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Pa. gas production growth flattens as drillers widen focus

Pennsylvania's gas production growth continued to flatline in April, according to the latest production data, as drillers kept expansion in check while gas prices stay range-bound around $3/MMBtu with shareholders banging the drum for less spending.

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While Washington County south of Pittsburgh and Wyoming County in the northeastern part of the state showed double-digit percentage increases in production, Pennsylvania's top five gas producers reported small gains or even decreases on a month-to-month basis, according to figures reported to the state's Department of Environmental Protection. The state and the nation's largest gas producer, EQT Corp., reported a less than 1% increase in April, while Chesapeake Energy Corp. reported a 7.2% fall from March's numbers.

In contrast, Cabot Oil & Gas Corp., which has contracts to supply gas from its Susquehanna County fields to fire the soon-to-start Caithness Moxie Freedom Generating Plant and the just-started Lackawanna Energy Center, reported a 7% increase in gas production in April, though it was still just a 1.9% year-over-year gain.

Selling gas directly to nearby power plants is one of Cabot's strategies for working around the slow walk of permitting for the 650-MMcf/d Constitution Pipeline and ongoing construction of the 1.7-Bcf/d Atlantic Sunrise, both being developed by Williams Cos. Inc.'s Transcontinental Gas Pipe Line Co. LLC.

While a year-over-year comparison showed big gains for top five producers EQT, Range Resources Corp. and Southwestern Energy Co., most of that increase is due to smaller 2017 numbers when drillers were still recovering from the 2015-2016 oil and gas price trough.

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The geographical focus of the Pennsylvania gas plays, where the same five or six counties typically produce about 75% of the gas, loosened in April, when the top five counties accounted for 65% of the state's production. Tioga County in north-central Pennsylvania and Allegheny and Butler counties around Pittsburgh showed marked increases, albeit from smaller bases.

In Tioga County, where the acreage often consists of the Marcellus Shale stacked on top of the Utica Shale, April production grew 31%, led by a 22% increase, to 378.3 MMcf/d, on the part of Royal Dutch Shell PLC and a 35% increase by the Spanish company Repsol SA.

Southwestern, a newcomer to the county targeting the Marcellus formation, nearly quadrupled production in Tioga year over year to 51.7 MMcf/d.