Pennsylvania Shale Gas Output to More Than Double This Year - Study

HOUSTON (Dow Jones Newswires), July 21, 2011

Natural gas production from Pennsylvania's Marcellus Shale should reach the equivalent of 3.5 billion cubic feet per day this year, more than double 2010's output, according to new research by a trio of Pennsylvania State University professors.

The study, released Wednesday, further estimates that production in the state from the deeply-buried rock formation will rise to the equivalent of 6.7 billion cubic feet per day in 2012 and 17.5 bcfe in 2020.

That level of production would make the Pennsylvania basin the largest supplier of natural gas in the U.S., able to meet about 25% of the country's demand, said Kathryn Klaber, who heads the Marcellus Shale Coalition, an oil and gas industry advocacy group.

The Marcellus Shale underlies parts of several Mid-Atlantic and Midwestern states but production is centered in Pennsylvania.

In 2010 1,405 wells were drilled there, yielding the equivalent of 1.3 billion cubic feet of gas per day, according to the study. The professors, who obtained data from producers through the advocacy group, said that 2,300 wells are planned to be drilled this year and forecast that the number will steadily rise to about 2,500 a year by 2020.

While producers have focused on Pennsylvania with some forays into Ohio and West Virginia, several are eying an expansion into New York.

Many initially believed that southwest Pennsylvania held the most productive fields. But a string of recently drilled wells in northern Pennsylvania have made exploration in New York -- where a ban on hydraulic fracturing, the controversial technique needed to crack open the energy-bearing rock, was recently lifted -- more attractive.

Twenty-four of Pennsylvania's 25 highest producing wells are in counties that border New York, according to the Pennsylvania Department of Environmental Protection.

In May, Houston-based Cabot Oil & Gas said two of its wells in that border area are producing nearly 30 million cubic feet of natural gas per day -- significantly more than any previous Pennsylvania wells.

Copyright (c) 2011 Dow Jones & Company, Inc.


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