LNG

US energy regulators have been asked to confirm the entry into service from June 11 of the $7 billion Mountain Valley Pipeline in Virginia and West Virginia whose operator is Equitrans Midstream, a company currently the subject of a merger deal with LNG player EQT Corp., the largest shale-gas operator in the US Appalachian Basin.

EQT Corp., the leading US natural gas producer in the Appalachian shale basins and an emerging LNG player, reported a dropped in net income in the first quarter of 2024 as prices were lower, sales increased and a merger was agreed with Equitrans Midstream Corp.

Northern Oil and Gas Inc., the US energy company based in Minneapolis, is proceeding with two acquisition transactions for natural gas in the Appalachian Basin and oil and gas in the Northern Delaware Basin in an action-filled year of US merger and acquisition activity.

Gulfport Energy Corp, a US natural gas exploration and production company with significant acreage in the Utica Shale of eastern Ohio and the Woodford and Springer Scoop plays in Oklahoma, has become the latest US energy operator to file for Chapter 11 bankruptcy protection.

As part of a restructuring plan, Gulfport said it expected to eliminate about $1.25 billion in funded debt and significantly reduce annual cash interest expenses.

Gulfport, whose headquarters are in Oklahoma City, said it had filed petitions for Chapter 11 relief under of the US Bankruptcy Code in the Court for the Southern District of Texas.

Weak demand due to the Covid-19 pandemic and the oil price plunge and economic slowdowns have depressed the liquidity and values of energy company assets around the world.

Gulfport said it intended to use the proceedings to strengthen its balance sheet, restructure certain debt obligations, significantly reduce its midstream cost structure and achieve a more sustainable capital structure.

The company stated that it intended to continue to operate in the ordinary course of business during the restructuring process.

As a result of the current commodity price environment, Gulfport was one of many companies that said earlier in 2020 that had made a strategic decision to defer near-term production to later periods in 2020 and early 2021 when natural gas prices were expected to be higher.

The Utica Shale is located in the Appalachian Basin of the US and is located a few thousand feet below the Marcellus Shale.

Natural gas output in the Utica Shale accounted for 77 percent of Gulfport’s total net quarterly production.

The company said its proved reserves in the Utica amounted to 3.2 trillion feet equivalent net. Its activities are focused on 205,000 net acres within the core of the dry gas, wet gas and condensate windows of Utica’s Point Pleasant formation.

In a statement, Gulfport said it has secured $262.5 million in debtor-in-possession financing from its existing lenders under its revolving credit facility, including $105M in new money that will be available upon court approval.

Gulfport is also present in the South Central Oklahoma Oil Province (Scoop) play of Oklahoma, which is located in the southeast portion of the prolific Anadarko Basin.

The company has 1.3 Tcf equivalent of net proved reserves and 76,000 net reservoir acres.

David M. Wood, President and Chief Executive of Gulfport, explained that since the leadership team was reconstituted in 2019, it had taken decisive actions to streamline the business and strengthen the balance sheet.

“Despite these efforts, our large legacy debt burden in addition to significant legacy firm transportation commitments created a balance sheet and cost structure that was unsustainable in the current market environment,” stated Wood.

“After working diligently to explore all strategic and financial options available, Gulfport’s Board of Directors determined that commencing a Chapter 11 process is in the best interest of the company and its stakeholders,” he added.

The American shale basins of Marcellus and Utica that underpin rising US LNG exports and domestic gas use contain geological indicators of huge volumes of undiscovered technically recoverable resources of natural gas.

TC Energy Corp., the Canada-based North American pipeline and infrastructure company, has agreed to sell US shale basin midstream assets held by its subsidiary Columbia Midstream Group for US$1.27 billion to UGI Energy Services of the US.