latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/pa-shale-gas-production-returns-to-year-ago-levels-as-drillers-open-the-valves-62200685 content esgSubNav
In This List

Pa. shale gas production returns to year-ago levels as drillers open the valves

Blog

Insight Weekly: Banks' efficiency push; vacuuming carbon; Big Pharma diversity goals

Blog

Smart thermostats gain traction in US, point to modest electricity savings

Blog

The Future of Risk Management Digitization in Credit Risk Management

Blog

Insight Weekly: Banks pursue deals; offshore wind transmission; UK broadcasters vs. streamers


Pa. shale gas production returns to year-ago levels as drillers open the valves

Pennsylvania's shale gas production returned to pre-crisis levels in November 2020 as the state's largest producers opened the valves to let gas flow freely into a subdued winter market.

SNL Image

Shale gas production in the state increased 1.3% year over year to 19.97 Bcf/d in November, according to the Department of Environmental Protection's latest data Jan. 19, following months of declines or no growth. The state's five largest producers — EQT Corp., Cabot Oil & Gas Corp., Chesapeake Energy Corp., Range Resources Corp. and Southwestern Energy Co. — accounted for two-thirds of the state's total production volumes in November.

The producers, under pressure from investors to reduce costs while at the same time grappling with decades-low commodity prices, cut back on new wells in November to conserve cash, continuing a trend they followed all year. Permits for new wells picked up slightly in December 2020.

EQT, the nation's largest natural gas producer by volume, shut in 570 MMcf/d in September 2020 but said in late October 2020 that it had all been returned to market.

"Natural gas operators responded quickly to stronger prices during the fourth quarter of 2020, increasing gas production by 1.7 Bcf/d in November alone," energy data firm Enverus said Jan. 19. "Enverus expects gas prices to average $3.25/MMBtu, levels higher than those currently observed in the forward curve, particularly in 2021 and 2022."

Despite the oil and gas crisis of early spring and EQT's decision to start and stop gas flow to time the market, the company's November production was nearly 13% higher than the same period in 2019. The bulk of that gain came from new wells in Greene County in the southwest corner of the state on leases acquired when EQT bought Rice Energy in 2017. Current EQT President and CEO Toby Rice was president and COO at Rice.

Another big contributor to the state's gains was Chesapeake, which spent most of the year in bankruptcy reorganization, emerging Jan. 13. With its Marcellus position in the northeast part of the state a bright spot among the basins it operates in, Chesapeake ramped production up nearly 8% while still in bankruptcy court. The company has declined to comment on where the Appalachian unit fits into the "new" Chesapeake's post-Chapter 11 operations.

SNL Image