EQT may sell “small portion” of royalties from natural gas production

Pittsburgh-based EQT Corp., the largest independent natural gas producer, “is in talks to have an investor take a 1 percent royalty interest in revenue from natural gas production,” the Pittsburgh Business Times reports. The company’s new management team “has been working to cut drilling costs and improve the company’s financial picture” as the domestic shale industry is experiencing sharp declines, according to the article. EQT said during the third-quarter conference call “it was evaluating ways to monetize its interest in natural gas production.” Then-Interim CFO Kyle Derham said, “[w]e are confident this strategy could generate significant proceeds that can be used to de-lever without a significant impact on development returns.” For more, read the full article.

Pennsylvania

Continued low natural gas prices spark new round of impairments

Several oil and gas companies have been “forced to recalculate and reduce the value of their assets to reflect a down market,” as continued low natural gas prices “have been putting a damper on corporate earnings for many months,” the Pittsburgh Post-Gazette reports. CNX Resources Corp. recently “wrote down $46 million in assets in Central Pennsylvania,” according to the article, following a “blockbuster $10 billion impairment by Chevron Corp. last month, more than half of which was attributed to Appalachian oil and gas assets.” EQT Corp, the largest natural gas producer in the country, “is expected to write down between $1.4 billion and $1.8 billion in assets” next month. The wave of impairments means “some oil and gas leases will be allowed to expire without follow-up and some potential drilling locations are now off the table.” For more, read the full article.

Pennsylvania

Ohio oil production gains outpaced natural gas gains for third quarter of 2019

While oil and natural gas production in Ohio’s shale region saw gains in the third quarter of last year, oil production gains were higher than natural gas on both a percentage and annual basis for that period, according to a recent article in The Daily Reporter. Horizontal wells “produced more than 7.2 million barrels of oil and nearly 673.97 billion cubic feet of natural gas for the quarter compared with more than 5.54 million barrels of oil and 605.71 billion cubic feet of natural gas for the third quarter of 2018,” the article reports. Those numbers “reverse the script” from 2018, “when oil production trailed natural gas on a percentage basis.” Ohio’s shale region has produced “more than 18 million barrels of oil and more than 1.9 million cubic feet of natural gas” in the first three quarters of 2019. For more, read the full article.

Ohio

Ohio’s natural gas and oil production jumped again in third quarter of 2019

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management’s quarterly report released in December showed natural gas and oil production in Ohio “jumped up again” in the third quarter of last year, Farm and Dairy reports. Horizontal wells “produced 673,962,146 Mcf, or 673 billion cubic feet, from the beginning of July to the end of September,” a 9-percent increase over second-quarter production. Third-quarter oil production was up 24 percent. The report listed 2,419 horizontal shale wells in production. For more, read the full article.

Ohio

Utica Shale’s third-quarter production sets new state records

Figures released by the Ohio Department of Natural Resources (ODNR) show Ohio’s horizontal shale wells produced a record 7,200,304 barrels of oil and 673,962,146 Mcf (674 billion cubic feet) of natural gas in the third quarter of 2019, The Daily Jeff reports. These totals, which represent increases of 29.84 percent and 11.27 percent for oil and natural gas production respectively over the same quarter last year, set new state records for quarterly production. The ODNR report lists 2,470 horizontal shale wells, with 2,419 of those reporting production during the quarter. For more, read the full article.

Ohio

Ohio’s shale industry generated $78B in investment over the past decade

The Utica and Marcellus shale formations “account for more than 85 percent of U.S. shale gas production growth since 2011,” and a recent JobsOhio report finds proximity to them in eastern Ohio “is the greatest contributing factor to the tens of billions” of investment dollars plugged into the state’s economy during the past decade, according to an Akron Legal News editorial. The JobsOhio report, a byproduct of a Cleveland State University study, covers investment through 2018 and finds total investment in Ohio’s shale energy sector “has reached $78 billion since tracking began in 2011,” according to the article. Energy officials “expect an uptick in midstream and downstream investment for the near-term given the billions of dollars in projects” in late planning stages or that have broken ground as of 2019. For more, read the full article.

Ohio

Commission that oversees fracking to recommend changes to law

Ohio Oil and Gas Leasing Commission members are recommending changes in state law “governing fracking on public land and the size and operations of the commission,” The Columbus Dispatch reports. The Ohio Department of Natural Resources (ODNR) staff proposed changes and presented them to the commission, which includes ODNR Geological Survey Division Chief Mike Angle, “two members representing oil and gas interests, attorneys Matt W. Warnock and Michael W. Wise,” former Ohio EPA director Richard Shank representing the environment, and a public representative, former state Bureau of Workers’ Compensation CEO Steve Buehrer.

Proposed changes include ensuring “there are no conflicts of interest involving commission members when it comes to mineral rights,” adding members to the commission, and clarifying language “to allow state agencies to make lease stipulations,” among others. There are 2,142 wells on or beneath public property in Ohio; 64% of them are active, including 503 in wildlife areas, 31 in state parks, 20 in preserves and 10 in state forests. For more, read the full article.

Ohio

Marathon Petroleum will split off Speedway and replace CEO

Findlay-based Marathon Petroleum Corp. announced plans to “spin off its Speedway gas-station business” and replace Chairman and CEO Gary Heminger, who will retire next year, The Columbus Dispatch reports. The announcement reverses Marathon’s position from recent statements that the company intended to continue under its current structure despite pressure from investors (see our October 15, 2019 blog post). Elliott Management Corp., part of the group of shareholders that pushed for the split, said in a statement the move “will unlock substantial value for shareholders,” according to the article. For more, read the full article.

National

Shale Crescent USA region has generated $1.1 trillion in savings nationwide

A new economic analysis shows natural gas end-users, including “American households, businesses, manufacturers, and electric power generators,” have saved $1.1 trillion since 2008 “as a result of increased natural gas production in the Shale Crescent USA region,” prnewswire.com reports. The Ohio Oil & Gas Energy Education Program and Shale Crescent USA published the findings in a report, Natural Gas Savings to End-Users: 2008-2018, A Technical Briefing Paper. Users in Ohio, Pennsylvania and West Virginia “have realized a combined savings of more than $90 billion since 2009,” according to the article. For more, read the full article.

National

Marathon Petroleum executives resist idea to split company

Marathon Petroleum CEO Gary Heminger and Greg Goff, one of the company’s directors, recently assured employees “the company intends to continue as a diversified oil and gasoline company” in response to a New York hedge fund’s recommendation to break Marathon into three companies, the Akron Beacon Journal reports. Findlay-based Marathon operates a refinery in Canton and is the “majority owner in a partnership that operates MPLX, an oil and natural gas gathering network with operations in Stark County and the Utica Shale.”

Elliott Management, which owns 2.5% of Marathon’s stock, said it believes Marathon would be more valuable if the company split into three businesses: Speedway gas and convenience stores, a refining operation, and MPLX as a standalone “midstream business moving oil and natural gas from wells to refineries and processors.” For more, read the full article.

National
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