latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/private-drillers-in-pennsylvania-go-quiet-in-march-as-gas-prices-hit-rock-bottom-57945344 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Private drillers in Pennsylvania go quiet in March as gas prices hit rock bottom

European Energy Insights July 2020

As COVID-19 Wears On, Regulators Examine Moratorium Extensions, Cost Recovery

Essential Energy Insights - June 11, 2020

Webinar Replay

Deep Dive on Oil & Gas for Financial Institutions


Private drillers in Pennsylvania go quiet in March as gas prices hit rock bottom

Pennsylvania's shale gas permitting activity increased by nearly one-third in March compared to February, as supermajor Chevron Corp. filed for 23 modified permits on leases it is expected to sell in Fayette County, operations it said in December 2019 it was writing off.

The state's private drillers moved to the sidelines in March, accounting for only 8% of the 127 shale gas permits issued in the month, according to the latest data from the Department of Environmental Protection. The typical split between the public independents and private drillers, most backed by private equity, is roughly 70/30; in March it was 92/8, according to DEP data.

The 127 permits pulled in March were up from the 121 permits pulled in March 2019, indicating that Pennsylvania producers are not ready to start chasing a predicted spike in gas prices in the second half of the year.

As the private drillers dropped off the radar in March, Pennsylvania's top independent producers, led by EQT Corp., the nation's largest gas producer by volume, kept their activity on familiar terrain with the same four counties in the northeast and southwest corners of the state — Susquehanna and Bradford, and Washington and Greene, respectively — seeing the most activity.

EQT pulled 29 permits in Washington and Greene counties south of Pittsburgh, a 42% drop from its activity in March of 2019, while neighbor Range Resources Corp. continued its double-digit permitting pace, pulling 28 permits to drill in Washington County as it executes a front-loaded drilling schedule for the year.

Pennsylvania drillers pulled back activity in January and February as gas prices slid to record lows on warm winter weather with billions of cubic feet worth of "free" gas coming to the market from shale oil wells in Texas. But natural gas prices have firmed as shale oil drillers beat their own retreat as crude prices went into free fall, cutting back on new Permian Basin shale oil wells and eliminating some of the surplus "free" gas that capped commodity gas prices.

Pennsylvania's producers have spent the past year slashing spending to survive in a $2/MMBtu market environment and could be in for an unexpected bonanza at the end of the year, analysts say, as an oversupplied gas market flips to undersupplied with winter arriving.

Energy market analysis firm Enverus said it expects dry gas production will decline by more than 6 Bcf/d year over year by December 2020. "A sharp increase in natural gas prices is needed to incentivize natural gas production growth from gas directed plays, namely Marcellus, Utica and Haynesville," the firm said in a note April 7. "Enverus forecasts prices will exceed $4/MMBtu and could reach $4.50/MMBtu as early as the coming winter."

SNL Image