Chesapeake Swings to Profit in 2Q, Investors Still Punish Stock
Chesapeake Energy released its second quarter 2019 update yesterday. The company continues its mission to transform itself from a natural gas producer into an oil producer. The company is on track to produce 250,000 barrels per day (bpd) of oil in 2019 (averaging 122,000 bpd in 2Q). CEO Doug Lawler said Chessy will dial back spending on natgas in 2020 and allocate more money to oil drilling in Texas and Wyoming. The Marcellus Shale continues to be a natural gas cash cow for the company, helping fund drilling in other plays.
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Last Thursday the Texas Eastern Transmission Company (TETCO) pipeline exploded near a trailer park in Lincoln County, Kentucky (see 
Marcellus/Utica gas hitches a ride to the Gulf Coast to feed several LNG export facilities. We previously outlined how some gas flows to Cheniere’s Sabine Pass LNG plant via Williams’ Transco system (see 
PennEast Pipeline is a $1 billion (or $1.2 billion, depending on the source) new greenfield pipeline project from Luzerne County, PA to Mercer County, NJ. PennEast will flow PA Marcellus gas to markets in NJ. The project has faced numerous lawsuits and regulatory blockades, much of it in NJ. We won’t recount all of the ins and outs. What we will tell you is that PennEast is about to overcome another such government blockade by submitting a new Freshwater Wetlands Permit application to the NJ Dept. of Environmental Protection (DEP).
Pennsylvania state officials in the Gov. Tom Wolf administration (yes, lib Dem Tom Wolf) are drawing up plans, a “playbook,” for how to redevelop the increasing number of coal-fired electric generating plants that are closing in the state. Most of those plans boil down to this: redevelop those sites as natural gas-fired electric plants and/or petrochemical plants. Both are tied directly to PA’s prolific Marcellus Shale. Who knew there was such common sense inside the Wolf Administration?
Last November MDN told you that Northeast Energy Center, backed by Liberty Energy and NorthStar Industries, is proposing to build an LNG liquefaction plant in central Massachusetts (see 
Liberty Utilities in Keene, New Hampshire wants to convert its 1,200 or so customers over to using natural gas–convert them from using propane. Natgas is cheaper (for customers) and has more reliable supplies. Liberty asked the NH Public Utilities Commission for permission to convert in 2017. Of course anti-fossil fuel lunatics objected, and the PUC delayed. Now, over two years later, the PUC has granted permission to Liberty to move forward with converting its commercial customers at one location.
MARCELLUS/UTICA REGION: WV PSC says customers can expect lower natural gas rates this winter; OTHER U.S. REGIONS: Northern Missouri pig poop project starts distributing natural gas; NATIONAL: EIA’s Henry Hub spot price forecast slips to $2.36 through 2019, $2.75 in 2020; Dems want to kill oil and gas leasing. Here’s why it matters; The great American oil and natural gas pipeline boom; The science is settled: Fracking makes America strong and healthy; INTERNATIONAL: When it comes to oil prices today, it’s China, China, China; Abbott to AMLO… Wrap up pipeline probe and get natural gas moving south.
It appears the Virginia Dept. of Environmental Quality (DEQ) has become politicized. Why is it that leftists (like Va. Gov. Ralph Northam) politicize what are supposed to be impartial government agencies? The DEQ has issued a “stop work” order to Mountain Valley Pipeline (MVP) for construction activities along a tiny two-mile stretch in Montgomery County. Fine, if there are issues, stop the work. It’s the highly politicized and inappropriate press release the DEQ issued that accompanied the stop work order we object to.
Two weeks ago MDN brought you news about a newly passed Ohio law (House Bill 6) to prop up two bankrupt nuclear power plants and several coal-fired plants (see 
In March 2017, radical green groups, including the Sierra Club, Lancaster Against Pipelines, Lebanon Pipeline Awareness, Allegheny Defense Project, Clean Air Council, Concerned Citizens of Lebanon County, and Heartwood, filed a lawsuit in the U.S. Court of Appeals for the District of Columbia in an attempt to block construction of the $3 billion Atlantic Sunrise Pipeline project in Pennsylvania (see 
A month ago MDN told you that UGI, a big utility and midstream company headquartered in Pennsylvania, had cut a deal to buy certain pipeline assets in the Marcellus/Utica from Columbia Midstream (see 
No doubt you’ve noticed the price of natural gas has been relatively low over the past few weeks, dropping from around $2.40 per thousand cubic feet (Mcf) a month ago to now flirting with $2/Mcf. The last time gas prices went below $2/Mcf was in 2016. One of the reasons, believe it or not, that the price has fallen dramatically over the past few days is because of a single LNG export facility–Cheniere Energy’s Sabine Pass facility (which exports some M-U gas).
MARCELLUS/UTICA REGION: Trump calls off planned trip to Shell’s cracker plant in Beaver County; All that rain drives demand for seeding, water barriers; Yudichak, DEP secretary tout severance tax proposal to aid Nanticoke park plan; Susquehanna County responds to EMS crisis using shale money; OTHER U.S. REGIONS: Freeport LNG allowed to export commissioning cargoes; Big Oil taking smaller rivals to school on shale; Inland leaders defend natural gas in homes, businesses; NATIONAL: United States sets new daily record high for natural gas use in the power sector; U.S. natural gas exports top 1 Tcf in 1Q2019, says DOE; Biden’s plan to eliminate fossil fuels is bad for our national security, worse for our economy; Give up your gas stove to save the planet? Banning gas is the next climate push; INTERNATIONAL: As Europe swelters, illegal refrigerants are emitting four million cars’ worth of CO2.