Pennsylvania 1Q gas output up nearly 10pc

Pennsylvania's natural gas production grew by nearly 10pc in the first quarter of 2018 from a year earlier as new pipeline infrastructure came on line and demand soared on cold weather.

Output in the US state during the three-month period ended March 31 topped 16 Bcf/d (453mn m³/d), according to Pennsylvania's Independent Fiscal Office (IFO). The IFO provides revenue projections for use in the state budget along with analysis of fiscal, economic and budgetary issues.

Horizontal well output drove all of the increases in total output, according to IFO data. Vertical well output declined by 25pc on the year to 22mn cf/d during the quarter. Horizontal well production has increased by 12pc over the past two years, with a steady increases reported over the past six consecutive quarters. There were 7,913 producing horizontal wells in the state during the first quarter, up by nearly 10pc from a year earlier.

All of the production growth in the first quarter was driven by wells drilled in 2016 and 2017. Output from wells drilled in 2015 showed the largest decline, dropping by more than 30pc from a year earlier.

Susquehanna, Washington, Bradford and Greene counties comprised two-thirds of statewide production, the IFO said.

Pennsylvania's natural gas output ranks second in the nation behind Texas, according to the US Energy Information Administration. In the first two months of 2018, Texas produced 22 Bcf/d, compared with Pennsylvania's 16 Bcf/d.

Spot prices at Dominion Transmission South, an index located in the southwestern portion of the state, averaged $2.61/mmBtu during the first quarter of 2018, down by nearly 3pc from the year-earlier average, likely on higher production rates.