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On December 5, the Independent Fiscal Office reported third quarter natural gas production in Pennsylvania declined by 0.8% over 2021, the third consecutive quarter in which production did not increase year-over-year.
It also represents the strongest year-over-year decline in quarterly production since monthly production data have been published (2015).
Natural gas production did increase slightly to 1,878 billion cubic feet in the third quarter over 1,852 billion cubic feet in the second and first quarter of 2022.
There were 158 new horizontal wells spud (drilled) in the third quarter of 2022. This figure represents an increase of 47 wells (42.3%) compared to the same period in the prior year.
This uptick in drilling was likely in response to the dramatic increase in prices in late summer.
Preliminary data for the fourth quarter show that the number of wells spud in October and November is down 13.6% from the same period in 2021.
There were 11,119 total producing wells in the third quarter of 2022, an increase of 4.1% from the prior year. Horizontal producing wells, which account for over 99% of production, increased by 4.4%.
Data for the third quarter of 2022 show that the Henry Hub price increased by 85.8% from the same period in 2021 and the average Pennsylvania hub price increased by 94.7%.
The dramatic increase in prices was due to the combination of weaker-than-usual production growth and strong demand (domestic and international).
Current forecasts project that prices will remain elevated in the short term due to global supply and demand pressures.
Click Here for the IFO 3rd Quarter Report.
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[Posted: December 5, 2022]
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