Pennsylvania's shale gas producers pulled 27% fewer permits to drill in December 2018 compared to the same month in 2017, according to state Department of Environmental Protection data, as the companies continued to measure their pace of operations to conserve cash.
The number of permits for new wells has less correlation with production volumes as producers get more efficient, pulling more gas from fewer wells. Permits for new wells in 2018 declined 7% from the previous year, according to the environmental agency's database, while gas production grew 24%, to more than 17.5 Bcf/d, through October 2018, the latest month for which production data is available.
December's 138 new permits were a 12% increase over November, state data showed.
Four Pittsburgh-area counties topped the most-active list in December, according to the state figures. Driven largely by the nation's top natural gas producer by volume, EQT Corp., activity in Washington County dropped by nearly half, while permitting in Greene County to the south nearly doubled. Overall, EQT was issued 40% fewer permits in December compared to the same month in 2017.
EQT's neighbor and Pittsburgh-area rival, Range Resources Corp., illustrated the cost-cutting strategy Jan. 7 by announcing that it would miss analysts' fourth-quarter production expectations by about 5% while saving $20 million in costs. Range said it expects to post positive free cash flows for the quarter. In December 2018, Range pulled 24% fewer permits for new wells in Pennsylvania than it was issued in December 2017, according to the state figures.
Permitting in Pennsylvania's most productive county, Susquehanna, in the northeast corner of the state, stayed steady year over year at 13, with Southwestern Energy Co. and Repsol SA asking to drill new wells, while the county's top driller, Cabot Oil & Gas Corp., was issued no permits.
Fayette County, to the southeast of Pittsburgh, came back to life, with Chevron Corp. accounting for all 15 of the new permits for wells issued in December 2018, compared to none a year earlier. Chevron has been active off and on throughout 2018 in Fayette, Westmoreland and Greene counties, with 100 new permits issued for all of 2018.
"We have restarted our drilling campaign in the Marcellus [Shale]," a Chevron spokeswoman said. "The initial results are encouraging, as we've picked up right where we left off and continued our march toward lower unit development and operating costs."