Utica shale is deeper still, below the Marcellus shale

From a Summary by Sara Welch, Shale Gas Reporter, March 3, 2020

Despite implementing a plan to cut year-over-year spending by 20% in 2020, Southwestern Energy Co. expects annual production to climb by 10%. The increase in production is driven by the company’s investment in the Appalachian Basin.

The company forecasts capital expenditures of $860-940 million and anticipates overall production of 830-865 Bcfe. Although it expects to bring up to 110 wells to sales this year, mostly in West Virginia, the company’s oil and natural gas production is forecast to increase by 25% and 10%, respectively.

In its continued effort to cut costs, Southwestern managed to cut well costs to $824 per lateral foot last year — a 27% drop. This year, it expects well costs to average $730 per foot — a 10% reduction.

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EQT reacts to low natural gas prices, selling assets and cutting costs

From a Summary by Sara Welch, Shale Gas Reporter, March 3, 2020

Last week EQT announced it renegotiated its gas transportation rates and sold half its stake in pipeline company Equitrans Midstream Corp.

These moves are the company’s response to low natural gas prices.

In the fourth quarter, EQT recorded a $1.6 billion non-cash impairment charge. With U.S. natural gas prices trading at its lowest in nearly two decades, the country’s largest natural gas producer has been forced to find ways to mitigate prices.

In addition to selling its stake in the pipeline operator and renegotiating gas transportation rates, EQT has refined its hedging strategy and cut annual capital expenditure. The company expects 2020 capital expenditure between $1.15 billion and $1.25 billion, compared with a prior outlook of between $1.25 billion and $1.35 billion.

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CHEVRON to cut 320 jobs in Pennsylvania, markets assets

From a Summary by Sara Welch, Shale Gas Reporter, March 3, 2020

The next step in Chevron’s plan to liquidate its Appalachian Basin assets and close its Appalachian Mountain Business is to eliminate 320 jobs.

“We are taking active steps to reduce job loss and will facilitate the placement of as many impacted employees as we can with other Chevron business units,” said a Feb. 6 letter Chevron company officials sent to state Department of Labor & Industry.

In addition to attempting to reduce job loss, the company said it’s providing advance notice of layoffs to government stakeholders and employees.

The first round of layoffs is scheduled for April 6, although some employees will be offered temporary assignments with extended layoff dates, potentially through Dec. 31. Chevron’s office locations in Moon and Mount Braddock in Penna. will be affected as 320 workers combined will be laid off.

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Range Resources hit by $2.3 Billion in Fourth Quarter impairments

From an Article by Kallanish Energy News, March 2, 2020

Texas-based Range Resources reported a fourth quarter 2019 net loss of $1.81 billion, or $7.27 per share on revenue of $605.6 million. That compares to profit of $1.76 billion, or $7.15 per share in Q4 2018.

Fourth quarter earnings include $2.3 billion in impairments, including unproven properties in North Louisiana.

For full-year 2019, Range reported a net loss of $1.72 billion, or $6.92 per share, on revenue of $2.82 billion. That compares to a $1.74 billion net loss, or $7.10 per share, in full-year 2018.

“Range made solid progress on key strategic objectives in 2019,” said CEO Jeff Ventura, in a statement. “For the year, we reduced absolute debt, lowered well costs, improved our cost structure and delivered our operational plan for $28 million less than budgeted.”

The company, a major player in the Appalachian Basin, expects to spend $520 million in its 2020 capital budget and that will maintain production at about 2.3 billion cubic feet-equivalent per day (Bcfe/d). That includes $490 million on drilling and recompletions and $30 million on leases. About 30% of that production will be liquids.

The company expects to turn to sales 72 Marcellus Shale wells in 2020, with an expected average lateral length of 11,200 feet. Range anticipates drilling about 810,000 feet of lateral in 2020 while turning to sales about 806,400 feet of lateral in the year. That will keep in-progress well inventory nearly unchanged going into 2021.

It expects 2020 well costs to average less than $610 per lateral foot, the lowest rate in the Appalachian Basin.

In 2019, the company spent $728 million on capital spending, about $28 million less than its original budget. The company also sold assets worth $785 million in 2019 to reduce debt.

Range reported Q4 2019 production was 2.35 Bcfe/d. The company’s average realized price after hedges was $2.76 per thousand cubic feet-equivalent (Mcfe), with roughly 60% of gas production hedged.

Production in southwest Appalachia averaged 2.06 net Bcfe/d, a 16% increase from Q4 2018. The assets in northeast Pennsylvania averaged 98 net million cubic feet-equivalent per day (Mmcfe/d) in the quarter, including 10 net Mmcf/d of legacy acreage production.

The company brought on line 23 wells in southwest Appalachia in Q4 2019: six in the super-rich area, 10 in the wet area and seven in the dry area, Range said. Half of the wells turned to production in 2020 are from well pads with existing production.

In full-year 2019, the company turned to sales 84 Marcellus wells with an average lateral length of 10,550 feet and seven wells in Louisiana.

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See also: Energy Companies Face Looming Debt Burden – Wall Street Journal, February 19, 2020

The fortunes of exploration and production companies depend on oil and gas prices, which determine the value of their reserves and how much money they are able to borrow.

U.S. natural-gas producers face the highest hurdle, according to Moody’s. Antero Resources Corp. and EQT Corp. have the largest looming debt maturities by 2024, with $2.6 billion and $2.5 billion due, respectively.

Compressor station noise, blow-down, leaks & odors are issues!

Commentary on Fracking in Maryland

[Garrett County already has a huge natural gas storage field at Accident, MD]

In 2007 I was part of a team at the Department of Homeland Security (DHS) who reviewed $37 billion-dollar-plus programs.  We were trying to understand why so many DHS programs were failing.  As part of the review we’d have the program principals come in and we’d ask them questions about their program.  The last question was, “What do you want to buy?”  Remember these men and women had their hands out asking for hundreds of millions of dollars.  Many of them couldn’t answer the question.  They wanted the money but didn’t know how they were going to spend it.  They hadn’t done their homework.  Their approach from an engineering perspective was irresponsible.

On Tuesday, December 6^th, I went to the Pre-Legislative meeting in Garrett County.  I asked Delegate Bieztel and Senator Edwards some very basic questions about fracking, which they have supported since the O&G industry became interested in Maryland.  Since then our representatives have been claiming significant economic benefits which would result from fracking.

I asked them to tell me what the economic impact to the county would be especially to the average household.  They couldn’t give me any numbers.  Delegate Beitzel proceeded to tell me how to figure the amount of money land lessors could expect.

I asked them for the number, type, and duration of the jobs that we could expect and whether these jobs would be filled locally or not.  They couldn’t answer those questions except to say one had to make assumptions about lots of things.  I suppose they were telling me that it was hard to derive those numbers.  Maybe so, but if you’re asking people to support a risky proposition you should have done enough analysis to understand the basics.  I also asked them if they would require O&G companies to staff fracking operations with union workers since unions were very careful to protect the well-being (safety) of employees whereas fracking operators are not.  Fracking workers are seven times more likely to die on the job than on other type jobs according to the AFL-CIO.  Our representatives said they would not support a requirement for fracking operators to hire union workers.

The bottom line for me is our representatives are asking us to support fracking and its associated risks (costs) because of the benefits, and yet they don’t know what the benefits really are.  They are asking the average household to buy-in to their ideas without any idea how the average household will benefit.  That is, they want us all to assume the economic, health, and environmental risks associated with fracking even though they don’t know if any of us (other than land lessors) will benefit.  I ask myself and you, does it make sense to buy anything and not know the benefits?  I also ask myself if they really don’t know the basics about the benefits what do they really know about the costs (risks)?

As I think about this I become very angry.  I’m angry because they use their influence to gain support for fracking.  We trust these men to do what’s in our best interests and they exploit that trust.  I’m also angry (maybe angrier) that they don’t feel they’ve been irresponsible.  They think there’s nothing wrong with asking us to get on board even though they obviously don’t understand the benefits and probably don’t understand the costs.  We should ask these men to do their homework or perhaps find someone else to represent us.   They are after all, acting irresponsibly.

From:  Jim Guy, OldTown, Allehany County, MD

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How Fracking May Impact Your Health (Learning from Pennsylvania)

>>> From Engage Mountain Maryland, www.EngageMMd.org, EngageMountainMaryland@gmail.com

When the fracking rush consumed Pennsylvania, little was known about how industrial gas development could impact their residents’ health. With years of citizen complaints and health studies, evidence shows documented threats from fracking operations.

Studies by institutions have revealed issues such as respiratory problems, headaches, high blood pressure, anemia, heart attacks, and cancers as a result of gas drilling. Damaging effects have also been discovered on immune and reproductive systems, child development, and low birth weights for infants born near fracking sites.

Two guest speakers will be visiting Garrett County from Southwestern Pennsylvania who have been on the front lines, assisting victims of fracking. Raina Rippel, Director of  The Environmental Health Project (EHP) along with Jill Kriesky, MS, PhD, Associate Director, will be delivering a compelling program that outlines common health risks associated with communities engulfed in natural gas development.

This informative public session is to help the public better understand health risks associated with natural gas development and fracking. The general public is invited to attend this free event as well as health professionals who could greatly benefit from the program and share its content with others.

Wednesday, December 14 at 6:00PM

Ace’s Run Restaurant & Pub (lower level)

20160 Garrett Highway

Oakland, MD 21550