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Pa. shale gas production slowed in October amid plans for growth

Despite huge increases in new permits to drill in the counties south of Pittsburgh, presumably to start filling new capacity out of the Appalachian shales brought by Energy Transfer Partners LP's Rover Pipeline LLC, shale gas production in Pennsylvania declined 2% in October, according to data reported to the state Dec. 18.

Greene County, identified by the newly enlarged EQT Corp. as a locus of new effort after merging with Rice Energy Inc. to become the largest natural gas producer in the U.S., saw its production drop 9% month over month, according to the state Department of Environmental Protection's figures. But the county may be on the verge of production growth, judging by the aggressive signals EQT is sending Wall Street analysts.

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"Greene County has a total acreage of 370,000 acres," EQT CEO Steven Schlotterbeck told analysts on the company's Oct. 26 third-quarter earnings call, before the merger closed. "To date, over the last 11 years, 75,000 of those acres have been developed. So the gas is being drained from 75,000 acres. That leaves 295,000 acres in Greene County alone that are now undrilled and undeveloped and undrained."

Schlotterbeck continued: "After the Rice transaction, EQT will control 212,000 of those acres. So 57% of the county will be under the control of EQT, where 80% of that is remaining to be drilled."

Schlotterbeck has said EQT plans to start 2018 by drilling longer laterals, primarily in Greene and the neighboring Washington county, using the extra leasehold it acquired with the Rice purchase.

"With our consolidated acreage portfolio, we are targeting a 50% increase in average lateral length and are extremely confident that with our enhanced operational efficiencies we will deliver on synergies, improve overall returns, and continue to deliver increased value to our shareholders," Schlotterbeck said in a Dec. 7 email.

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Statewide, shale gas production grew 9% compared to October 2016, with the dry gas northeast portion of the state continuing to dominate the standings. Susquehanna County, home to the operations of the state's leading gas producer, Cabot Oil & Gas Corp., saw gas production grow 6% year over year. Cabot's October production was 11% above October 2016.

Most of the big producers kept their production flat to declining compared to the previous month, with only Southwestern Energy adding production compared to September. Even its 2% growth was well off the breakneck 32% year-over-year pace.