Report Details Pennsylvania Production, Consumption and Well Inventory

The recent unconventional production report from the Pennsylvania Department of Environmental Protection has illustrated the massive amount of natural gas being produced from a relatively small number of unconventional wells.

Unconventional horizontal wells reporting production since July 1, 2010 (4,800 wells) have averaged about 1.6 BCF in total production and increased annual shale output by more than 600 percent.

While the average production is relatively high for such a short period of time, it is important to note that shale wells do have great production variability from well to well.
Currently, the state consumes about 1 Trillion Cubic Feet (TCF) of natural gas per year.

Given the newly abundant supply of natural gas, the state has increased its consumption by about 13 percent annually or just more than 110 Billion Cubic Feet (BCF) over the last four years.

The most noticeable change in Pennsylvania’s natural gas consumption is in the power generation sector, which increased consumption by 24 percent, or nearly 70 BCF annually.

Even given the rather significant increase in consumption, shale production still made the state a net exporter of natural gas during the spring of 2011.

If adding in legacy conventional natural gas resources, Pennsylvania likely became a net exporter of natural gas in late 2009 or early 2010.

While Pennsylvania currently exports about 2.5 times the amount of natural gas it consumes what does the future hold?

In 2014, drilling in Pennsylvania appears to be running 10-15 percent ahead of last year, with 1,200-1,400 new wells anticipated. Beyond the new wells drilled, Pennsylvania still has a significant well inventory not reporting production.

Roughly 1,750 wells are classified as active but not reporting production. Generally, wells that are active but not producing are considered to be “in inventory” waiting on pipeline or completion.

About 550 wells are designated as regulatory inactive, which means they have 5-years to return to production or be plugged. There is no clear guide as to how many inactive wells will be brought back on line or plugged.

Very few modern shale wells appear to be plugged, with only 22, mostly vertical wells, reported plugged during the last production reporting cycle.

Finally, about 400 wells appear to be somewhere between drilling and production processes. The data does show the well inventory falling over the last several years to roughly 30-40 percent of all wells drilled.

New drilling, wells in inventory, regulatory inactive wells, and wells in transition, all point to a significant inventory of wells yet to enter the production stream.

~James Ladlee, Associate Director, Penn State Marcellus Center

DEP Begins to Collect Monthly Natural Gas Production Data
Bureau of Forestry to Offer Work Capacity Test

Leave a Reply