Gas Driller Hits a Gusher—and Sinks Its Own Stock
A big find typically would send an energy company’s stock surging, but in an industry awash in the commodity, it is having the opposite effectBy Timothy Puko And Ryan Dezember, WSJ
Nov. 26, 2015 5:33 a.m. ET
EQT Corp. this summer drilled what by some measures is the biggest natural-gas gusher ever. The Pittsburgh energy company’s reward: a tumbling stock price.
The well, in southwestern Pennsylvania’s Greene County, spewed enough gas in its first 24 hours to power every home in Pittsburgh for nearly three days. Named Scotts Run 591340 after a historic coal field that sparked a regional energy boom after World War I, the well has continued to produce at unusually high rates with no signs of fading soon.
That would sound like good news. But in a glutted industry in which natural-gas prices are plunging as record amounts of unused gas build up in storage, it is a problem. Since EQT finished drilling the gusher in July, its shares have lost 29%, while U.S. natural-gas prices have fallen 24%.
Scotts Run 591340 taps part of a rock formation called the Utica Shale that has only been lightly explored so far because it sits almost 3 miles below the Earth’s surface.
Situated beneath Pennsylvania, West Virginia and Ohio, the Utica is close to gas-consuming regions of the Northeast. If it proves as productive as EQT’s well and a few nearby wells suggest, it could mean trouble for billions of dollars of wells and pipelines built in and from more established regions like north Louisiana and the Rocky Mountains.