EQT suspends natural gas drilling in parts of Pennsylvania and West Virginia

EQT Corp. will suspend natural gas drilling outside of core areas in Pennsylvania and West Virginia, a sign that the commodities rout hasn’t spared gas producers.

The Pittsburgh-based company won’t drill new wells in central Pennsylvania and in the Upper Devonian shale basin, which sits atop the Marcellus reservoir in the western part of the state, Chief Executive Officer David Porges said during EQT’s third-quarter earnings call. EQT will focus on core acreage in the Marcellus and Deep Utica formations in southwestern Pennsylvania and northern West Virginia, Porges said.

Natural gas futures have tumbled 18 percent this year as mild weather reduced demand, sending stockpiles toward a record. Production will expand 5.6 percent in 2015 to an all-time high of 79.06 billion cubic feet a day as shale output rises, according to the U.S. Energy Information Administration. Gas slid to a three-year intraday low of $2.358 per million British thermal units Thursday on the New York Mercantile Exchange.

“The focus in 2016 will be on this more narrowly drawn notion of what the core Marcellus would be, assuming the Deep Utica play works,” Porges said.

The company plans to drill 10 to 15 wells next year in the Deep Utica formation, which “could be larger than the Marcellus over time,” Porges said. EQT’s preliminary estimate for 2016 production growth is 15 to 20 percent above 2015 levels, he said.

EQT dropped 4.2 percent to $71.13 at 12:40 p.m. in New York. Shares are down 6 percent this year.

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net Charlotte Porter, Robin Saponar

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