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Pennsylvania gas output remains focused in northeastern, southwestern corners

Houston (Platts)--8 Dec 2017 556 pm EST/2256 GMT


Pennsylvania natural gas production continues to be concentrated in counties in the northeastern and southwestern corners of the state, according to a report by the state's Independent Fiscal Office.

Four counties -- Susquehanna and Bradford, in the dry gas northeastern region, and Washington and Greene in the liquids-rich southwestern region -- comprised two-thirds of statewide production in the first three quarters of 2017, the IFO report said.

Susquehanna in the northeastern corner of the Commonwealth was the leading gas producer, with output of 966.1 Bcf through September, comprising almost one quarter of the total gas production in the state.

Coming in at second place with production of 679.2 Bcf, about 17% of the state's total, was Washington County.

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Bradford County, one county to the east of Susquehanna, came in as the No. 3 producer, with production through September of 583.3 representing almost 14% of the state's production.

Rounding out the top five producing counties were Greene, with production of 495 Bcf, and Lycoming in the Northeast, with output of 268.3 Bcf.

All of the state's gas-producing counties except Greene, Lycoming and Fayette registered gains in terms of production for the first three quarters of the year compared with the same period of last year.

"The order of top gas-producing counties generally has remained consistent over the last several years, with production shifting somewhat from northeast to southwest counties," IFO spokesman Mark Ryan said in an email statement Friday.

The report found that most of the production gains recorded in the first three-quarters of 2017 came from wells spud in 2015 and 2016.

Although the report did not attempt to identify the reason behind this trend, Ryan said it might have resulted in part from producers drilling but not completing wells, in order to complete them at a later time when price realizations were better.

"There may be various reasons that most of the production gains were from wells spud in 2015 and 2016," he said. "The decline curve and a drop-off in productivity as the wells age also may contribute to this result."

In recent months production in Northeastern Pennsylvania has been seen to taper off, according to Platts Analytics.

Currently most of the production growth seems to be focused in the counties that make up the Appalachian Pennsylvania Southwestern Dry region, comprising Fayette, Greene, Huntingdon, Somerset and Westmoreland counties.

Platts Analytics also sees a lot of growth in the Appalachian Pennsylvania Southwest Wet region, including, Allegheny, Beaver, Butler, Crawford, Erie, Lawrence, Mercer, Venango and Washington counties.

The growth in production witnessed in the southwestern region of the state is largely being driven by producers in anticipation of new pipeline takeaway capacity being built in the region, which is expected to come on line within the next several months.

Platts Analytics has already seen a fairly substantial impact from this development over the last several months and expects to see even further upside for producers come early 2018 and into the later part of the year.

The IFO report found that on a quarterly basis, in Q3 2017, total production in the state grew by 4.8%, while the number of producing wells increased by 9.3%, compared with the third quarter of 2016.

"Production growth accelerated modestly during the last two quarters after decelerating from 14.5% in the second quarter of 2016 to 2.2% in the first quarter of 2017.

The number of producing wells has grown steadily over the last seven quarters," the report finds.

On an annual basis, the number of Pennsylvania producing wells in 2016 was 7,179, which was 9.7% higher than 2015.

From 2011 to 2016, the number of producing wells grew at an average annual rate of 32.3%, according to the report.

--Jim Magill, jim.magill@spglobal.com; Eric Brooks, eric.brooks@spglobal.com
--Edited by Richard Rubin, richard.rubin@spglobal.com



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