Natural Gas Production Report, 2016 Quarter 3
November 30, 2016 | Natural Gas
The Pennsylvania Department of Environmental Protection (DEP) publishes monthly production data submitted by natural gas extractors that operate in the state. Unless otherwise noted, this report uses those data, in conjunction with DEP data on wells spud, to develop statewide tabulations of production volume and well counts for the third quarter of 2016 and the calendar year-to-date. These data are current as of November 21, 2016 and pertain only to gas produced from unconventional formations, which include the Marcellus and Utica formations. The final page provides definitions of the technical terms used throughout this report.
Year-over-year growth in production from horizontal wells was driven by wells spud in 2015 and 2014. These wells accounted for 43.7 percent of production in the third quarter of 2016, but only 72 percent of wells drilled in 2015 and 2014 produced gas during that period. Wells spud in 2013 and earlier recorded declines in production (-11.1 percent), despite a small increase in the number of producing wells (1.5 percent). This is consistent with the general decline in productivity of wells as they age. Despite their lower productivity, wells spud in 2013 and earlier remain active with at least 80 percent of those wells producing gas in the third quarter of 2016.
Susquehanna County was the highest-producing county in the state, representing nearly one quarter of all horizontal well production (23.7 percent). The largest increases in production among top-ten counties occurred in the southwest region of the state (Washington, Greene, Butler and Fayette). All declines in production occurred in the northeast region (Bradford, Lycoming, Tioga and Sullivan).
Historical production volume has declined slightly since the first quarter of 2016, even though the number of producing wells increased during that period. This is due to the large number of wells spud in 2013 and earlier, which have become less productive as they age.
There were 145 new wells spud in the third quarter of 2016. This was an increase of 73 wells over the prior quarter, which is the largest quarterly increase since 2012. However, the 145 new wells spud is still one of the lowest totals on record.
Shut-in wells and spud but not completed (unfinished) wells peaked in the third quarter of 2015 and the second half of 2014, respectively, and began to decline after those periods. Shut-in wells declined by 7.1 percent from the second quarter to the third quarter of 2016, while spud but not completed wells increased by 12.3 percent.