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Using fewer rigs and less cash, Pennsylvania's gas production still grows

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Using fewer rigs and less cash, Pennsylvania's gas production still grows

Despite fewer rigs in action, shale gas production in Pennsylvania inched higher to 18.55 Bcf/d in July, pushed up by significant jumps in production by two producers in northeastern Tioga County, the latest state data showed Sept. 17.

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Southwestern Energy Co. and Spanish oil and gas producer Repsol SA both reported roughly 30% increases in shale gas volumes from Tioga when compared to June, the state Department of Environmental Protection data said. Repsol's 159 MMcf/d of Tioga production was a 50% increase over a year ago, while Southwestern's 194 MMcf/d of Tioga production was 23% more than reported a year ago.

Tioga is in the same dry gas portion of the Marcellus Shale as the state's top gas-producing county, Susquehanna, and is one of the few areas in Pennsylvania where the Utica and Marcellus shales are stacked vertically with enough thickness to be commercially appealing. Producers have been better positioned to add production from Tioga since the October 2018 opening of Williams Cos. Inc.'s 1.7-Bcf/d Atlantic Sunrise pipeline out of Susquehanna County to markets to the south.

Tioga's top producer is Royal Dutch Shell PLC, which has made the county the hub of its Appalachian shale efforts and has targeted the Utica and Marcellus stack. Shell reported 354 MMcf/d of gas production in July, about 18% less than it reported in Tioga a year ago but 2% more than it reported in June. Repsol and Southwestern have kept their drilling to the shallower, and therefore cheaper, Marcellus Shale.

The 18.55 Bcf/d of state gas production was an 11% increase over July 2018 but only a 1% increase over June as Pennsylvania's top producers are all under pressure from investors to spend less money, which translates into flatter production profiles. Pennsylvania's top five producers account for 65% of the state's production volumes.

The state's top five producing counties, located in both northeast and southwest corners of the state, produced 75.6% of Pennsylvania's gas in July, according to state data.

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