Shale Daily / NGI All News Access

Marcellus Permitting Hits High Point For Year

The Pennsylvania Department of Environmental Protection (DEP) issued more Marcellus Shale drilling permits in September than in any other month of the year, but drilling slowed from summer highs.

The DEP issued 322 Marcellus drilling permits last month, but operators reported drilling only 147 wells into the formation in September after topping 200 in July and August (see Shale Daily, Sept. 20; Aug. 10). In September 2010 the DEP issued 285 Marcellus permits and operators reported drilling 196 wells.

Marcellus development in Pennsylvania remains on the rise year-over-year, though. Through the first nine months of 2011, the DEP issued 2,514 permits and operators reported drilling 1,388 wells, up from 2,350 permits issued and 1,099 wells drilled in the first nine months of last year.

According to NGI's Shale Daily Unconventional Rig Count for the week ending Oct. 7, the number of rigs actively drilling in the Marcellus dropped 2% from the previous week from 167 to 163. However, drilling in the play is still up 15% from the 142 rigs that were operating one year ago.

Although northeastern Pennsylvania continues to lead the Marcellus for permitting and drilling, activity is slowing in early development areas and increasing in neighboring counties. While the 627 wells drilled in Bradford, Tioga and Susquehanna counties through September is an 11.5% increase over last year, permitting is down 7.6% to 1,097. Meanwhile, the 478 permits issued and 278 wells drilled in neighboring Lycoming, Wyoming, Potter and Sullivan counties through September are a 62% and 118% increase year over year.

Chesapeake Energy Corp. led development in the state and the region in September, spudding 21 wells in Bradford. Anadarko Petroleum Corp. spudded 17 wells in Lycoming, Talisman Energy Inc. spudded 14 wells in Tioga and Shell Western Exploration and Production LP spudded 13 wells, also in Tioga.

Similarly, in southwestern Pennsylvania, development is essentially flat year over year in Washington, Westmoreland, Fayette and Greene counties, with the DEP issuing 449 permits and operators drilling 269 wells this year through September. But the 184 permits issued and 69 wells drilled in Butler, Armstrong and Indiana counties through the first nine months of 2011 are 84% and 27%, respectively, over this point last year.

Williams Production Appalachia LLC led development in the region in September, spudding 12 wells in Westmoreland, while Chevron Corp. spudded 10 wells in Fayette and Greene, Range Resources Corp. spudded seven wells in Washington and CONSOL Energy Corp. spudded six wells in Westmoreland.

The DEP does not distinguish between Marcellus and Utica wells in its permitting and drilling figures.

The Ohio Department of Natural Resources (ODNR) issued 17 permits in September for horizontal and vertical wells in the Utica Shale and associated Point Pleasant, down from 22 permits issued in August.

Chesapeake continues to lead drilling, permitting and promotional activities in Ohio, but Anadarko is increasingly active, picking up six drilling permits in September (see Shale Daily, Sept. 22; Sept. 20).

Currently, operators in Ohio are working on four Utica wells, according to the ODNR. Chesapeake finished drilling one well in Carroll County in late September and is currently drilling two other wells in Carroll and Portage counties, while Anadarko is currently drilling its first Utica test well.

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