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Gross gas production in Pennsylvania and the Permian Basin probably hit all-time highs in August, a Rystad Energy data analysis shows, pushing up total US output and helping reverse a decline in the first half of the year when oil output curtailments reduced associated gas volumes.
With nearly complete reported data coverage for August, we see another month of material additions of about 500 million cubic feet per day (MMcfd). This puts Pennsylvania’s total shale gas output above 19.8 billion cubic feet per day (Bcfd) in August, 100 MMcfd higher than the previous record from November 2019.
Associated gas output in the most prolific unconventional basin, the Permian, also delivered a new record. Our updated data shows that by the end of summer, the basin’s production returned to its previous record in New Mexico and surpassed the previous high in Texas touched in the first quarter of the year. Basin-wide gross gas output is currently estimated at 16.84 Bcfd, 70 MMcfd higher than the previous record in March.
Most large shale gas producers in Pennsylvania increased production in August, both on a year-on-year and quarter-on-quarter basis. EQT produced 3.7 Bcfd of shale gas in the state during the month, which corresponds to a 13%-14% increase over the previous three months and a year earlier. Cabot’s volumes remained practically unchanged from a year earlier, but recovered substantially, by 10%, through the summer months.
Chesapeake saw little to no immediate impact on its operations from its Chapter 11 filing, as output increased by 9.4% between May and August. CNX Resources is the only outlier among the top 10 shale gas producers in the state, with significant production declines both from the previous quarter and from a year earlier.
Pennsylvania’s resilient shale gas production is remarkable given the significant slowdown both in rig count and fracking activity this year. Lower drilling and fracking activity is reflected in the decline in wells put-on-production (POP). In 2019, we saw a material increase in frac activity in the state during summer, with shale POPs spiking to an average of 75 wells per month in the third quarter. Since then, POP activity has slowed to 40-45 wells per month in the second quarter of this year.
The fast recovery in Delaware New Mexico in the post-curtailment period was driven by both smaller private operators, who opportunistically ramped up operations as soon as oil prices improved, and large, well-established public producers.
Devon’s oil output came down from the pre-Covid-19 peak and stabilized at around 110,000 bpd during the summer months. Occidental is the only large producer in New Mexico that saw a substantial slowdown in volumes beginning in the fourth quarter of last year. Occidental’s operated oil production declined from about 150,000 bpd in October last year to about 90,000 bpd in August this year. Excluding Occidental, the sub-basin practically returned to the pre-Covid-19 production record by August.
(Source: Rystad Energy – Image: gas flare in the Permian Basin/The Texas Tribune)
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