Appalachia

The explosive growth of the Marcellus and Utica shales in recent years has crowded out natural gas flowing from the Western Canadian Sedimentary Basin (WCSB) toward traditional downstream destinations in markets that include the Midwest and Eastern Canada, but new developments could alter the competitive balance moving forward.

Appalachian pure-play Montage Resources Corp. plans to slash spending by $30 million through the remainder of the year as natural gas prices stagnate, but production is expected to increase.

Appalachian pure-play Southwestern Energy Co. (SWN) said Wednesday that the company would reduce its rig count from six to two in the coming weeks as part of plans announced earlier this year to cut spending and better control costs.

Appalachian producers are finally enjoying the benefits of surplus pipeline capacity that matches their prolific natural gas volumes, but more will be needed in the coming years to prevent additional bottlenecks that have long plagued the region and undercut local prices, according to RBN Energy LLC.

Growth prospects for Appalachian operators remain limited as the natural gas outlook continues to dim on a variety of factors, according to a panel of analysts from Bank of America Merrill Lynch (BofAML), which recently shared its forecast at the LDC Gas Forums Northeast in Boston.

Now well into a second year of increasing transactions, total sales by 24 leading natural gas marketers were up 4.29 Bcf/d (4%) in the first quarter compared with the same period last year, according toNGI’s 1Q2019 Top North American Natural Gas Marketers rankings.

Appalachian producers trying to control costs in a low-price natural gas environment, along with their counterparts in the Permian Basin grappling with soaring production volumes, are more seriously thinking about water management in what could be a big opportunity for the midstream sector in the coming years.

Appalachia’s natural gas-heavy exploration and production (E&P) companies continue to face headwinds, with downward pressure on strip pricing expected to lead to even deeper spending cuts as they try to operate within cash flow and deliver on this year’s plans.

Privately held EdgeMarc Energy Holdings LLC said Wednesday it has filed for Chapter 11 bankruptcy protection in order to sell all of its Appalachian assets after a pipeline explosion last year in western Pennsylvania stranded production from its core assets.