After shutting in 1.4 Bcf/d of production volumes in May and pulling few permits for new wells over June and July, the largest U.S. natural gas producer, EQT Corp., is cranking up its machine to catch rising oil and gas prices this fall and winter, according to August shale gas permitting data from Pennsylvania's Department of Environmental Protection.
Pennsylvania issued 77 permits for shale gas wells in August, down 24% from the same month in 2019. Nearly half went to EQT, which pulled 38 permits compared to 12 in June and July combined. EQT's August activity was focused on Greene and Washington counties south of Pittsburgh, according to DEP data as of Sept. 4.
The increase in permitting activity is a sharp turn for the Appalachian driller. As recently as the company's July 27 second-quarter earnings conference call, President and CEO Toby Rice told analysts that while EQT returned all of the gas it pulled from production in July, the company was ready to shut in gas in the fall if prices stayed low.
Joining EQT in Greene County was CNX Resources Corp., which pulled eight permits in August, one more than in July. The state's other big permit puller in August was New York gas company National Fuel Gas Co., which pulled eight permits to drill in north-central Cameron County, acreage that is prospective to both the Utica and Marcellus shales.
The state's four other large producers — Southwestern Energy Co., Cabot Oil & Gas Corp., Range Resources Corp. and Chesapeake Energy Corp. — accounted for only 10 permits in August, consistent with lower activity throughout the summer as commodity gas prices at the benchmark Henry Hub stayed below $2/MMBtu until starting to rise in August. Including EQT, the state's top five gas producers accounted for 62% of the state's August permitting activity, while publicly traded drillers accounted for 83% of activity.
PennEnergy Resources LLC had seven of the 13 shale gas permits pulled by private drillers in August, according to DEP data. Backed by EnCap Investments LP, PennEnergy operates primarily in Butler County, north of Pittsburgh, on acreage acquired when Rex Energy Corp. went bankrupt in 2018.
