We’re a few days late with this edition. Our apologies.

Today, gas prices are at $2.54/MMBtu, rig counts are at 373 and likely to continue climbing, and storage levels are at 3,196 Bcf which is higher than last year and higher than the five year average.

Production of LNG hit its highest level ever in November of 2020.

Demand for LNG is up, as supply is down.

A center-left policy organization is recommending to President-elect Biden that natural gas be part of our energy policy.

Oil and gas producers are expected to keep spending down through next year.

There’s a new record for longest lateral, 20,060 feet, beating the previous record holder by a little over 200 feet. That’s almost four miles long. Sheesh.

RBNEnergy has ten predictions for 2021. They got hammered on their 2020 predictions because of COVID, but now COVID is a known variable so maybe they’ll do better this year.

Demand for LNG will be up this year.

Electric cars need natural gas. Well, they need natural gas for the next decade or so.

Th Atlantic Coast Pipeline has a plan for reclaiming the land it has disturbed. That plan does not include pulling any installed pipe out of the ground. They also intend to keep the right of way agreements. Many of our clients will not have to worry about that, though, because we got expiration language in most of our agreements with ACP. Our agreements will end.

Cold weather is driving up natural gas prices, as it does.

OPEC+ will cut overall production, with Saudi Arabia cutting the lion’s share and Russia and Kazakhstan getting slight increases.

The Henry Hub spot price for natural gas averaged $2.05/MMBtu in 2020, according to the EIA. That’s the lowest in 25 years!

Mergers and Acquisitions activity will be down this year, which is usually a good sign that things are improving in the industry.

Seeking Alpha does a deep dive into predicting the price of natural gas. Prices should be up this year, but that just means that drillers will pick up the pace. The article mentions the possibility of going into next winter with the lowest storage levels ever. I’ll believe it when I see it.

The EIA is predicting natural gas prices to average just over $3.00/MMBtu this year. There have been other predictions as high as $4.00/MMBtu. $3.00 seems a lot more reasonable.

OPEC cut production, and now it is warning US producers not to make up the difference or they’ll see the price of oil drop again.

The EIA is predicting that US natural gas production will be down in 2021 compared to 2020.

We’re a day late, so these numbers are for December 16, 2020. Rig counts are at 338, up by 16 from last month. Natural gas is at $2.71/MMBtu, and has gone as high as $2.90 and as low as $2.40. Gas storage is down more than expected, but still higher than the five year average.

The PTT Chemical cracker plant’s final decision has been pushed back to 2H2021.

The new longest onshore horizontal well measures in at 3.8 miles long and 2 miles down. It’s somewhere in eastern Ohio. It’s in the Utica shale. If a company asks you for Utica rights (Tug Hill is adamant about getting Utica in Wetzel right now) then they might actually be interested in producing them. Utica hasn’t been as exciting as Marcellus because of technology constraints, but the technology is clearly coming along.

Production from almost all regions is expected to drop off, according to the EIA. This is a clear result of fewer rigs. Rig counts are coming back, though, and efficiency continues to increase, so any supply deficit that might come up will be short term and easily made up.

We haven’t heard much from Northeast Natural Energy in a while. Today there’s news that they’re receiving $65 million for their acquisition and production program. So, they’re still in business. Most of their oil and gas production and leasing work to date has been in Monongalia County, West Virginia. Will it stay that way? They didn’t get what most would consider an enormous amount of money for lease acquisition, so I suspect they’ll stay close to their already-acquired property.

Seems like everybody is predicting natural gas prices to average above $3.00/MMBtu next year.

And just like that, interest in natural gas production picks up. So surprised….

I’m no foreign policy expert, but more oil money in the hands of the Saudis does not strike me as a good thing.

Mexico made $2.5 billion dollars on its oil hedge this year. Not bad for a year’s work.

Converting natural gas to a solid at room temperature would be a game changer. The usual question applies, will this new technology scale up?

OPEC and Russia have agreed to increase oil production by 500,000 bpd starting in January.

American shale executives apparently think that oil demand is going to be somewhat stagnant for a while. That’s good for West Virginia oil and gas owners, as our natural gas won’t have as much competition from gas produced from oil wells.

Long range weather predictions are calling for more mild weather, so natural gas futures have gone down.

There is only one thing that is going to slow down oil and gas production–a lack of funding. It seems that banks have figured out that oil and gas companies are bad investments, and the funds are drying up. Give it a few years, though, and a new crop of recently-graduated-from-college investment bankers will come along and throw money at oil and gas again because they don’t know any better.

Egypt has significantly increased its hedge on oil to protect against higher prices. Most interesting.

There were two oil and gas groups in West Virginia. Now there is one. Neither of them really advocated for mineral owners rights, so it’s not incredibly important for my clients to know about this, but it does count as West Virginia oil and gas news.

An article that argues that the end of oil and gas is not near.

Producers in the Marcellus/Utica region have been shutting in wells for economic (supply and demand) reasons. RBNEnergy goes in depth on the subject. This is useful to understand because if your well is shut-in it will affect your royalty check.

Natural gas is at $2.76/MMBtu, but was up around $3.50 for a while and spent most of it’s time this last four weeks around the $3.00 range.

Rigs have gone up by 30 in the past month, from 282 to 312. That’s probably still a little low, and they’ll have to increase to keep up with demand.

Demand for heating will probably be up this winter, as offices are going to be open, but lots of people will be working from home resulting in more heating of residences during the day.

Here is someone else’s analysis of what a Democrat administration would mean to the oil and gas industry.

RBNenergy has a good overview article about how imports and exports of oil have changed over the decades, and how that’s affected American refineries.

The Governor has announced a methanol plant to be built in Pleasants County, WV. So a power plant that’s going to employ between 20 and 130 people (why the big range?) gets shut down because it will be in direct competition with coal, but a methanol plant that will employ about 30 people but won’t be in direct competition with coal is a boon the the state? Talk about ole boy politics. We need both plants.

EQT owns a share of the Mountain Valley Pipeline. They’re trying to sell it off.

EQT is trying to buy CNX. That’s a big deal.

Libya has reopened its fourth and final port. Soon we’ll start to see about 1 million bpd more oil added to the economy. That’s should keep prices at the pump down for a while.

SeekingAlpha analyzed CNX and determined that it’s a good buy for EQT. Mainly, CNX produces gas for a cost of $1/MMBtu, compared to most other companies at about $1.70/MMBtu. CNX also has a plan to be cash flow positive for the next seven years. That’s unheard of in the industry!

Weather, as usual, affects the price of natural gas more than any other factor.

EQT has announced that it has entered into a purchase and sales agreement with Chevron to buy all Chevron’s Marcellus/Utica assets for $735 million. Seems like a pretty good deal.

CNX says it’s not smart for them to merge with or be acquired by another company.

Antero’s earnings call can be interesting, too. Most interesting is the data about wells and production at the very beginning, but later in the call there’s a statement that Antero doesn’t expect the cracker plant in PA to be finished until 2022.

When Berkshire Hathaway bought out Dominion’s pipeline operations (including the Atlantic Coast Pipeline), they also acquired 25% of the ownership of the Cove Point LNG plant and the right to operate it.

The EIA forecasts that there will be more residential natural gas use this winter. Makes sense, with more people working from home.

If you wanted to know more about LPG than you need to, this RBNEnergy article is for you!

Libya has already ramped up to producing 1,000,000 barrels per day. That was fast!

It’s been a while since we’ve linked to an article about using LNG to fuel trucks and fleet vehicles, so here you go.

The world’s large ships are moving to LNG as their primary fuel source, which is a good thing any way you look at it.

The number of active fracking crews has jumped 50% since September as the oil industry attempts to keep production up and costs low by completing DUCs.

The United Arab Emirates has entered into the shale gas battle.

An update on the Mountain Valley Pipeline. Looks to us like the environmentalists might do the same thing to the MVP that they were able to do to the ACP. Stay tuned.

A study suggests that fracking pressures should be reduced to increase production of gas. If this is true (more testing will be done before this is adopted across the industry) then the cracks made in the process will probably not propagate outwards as far as they currently do, and we’ll see the horizontal legs pushed closer together to compensate. If.

Natural gas prices are $2.79/MMBtu after hitting a low below $2.00 about three weeks ago, and rig counts are at 269, climbing slowly as drillers realize that their production numbers are falling off too much.

Chevron has at least one bid for its Marcellus/Utica holdings. EQT has offered $750 million. Chevron has about 800,000 acres and some pipeline rights up for sale, so that’s bargain basement territory, right around $1000 per acre. It’s hard to imagine that other bids are for significantly more, though.

Natural gas prices will be lower for many West Virginia consumers this winter.

Demand for natural gas is down, but drilling is down even more. New wells won’t supply even the reduced demand. Drillers don’t have the money to drill enough new wells. Instead, they are completing drilled but uncompleted wells (DUCs), wells that they drilled in the past but didn’t frack.

Gas prices nosedived, but that’s pretty typical this time of year.

LNG exports seem to be picking back up, judged by the line of tankers in the Gulf.

Libya is starting up oil production, again, but not totally.

Slapping Governor Jim Justice in the face, the West Virginia Economic Development Authority approved a direct loan (not just a loan guarantee) to the Brooke County power plant.

The Mountaineer NGL Storage project has requested that the State of Ohio cancel it’s permits. This is bad news, but not necessarily an end. This project is very dependent on the PTT Chemical cracker plant getting built, and they keep kicking that can down the road. If the cracker gets final approval, the storage project will probably get final approval.

The EIA just now (October 2020!) published numbers for 2019 for natural gas production, use, and export. All three set record highs.

One prediction has natural gas prices hitting $5/MMBtu next year. I have a hard time believing that, as it’s only too easy to bring more rigs online and increase production to offset any rise in demand. That’s what horizontal fracking has done to the oil and natural gas market.

Here’s a good analysis of current natural gas supply and demand over at Seeking Alpha. Short take: demand is slowing, but supply has slowed more.

Since we’ve posted one prediction, here’s another. Yahoo Finance is saying 2021 will see $3.13/MMBtu average for the year, due to reduced production. I’d say that’s a more realistic price prediction.

Southwestern Energy owns a lot of leases in West Virginia. Their bank has reaffirmed their line of credit of $1.8 billion. They must be doing OK, even in these lean times.

Saudi Arabia plans to increase oil production from 12 million barrels per day to 13 million barrels per day. Expect to see prices at the pump go down.

The Brooke County power plant that the Governor was fighting with Brooke County over is now dead. The CEO said that investors were scared off by the fight. Well, those weren’t his words, but read between the lines for yourself.

A third prediction puts natural gas prices ending 2021 at $4.00/MMBtu. Huh. Those folks follow the market forces a lot closer than we do, so maybe…..?

Natural gas prices are at $2.36/MMBtu, and rig counts are at 254, up 10 from last month.

It’s been an interesting month for energy. Hurricane Laura hit, the industry seems to be turning around as demand ramps back up, West Virginia’s Governor got into a little tiff with Brooke County, West Virginia–as in the whole county, Libya seems poised for peace and oil production, and Hurricane Sally is about to hit. Read on for details!

The Houston Chronicle is saying that by the end of the third quarter of 2020, all of the wells that have been shut-in because of the slowdown in the economy will have been turned back on.

Antero is raising money to pay for old debts by creating new debts.

If you want to dive into the science that these oil and gas companies do when planning and drilling wells, this is a good article for you.

The demand for natural gas liquids has rebounded far more quickly than the demand for oil or natural gas.

The natural gas fired energy plant that’s planned for Brooke County is now on the ropes. The State of West Virginia has backed out of a promise to guarantee a $5,000,000.00 loan for the project. The reason cited in the article is that the State hadn’t been given enough assurance that the majority of workers would be West Virginians. That’s really short-sighted. Either somebody is badly informed regarding this project as a whole, or there’s some political wrangling going on in the background that we won’t ever get to see. Politics is rather like making sausage, after all.

The Mountain Valley Pipeline has requested a two-year extension on permits needed to complete its construction.

West Virginia Governor Jim Justice was questioned about the decision to back out of guaranteeing the loan on the Brooke County power plant. We find his answers to be rather…..questionable…..in the sense that most of his answers were in the form of questions that he says he wants answers to. Really? At this point in the process? Hmmmm.

The United States set a record for daily natural gas power burn in July. That was unexpected!

Some Brooke County public officials responded to some of Jim Justice’s questions.

Elba Island’s tenth and final LNG train went online!

Hurricane Laura hit the Gulf Coast, killing people, destroying property, and disrupting the natural gas liquefaction plants located there. The most fascinating stat is that 85% of oil and 59% of natural gas wells in the Gulf Coast area were shut-in because of this, but the price of those products didn’t skyrocket. Used to be, it would have. Horizontal fracking has made our energy economy more robust. That’s good for consumers.

Jim Justice clarified some of his statements. He still doesn’t seem to understand natural gas pipelines in relation to the shape and topography of his state in the northern panhandle. Someone needs to show him a map of the Rover pipeline. Oh look! I found one online in less than 10 seconds. What in the world is he up to?

Hurricane Laura didn’t do any actual damage to the Sabine Pass LNG plant.

Oil production in the United States is likely to see a significant decline in the next few months. Natural gas production will also decline, both because some natural gas is always produced with oil, and because natural gas plays are experiencing many of the same market forces that oil is right now.

There haven’t been as many mergers in the oil and gas patch as people were expecting. That’s interesting because mergers are usually the result of a bankrupt company being absorbed by a more financially healthy one.

Libya has been in civil war for almost a decade. There is currently a cease fire in place, and more than one interested party is pushing for permanent peace, including the Italians. If peace breaks out, Libya would start producing oil again.

The President of the West Virginia Chamber of Commerce wrote an op-ed in support of the Brooke County power plant. He points out that this type of power plant is coming, and if it’s not built in West Virginia it will be built somewhere else.

We don’t usually get into politics, but this piece deals simply and apolitically with Joe Biden’s stance on fracking, and explains why he won’t (and in fact, can’t) ban fracking entirely. It’s pretty free of political rhetoric, and explains why I wasn’t hyped up about a Republican winning last time, and why I’m not worried about a Democrat winning this time.

As an aside, and this is the one and only subject on which I’ll get into politics outside of energy policy on this forum, I strongly encourage you all to vote third party, because if you think about it, your vote counts for a lot more when you vote third party than if you vote for one of the two majors. I won’t be discussing politics in the comment section. Now, back to oil and gas.

A wastewater injection well may be leaking wastewater into a formation that other gas wells are producing from.

King coal could be influencing Governor Justice to slow down the Brooke County power plant.

The State approved the loan guarantee.

The West Virginia Coal Association wrote a letter opposing the power plant.

It looks like Libya really is going to start producing oil again.

Hurricane Sally is approaching the Gulf Coast.

It has been a while since we’ve posted on this website. A lot has happened, of course. You know about coronavirus and probably are aware that it has been bad for the natural gas industry. The effects seem to be tapering off just a little bit at this point.

What you don’t know is that we’ve been working to start an estate planning law practice. Oil and gas has just been so slow lately that we’re having to do something else to make ends meet. If you’re in West Virginia and would like to take a look at a will or a power of attorney, or if you are the guardian/parent of young kids, pop on over to wvestateplan.com and then give us a call. We’re awfully excited to be providing this service for our people!

In the meantime, oil and gas is still there.

Gas prices are $2.32/MMBtu (nice!) and rig counts are at 244 and still creeping down.

Now, for the really high points of the last few months.

The demand for natural gas in the U.S. went up last year, but only by about 3%. Production went up by 10%, hence lower prices.

COVID-19 has affected everything, including natural gas prices. It’s not a direct affect, though. The demand for energy, overall, has gone down. That drives down the price of oil. That drives down the production of oil. That drives down the supply of natural gas that is produced from oil wells. That reduces the supply of natural gas, which actually increases the price of natural gas. Of course, overall demand is down so the price of natural gas has gone down. It hasn’t gone down as much as oil has gone down, though, because of the inverse relationship between oil and natural gas. The result has been that natural gas prices hit a low of $1.52/MMBtu, but did not stay there.

There has been a plan to build a gas-fired power plant in West Virginia’s northern panhandle, in Brooke County, for years. Back in June, the Brooke County Commission passed a resolution in support of the plan. Apparently, that was a necessary step in the process.

The Atlantic Coast Pipeline won its appeal to the U.S. Supreme Court, which meant that the ACP could finally be built. Then a couple weeks later, Dominion cancelled the project entirely. Then, they sold all of their pipelines to Berkshire Hathaway, a/k/a Warren Buffett. Talk about mixed messages.

Antero Resoures sold some of its royalty rights to another company, a financial move which could mean a lot, or could just be business as usual. Then they did it again.

The Times West Virginian ran a pretty comprehensive article about how the natural gas industry in West Virginia has responded to the coronavirus.

One of the financial backers for the PTT Global Chemical cracker plant pulled out. That’s a hard blow, but not insurmountable. Clearly, as PTT turned around and signed a deal with Mountaineer NGL Storage to use their gas storage.

When banks aren’t loaning money to oil and gas producers, you know the industry is having hard times. Banks are currently selling off their previous loans to producers.

In a good sign that economic activity is picking back up after COVID-19, gas delivery to LNG exports and domestic consumption drove the price of natural gas futures up $.30 in one day.

And that’s that. We’ll probably post one of these once a month for the near future as we ramp up our estate planning offerings. Thanks to everyone who mentioned that they missed seeing these, it’s always gratifying to know that your work makes a difference to someone.

The price of natural gas is $1.75/MMBtu (as low as $1.64 at one point), and rig counts are 790. Things haven’t changed much in the last two weeks. Even storage levels are still just above the five year average, as they have been for months. We seem to have hit bottom.

Oil prices are stabilizing. Investors seem to think that the effect of coronavirus on oil demand has now been built in to the price of oil and it doesn’t need to change any more. Of course, if coronavirus starts to affect a lot more people, that could change.

Antero is working to cut its costs and increase production — same old, same old. They mention a 10% reduction in General and Administrative Costs, which is from a layoff in 2019 and natural attrition of employees quitting for various reasons. Doesn’t look to us like another layoff coming. This year is probably going to end with no growth from any of the drilling companies, few leases taken relative to the past, and fewer acres drilled. Our clients will be getting less money from royalties and from lease bonuses. If that’s what you’re relying on to get you through the year, you’d better find another source of income.

This article makes the argument that natural gas prices are going to remain down for the foreseeable future.

Interestingly, the West Virginia Senate passed a bill that will encourage the development of solar power in the state. The bill moves on to the House next.

Production is decreasing. This is the first time that has happened in…..well, a long time. It’s not anything to get too excited about. Production will increase the second prices stay up a bit, so prices will never skyrocket. Good for consumers, bad for royalty owners.

The West Virginia legislature is pushing a bill that would create tax credits for companies that store or transfer natural gas. It’s aimed at cracker plants and large storage facilities. It would be financially beneficial to have those plants here rather than the Gulf Coast.

Chevron sold off its assets in the Marcellus shale area, and now it’s firing its employees.

Producers have been bringing DUCs online as that’s a cheaper way of getting some gas to market than drilling a new well. The supply of DUCs is going down, though. At some point they’ll have gone through most or all of the DUCs. What happens then?

A 24-inch gas pipeline ruptured in Mississippi, injuring 46 and forcing 300 to evacuate.

Gas prices are at $1.84/MMBtu, and rig counts are the same as they were last week.

EQT is going to sell an overriding royalty, hoping to raise $1 billion.

At least one person thinks that fracking has led to fewer recessions.

Gas prices are not expected to get above $4/MMBtu until 2050. 2050! I’m not surprised. Unless there’s some kind of long, big, sudden emergency, the supply of gas is going to outpace demand.

John Hess, CEO of major oil corporation Hess Corporation, says that fracking in America is going to slow down in the next few years. Basically, he thinks we’re just about tapped out of new shale to drill.

Coronavirus is a black swan event, and will cut back on oil demand. Exactly how much is really unknown at this time as the virus’ spread and consequent affect on everything is still unknown.

EQT is in trouble, but not so much that they couldn’t declare a dividend for their stocks. It’s just 3 cents, but hey, it’s something. Guess they shouldn’t be cutting back on how much they pay people for their leases.

An article at Seeking Alpha dives deep into how capital expenditures in oil and gas are dying off and concludes that natural gas prices are going to go up again soon. The one thing he doesn’t talk about is how much more efficient drillers have become in the last few years. Gas prices are going to stay down for a while.

West Virginia’s legislature is trying to criminalize trespassing on critical infrastructure facilities (pipelines). Seriously? Why should pipelines get special consideration? We already have trespass laws on the books.