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Pennsylvania Shale Production Increased Again Last Year

While the growth wasn't as marked as it has been in recent years, Pennsylvania's unconventional natural gas production increased modestly in 2015 when compared to 2014 volumes, representing the decline in active rigs, capital spending cuts and workforce reductions that characterized activity in the play last year.

Shale producers churned out 4.6 Tcf of natural gas in 2015, up by about 13% from the 4.07 Tcf they produced in 2014, according to figures released this month by the Pennsylvania Department of Environmental Protection (DEP) (see Shale DailyFeb. 17, 2015).

Although growth was more tempered, last year's volumes set a new record for the state, continuing an ongoing trend in Pennsylvania. In 2013, the state's unconventional gas wells produced 3.3 Tcf of natural gas, when the Marcellus Shale helped propel Pennsylvania to the second largest gas producing state in the country behind Texas (see Shale DailyFeb. 20, 2014). In 2012, the DEP reported that 2.04 Tcf of natural gas was produced (see Shale DailyMarch 6, 2013).

The state easily remains the Appalachian Basin's largest gas producer. In Ohio, Pennsylvania and West Virginia, volumes were expected to come in lower than they might have with higher oil and gas prices. The commodity slide that began in mid-2014 grew worse last year, when operators across the basin and the country announced plans to reduce spending, cut staff, drop rigs and scale-back operations.

Last year's metrics were little unchanged from 2014, however. Chesapeake Energy Corp., Cabot Oil & Gas Corp., Southwestern Energy Co., Range Resources Corp. and EQT Corp. remained the state's top-five gas producers, respectively. Southwestern moved ahead of Range as the state's No. 3 producer.

Susquehanna County in Northeast Pennsylvania, was the state's top-producing county, while Washington County in the southwest part of the state moved ahead of Bradford County in the northeast as the second highest producing county.

For years, operators have increasingly turned their attention to the Southwest part of the state, where more takeaway capacity is available. More recently, operators also started to prove-up the Utica Shale in that part of the state (see Shale DailyAug. 25, 2015).

Legislators passed a bill in 2014 that requires operators to submit production data up to 45 days after the end of the month rather than twice a year (see Shale Daily, Oct. 21, 2014). The new requirement took effect early last year and also requires the status of each well to be reported. Similar to former reporting requirements, operators submit raw data, which is then published by the DEP.

At year-end, there were 6,618 producing shale wells in the state, up from 5,965 active wells at the end of 2014.

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