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Pa. gas production slipped from record-breaking pace in late 2018

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Pa. gas production slipped from record-breaking pace in late 2018

After steady growth through the summer and fall to fill capacity of new pipelines in Appalachia, Pennsylvania's gas production slipped 1.5% to 18.03 Bcf/d in November 2018.

The down month brought to an end a streak of five straight months of production growth, according to data reported to the Pennsylvania Department of Environmental Protection by Jan. 16. October's production numbers were revised upward 0.76 Bcf/d to a record 18.3 Bcf/d by DEP due to late filings.

Nonetheless, Pennsylvania's November gas production was up 16% year over year and 12% for the year-to-date, according to DEP's data.

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Pennsylvania producers added more than 1 Bcf/d of new production this fall to help fill the nearly 8 Bcf/d of new gas pipeline capacity out of West Virginia, Ohio, and Pennsylvania on Energy Transfer LP's Rover Pipeline LLC, DTE Energy Co. and Enbridge Inc.'s Nexus Pipeline, Columbia Gas Transmission LLC's Leach Xpress and Williams Cos. Inc.'s Atlantic Sunrise Pipeline.

Greene County, in the southwest corner of the state below Pittsburgh, was the fastest growing county in November with a 47% year-over-year growth rate as EQT Corp. continued to capitalize on acreage acquired in its purchase of Rice Energy in November 2017. EQT is the largest gas producer in the United States.

Susquehanna County in the northeast corner of the state grew 14% year over year in November to 4.26 Bcf/d. Susquehanna is home to wells operated by the state's second largest gas producer, Cabot Oil & Gas Corp., as well as long-time shale gas drillers Chesapeake Energy Corp. and Southwestern Energy Co.

The slowdown did not surprise the gas market consultants at S&P Global Platts' PIRA Energy Group. "Appalachian production has been on a tear in recent months," PIRA told its clients Dec. 12. "Such robust gains in recent months is eye catching and does make a call for moderating growth somewhat unnerving."

PIRA thinks drillers will start to heed the stock market's call for slower growth with less spending and a return of capital to shareholders. It expects year-over-year production growth for all of Appalachia in 2019 to be less than 15% to 20%.

The state's top five drillers maintained their place on the leader board and accounted for 64.5% of the state's total production, a sliver less than the month before. Five counties were the source of 77% of the state's gas production. Producers continue to focus on liquids-rich counties south of Pittsburgh and dry gas counties in the northeast part of the state.

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S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.