Tuesday, November 24, 2020

Independent Fiscal Office Reports 3rd Quarter Natural Gas Production Increased 2%, Price Declined By 42.4% Over Last 18 Months

On November 24, the
Independent Fiscal Office reported third quarter natural gas production increased by 2 percent over the third quarter of 2019, but the price of natural gas in Pennsylvania fell by 42.4 percent over the last 18 months.

There were 111 new horizontal wells spud in the third quarter of 2020. This figure represents a decrease of 24 wells (-17.8 percent) from the same period in the prior year, and the sixth consecutive quarter in which there was a year-over-year decline in new wells spud. 

The figure also represents the lowest number of new wells spud in a quarter since the second quarter of 2016.

There were 10,162 total producing wells in the third quarter of 2020, an increase of 5.9 percent from the prior year. Horizontal producing wells, which account for over 99 percent of production, increased by 6.3 percent from the prior year. 

This is the smallest year-over-year increase in quarterly horizontal producing wells on record. 

Decelerating growth in producing wells is the result of less drilling activity and older wells being shut in or plugged.  

Recent growth in producing wells dropped below rates from early 2017, when quarterly production growth was at its lowest level on record. 

Without a significant uptick in new wells spud, producing well growth will likely continue to decelerate.

Click Here for a copy of the report.

[Note: The continued lack of growth in the number of new wells has a negative impact on the funding of both DEP’s Oil and Gas Regulatory Program, since it depends on per-well permit fees and a decline in the revenue from the Act 13 drilling impact fee, which is also dependent on the number of wells and on the price of natural gas.]

[Posted: November 24, 2020]  PA Environment Digest

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