As Marcellus Shale development accelerates in Pennsylvania, it is also expanding.

Recent drilling and permitting figures released by the Pennsylvania Department of Environmental Protection (DEP) show that shale development is moving into new areas of the state.

The DEP issued 1,367 Marcellus drilling permits through the first five months of this year and operators drilled 654 Marcellus wells during that time, according to the data. That’s roughly 16% above the 1,172 permits issued and 564 wells during the same period last year, and exponentially greater than the 596 permits issued and 146 wells drilled between January and May of 2009.

Pennsylvania operators only report production data twice a year, with the next deadline not until August, but the DEP releases permitting figures and well counts monthly (see Shale Daily, Feb. 28).

While northeastern Pennsylvania continues to be the most active region of the state, permitting statistics show that interest in some of the initial areas of development may have peaked for now. For instance, Bradford County continues to be the most active county in the state with 293 wells permitted and 158 wells drilled this year through the end of May, but development is slowing after a boom in 2010. The DEP issued 355 permits and operators drilled 143 wells in county last year through May, significantly higher than the 139 wells permitted and 16 wells drilled by May in 2009.

Development, though still high, is also plateauing in neighboring Tioga and Susquehanna counties.

In Lycoming County to the south, though, development could triple this year on the back of a major permitting effort by Anadarko Petroleum Corp. and a smaller push by Range Resources Corp. The DEP issued 128 permits and operators drilled 96 wells in Lycoming through the end of May, compared to 58 permits and 32 wells through May 2010, and 33 permits and four wells by May 2009.

Range expects to quadruple its gathering system capacity to 200 MMcf/d by the third quarter. Both Range and Anadarko maintain regional offices in Williamsport, PA, the county seat of Lycoming.

Potter County to the west is also showing growth. While well counts remain low and have actually fallen slightly year-over-year — nine in 2011 compared to 11 in 2010 — permitting in Potter is up 165% on the backs of mid-size players like Ultra Petroleum Corp., Seneca Resources and Penn Virginia Corp. (see Shale Daily, May 11).

That may be in part because of costs. In a May conference call Ultra Director of Exploration Doug Selvius said costs in Potter and Tioga counties averaged $4.3 million per well, while the deeper wells in Lycoming and Clinton counties just to the south averaged between $6 million and $7 million.

A similar expansion is taking place in southwestern Pennsylvania. The historically active Washington, Fayette and Greene counties continue to lead the region, but operators are increasingly permitting wells in nearby Butler, Westmoreland and Armstrong counties.

In Washington drilling is down 13% — to 71 wells in 2011, from 82 in 2010 — and permitting down 27% — to 92 permits this year, from 117 last year — through the first five months of the year.

To the north in Butler, though, permitting is up nearly 300%, as smaller players Rex Energy Corp. and Phillips Resources Inc. (recently acquired by ExxonMobil Corp.) pursue the wet gas of the Marcellus, as well as the Upper Devonian and Utica Shales above and below it (see Shale Daily, June 13; June 10).

Despite plans to shift spending from the dry Marcellus to the wet Eagle Ford, Talisman Energy Inc. is the currently most active Marcellus operator in Pennsylvania this year with 99 wells (see Shale Daily, Jan. 12). Chesapeake Energy Corp. is a close second with 97 wells, followed by Anadarko with 69 wells, Range with 67 wells and the Shell-subsidiary East Resources Corp. with 58 wells.