BTU Analytics - Montage Acreage Provides Southwestern Optionality in SW Appalachia

While many in the market have been focused on what consolidation will come in the major oil plays as a result of the pandemic-driven low oil prices, such as from the Chevron-Noble acquisition, gas producers have also made moves to better position themselves in a low liquids price environment. Most recently, Southwestern announced that it would acquire Montage Resources in an all-stock deal. In addition to making the combined entity the third largest Northeast producer, the Montage assets give Southwestern greater optionality in its SW Appalachia acreage to choose between dry gas acreage when liquids pricing is low and wet gas acreage when liquids pricing is high. This optionality is key at a time when liquids pricing is expected to remain pressured as the world recovers from the COVID-19 pandemic and its resulting impacts to hydrocarbon demand. Today’s energy market commentary will utilize BTU Analytics E&P Positioning Report to analyze Southwestern and Montages acreage and the flexibility afforded to Southwestern by the acquisition.

https://btuanalytics.com/shale-production/montage-acreage-provides-southwestern-optionality/

SPE Oil and Gas Facilities - What Are the Market Drivers for a Recovery?

The crude oil and natural gas markets may recover in 2020, but the speed of recovery in terms of pricing will be different. The crude oil market is rebalancing following a recent mild price recovery, but an increase in COVID-19 cases remains cause for concern. Natural gas may not recover until winter 2020/2021 as low prices, weak demand, and ample storage weigh on the industry.

“Each of (the markets) has very different dynamics going on, but they are definitely being impacted by pandemic and demand destruction trends,” said Enverus VP of Strategic Analytics Bernadette Johnson.

Speaking during the virtual 2020 Unconventional Resources Technology Conference (URTeC), Johnson outlined key drivers for the markets.

https://pubs.spe.org/en/ogf/ogf-article-detail/?art=7418

Seeking Alpha - Antero Resources Is Making Money Its Way

Summary

• A $300 million initial cash payment was received on an overriding royalty.
• The company continues to repurchase bonds at a 17% second-quarter discount.
• The maturity of the 2021 bonds is no longer an issue.
• The company continues to make money in nontraditional ways.
• Industry activity has dropped below levels previously forecast.

https://seekingalpha.com/article/4356928-antero-resources-is-making-money-way

Seeking Alpha - Natural Gas - A Messy Bottom

Summary

• Hotter weather over the weekend combined with no increase in Lower 48 production propelled natural gas prices up by ~10%.
• September should see LNG exports from the US rebound thanks to better economics.
• But the bottom is messy because the market's concern about US storages getting close to tank top needs to go away first.
• The market will do everything in its power to avoid the tank top scenario even if it means that it overly discounts prices in the near term.
• As a result, the key ingredients for higher prices are still hotter weather and lower production, so if these two variables continue to trend in the same direction, expect us to turn into bulls.

https://seekingalpha.com/article/4356457-natural-gas-messy-bottom

World Oil - Chesapeake’s fate marks the end of an era in U.S. shale

HOUSTON (Bloomberg) --It will go down as wildest of the shale wildcatters, the overreaching pioneer of fracking techniques that minted vast fortunes and, now, have left behind ruin.

At long last, financial reality has caught up with Chesapeake Energy Corp., avatar of the boom and subsequent bust of North American shale.

Chesapeake’s spiral toward oblivion accelerated this week with executives said to be preparing for a potential bankruptcy filing, signaling the imminent end of Chief Executive Officer Doug Lawler’s 7-year campaign to turn around the troubled gas explorer. For a company that’s been skirting disaster for most of the past decade, the Covid-19-driven collapse in world energy prices merely added one more exclamation point to a tale of risk, hubris and debt.

https://www.worldoil.com//news/2020/6/12/chesapeake-s-fate-marks-the-end-of-an-era-in-us-shale

RigZone - Global Gas Market Still Extraordinarily Oversupplied

(Bloomberg) -- The specter of negative prices is hanging over energy markets more than a month after oil’s unforgettable crash below zero.

While crude has staged a rapid recovery after a deal by the biggest producers to curb a surplus, the $600 billion global gas market remains extraordinarily oversupplied. Traders and analysts say the worst may be yet to come as demand falls and storage nears capacity, creating the ideal conditions for negative prices in some parts of the world.

It shows just how far the global energy industry is from recovering from a pandemic-fueled slide in demand and signals more pain for producers from the shale fields of Texas to Australia’s Curtis Island. Unlike the oil market, there’s been no sign of a coordinated response to address the glut, meaning the fallout could be deeper and longer.

https://www.rigzone.com/news/wire/global_gas_market_still_extraordinarily_oversupplied-03-jun-2020-162282-article/