Pennsylvania's shale gas producers pulled 34% more drilling permits in February than they did a year earlier, as new wells are needed to feed two big pipeline projects that finish construction later in the year.
Permits for shale gas wells, an indication of future production activity, slackened a bit in the counties around Pittsburgh, according to the February permitting data from the Pennsylvania Department of Environmental Protection, but the southwest region continues to be the spot where drillers put the most rigs, looking for liquids-rich gas wells as the prices for ethane and propane improve.
Greene County, in the southwestern corner of the state, was the site of the most permits for new wells, driven by the nation's largest natural gas producer, EQT Corp., which was issued 76 permits in February, predominantly in Washington and Greene counties south of Pittsburgh. Four Pittsburgh-area counties accounted for about half of the 195 permits issued statewide, compared to their 68% share in February 2017. Southwest counties such as Westmoreland and Allegheny saw sharp upticks in permits for new drilling.
With increased takeaway capacity from Energy Transfer Partners LP's 3.25-Bcf/d Rover Pipeline LLC coupled with a steady rise in oil-linked NGL prices, producers are increasingly interested in the southwestern portion of the state.

Activity in the northeast's Susquehanna County is picking up in anticipation of the completion of Transcontinental Gas Pipe Line Co. LLC's 1.7-Bcf/d Atlantic Sunrise project linking the dry gas-focused northeast Marcellus Shale to Dominion Energy Inc.'s Cove Point LNG LP terminal in Maryland and points farther south. Atlantic Sunrise is scheduled to be in service this summer.
Cabot Oil & Gas Corp., the dominant producer in Susquehanna County, was issued 23 permits for new wells in the county, a sharp break from the year before when it pulled no permits. For the entire county, more than four times the permits were issued in February than a year earlier.
For the second month in a row, supermajor Chevron Corp. continued to bring its Appalachian operations back to life after limited drilling in recent years due to low commodity prices. Chevron was issued 28 permits in February, compared to none in February 2017 and 21 in January. A new well design and expanded pipeline capacity convinced Chevron to crank up its almost idle Appalachian operations east and south of Pittsburgh.
"We continue to improve our basis of design, which has doubled the expected ultimate recovery per well," James Johnson, Chevron's executive vice president of upstream, told analysts on a March 6 conference call. "In Appalachia, we're moving back into development mode, targeting opportunities in both the Marcellus and Utica formations from common well pads. Realizations and economic returns are expected to further improve as pipeline infrastructure is completed."
