Driven by 112 new permits for the newly merged EQT Corp. and Rice Energy Inc., more than two-thirds of all horizontal well permits issued in November targeted four southwest Pennsylvania counties around Pittsburgh, according to state data.
November's figures from the Department of Environmental Protection marked the continuation of a trend that began early in 2017: drilling activity shifting from dry gas northeastern Marcellus Shale counties to those in the wet gas southwestern part of the state. Two factors drive the trend: New pipeline projects out of the northeast are stalled in court while pipelines are opening in the southwest, and slight increases in NGL prices mean liquids stripped from the wet gas provide a healthy bump to producer revenues.
Interest in the southwest corner of Pennsylvania has been growing since Energy Transfer Partners LP's 3.25-Bcf/d Rover Pipeline LLC started coming online. While Rover does not extend into Pennsylvania, opening a new line makes room for gas on older systems outbound from the state, such as Dominion Energy Transmission Inc., Columbia Gas Transmission LLC and Texas Eastern Transmission LP.
In the southwest, EQT and Rice combined accounted for 112 permits, nearly 50% of the state's total, all in counties around Pittsburgh. Based on third-quarter reported production volumes, the EQT/Rice combination moved 3.4 Bcf/d of gas, surpassing Exxon Mobil Corp.'s 2.9 Bcf/d of U.S. gas production as the country's largest gas producer.
"We came out of the gate strong starting day one, and it was a seamless transition," EQT CEO Steve Schlotterbeck said in an email Dec. 7. "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."
EQT aims to boost the average lateral length of its wells to 12,000 feet or more in 2018 using the neighboring Rice acreage it acquired in the merger. EQT plans to add two more frack crews in 2018 to the 10 rigs and eight crews it already has working, a spokesperson said Dec. 7.