Facts & Rumors # 550
April 27, 2024
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Volcano Could Drive NatGas Prices. Particles in the atmosphere can cool the earth.
Eruption Activity. Mount Ruang, a 725-meter (2,378 ft) stratovolcano, underwent at least seven explosive eruptions since April 18th, ejecting a massive ash plume and volcanic gases up to 65,000 feet into the atmosphere.
The eruptions produced lava, incandescent rocks, ash, and volcanic lightning, with the ash plume spreading in multiple directions and covering nearby areas like Manado city.
As of April 23rd, satellite data estimated around 300,000 tons of sulfur dioxide had been released, with some gases reaching the stratosphere.
Climate Impacts
Sulfate aerosols from volcanic SO2 can reflect incoming solar radiation back into space, leading to a cooling effect on the Earth’s surface temperature. This can cause temporary “volcanic winters.
However, the climatic impact is usually short-lived, lasting no more than 10 years after a major eruption.
MVP JUST About Done! Mountain Valley Pipeline largely completed, company says. Roanoke Times. The Mountain Valley Pipeline is largely completed, the company said Monday in requesting federal approval for it to be placed in service. Although some work remains, the company asked the Federal Energy Regulatory Commission to issue an order by May 23 that would allow it to begin operations. “Mountain Valley has completed all waterbody and wetland crossings project-wide,” Matthew Eggerding, deputy general counsel for the joint venture building the natural gas pipeline, wrote in a letter filed late Monday to the FERC docket.
Shale Oil Production Slowing Down. U.S. shale oil production growth is slowing down. Oil Price. At the start of this week, following Iran’s missile attack on Israel, oil prices inched up. The key word here was “inched”. The attack was a first; it came from the fourth-largest oil producer in OPEC, and it targeted a country notorious for its military prowess. Yet prices only inched up rather than soaring. One could argue this was because the situation was apparently defused quickly, with neither of the sides willing to engage in an escalation, but this may only be part of the reason for oil prices’ lukewarm reaction. The other reason is U.S. shale supply—and that supply may be about to become tighter.
Appalachia Slowing Down. CNX, Appalachia peers defer completions as NatGas prices languish. Hart Energy. CNX Resources and other Appalachia producers are pushing out well completions and slashing production with natural gas prices near historic lows. Canonsburg, Pennsylvania-based CNX Resources will defer completions on three Marcellus Shale pads, consisting of 11 wells, due to near-term challenges in the natural gas market, the company disclosed to investors last month.
Range Not Slowing Down. Range Resources sees strong natural gas demand, keeps production steady. NGI. The Appalachian Basin pure play’s executives reiterated to analysts during a call to discuss first quarter earnings on Wednesday that they intend to hold output flat this year. They aim to meet strong and diversifying domestic industrial needs for natural gas as well as a looming spike in LNG demand. Range is positioned to address current needs and “to help meet future energy demand, whether that is through exports to international markets or serving our needs closer to home for further electrification of our economy related to power generation needed for artificial intelligence and data centers or increased domestic manufacturing,” CEO Dennis Degner said.
Frackers Want to Address Well Productivity Declines. U.S. frackers seek ways to reverse well productivity declines. Oil Price. As well productivity in the U.S. shale patch has declined in the past two years, producers are looking to deploy new technology to reverse these declines, but small companies often cannot afford the high upfront costs, industry executives and analysts have told Reuters. While shale production pushed U.S. crude oil output to record highs in recent months to above 13 million barrels per day (bpd), the rate of productivity declines has steepened since 2020 as the fracking of closely located wells has interfered with geology and pressure, resulting in more difficult extraction of the resources. Oil decline profiles have steepened across U.S. shale oil plays over the last decade, Enverus Intelligence Research (EIR) said in a report in August 2023.
New Permian Pipeline. Moss Lake Partners propose new pipeline in Permian Basin. Midland Reporter Telegram. Moss Lake Partners has started the pre-filing review process with the Federal Energy Regulatory Commission for its DeLa Express pipeline. The proposed 42-inch, 690-mile pipeline would move up to 2 billion cubic feet per day of natural gas from the Permian Basin to Port Arthur, Texas and Cameron Parish, Louisiana. Rob Wilson, vice president, product at East Daley, told the Reporter-Telegram by email that there is a need for a new pipeline.
TX Oil Export Terminal Approved. $1.8B Texas oil export terminal ok’ed by federal regulator. ENR. The U.S. Maritime Administration has approved construction of what some say is a record size offshore oil export terminal in the Gulf of Mexico 30 miles off Freeport, Texas. The project also would include two pipelines to shore, each 40 miles, and a 10-mile onshore line to a proposed inland terminal.
Big Drop in NatGas Emissions. New study identifies big reductions in US natural gas emissions. Forbes. A study published Tuesday finds that America enjoys a profound abundance of natural gas so large that even the most conservative estimates indicate a supply for at least the next 100 years. The study, conducted by The National Petroleum Council – a federal advisory committee that serves under the umbrella of the Department of Energy – also finds that federal energy and climate policies already in place would create a 59% reduction in methane emissions by 2050. The study, titled “Ch4arting the Co2urse: Reducing GHG Emissions From The U.S. Natural Gas Supply Chain,” was requested by Energy Secretary Jennifer Granholm, who asked for a comprehensive assessment of the magnitude and major sources of natural gas-related greenhouse gas emissions, along with reductions in those emissions that could be achieved from a variety of potential public policy pathways between now and 2050.
Record M&A in First Quarter. US oil and gas M&A hits quarterly record after blockbuster 2023. Reuters. U.S. oil and gas deals hit a record $51 billion in the first quarter, a continuation of last year’s fierce merger pace centered in the top U.S. shale field, data provider Enverus said on Tuesday. Energy companies have rushed to expand oil and gas drilling inventories, especially in the Permian Basin of West Texas and New Mexico, where producer break-even costs are about $64 a barrel. Oil prices averaged about $77 a barrel last quarter and this week traded near $83 per barrel.
AI Data Centers Boom Times for NatGas!! AI boom to fuel natural gas demand in coming years, report says. Reuters. A spike in power usage from artificial intelligence (AI) data centers could significantly boost natural gas demand in the second half of the decade, analysts at investment banker Tudor Pickering Holt & Co said in a report on Tuesday. As much as 8.5 billion cubic feet per day of natural gas could be required additionally to match the rise in demand, the report added. U.S. power and technology companies have expressed concerns that the country’s electrical systems are not expanding fast enough to meet the rapidly growing power needs of technology such as Generative AI, prompting data center businesses to sometimes bypass utilities and strike deals directly with power producers or build their own supply.
EQT’s TX LNG Deal. Texas LNG export plant signs additional offtake deal with EQT. Reuters. Glenfarne Group LLC’s proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp (EQT.N), opens new tab, the U.S. energy company said on Tuesday. Tolling agreements are fee-for-service deals in which the gas provider pays the company to convert gas to LNG, which it then sells to its customers. According to the terms of the agreement, the Texas terminal will provide natural gas liquefaction services of an additional 1.5 million tons per annum (MTPA) over 20 years, taking the total supply volume to EQT to 2 MTPA.
Regional Banks Support LNG Projects. Regional U.S. banks sharply expand lending to oil and gas projects. Capital & Main. While major European banks say that they intend to pull back from the financing of fossil fuel production, regional banks in the U.S. are filling the gap. Citizens Financial Group, Truist Securities, Fifth Third Securities, US Bancorp, and BOK Financial Corporation — the latter of which has said that it sees many “more opportunities” in the oil and gas sector — have sharply ramped up their lending to the fossil fuel industry in recent months. Combined, their lending jumped by more than 70% on an average annualized basis since the beginning of 2022, compared to the previous six years, according to data compiled by Bloomberg.
Permian Producers Paying to Get Rid of NatGas. Permian producers will pay you to haul their natural gas away. Texas Monthly. Imagine a sign by the egg case at your local H-E-B: “Take a dozen home. Please. We’ll pay you $4 per carton. No limit per customer.” Sound outlandish? Maybe, but this is essentially what has happened with natural gas in West Texas in recent days. Last weekend, the price for gas at the Waha Hub, a major pipeline junction near Fort Stockton, was -$3 per thousand cubic feet. That’s negative three dollars. If you sent gas to Waha, you had to pay someone to take it off your hands. You may now be saying to yourself, “I’d like some of that gas. I use natural gas to cook dinner every night. Can I get paid to burn gas?” The answer to your question is: Not unless you own a pipeline between West Texas and your house.
March DUC Report. Despite a 280-well drop-in Permian Basin drilled, but uncompleted wells, the total number of DUCs in four of the US’s major shale basins in March fell slightly from a year ago, government data shows.
The Energy Information Administration’s monthly Drilling Productivity Report shows 2,386 DUCs reported last month in Appalachia (the Marcellus and Utica Shale plays), the Bakken, Eagle Ford and Permian basins.
That figure compares to 2,488 DUCs in place in March 2023, a 4.1% year-over-year drop, EIA reported this week. The latest total was up 13 wells from February 2024’s 2,373-well total.
The Eagle Ford was the other basin reporting a year-over-year drop in DUCs, dropping 61 wells, or 14.8%, to 352 from 413. The 352-well total was down two wells from February.
Both Appalachia and Permian experienced triple-digit YoY increases in DUCs. The Permian recorded a 125-well, 16.4%, increase, to 886 from 761, while Appalachia experienced a 114-well, 16.1%, increase, to 820 from 706 from March 2023. From February 2024, to March, Permian saw a four-well increase, while Appalachia’s DUC total rose by seven wells.
PA Permits April 15, to April 25, 2024
County Township E&P Companies
1. Fayette German EQT
2. Greene Aleppo Rice Drilling
OH Permits April 7, to April 13 2024
County Township E&P Companies
1. Carroll Union EAP OHIO
2. Carroll Union EAP OHIO
3. Carroll Union EAP OHIO
4. Carroll Union EAP OHIO
WV Permits April 4, to April 18, 2024
1. Brooke SWN
2. Brooke SWN
3. Marion EQT
4. Marion EQT
5. Marion EQT
6. Marion EQT
7. Marion EQT
8. Marshall Eagle Natrium
9. Tyler Tribune Resources
10. Tyler Jay-Bee O&G
11. Tyler Jay-Bee O&G
12. Tyler Jay-Bee O&G
13. Wetzel SWN
14. Wetzel SWN
15. Wetzel SWN
