The Marcellus Shale | September 2022

Field Overview

The Marcellus Shale is the largest gas play onshore in the US. Located in the Northeast, it supplies the high-demand markets along the East Coast. Most of the basin’s gas is produced through unconventional methods, while the little oil produced is mostly by conventional means. Some of the top formations include the Onondaga and the Huntersville.

State Drilling Statistics

Active Drilling Rigs in Basin- 41 (+2)
Total Rigs in Pennsylvania- 24 (-2)
Total Rigs in United States- 769 (+10)
Total U.S. Rigs – 42% YTD

State Permitting Data
Permits Approved – 64

Marcellus Top Producers
Top Producer By BOE – Chesapeake

Basin Highlights

U.S. Northeast faces potential energy shortages as rails start to shut

A possible union strike in states along the east coast could mean a railroad shortage which would delay important oil shipments. Some of the northern states rely on imported oil and gas from the south via rail to supplement pipeline transportation, especially before winter when temperatures dip more than any other area in the country. States in the New England area rely heavily on the railroad network because the pipeline network is sparse in that area, meaning a shutdown can drastically increase energy prices. Many states, especially in the New England area, are already dealing with a distillates shortage, the main feedstock for heating fuels. 

Fetterman spurns Democratic anti-fracking message in bid for rural support

Being a Senator in Pennsylvania is a tough position, one has to simultaneously vouch for the state’s booming gas industry while also pleasing the majority of those who want to set and reach climate goals. John Fetterman is trying to walk that line 16 days before the next election where he is running against Dr. Oz, the former TV personality. Fetterman, who has in the past spoken out against the natural gas sector, has reconsidered his position and has now pledged to protect workers in the industry. Although he uses strong words such as ‘pledge’, he has also signed the Inflation Reduction Act, which would provide hundreds of billions of dollars to transition the state away from fossil fuels.

Mergers And Acquisitions Are Back With $10 Billion In New Deals

Merger and acquisition seemed to dip along with the price of oil in 2020, now that oil seems to be remaining in the mid to high $80s, some companies are coming out of their shells. One notable acquisition that took place recently was between Pennsylvania oil and gas producer THQ Appalachia and XcL Midstream, as the former acquired the latters gathering and processing assets in the state for just over $5 billion. Another notable merger was between Sitio Royalties and Brigham Minerals for just under $5 billion in an all-stock deal. While companies are less willing to risk big spending on mergers and acquisitions in a volatile market, it seems some are braving the waters to make some big deals.

Operators with Most Permits in PA

Top Producers By Gas

Rig Count

PA Oil Production

PA Natural Gas Production

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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
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