Facts & Rumors # 548
April 6, 2024
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Chesapeake – SWN and Exxon – Pioneer Deals Delayed. Chesapeake Energy and Southwestern Energy said on Friday the closing date of their proposed $7.4 billion merger has been pushed back to the second half of the year after receiving a second request for information from the Federal Trade Commission.
Chesapeake had agreed to buy smaller rival Southwestern Energy earlier this year, a deal that will make it the largest independent U.S. natural gas producer. The deal was earlier expected to close by the second quarter of 2024.
U.S. lawmakers have sought increased scrutiny by the FTC over multi-billion-dollar deals. Nearly 50 Democrats in the U.S. Congress in March urged the regulator to probe oil and gas company deals and expand current investigations to protect consumers and industry competition.
Exxon Mobil and Pioneer Natural Resources received similar requests from the FTC related to their $60 billion merger, along with Chevron for its buyout of Hess Corp.
Chesapeake and Southwestern said they would cooperate with the FTC in its review. (Reporting by Seher Dareen in Bengaluru; Editing by Shilpi Majumdar)
Williams Expanding in Columbiana County, OH. Company to boost natural gas capacity in Columbiana. Youngstown Business Journal. Williams Companies, a Fortune 500 corporation based in Tulsa, Okla., plans to invest additional resources in Columbiana County to accelerate delivery of natural gas to its midstream network across the Utica shale basin, the company confirms. According to a spokesperson for Williams, the company “seeks to construct a compressor station in Hanover Township, an important part of the energy supply chain to bring clean, affordable natural gas to the area.”
TX O&G Activity Unchanged 1st Qtr. Dallas Fed energy survey outlines oil and gas activity. Rigzone. Activity in the oil and gas sector was relatively unchanged in the first quarter of 2024, according to oil and gas executives responding to the Dallas Fed Energy Survey, the Dallas Fed stated in its latest survey. “The business activity index, the survey’s broadest measure of conditions energy firms in the Eleventh District face, was 2.0 in the first quarter, suggesting little to no growth during the quarter,” the Dallas Fed noted in the survey. “The index was essentially unchanged from last quarter,” it added.
Chevron vs. Exxon in the Permian. Permian Basin: Chevron and Exxon compete for top oil producer in US. Carlsbad Current Argus. Oil and gas mergers, largely in the Permian Basin spiked last year as companies sought to consolidate assets in the booming region, according to a government report issued last week. Corporate mergers and acquisition (M&A) were valued at about $234 billion in 2023, the report read, outpacing every other year since 2011. This marked a return to the trend of consolidation after “marked volatility,” driven by the COVID-19 pandemic led to strong decline in transactions in 2020 and 2022, read the March 19 report by the Energy Information Administration.
NatGas Goes Negative in TX. Natural gas prices go negative in Texas. Who wins and losses. Barron’s. The price of natural gas in West Texas has gone negative, meaning producers essentially have to pay pipeline operators to take it away. The problem is that too much natural gas is being produced and there aren’t enough pipelines to send it elsewhere. Natural gas is still trading in positive territory in most other areas of the U.S. But the dynamics sending gas below zero in Texas are important for investors to watch, because they could weigh on some stocks, even as they help others.
NatGas Henry Hub Price at the End of the Year. Oil and gas execs reveal where they see Henry Hub price heading. Rigzone. Executives from oil and gas firms have revealed where they expect the Henry Hub natural gas price to be at various points in the future as part of the recently released first quarter Dallas Fed Energy Survey. The survey highlighted that the average response executives from 144 oil and gas firms gave when asked what they expect the Henry Hub natural gas price to be at the end of 2024 was $2.59 per million British thermal units (MMBtu). The low forecast in the survey was $1.50 per MMBtu, the high forecast was $7 per MMBtu, and the Henry Hub price during the survey was $1.44 per MMBtu, the survey pointed out.
U.S. Output Falls in January. U.S. crude output falls 6% in January due to severe cold, EIA says. Natural Gas World. U.S. crude oil production dropped in January to 12.5 million barrels per day (bpd), a 6% decline from December’s record high, following freezing weather, data from the Energy Information Administration showed on Friday. Crude oil output in top oil state Texas fell in January to 5.4 million bpd, down about 5% from the prior month, the data showed, while production in North Dakota fell nearly 13% to 1.1 million bpd.
Oil Ends the Year at 14mm Barrels per Day. Macquarie sees USA oil production exiting 2024 at 14mm barrels per day. Rigzone. In a report sent to Rigzone this week, Macquarie strategists outlined that their base case sees U.S. oil exiting 2024 at around 14 million barrels per day and 2025 at around 14.5 million barrels per day. “We recently updated our U.S. oil production expectations, which still contemplate U.S. supply reaching ~14 million barrels per day by year end 2024, albeit with slight downward revisions to our shale outlook offset by anticipated Gulf of Mexico strength,” the strategists stated in the report. “Looking out to 2025, we model U.S. production exiting the year at ~14.5 million barrels per day, despite our expectation for significantly lower crude prices next year,” the strategists added.
Enbridge to Bring Permian NatGas to the Gulf. Enbridge to bring Permian gas to Gulf Coast to tap LNG demand. Oil Price. Enbridge is forming a joint venture to build and operate natural gas pipelines connecting gas supply from the Permian Basin to the U.S. Gulf Coast to tap into growing LNG export demand, the Canadian-based pipeline giant said on Tuesday. Enbridge has entered into a definitive agreement with WhiteWater/I Squared Capital and MPLX LP to form a joint venture that will develop, construct, own, and operate natural gas pipeline and storage assets connecting Permian gas with the Gulf Coast. Enbridge will own 19% of the joint venture, with the other co-owners WhiteWater/I Squared with 50.6% and MPLX with a 30.4% stake.
More Flawed Academic Research. LNG. The entire push to halt new natural gas exports traces back to one Ivy League prof and his shaky study. Daily Caller. A questionable study by a Cornell University climate scientist gave climate activists and the media ammunition to wage a pressure campaign against the Biden administration to take action against liquefied natural gas (LNG) exports. “Dr. Robert Howarth openly admitted he prematurely released his not-yet-peer-reviewed study in order to influence politics and advance activist agendas against responsible oil and gas development,” Jeff Eshelman, the president and CEO of the Independent Petroleum Association of America, told the DCNF. “His research – which has been widely panned and largely dismissed by the scientific community – ignores the environmental benefits of U.S. natural gas and LNG, including data by the Department of Energy.”
DOE Cancels SPR Purchases. DOE cancels purchases for strategic oil reserve. E&E News. The Department of Energy canceled two major purchases to refill the Strategic Petroleum Reserve on Wednesday — a signal that the Biden administration may slow or pause replenishment of the reserve as oil prices rise. DOE will not award contracts to supply the SPR with a total of 3 million barrels of crude oil in August and September, as prices topped $84 per barrel of U.S. benchmark West Texas Intermediate. The agency cited the need to keep “the taxpayer’s interest at the forefront,” but said it would “continue to solicit available capacity as market conditions allow.” “As always, we monitor market dynamics to remain nimble and innovative in our successful replenishment approach to protect this critical national security asset,” DOE said in a statement.
OH an Oil Play. Thanks, MDN. Ohio Utica quickly becoming an oil play – “could go on for decades”. Marcellus Drilling News. Oil production in the Ohio Utica hit a record 27.8 million barrels in 2023, up 41% from 2022, according to researchers at the Levin College of Public Affairs and Education at Cleveland State University. In December, eastern Ohio oil wells pumped 93,000 barrels of crude, up one-third from December 2022, according to federal data. Oil has been locked away in the Utica/Point Pleasant shale layer for millennia. Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, was the first to see the vision of freeing oil from the Utica. However, it was a successor company, Encino Energy, that figured out how to coax large quantities of oil out of the Utica shale.
LNG Exports Do Not Increase Domestic Prices. Thanks, MDN In January, Joe Biden announced a “pause” for any approvals of new LNG export plants (currently 17 requests in the pipeline) for at least one year. One of the reasons cited for the pause is the oft-repeated lie that exporting LNG causes the price for natural gas here at home (for both residential and commercial) to skyrocket. A new report published by the Texas Oil & Gas Association refutes that claim using energy data from the federal government itself.
PA Permits March 18, to April 3, 2024
County Township E&P Companies
1. Armstrong North Buffalo Snyder Bros.
2. Bradford Springfield Blackhill Energy
3. Bradford Terry Chesapeake
4. Greene Franklin Rice
5. Greene Franklin Rice
6. Washington Cecil Range
OH Permits March 10, to March 30, 2024
County Township E&P Companies
1. Harrison Freeport EOG
2. Harrison Freeport EOG
3. Harrison Freeport EOG
4. Harrison Freeport EOG
WV Permits March 18, to March 29, 2024
1. Lewis HG Energy
2. Lewis HG Energy
3. Lewis HG Energy
4. Lewis HG Energy
5. Lewis HG Energy
6. Lewis HG Energy
7. Lewis HG Energy
8. Lewis HG Energy
9. Lewis HG Energy
10. Monongalia Northeast Nat. En.
11. Monongalia Northeast Nat. En.
12. Monongalia Northeast Nat. En.
13. Wetzel Tug Hill
14. Wetzel SWN
