Platts
Chesapeake's Marcellus cuts to have little spot gas price impact

Tuesday, January 24, 2012

Despite Chesapeake Energy's announcement Monday it would move rigs from its Marcellus Shale operations, market sources and data analysis indicates there would be little price impact from such curtailments.

The company currently has some 18 rigs in northern Pennsylvania, with most of the rig losses coming from the sweet spots in Bradford and Susquehanna counties, according to Bentek Energy. Bentek is a unit of Platts.

"In the grand scheme of things, when you look at overall production from the Marcellus, it's not that big of a deal," a Northeast fundamentals analyst at a producer said.

Chesapeake's production in the area averaged 699,000 Mcf/d in the fourth quarter of 2011, according to Bentek, roughly equating to about 16.5% of dry gas production in Pennsylvania and 11.6% of total Northeast production in that time frame.

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