Mercer Capital's Energy Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes a macroeconomic trends, industry trends, and guideline public company metrics.
Mercer Capital's Value Focus: Exploration and Production | Fourth Quarter 2022 | Region Focus: Appalachian Basin
1. BUSINESS VALUATION &
FINANCIAL ADVISORY SERVICES
VALUE FOCUS
Exploration & Production
Fourth Quarter 2022 // Region Focus: Appalachian Basin
EXECUTIVE SUMMARY
Production in the Marcellus & Utica held steady in 2022 despite historically high commodity price volatility driven by the Russian-Ukraine war, the sabotage of
the Nord Stream pipelines, and rising LNG exports to Europe to stave-off potential winter heating shortages. The Q4 Appalachian rig count is at a level beyond
that needed for production volume maintenance, so there would seem to be at least some potential for Henry Hub price reductions going into 2023. However, the
demand for new natural gas supplies to Europe provides a countervailing wind to any potential downward movement in natural gas prices. In the end, the natural
gas markets seem to be in the midst of a series of events that promise continued supply and demand shifts with no certainty as to where the market will go in 2023.