Pennsylvania

Energy. Environment. Economy.

Marcellus Production Tops Haynesville

Susan Phillips / StateImpact Pennsylvania

A Cabot Oil and Gas drill rig at night in Susquehanna County.

Pipeline expansions serving the Marcellus Shale gas boom have helped boost production rates above seven billion cubic feet a day, according to an analysis by IHS. The report says the Marcellus now leads the Haynesville Shale as the most productive shale play in the country. The Haynesville Shale formation stretches beneath northwestern Louisiana, eastern Texas and southwestern Arkansas.

The largest winners according to IHS are two companies that began tapping the Marcellus ahead of the pack — Range Resources and Cabot Oil and Gas.

“These companies have created significant shareholder value through low-cost, efficient growth that has been commensurate with the explosion of production coming from the Marcellus,” said Bryan McNamara, principal energy analyst at IHS.

But McNamara also says not every driller has enjoyed this type of success.

The report says low natural gas prices have driven down the number of rigs operating in the Marcellus resulting in a 30 percent drop in the number of wells drilled in 2012, as compared to the previous year. The number of permits to drill, however only dropped by five percent in 2012. Gas prices are expected to rise in 2013, according to the report. So, Marcellus production may rise as well.

The top five drilling counties include Bradford, Lycoming, Susquehanna, Tioga and Washington county.

“In this case, we anticipate drilling activity picking up across all five counties,” said Bryan McNamara in an IHS release. “As for Range Resources and Cabot Oil and Gas, with both companies holding non-proven Marcellus resource potential nearly five times current proved reserves, we expect continued operational success and high production growth to remain value drivers.”

Cabot Oil and Gas concentrates its efforts in the northeast part of the state with about 368 active wells. The company faced lawsuits and criticism after a number of residential water wells in Dimock were contaminated after drilling began. The Department of Environmental Protection blamed Cabot for faulty well construction. The company says their actions did not cause the contamination, which they say was present before drilling began.

Range Resources has also run into trouble with their neighbors in Washington County, where the company actively drills. Range has about 882 active wells, primarily in the western part of the state. Range Resources has also been accused of contaminating water and air by residents living near their drilling sites. And the company has battled local officials over zoning.

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