December 17, 2020 – S&P Global Platts
Pa. shale gas production flattens as drillers time the market, contain costs
By Bill Holland
EQT Corp. and other producers have been turning their gas production on and off like a light switch, RBN Energy gas market analyst Sheetal Nasta wrote Dec. 14. In contrast to other analyses focused on benchmark spot and futures prices at Louisiana's Henry Hub, RBN said drillers seem to be timing their flows to prices inside Appalachia, specifically at Dominion South, a pricing point south of Pittsburgh.
October shale gas production in Pennsylvania grew about 1% percent year over year and compared to the preceding month as drillers stuck with their maintenance drilling programs designed to control costs and return cash to investors. Pennsylvania producers delivered 18.84 Bcf/d of gas in October, compared to 18.71 Bcf/d in September and 18.66 Bcf/d in October 2019, according to the state Department of Environmental Protection database Dec 16.
Nasta said the starts and stops of producers' gas shut-ins correlate more closely to changes in the Dominion South spot price — opening the valves when prices are above 75 cents/MMBtu and shutting in the gas when local prices fall below that mark. Historically, oil and gas producers have been reluctant to interfere with the free flow of producing wells because of concerns about damaging the well.