Facts & Rumors # 536
December 16, 2023
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Why Oil Prices Are So Low! U.S., Canada produce record amounts of oil and gas in 2023. Spectrum News. The United States and Canada will produce more oil and gas this year than any other region in the world, according to a new analysis from S&P Global Commodity Insights. The two countries are on track to produce more than 41 million barrels of oil and gas per day, whereas the Middle East produces about 38 million barrels. “North America has an advantage that Europe and mainland China (and many other nations) do not,” S&P Global Commodity Insights North American Crude Oil Market director Celina Hwang said in a statement. “The United States and Canada produce more oil and gas than any other region in the world, and they also produce more than they consume.”
IEA Forecasts $2.80 NatGas. Thanks, MDN. Once a month, U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. Last month, the report predicted the price for Henry Hub natural gas futures would average $3.40 this winter. The latest monthly report, issued Tuesday, slashes that number all the way down to $2.80 (down 18%). A warm start to winter coupled with record-high production is cited as the reason for the change.
EQT Could Be Divesting Some of Its Portfolio. EQT Corporation EQT is considering the divestment of a portfolio of minority interests in wells located in Pennsylvania’s Marcellus shale formation, per a Reuters report. The value of this portfolio could exceed $3 billion.
The company is collaborating with an investment bank to conduct an auction for these stakes, commonly referred to as non-operating interests within the energy sector. Non-operating positions entitle holders to a share of the proceeds from the sale of hydrocarbons without assuming responsibility for drilling or other operational activities. However, they are required to contribute their portion of the associated costs.
EQT Corp intends to divest stakes in assets located throughout Northeast Pennsylvania, generating 700 million cubic feet per day in current production. Chesapeake Energy CHK is the operator of these assets, with EQT holding a 25% non-operating interest. Additionally, various other parties possess smaller ownership stakes in these assets.
EQT Corp’s effort to divest its position, primarily acquired through the $3-billion takeover of Alta Resources in 2021, is part of the company’s broader strategy to expedite the reduction of its $5.9-billion debt load and enhance shareholder returns.
The natural gas sector has seen limited deal activity due to subdued demand in the United States, leading to lower commodity prices and diminished confidence in pursuing acquisitions. However, analysts anticipate an uptick in deal flow next year, driven by increasing export demand that is expected to elevate valuations in the sector.
In October, United State-based natural gas producer Chesapeake Energy initiated discussions with rival gas producer Southwestern Energy SWN regarding a potential acquisition.
The discussions between Chesapeake Energy and Southwestern have been on and off for several months, and Chesapeake Energy is anticipated to explore various options, including potential acquisitions. There is also a consideration of pursuing alternative targets.
If negotiations between the two companies materialize, the resulting entity could surpass EQT to become the largest natural gas-focused exploration and production company in the United States in terms of market value.
Toby Rice Gets a Seat at the Table. ‘That’s our business’: Shale gas exports get a seat at the global table. Pittsburgh Post-Gazette. For a few days at this year’s global climate conference, it looked as if the whole thing might end without an agreement over the role of fossil fuels in tackling rising temperatures. But the consensus arrived on Wednesday that the world should transition away from fossil fuels. One thing that was clear from the start: Oil and gas was always going to be on the menu as world leaders convened in Dubai. Toby Rice, CEO of Pittsburgh-based EQT Corp., wanted to be at the table when it happened. “When you’re talking about climate, you’re talking about energy and that’s our business,” he said in an interview with the Atlantic Council, which hosted one of the side events at COP28.
Occidental Buys CrownRock. Shale oil deals are defying the M&A slump. Axios. U.S. shale oil deals are booming, in defiance of the broader M&A slowdown and talk about an energy transition. Driving the news: Occidental Petroleum yesterday said it would pay around $12 billion to buy CrownRock, an energy producer focused on the Permian Basin in West Texas. The big picture: The Permian Basin alone has been the focus of more than two dozen deals so far in 2023, representing a record $100 billion+ in value.
Oxy pays $12 billion for major independent. Odessa American. The Occidental Petroleum Corp. has just paid $12 billion for one of the Permian Basin’s leading independent oil companies, the CrownRock Corp., and the Texas Independent Producers & Royalty Owners Association says the transaction harbingers more such consolidations. TIPRO President Ed Longanecker said Tuesday from Austin that the acquisition of CrownRock “is a strategic, accretive and highly complementary addition to Oxy’s portfolio and a testament to the importance of the Permian Basin and its critical role in meeting growing global demand for oil and natural gas.
Warren Buffet Still Committed to Oil. Berkshire Hathaway adds to Occidental Petroleum stake with further $589m investment. Investment Week. Berkshire Hathaway has added to its position in Texas oil company Occidental Petroleum with a further $588.7m investment, according to a US Securities and Exchange Commission filing yesterday (13 December). This equated to nearly 10.5 million shares and brings Berkshire Hathaway’s stake to around 27%. Berkshire Hathaway, which is overseen by chair Warren Buffet, bought 3.7 million worth of shares in March 2023 for around $216m. Buffett’s company began buying large quantities of Occidental stock in 2022, around the time Russia invaded Ukraine. Midland Reporter-Telegram also reports.
NatGas Expansion in TX. Natural gas expansion project to add more reliable energy to Texas grid. Center Square. On Thursday, a north Texas-based natural gas energy expansion project was announced to further strengthen the Texas grid. Gov. Greg Abbott, ERCOT President and CEO Pablo Vegas, and Calpine Corporation CEO Thad Hill announced Calpine was expanding its natural gas production operations at its Freestone County Energy Center. The center is a natural gas-fired combined-cycle facility located near Fairfield, Texas. It was the first facility Calpine built in the northern Texas Regional Entity market area and sells electricity to ERCOT, according to its website.
TX Emissions Record Low in 2022. Report finds Texas methane emissions hit record low in 2022. Midland Reporter-Telegram. A new report indicates Permian Basin oil and natural gas producers are succeeding in driving methane emissions lower even as oil and natural gas output rises to record highs. Texans for Natural Gas, an educational campaign of the Texas Independent Producers and Royalty Owners Association, released its new report indicating Texas producers drove methane intensity to a record low 0.12% in 2022 even as output reached record levels. The report emphasized the decade-long downward trend in methane intensity. Ed Longanecker, TIPRO president and spokesperson for Texans for Natural Gas, told the Reporter-Telegram by email, “According to a recent study, the new methane rules will directly impact hundreds of thousands of low producing wells in the United States and could have a notable impact on future oil and gas production volumes. We are currently reviewing the language and coordinating with our members and partner trade associations across the country. I also suspect there will be legal challenges to this rulemaking, so we will need to wait and see how it ultimately plays out.”
New Methane Rules Could Kill Small Producers. Small U.S. oil and gas producers from Texas to Wyoming are concerned that the new federal rule designed to slash methane emissions in the industry could force them to shut down wells and put them out of business. Some industry associations and oil-producing states criticized the new federal methane rule, saying it would burden producers and lead to job losses. The Independent Petroleum Association of America (IPAA) said, “The new source requirements will impose complicated new requirements, and the 2022 proposed existing source requirements have been estimated to lead to the shutdown of 300,000 of the nation’s 750,000 low production wells, wells that are essential to our country’s energy production.”
O&G Jobs Continue to Grow. Thanks, MDN. Oil & gas jobs continue to grow – Latest numbers for PA, OH, WV. The Energy Workforce & Technology Council, based in Houston, TX, is the national trade association for the global energy technology and services sector. The Council reports jobs in the O&G sector increased in November, adding 1,286 jobs. The O&G industry employs 652,398 jobs across the country, just 54,130 jobs away from returning to pre-pandemic levels. And how much do those jobs pay? The average hourly earnings for frontline oil-and-gas workers rose 1.3% in October from the previous month to $44.11, according to a Labor Department report released last week.
Pipelines Circling the Earth 4 times!!! Carbon capture needs enough pipelines to circle Earth four times. Bloomberg. The world inked a historic pact at COP28 climate talks this week to move away from using fossil fuels. But it also endorsed a key technology that could give them a lifeline: carbon capture and storage. And the US is set to be the most important proving ground for capturing the greenhouse gas and the sprawling network of infrastructure needed for it to work. The rest of the world will be watching. More than $83 billion in investments have poured into CCS over the past three decades, according to BloombergNEF. Now, the US is making a new massive bet on carbon capture and storage and the country will be a test case for technology’s success — or failure. If capturing carbon is going to be part of the world’s arsenal to fight global warming, it has to work in the US. Associated Press relatedly reports.
PA December 4, to December 14, 2023
County Township E&P Companies
1. Westmoreland Penn Apex Energy
2. Westmoreland Penn Apex Energy
3. Westmoreland Penn Apex Energy
4. Westmoreland Penn Apex Energy
5. Westmoreland Penn Apex Energy
6. Westmoreland Penn Apex Energy
OH December 3, to December 14 2023
County Township E&P Companies
1. Belmont Pultney Ascent
2. Belmont Pultney Ascent
3. Guernsey Center EAP OHIO
4. Guernsey Center EAP OHIO
5. Guernsey Center EAP OHIO
6. Guernsey Center EAP OHIO
7. Jefferson Salem EAP OHIO
WV Permits November 20, to December 1, 2023
1. Kanawha Columbia Gas
2. Kanawha Columbia Gas
3. Marion EQT
4. Marion EQT
5. Marion EQT
6. Marion EQT
7. Marion EQT
8. Marion EQT
9. Marion EQT
10. Marion EQT
Marion EQT
