Facts & Rumors # 545
March 9, 2024
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Big Brother Methane Satellite to Launch on Monday. Google-backed satellite to track global oil industry methane emissions. Reuters. A new satellite backed by Alphabet Inc’s Google opens new tab and the Environmental Defense Fund group will launch from California on Monday with a mission to pinpoint oil and gas industry methane emissions from space. The MethaneSAT satellite will add to a growing fleet of spacecraft in orbit that are meant to help fight climate change by publishing data on emissions of the invisible but potent greenhouse gas. While the European Space Agency and another satellite-based tracker called GHGSat are already providing methane emissions data, MethaneSAT will provide more detail and have a much wider field of view, its backers say.
Drillers Deal with Historic Low Prices. Drillers are facing a challenging market with historic low prices and oversupply, partly due to El Niño and delayed LNG demand.
Chesapeake Energy and other major gas producers are reducing new gas capex by up to 20%, deferring new well production to manage costs and prepare for future demand.
The industry anticipates a shift from the current surplus to a potential deficit around 2025-2028, driven by new LNG facilities and increased industrial and power generation demand, offering hope for price recovery and sector growth.
“It was the best of times, it was the worst of times.” That line taken from the 1859, Dickensian novel, A Tale of Two Cities, fairly well describes the state in which we find the present-day natural gas market. Burgeoning supplies from prolific wells in the Marcellus and Haynesville shale basins have met with increasing amounts of associated gas from the Permian as noted in last month’s EIA-Drilling Productivity Report-DPR.
All of this has met with an El Niño led reduced demand for winter heating needs. The El Niño effect, combined with extended timelines for the arrival of new LNG demand for pipeline gas, has simply destroyed pricing for the commodity over the last several months. Tying these points to my opening line, we see that a huge storage overhang will greet injection season, with storage volumes that are likely to be substantially above 2023 levels. You can see the slope of the blue line in the EIA gas storage graph below is much flatter than at the same point in late March of 2023, where inventories bottomed at 1.830 TCF. In all likelihood, we will reach late March of 2024 with at least an extra couple of hundred BCF in the tank.
The best time times in gas supplies mean that it’s the worst of times in terms of the prices producers receive for their products. RBN Energy noted in their daily blog a few days ago that gas prices had recently reached historic lows on an adjusted basis-
Repsol to Invest $1.1 Billion in the Marcellus over the Next 4 Years. Thanks, MDN. Spanish energy giant Repsol, with around 214,000 net acres of leases in the Marcellus Shale, primarily located in northeastern Pennsylvania in Bradford, Susquehanna, and Tioga counties, issued the company’s fourth quarter and full-year 2023 update last week. Among the tidbits coming to light is a statement by Repsol management that the company plans to spend €$1 billion (US$1.083 billion) in the Marcellus over the next four years. Repsol loves the Marcellus!
PetroVybe to Drill 50 Wells in Eagle Ford. South Texas Drilling Permit Roundup: Dallas driller plants flag in the Eagle Ford. San Antonio Business Journal. PetroVybe Opco LLC, a newly-formed oil and gas exploration company based in Plano, announced plans to drill 50 new wells in the Eagle Ford Shale. Last week, PetroVybe drilled its first well in Lavaca County, a county nestled in the northeastern portion of the shale. The well will be drilled 7 miles southwest of Hallettsville with a total depth of 9,750 feet. The well is part of the company’s recently announced plan to drill 50 new vertical wells on a 55,000-acre “proven but underdeveloped field” in the Gulf Coast Basin over the next five years, with a goal of raising $50 million from investors. Referring to the acreage as a “conventional vertical drilling play … consisting of high BTU ‘wet’ natural gas,” the company anticipates a 21% cash-on-cash return on investment in the first year of the project.
Heavy Iron Oil Services Moving to WV. Oil service company bringing headquarters to West Virginia with almost 100 jobs. WTRF. A Pennsylvania company packed up its equipment and officially moved operations to Hancock County, bringing nearly 100 jobs to the Ohio Valley. Chester officials, county commissioners and residents joined as Heavy Iron Oil Services cut the ribbon to their new headquarters and paving the way for new jobs.
Will Consumers Pay for “Certified Gas?” Thanks, MDN. Every major (and most minor) drillers in the Marcellus/Utica have, over the past couple of years, signed on to one or more of the responsible gas certification authorities. Responsible or “certified” or “differentiated” gas is gas that is produced with lower methane emissions as certified by an outside organization like Project Canary, MiQ, or Equitable Origin. Given certification reviews cost big money, you would think (hope) there are actually customers on the other end who *want* to buy the certified NatGas, and may be willing to pay a premium to get it. Utility companies are some of those customers who want to buy certified gas in order to comply with various mandates to lower emissions. But certified gas comes at a price — a price that gets passed on to end-user customers. How do they feel about paying more for certified gas?
PA Permits February 26, to March 7, 2024
County Township E&P Companies
1. Butler Parker Laurel Mtn.
2. Susquehanna Auburn Chesapeake
3. Susquehanna Auburn Chesapeake
4. Susquehanna Auburn Chesapeake
5. Tioga Westfield Seneca
6. Tioga Westfield Seneca
7. Tioga Westfield Seneca
8. Westmoreland Derry Campbell O&G
OH Permits February 25, to March 2, 2024
County Township E&P Companies
1. Harrison Washington Gulfport
2. Harrison Washington Gulfport
3. Harrison Washington Gulfport
WV Permits February 26, March 1, 2024
1. Clay Mountain V O&G
2. Clay Mountain V O&G
3. Ritchie Antero
4. Ritchie Antero
5. Ritchie Antero
6. Taylor Arsenal
7. Taylor Arsenal
8. Wetzel EQT
9. Wetzel EQT
10. Wetzel EQT
11. Wetzel EQT
12. Wetzel EQT
13. Wetzel EQT
14. Wetzel EQT
15. Wetzel EQT
16. Wetzel EQT
17. Wetzel EQT
18. Wetzel EQT
19. Wetzel EQT
