These interactive presentations contain the latest gas (and a little oil) production data, from all 11,173 horizontal wells in Pennsylvania that started producing from 2010 onward, through March this year.
Total production
Natural gas production in Pennsylvania was 20.3 Bcf/d in March (Hz. wells only), 0.4 Bcf/d below the output 2 years earlier and unchanged from a year ago. Last year, 567 horizontal wells came online, a similar number as the previous 2 years, but far below the numbers seen in the 2011-2019 period.
Drilling Activity
As of last week, 24 rigs were drilling horizontal wells in Pennsylvania (according to Baker Hughes), about the average during the previous 12 months:
With natural gas prices having fallen steeply during the previous 12 months, to near their lowest level in the past decade, it is no wonder that the rig count is so low as well. Given the delay between price changes and the impact on activity levels, we will probably see further declines in the rig count in the near term.
Permit activity
We can see a similar fall in permitting activity, with only 29 permits for new horizontal wells approved in April:
Coterra Energy and Chesapeake are the operators with most of the new permits approved since the start of this year (40 and 35 resp.). EQT, the 2nd larger shale gas producer in the state, ranks only 13th, and you can see in the final tab of the interactive presentation at the top of this post that its production has declined by 15% in the past 2 years.
Well productivity
In the “Well quality” of the interactive presentation you can find that average well productivity in Pennsylvania has stagnated since 2019.
In the following overview, average well productivity and completion designs are plotted versus production start dates for the 4 largest natural gas operators in the state:
In the top chart, you can see how well productivity, as measured by the average cumulative gas recovered in the first 6 months has changed over time, by operator. Only EQT is showing a significant rise since 2019, but this is probably due to high grading and with fewer wells completed. In the bottom chart you can also see that it had the biggest completions (measured in lateral length & proppant loading) last year.
Note also how Chesapeake’s average well performance has fallen during the last 2 years, despite also slightly bigger completions.
Terminal decline rates
Finally, we’ll take a look at how steep older wells decline:
In the top chart you can find the average production rates for horizontal wells, by vintage year of first production. In the bottom chart we display the average annual decline rates. As you can see these are steep in early years (at around 40% in year 2 compared with year 1), but then steadily fall until they appear to bottom out at around 10% after 9-10 years.
Finally
Production data is subject to revisions.
Sources
For this presentation, I used data gathered from the following sources:
- Pennsylvania Department of Environmental Protection
- FracFocus.org
Brief manual
The above presentations have many interactive features:
- You can click through the blocks on the top to see the slides.
- Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items.
- You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.
- Tooltips are shown by just hovering the mouse over parts of the presentation.
- You can move the map around, and zoom in/out.
- By clicking on the legend you can highlight selected items.
- Note that filters have to be set for each tab separately.
- The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.
- If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.
Key Takeaways
- Pennsylvania horizontal wells produced 20.3 Bcf/d in March, down 0.4 Bcf/d versus March 2021 and flat year over year.
- Only 567 horizontal wells came online in Pennsylvania in 2022, similar to 2020–2021 but far below 2011–2019 levels.
- Baker Hughes reported 24 rigs drilling horizontal wells in Pennsylvania as of last week, roughly the average of the prior 12 months.
- Only 29 permits for new horizontal wells were approved in Pennsylvania in April.
- Coterra Energy and Chesapeake led Pennsylvania horizontal permitting year-to-date with 40 and 35 permits approved, respectively.
- EQT ranked 13th in Pennsylvania permits year-to-date and its production declined 15% over the past two years.
- Average Pennsylvania well productivity has stagnated since 2019, based on first-6-month cumulative gas recovered.
- Average annual decline rates for Pennsylvania horizontal wells are about 40% in year 2 and bottom near 10% after 9–10 years.
