By David Conti of the Pittsburgh Tribune Review
The for-sale sign WPX Energy Inc. recently put on its Marcellus shale wells and land could signal more moves among natural gas producers struggling with low prices, observers say.
“I do know a couple of companies that are interested in getting out of the basin,” Lou D’Amico, president of the Marshall-based Pennsylvania Independent Oil & Gas Association, said earlier this month. . He would not name those companies.
Don’t expect a wide-scale abandonment of the country’s most productive gas region, though, despite lower prices here, analysts said. Established companies can power through the tough market by increasing production until a glut eases or rely on production of liquids such as ethane or propane.
“I don’t see a mad rush of (companies) trying to sell off their assets,” said Matt Henderson, shale asset manager at Penn State’s Marcellus Center for Outreach and Research.
“Some consolidation is likely,” said Matt Woodson, an upstream research analyst at Houston-based Wood Mackenzie. “You can still make money in the Marcellus.”
Tulsa-based WPX, which entered the shale play later than other companies when it was formed by Williams Co. and has a smaller footprint of land for drilling, put its 121 producing Marcellus wells and related equipment on the market to focus on oil and gas drilling in Colorado, North Dakota and New Mexico.
Management led by new CEO Richard Muncrief “decided to focus on three basin areas where we’re making more money,” said Susan Oliver, a spokeswoman at WPX’s Cecil office.Read more