This is an older blog post, you will find one on more recent data here
These interactive presentations contain the latest gas (and a little oil) production data, from all 10,584 horizontal wells in Pennsylvania that started producing from 2010 onward, through March.
Natural gas production in Pennsylvania was 20.2 Bcf/d in November (Hz. wells only), 1 Bcf/d below the output 12 months earlier. After 10 years of rapid production growth, natural gas production has stagnated since early 2021. In this post, we’ll analyze some of the factors behind this.
As of last week, 22 rigs were drilling horizontal wells in Pennsylvania (according to Baker Hughes). Eleven years earlier there were over a 100 rigs, despite natural gas prices at relatively high levels in the past year:
In this overview, you can see how the horizontal rig count (in blue) has fallen since 2011, with an uptick in activity at the beginning of 2022. Natural gas prices (HH) have fallen recently, after surging a year ago.
In the following overview, you can find another reason behind the stagnation of hydrocarbon production in Pennsylvania:
In the top chart, you can see how well productivity, as measured by the average cumulative gas recovered in the first 6 months has trended over time. The horizontal wells that came online in 2011 recovered about 0.5 Bcf of natural gas during the first 6 months, while those beginning in Q2 of 2021 did about 5 times that (2.6 Bcf). However, the trend in the last 2.5 years does appear to be falling, despite long lateral lengths (2nd chart) and high proppant loadings (bottom chart). The 148 horizontal wells that were completed in Q2 of last year were frac’ed with 23 million pounds each, compared with an average of 4 million pounds for wells completed in 2022.
However, not all operators are equally affected by declining productivity. In the next graph you’ll find how well productivity of the top 5 operators has changed over the last decade:
In the figure above you can find the performance of the top 5 operators in the past decade, as measured by the same metric (average cumulative gas recovered in the first 6 months). Especially Chesapeake has seen a rapid decline in average output in the past 2 years, although it is still just in the lead, above EQT, which has seen almost continuous increases in productivity.
In the final tab (“Top operators”), the output and well locations of the top-10 natural gas producers in Pennsylvania are displayed. You’ll find here that EQT’s overall production has still fallen, despite the growing productivity as we just saw, as it completed far fewer wells; 33 through November 2022, vs 129 in the first 11 months of 2020.
Production data is subject to revisions.
For this presentation, I used data gathered from the following sources:
- Pennsylvania Department of Environmental Protection
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.