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Page added on February 20, 2015

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Natural gas production breaking records

Production

Pennsylvania’s unconventional gas wells continued to blast production records out of the water last year, pumping out nearly 4 trillion cubic feet of gas.

According to data the state Department of Environmental Protection released Tuesday, Feb. 17, operators working in the Marcellus Shale industry reported producing nearly 1 trillion cubic feet more gas in 2014 than in 2013, increasing overall production by more than 30 percent.

“Economic growth from natural gas production has translated to increased disposable income for families and more profitable businesses,” Frank Macchiarola, an executive vice president for the trade group America’s Natural Gas Alliance, said in a prepared statement. “Pennsylvania also is supplying the rest of the country with abundant natural gas and helping to power America.”

Cabot Oil & Gas Corp. claimed the industry’s 16 top-producing wells in last year’s second half. Those wells produced a combined 57.5 billion cubic feet of natural gas – enough to heat roughly 780,000 homes – between July and December.

At the head of the pack, Chesapeake Appalachia LLC, with the bulk of its 650 active wells in Bradford County, produced more than 788 billion cubic feet in 2014, a 16 percent increase from the year before.

Production in drilling counties surrounding Lackawanna County rose considerably with 48 percent more gas coming out of Wyoming County, a 33 percent increase from Susquehanna County and 14 percent more from Bradford.

Latest numbers from the federal Energy Information Administration show the gas fields in Pennsylvania and West Virginia make up the lion’s share, about 37 percent, of the nation’s daily production.

All major gas developers that use hydraulic fracturing or fracking to retrieve gas from Pennsylvania saw gains in 2014 over the previous year.

Talisman Energy USA Inc., a company that actually suffered shrinking production in 2013, bounced back with a 6 percent increase over last year.

The data, which is released twice a year, gives operators a rare chance to rate their production against the competition, Cabot Oil & Gas external affairs director George Stark said.

Just about all of Cabot’s 340 active wells are in Susquehanna County, dubbed the “sweet spot of the Marcellus.”

“We don’t have that many (wells), and yet we’re producing this strong,” Stark said.

Cabot hopes to see the growth continue, Stark said, but the gas needs a delivery system, and pipeline construction has chronically trailed production.

Stark said two interstate pipelines now in pre-construction phases would carry Marcellus gas from wells in Susquehanna County to customers in New England all the way to Georgia and could supercharge the entire industry.

“We’ve demonstrated the production, and it’s going to be here,” Stark said. “Once we get the lines, like Constitution and Atlantic Sunrise, we have evidence that we’ll be able to deliver the gas.”

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13 Comments on "Natural gas production breaking records"

  1. dave thompson on Fri, 20th Feb 2015 9:09 am 

    “Cabot hopes to see the growth continue, Stark said, but the gas needs a delivery system, and pipeline construction has chronically trailed production.” I am sure without even looking at the facts, this lack of natural gas infrastructure is an Obama led conspiracy to undermine America and the near future that we are presently going to see soon.

  2. rockman on Fri, 20th Feb 2015 10:35 am 

    Indeed the story of the MS is amazing. As recent as 2007 the MS accounted for only 2% of total US NG production. Today it’s pushing close to 20%. And 20% of the production of the largest NG producer on the planet is a very big number. The much greater flow rates of hz wells is THE reason for this phenomenal increase. That’s the good news: high rates from hz wells in fractured reservoirs. And the bad news: the high decline rates of hz wells in fractured wells. See details here:

    http://www.eia.gov/…/pdf/marcellus.pdf

    Last year the new MS wells added over 700 million cf/day. But the decline rate of the early wells are now catching up: a loss of over 600 million cf/day from the heritage wells. The net gain: just 171 million cf/day. To put that big number onto perspective: it presents less than 1% of the total MS production today and much less than total US NG production. The charts in the link clearly show the MS booming growth has just smacked into a brick wall. The MS will continue to be a significant source of NG for some time. But the boom is over and a more static reality is undeniable. Some cornies will no doubt post hundreds of words denying it. And when you read those words (as compared to FACTS) just look back at the charts in the link above and you’ll stay grounded.

  3. JuanP on Fri, 20th Feb 2015 11:25 am 

    The Marcellus is mighty! 😉

  4. Plantagenet on Fri, 20th Feb 2015 11:26 am 

    The price of NG collapsed a few years ago when frakking produced a glut of NG. Interesting to see that NG production never fell off in spite of the much lower prices of the last few years.

  5. rockman on Fri, 20th Feb 2015 9:50 pm 

    “The price of NG collapsed a few years ago when frakking produced a glut of NG.” The price of NG fell at the end of ’08 because it reached a level the economy could not sustain. That’s why 75% of the rigs drilling hz wells in the whales went idle. Fortunately that’s when the exceptional productivity of just one formation, the Marcellus, was discovered. Between that factor and lower transport costs thanks to being adjacent to a major NG import market total US NG production has done very well. But if one bothers to look at the EIA link I posted the rate of production increases from the MS has gone into the toilet. Unless some significantly changes in the dynamics of US NG production we appear to be getting close to a peak.

    I suspect the one significant change could result from a much healthier US economy in a couple of years thanks to lower oil prices. If NG demand increases, especially at the commercial level, and prices increase a good bit new life could be seen in the other shale plays.

  6. Amvet on Sat, 21st Feb 2015 5:19 am 

    The latest EIA data/projections on Marcellus NG production shows a production decline in older wells of 621 mcfd vs a new well production of 792 mcfd. That means that 78.4% of new production is offset by losses in older production. The total production is massive for 100 drilling rigs. Any data on how many wells are drilled per month?

  7. rockman on Sat, 21st Feb 2015 7:06 am 

    Amver – Search the PDF at

    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDkQFjAC&url=http%3A%2F%2Fwww.eia.gov%2Fpetroleum%2Fdrilling%2Fpdf%2Fmarcellus.pdf&ei=XoDoVPrLJta0yATlu4HACQ&usg=AFQjCNFjmFe_JTkXywjRRKJZby0h0zx2Tg

    Lots of good MS info there. The rig count has been rather static for a while around 105. Which is significant given the recent very small NET GAIN in production you mentioned. That gain represents less than 1% of total MS production and less than 0.3% of total US NG production.

  8. marmico on Sat, 21st Feb 2015 10:00 am 

    171/16,550 = 1.03% per month increase in production. It’s not 30% annual but is a hellava lot more than a brick wall.

  9. rockman on Sat, 21st Feb 2015 11:06 am 

    All in the eye of the beholder I suppose: compared to the 175% increase in MS production in just the last 3 years some hard breaks are currently being applied to the play IMHO. Especially when, according to the EIA in the 12 months (mid 2012 to mid 2013) the production from a new well increased 65% while the production increase from a new well for the 12 months in 2014 increased only 7%. Add that to the fact that the existing producing wells are currently losing about 230 billion cubic feet per year.

    I didn’t say the MS was dead. But if someone can’t see the boom in the MS is over they’re sadly delusional IMHO.

  10. Nony on Sat, 21st Feb 2015 2:48 pm 

    Rockman, the 171 MCF increase was last month’s change. Not “last years”. You are off by a factor of at least ~12.

    The “last year” (2014) change was (per EIA DPR)*

    DEC2014: 16.099 BCF/d
    DEC2103: 13.303 BCF/d
    increase: 2.8 BCF/d.

    see: http://www.eia.gov/petroleum/drilling/archive/dpr_dec14.pdf and then the year before, the analogous report.

    *Not a perfect compilation, but same documentss you were using and close enough.

  11. Nony on Sat, 21st Feb 2015 2:52 pm 

    And Marcellus gas in NE PENN is selling for less than $2/MCF (see the Transco price report). It has even occasionally dipped below $1. That’s not running out of geology or the like. That’s the OPPOSITE of your vaunted “POD” (100 dollar oil). That’s takeaway limited product.

    And the Marcellus basically kicked your ass out of Gulf gas drilling. Kind of humorous to read people like you back at TOD in ~2009-2010 talking about expecting gas at $8-10. We’re waiting. We’re waiiiiiiiting.

  12. synapsid on Sat, 21st Feb 2015 3:14 pm 

    Nony,

    NYR! NYR! NYR!

  13. Davy on Sat, 21st Feb 2015 5:14 pm 

    NOOOoooo, your back friend. I missed you. I have to give you some grief. You made it exactly 52 days with your new years resolution to stay away from the nutters on PO. Anyway, glad to have you back. I hope all is well.

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