Operators in Pennsylvania spud fewer Marcellus Shale gas wells last month than the year before, shifted their focus to counties in wetter areas of the play and saw turnover at the top in terms of most wells spud, data from the state Department of Environmental Protection (DEP) shows.
According to DEP’s Office of Oil and Gas Management (OOGM), operators spud 123 wells in the Marcellus in May, a decline of 15.8% from the 146 wells that were spud the previous May.
The decline was noticeable in northeastern Pennsylvania, but it stood out the most in Tioga County, which led the state in terms of wells spud in May 2011 with 26 wells. One year later, only four wells were spud there, a decline of 84.6%. Lycoming and Bradford counties ranked second and third (with 24 and 22 wells spud, respectively) over the same time frame but saw their totals decline 16.7% and 18.1%.
Conversely, the number of wells spud in Washington County, in the southwestern part of the state, more than tripled. Only eight wells were spud in May 2011, but 28 wells were spud there during the same month one year later, a 250% year/year increase.
After Washington, the next four counties in terms of wells spud in May 2012 were Lycoming and Susquehanna (each with 20), Bradford (18) and Greene (10).
“We’ve been experiencing and seeing the same thing,” Lou D’Amico, president of the Pennsylvania Independent Oil and Gas Association, told NGI’s Shale Daily on Wednesday. “I’m surprised that the spike in the southwest was that high, but I assumed there would be a significant spike there. Things on the dry gas side have really slowed down.”
Meanwhile the OOGM said the top five operators in terms of wells spud also saw significant change. In May of last year SWEPI LP, a Shell Oil Co. affiliate, was the top operator in the Marcellus with 18 wells spud, followed by Anadarko E&P Co. LP (16), Chesapeake Appalachia LLC and Talisman Energy USA Inc. (both with 15). Four companies — Carrizo Marcellus LLC, Chief Oil & Gas LLC, EQT Production Co. and Exco Resources PA LLC — were tied, each having spud nine wells.
Fast forward one year and the top operator in terms of wells spud was Range Resources Appalachia LLC with 21. EQT came in second place with 13, followed by Chesapeake with 12. Chevron Appalachia LLC, which didn’t even spud one well in the Marcellus the previous May, spud 10 wells there in May 2012. Chevron tied with Southwestern Energy Production Co. and WPX Energy Appalachia LLC.
D’Amico said the OOGM data “is probably very much reflecting the areas. I know Range is very heavily involved in the wet areas. I believe EQT and Chesapeake are also. Our biggest concern is determining how long it will take for natural gas prices to recover.”
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