Marcellus Shale drilling rebounded in October, according to recently released figures.

The Pennsylvania Department of Environmental Protection (DEP) issued 367 permits for wells into the Marcellus Shale in October -- the most of any month this year -- and operators reported drilling 212 wells into the formation -- up from 147 wells drilled in September.

The DEP issued 2,882 permits through the first 10 months of 2011 and operators drilled 1,600 wells, compared to 2,595 permits issued and 1,177 wells drilled last year through October.

According to NGI's Shale Daily Unconventional Rig Count for the week ending Nov. 4, the number of rigs actively drilling in the Marcellus increased 1% from the previous week from 156 to 158, but is down 3% from the 163 rigs operating in the play last year at this time.

The northeastern corner of Pennsylvania remains the most active region in the state. While permitting is down 4% to 1,259 in Bradford, Tioga and Susquehanna counties compared to last October, drilling is up 22% to 714 wells. And in neighboring Lycoming, Wyoming, Potter and Sullivan counties, permitting is up 51% to 525 and drilling is up 147% to 322 wells.

Talisman led development activities in October, spudding 34 wells in Tioga and Bradford. Shell Western Exploration and Production LP spudded 29 wells, all in Tioga. Chesapeake Energy Corp. spudded 28 wells in Bradford, Potter and Sullivan. Anadarko Petroleum Corp. spudded 17 wells, all in Lycoming. EOG Resources Inc. spudded 17 wells in Bradford, Clearfield and McKean. Southwestern Energy Co. spudded 13 wells in Bradford and Susquehanna.

In southwestern Pennsylvania, development is up in traditional hotspots and recent expansion areas (see Shale Daily, Oct. 12). After being flat between September 2010 and this September, permitting in Washington, Westmoreland, Fayette and Greene counties is now up 12% between this October and last, while drilling is up 31% to 319 wells. In Butler, Armstrong and Indiana counties, permitting is up 92% to 206 while drilling is up 25% to 83 wells.

Range Resources Corp. led development in the region in October by spudding 14 wells in Washington county. CNX Gas Co. LLC spudded 14 wells in Washington and Westmoreland counties and Chevron Corp. spudded 13 wells in Westmoreland, Fayette and Cambria counties.

The DEP does not distinguish between Marcellus and Utica Shale drilling in its reports.

Across the state line, the Ohio Department of Natural Resources (ODNR) issued 25 permits in October for companies to drill into Utica, up from the 18 permits issued in September. Of those permits, 16 went to Chesapeake, six went to Anadarko and the remaining three went to EnerVest Operating LLC, Beck Energy Corp. and Hill David R Inc., respectively.

In early November the ODNR issued four Utica permits to Devon Energy Corp., the newest major entrant into the play (see Shale Daily, Nov. 4). The permits are for two wells each in Ashland and Medina counties, in northern Ohio. The vast majority of Utica exploration to date has taken place in the southeastern corner of Ohio, along the West Virginia border. While Marquette Exploration LLC and Ohio Buckeye Energy each drilled a Utica well in Ashland County in 2009 and 2010, respectively, the Devon permits are the first issued in Medina.

The rapid increase in production from the Marcellus and Utica is expected to exacerbate infrastructure issues in the Northeast, according to Bentek Energy, which reported Wednesday that gas production in the Utica Shale will reach at least 1.2 Bcf/d by the end of 2014.

"Most of this gas will be transported to Northeast markets and further displace flows from other supply regions," Bentek said. "Even with nearly 2.0 Bcf/d of additional Northeast gas processing capacity scheduled to come online over the next two years, the combined production from the Marcellus and Utica shales could surpass total regional processing capacity by 2015. This would create significant transportation constraints and competition among producers vying for existing processing capacity."