This past Tuesday there was the annual Upstream PA Seminar. Dave Spigelmyer, President, Marcellus Shale Coalition, was one of the featured speakers. Spigelmyer’s comments provided real insight into the situation of the NatGas industry in PA which is very challenging.
Spigelmyer’s presentation included this information:
- There are 8972 unconventional wells in PA
- 800 shut in
- 766 drilling not completed
- 551 inactive
- 6805 unconventional wells are producing NatGas
- These wells produce 390 billion cu. ft. of NatGas monthly
- 5 trillion cu. ft. annually
- 20% of the total U.S. production
- The low price of NatGas has resulted in the significant reduction in CAPEX spending.
- Upstream operators have had major job reductions
- There has been considerable pressure on the supply chain.
- Calls for higher taxation and new regulations have eroded investment stability in PA.
- NatGas production in PA will likely some decline in 2016. Many wells are waiting infrastructure development
- The Marcellus operators sell NatGas at deep discounts. The average selling price per MMBTU in March 2016 was $1.15 which is probably about 60% below Henry Hub price.
- The industry will focus on end-user which is the power generation, plastics and pharma industries.
Spigelmyer raised several concerns regarding the health of the NatGas industry in PA which has generated tens of thousands of good paying jobs with excellent benefits. He identified how local businesses can support the industry.
Look for more information from the seminar to be posted on our blog.