a good conference. Joe and Bryce Custer, from NAI Ohio River Corridor commercial real estate brokerage, have created a brand new event called the Appalachian Basin Real Estate Conference. Looks like another winner!
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Last year a hedge fund manager tried pitching a fund that would “bet against” shale drillers to investors. At the time he was “basically kicked out of every office in New York City.” Good! However, the now-former hedge fund manager has an advisory service that in a sense also disparages the shale industry, but perhaps performs a valuable service for the industry. The new company uses data that is number-crunched from state records, applying assumptions that are “more realistic” than numbers offered by companies in investor presentations when it comes to how much the wells they *will* drill will produce. That is, this new service provides a more realistic look at reserves–proven and otherwise.
MARCELLUS/UTICA REGION: PA House Judiciary Committee holds Dec. 16 hearing on bipartisan anti-SLAPP lawsuit legislation; OTHER U.S. REGIONS: California pro-natural gas coalition using ‘guerilla’ tactics; DTE’s electricity subsidiary aims at net zero carbon emissions by 2050; Permian natural gas prices get crushed, again; NATIONAL: US drilling on federal and Indian lands surges in 2019; Key takeaways from Q3 ’19 energy earnings (part 1); Natural-gas futures rally to highest finish this month; An insider’s look at the ins and outs of international LPG trading; INTERNATIONAL: EIA projects that natural gas consumption in Asia will continue to outpace supply; The Arctic is Russia’s key to LNG dominance.
Williams has temporarily withdrawn three of four applications with the New Jersey Dept. of Environmental Protection (NJDEP) to build its Northeast Supply Enhancement (NESE) pipeline project. Just last month NJDEP gave Williams an extra month with the permits (see 
Andrew Cuomo is a desperate man. There’s nothing as dangerous as a cornered leftist politician whose policies have been revealed to cause pain and suffering for the very people he’s supposed to serve. That’s what has happened to man-child Andy–and desperate politicians who have been exposed for all to see do crazy things. In Andy’s case, he goes berserk. Cuomo has instructed his own state Public Service Commission (PSC) to look for ways to revoke the operating license of utility company National Grid, which supplies natural gas to all of Long Island (and the NYC boroughs that sit on Long Island, Brooklyn and Queens). Why?
Spending went down, but natural gas production went up slightly (3%) at the very first Marcellus driller, Range Resources, in 3Q19. The company previously forecast it would spend $756 million in 3Q but spent $736 million instead. The savings came “as a result of continued efficiency gains, water savings, and service cost improvements.” The company connected 22 new wells in the Marcellus to production in 3Q19, the same number they connected in 3Q18. Our takeaway: the company is doing more, producing more, with less resources. Getting more efficient.
Cabot Oil & Gas, one of our favorite Marcellus drillers, continued to impress during 3Q19. The company reports free cash flow popped 150% higher than 3Q18–even though the price of natural gas was down 23% over the same period last year. Production was 2.3 billion cubic feet per day, all of it dry natural gas. They drilled 22 new Marcellus wells (in Susquehanna County, PA) and completed 29 wells, which means they’re drawing down their DUC (drilled but uncompleted) well inventory.
Southwestern Energy, now a pure play driller focused on the Marcellus/Utica since selling off their Fayetteville Shale assets in Sept. 2018, produced 2.2 billion cubic feet equivalent per day (Bcfe/d) of natural gas in 3Q19, up from 2.0 Bcfe/d in 3Q18. (Those numbers remove the Fayetteville to compare apples to apples.) Southwestern drilled 24 new Marcellus and/or Utica wells and completed 30 wells in 3Q, which means, like other drillers, they continue to draw down their DUC (drilled but uncompleted) well inventory. Unlike Cabot which produces 100% dry gas, some 22% of Southwestern’s production was natural gas liquids.
Opposition to Pennsylvania Gov. Tom Wolf’s plan to have PA join with northeastern states in the so-called Regional Greenhouse Gas Initiative (RGGI) continues. Big opposition. Earlier this month Pennsylvania Gov. Tom Wolf went completely off his rocker with a power-grab to force PA into a regional alliance to tax natural gas-fired electric plants out of existence (see 
New York Gov. Andrew Cuomo followed a blindly stupid political philosophy of anti-fossil fuelism by blocking the Northeast Supply Enhancement (NESE) pipeline, with tragic consequences–thousands of potential natgas customers who cannot connect to the local utility. Is New Jersey heading for the same scenario under Gov. Phil Murphy? If the state rejects the PennEast Pipeline, that answer is a resounding YES. We’ve seen this movie before.
The stakes are about as high as it gets: “The immediate disruption of the natural gas industry,” says PennEast Pipeline. We’re referring to a terrible decision in September by the U.S. Court of Appeals for the Third Circuit that disallows PennEast from using the delegated power of eminent domain to cross properties either owned by, or with easements granted to, the state of New Jersey (see 
American Electric Power (AEP) recently sealed a deal to sell more than 31,000 acres of land in eastern Ohio to the state of Ohio for $47 million. The state will use it for a state park. However, subsurface rights are not part of the deal. AEP will wisely hold on those rights. At some point AEP may want to drill and frack the land, and that has antis in a tizzy.
All we can say is, shame on FirstEnergy. They hired people to block petition gatherers trying to get signatures for a referendum for the November ballot. The tactics used can only be described as bullying–sometimes physical. Workers are trying to get enough signatures on a petition to place a referendum on the November ballot. The referendum, if adopted, would overturn House Bill 6 which grants a $1 billion bailout to FirstEnergy’s economically failing nuclear power plants (see 
In September 2018 MDN brought you the news that Southwestern Energy had, for the first time anywhere, sold natural gas to a customer (utility company New Jersey Resources) that has been certified as “responsible gas.” The certification comes from Independent Energy Standards Corporation (IES) and they call it their TrustWell™ Responsible Gas Program certification (see