NGI Shale Daily
Pennsylvania Marcellus Activity Level in Early 2012

Friday, March 02, 2012

After three years of exponential growth, the Marcellus Shale is showing signs of plateauing this year.

Drillers in northeastern Pennsylvania -- the dry gas area of the Marcellus Shale -- in the months ahead will stomp on the brakes with both feet and jam the dry gas freight train into reverse, according to a recent analysis by Bentek Energy LLC (see Shale Daily, Feb. 22b). Even if they do, a bulging gas surplus will fester behind pipeline capacity constraints for years to come, the firm said.

"...Northeast supply growth has outpaced capacity additions and local demand growth and led to a huge backlog of non-producing wells, exacerbating the potential for supply congestion and price weakness," Bentek said in a Market Alert. "In response, producers have announced a 14% decline in total northeastern Pennsylvania (dry gas) rig activity."

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