Shale Directories Conferences
SPRING 2022 Hydrogen & Carbon Capture Conference
April 21, 2022
Registration OPEN NOW! (nearing a sell out!)
Hilton Garden Inn, Southpointe
Canonsburg, PA
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Ascent Is Buying Gulfport. A rumored merger between Utica Shale oil and gas drillers Gulfport Energy Corp. and privately held Ascent Resources would continue the roll-up of Appalachian shale gas producers and would be welcomed by the market, investment analysts said. The deal is said to be valued at about $8 billion.
“Our conversations with investors and industry contacts suggest an all-equity reverse merger near proved-developed-producing pricing would be well-received by the market, creating a larger-scale, lower-cost entity that would appeal to investors,” Truist Securities Inc. oil and gas analyst Neal Dingmann told clients March 30. “We believe scale continues to become more important, especially in areas such as Appalachia.”
The transaction would give Gulfport, which was fresh out of bankruptcy proceedings in 2021, more scale by combining its Ohio operations with neighbor Ascent, said Charles Johnston, senior high yield oil and gas analyst with credit research firm CreditSights. At the same time, it would allow Ascent to have publicly traded stock without an IPO, Johnston said.
The bulk of Gulfport’s Utica operations are in the dry gas counties along the Ohio River on the eastern edge of the state, while Ascent’s wells are focused on the “wetter” counties to the west where natural gas liquids and oil are mixed into the production stream.
Gulfport produces 1 Bcfe/d, 90% gas, with 77% of those volumes coming from the Utica, according to Matthew Keillor, an analyst with energy data and software company Enverus. Ascent produces nearly 2 Bcfe/d, 91% gas, all from the Utica.
Truist said Ascent, backed by private equity firm First Reserve Corp. and the Energy and Minerals Group’s EMG Fund II Management LP, could reasonably offer $114 per share for Gulfport, a nearly 32% premium to Gulfport’s trading value at March 29 market close.
Public companies have been snapping up privately held neighbors in Pennsylvania’s larger Marcellus Shale over the past year.
Most recently, Chesapeake Energy Corp. announced a $2.6 billion deal in January to buy northeast Pennsylvania neighbor Chief Oil & Gas LLC. EQT Corp., the largest U.S. gas producer, bought out Alta Resources LLC, another Chesapeake neighbor in Lycoming County, for $2.9 billion in July 2021. Both deals brought immediate gains in production volumes and revenues.
Talks of a potential merger were first reported March 25 by Bloomberg. Gulfport had no comment March 30 on any deal. Ascent did not reply to requests for comment.
PTTGCA Project Still Viable. Pays Back $20M to JobsOhio. The U.S. subsidiary of Thailand-based petrochemical giant PTT Global Chemical has repaid Ohio’s private economic development office $20 million after it failed to make an investment decision in 2020 on a proposed petrochemical plant in the state.
Spokespersons for both PTT Global Chemical America and JobsOhio said this week the company remains committed to building the multi-billion-dollar project in southeast Ohio’s Belmont County as PTTGCA continues searching for an investment partner.
The $20 million was paid to Bechtel Corp. in 2019 to complete site engineering and site preparation for a plant that would convert ethane — a byproduct of natural gas drilling from the Utica and Marcellus shale fields — into different types of polyethylene, raw materials for products that range from plastic bottles to vehicle parts.
The project has been optimistically viewed as a potential economic development boost for an Appalachian region still struggling from the loss of manufacturing jobs decades ago. The plant, its backers say, would create thousands of construction jobs and hundreds of permanent positions and spawn a manufacturing renaissance along the Ohio River.
A similar $6 billion petrochemical plant built by Shell Chemical Appalachia LLC 30 miles (50 kilometers) northwest of Pittsburgh is scheduled to begin operations this year. Shell announced its final investment decision in 2016. News that PTTGC would partner with a Japanese company to build a petrochemical plant in Belmont County first surfaced in 2015, spurring talk of a regional petrochemical hub to take advantage of abundant supplies of ethane.
In an interview with The Associated Press this week, Ohio Lt. Gov. Jon Husted expressed skepticism about whether the Ohio plant would be built.
“They can’t find a partner because of market conditions,” Husted said. “They’re the ones who made the promise on what they’re going to do, and it’s up to them.”
Husted said the site, which is owned by PTTCGA, would be attractive to other developers.
“There’s a lot of options for other end users,” Husted said. “The last thing I’m going to do is create a false hope. People in Appalachia have been promised a lot of things that businesses never delivered.”
PTTGCA spokesperson Dan Williamson said the company has invested $300 million in the project thus far and that company officials are committed to building the plant. He said there is no deadline for a decision on building it.
“If the company wasn’t still hopeful of this happening, they would not continue to invest in it,” Williamson said.
JobsOhio spokesperson Matt Englehart blamed the coronavirus pandemic for the delay in an investment decision that resulted in PTTGCA paying back the $20 million. A U.S. subsidiary of South Korea’s Daelim Industrial Co. withdrew as PTTGCA’s partner in July 2020.
JobsOhio, which is funded with profits from Ohio liquor sales, has provided an additional $50 million in grants and loans for developing the site where a FirstEnergy Corp. coal-burning power plant once stood.
“PTTGCA remains committed to the project, and JobsOhio and its partners continue to work closely with PTTGCA to bring the project to a positive final investment decision,” Englehart said in a statement, adding that PTTGCA is “actively pursuing investors.”
PTTGCA is “in the process” of resubmitting its expired air permit to the Ohio Environmental Protection Agency, Williamson said. The permit will reflect PTT Global Chemical’s commitment to reducing global emissions 20% by 2030 and net zero emissions by 2050, he added.
The Ohio EPA recently renewed the company’s wastewater discharge permit.
Working in the company’s favor is that prices for polyethylene and other raw plastics have rebounded since a steep drop in 2020. Analysts say global demand for plastic products will continue to rise this decade.
NatGas Rationing in Germany. The German government is warning its people that it could start rationing NatGas. Consumers are encouraged to significantly reduce consumption. The impact of rationing will have greater impact on businesses which may just shutdown because the cost of energy is so high, it cannot recoup the higher prices from its customers.
LNG Exports Driving Prices Up. (WSJ) The LNG export boom is draining U.S. natural-gas supplies and lifting prices. The U.S. is shipping more natural gas than ever overseas, which is keeping domestic inventories lean and power prices high. Natural-gas prices usually decline into spring, when heating demand drops but before air-conditioning season begins. This year prices climbed into spring, thanks to record export volumes and promises from the White House to support the shipment of even more liquefied natural gas, or LNG, to allies across the Atlantic to supplant Russian supply. Just as the advent of shale drilling ushered in a domestic fuel glut that kept a lid on prices, America’s rise as the world’s most prolific LNG exporter is putting a new floor beneath them, analysts say.
LNG Facility Update. Russia’s invasion of Ukraine has pushed U.S. LNG into the spotlight as Europe seeks to wean itself off Russian natural gas. In the short term, U.S. LNG to Europe is constrained by liquefaction capacity on the LNG output side but also by Europe’s own import capacity and pipeline grid. Very little can be done to quickly increase global LNG production, and while many export terminals will operate at peak capacity for longer to boost output, LNG terminals take time to build, so capacity for this year and the next few years is already set. Further out, however, there is no shortage of new projects hoping to capitalize on the current clamor for LNG and reach a final investment decision, and the U.S. could be headed toward its biggest year for new LNG capacity ever.
Supply Bottlenecks Constraining Production. Shale growth constrained by supply chain bottlenecks. All those who have hoped that the U.S. shale patch could ramp up oil production quickly to fill the gap that Russian supply is leaving in the Western oil market are in for a disappointment—at least this year. Supply chain bottlenecks from workforce to frac sand and equipment are holding back a surge in America’s oil production, even as the White House has changed the tune in recent weeks and called on U.S. producers to increase output. Not even $120 a barrel oil can prompt shale producers to embark on a surge in output. That’s not only because of capital discipline, which investors demand. Constraints in the supply chain are also hindering massive growth in U.S. oil production.
Black Rock in Denial in TX. BlackRock president denies accusations of fossil fuel divestment at Texas oil and gas convention. BlackRock President Rob Kapito disputed allegations that his investment company is engaging in fossil fuel divestment practices at the Texas Independent Producers and Royalty Owners (TIPRO) annual convention in Austin. The investment titan has been accused by Lt. Governor Dan Patrick of “capriciously discriminating against the oil and gas industry by exiting investments solely because companies do not subscribe to a ‘net zero’ policy beyond what is required by law.” In his discussion with TIPRO President Ed Longanecker, Kapito wasted no time in disputing Patrick’s and others’ charge. “BlackRock is the biggest investor in oil and gas,” he said, stating that the company has $264 billion invested in fossil fuel companies across the nation, $93 billion of which is in Texas.
US Oil Production Fell in January. U.S. oil output fell 2% in Jan to lowest since Sept -EIA. U.S. oil production fell in January by 2% to the lowest since September 2021, according to a monthly report from the U.S. Energy Information Administration on Thursday. Oil production fell to 11.4 million barrels per day (bpd) in January from 11.6 million barrels per day the month prior, the report showed. Production in Texas fell to 4.9 million bpd, lowest since August 2021, while output in New Mexico fell to 1.3 million bpd, lowest since July 2021. Oil prices have spiked around 40% since the start of the year, and trading has been volatile since Russia invaded Ukraine last month.
Uncle Joe Tapping Oil Reserves for Midterm Elections. Biden planning to tap oil reserve to control gas prices. President Joe Biden is preparing to order the release of up to 1 million barrels of oil per day from the nation’s strategic petroleum reserve, according to two people familiar with the decision, in a bid to control energy prices that have spiked as the U.S. and allies have imposed steep sanctions on Russia over its invasion of Ukraine. The announcement could come as soon as Thursday, when the White House says Biden is planning to deliver remarks on his administration’s plans to combat rising gas prices. The duration of the release hasn’t been finalized but could last for several months. The people spoke on the condition of anonymity to preview the decision.
Biden is releasing the reserves for six-months. What’s six months away? You guessed it! MIDTERM ELECTIONS.
PA’s Energy Independence. Committee advances measure to expand Pennsylvania’s energy independence. Pennsylvania House Environmental Resources and Energy Committee passed several measures that seek to maximize energy independence, ramp up domestic energy production across the state, and unleash the state’s potential to power American allies, Committee Chairman Daryl Metcalfe (R-Butler) said Monday. “Pennsylvania’s oil and gas industries are ready, willing, and able to increase domestic production if free-market policies are put in place to allow our resources to be cost-effectively transported throughout the country and around the globe to America’s allies,” Metcalfe said. “In order to fully unleash Pennsylvania’s unmatched potential to power the free world, we must work together to cancel both China Joe Biden’s and Gov. Tom Wolf’s job-killing, punitive crusade against the profitable production and exportation of natural gas and other homegrown fossil fuels.”
Russian Hackers Threaten TX Power Grid. Texas power grid, energy sectors facing elevated Russian cyber threats during war in Ukraine. Russian hackers have been probing Texas’ energy infrastructure for weak points in digital systems that would allow them to steal sensitive information or disrupt operations, according to interviews with energy companies, state officials and cybersecurity experts. State regulators and energy companies — from utilities to oil and gas transportation hubs to their associated vendors — said they have been aware of the elevated Russian cyber threats since the Russian invasion of Ukraine last month, but they’re careful to not say too much. “We are on super high alert,” said Thad Hill, CEO of Texas power giant Calpine, adding that he has been closely monitoring Russia’s cyber actions.
PA Permit March 14, to March 31, 2022
County Township E&P Companies
1. Armstrong South Buffalo Snyder Bros.
2. Armstrong South Buffalo Snyder Bros.
3. Armstrong South Buffalo Snyder Bros.
4. Armstrong South Buffalo Snyder Bros.
5. Armstrong South Buffalo Snyder Bros.
6. Armstrong South Buffalo Snyder Bros.
7. Armstrong South Buffalo Snyder Bros.
8. Beaver Economy Boro PennEnergy
9. Beaver Economy Boro PennEnergy
10. Beaver Economy Boro PennEnergy
11. Beaver Economy Boro PennEnergy
12. Beaver Economy Boro PennEnergy
13. Beaver Economy Boro PennEnergy
14. Butler Concord Lola Energy
15. Butler Winfield Penn Energy
16. Sullivan Forks Chief
17. Susquehanna Auburn Coterra
18. Susquehanna Auburn Coterra
19. Susquehanna Auburn Coterra
20. Susquehanna Auburn Coterra
21. Susquehanna Gibson Coterra
22. Susquehanna Gibson Coterra
23. Susquehanna Gibson Coterra
24. Susquehanna Gibson Coterra
25. Susquehanna Gibson Coterra
26. Susquehanna Gibson Coterra
27. Susquehanna Lenox Coterra
28. Susquehanna Lenox Coterra
29. Susquehanna Lenox Coterra
30. Susquehanna Lenox Coterra
31. Susquehanna Lenox Coterra
32. Washington Fairfield EQT
OH Permits March 18, to March 26, 2022
County Township E&P Companies
1. Belmont Wheeling Ascent
2. Belmont Wheeling Ascent
3. Monroe Lee SWN
4. Jefferson Warren Gulfport
5. Jefferson Warren Gulfport
6. Jefferson Wells Ascent
WV Permits March 14, to March 25, 2022
1. Doddridge Antero
2. Doddridge Antero
3. Monongalia Northeast
4. Monongalia Northeast
5. Monongalia Northeast
6. Monongalia Northeast
7. Monongalia Northeast
8. Tyler Antero
9. Tyler Antero
10. Tyler Antero
11. Tyler Antero
12. Tyler Antero
13. Tyler Antero
14. Tyler Antero
15. Wetzel EQT
16. Wetzel EQT
17. Wetzel EQT
18. Wetzel EQT
19. Wetzel EQT
20. Wetzel EQT
21. Wetzel EQT
22. Wetzel EQT
23. Wetzel EQT
24. Wetzel EQT
25. Wetzel EQT
26. Wetzel EQT
27. Wetzel EQT
Joe Barone 610.764.1232
