PA IFO 2Q25: Production Up 9%, Drilling Up 67%, Spot Price Up 61%
Yesterday, the Pennsylvania Independent Fiscal Office (IFO) released its latest quarterly Natural Gas Production Report for April through June 2025 (full copy below). There were 105 new horizontal wells spud (drilled) in 2Q25, a huge increase of 42 wells (+67%) compared to 2Q24. Natural gas production volume was 1,954 billion cubic feet (Bcf) in 2Q25, up 162 Bcf (+9%) from 1,792 Bcf produced in 2Q24. The average Pennsylvania spot hub price was $2.38, an increase of $0.90 (+61%) from the prior year. All in all, it was a great second quarter for the PA Marcellus. Read More “PA IFO 2Q25: Production Up 9%, Drilling Up 67%, Spot Price Up 61%”
Two weeks ago, the Baker Hughes U.S. rig count resumed a downward trend, which continued last week. The count lost another two rigs to end the week at 536. The count has been down (bleeding) 16 of the last 18 weeks. Fortunately, the Marcellus/Utica count has remained constant for the past six weeks, at a combined 36 active rigs. PA operated 18 active rigs. OH ran 11 rigs. And WV operated 7 rigs. Twenty-four rigs targeted the Marcellus and 12 rigs targeted the Utica last week. The overall downward trend in the national count is due to a slowdown in oil-focused drilling, although last week’s figures reversed this trend. Baker Hughes said oil rigs rose by one to 412 last week, while gas rigs fell by three to 119. 
ExxonMobil issued its annual Energy Outlook yesterday, a report that peers into the crystal ball to predict where the energy sector is headed from now until 2050. The company bets its future on what it thinks will happen. In this latest report, Exxon projects that global natural gas demand will rise by over 20% by 2050, as it replaces coal in industry and meets growing electricity needs in developing countries. Based on that view, the company plans to grow its production by 18% over the next five years. Exxon predicts that global oil demand will plateau after 2030, although it is expected to remain above 100 million barrels per day. The crystal ball suggests that gasoline demand will drop 25% due to the rise of electric vehicles (we beg to differ). However, demand for distillates for transportation is expected to remain strong. 
Last week, the Baker Hughes U.S. rig count resumed its downward trend, losing another rig from the week before to 538 active rigs nationwide. The count has been down (bleeding) 15 of the last 17 weeks. The Marcellus/Utica count remained the same for the past five weeks at a combined 36 active rigs. PA operated 18 active rigs. OH ran 11 rigs. And WV operated 7 rigs. Twenty-four rigs targeted the Marcellus and 12 rigs targeted the Utica last week. The downward trend is due to a scaleback in oil-focused drilling. Baker Hughes said oil rigs fell by one to 411 last week, while gas rigs held steady at 122. 
EY, previously known as Ernst & Young, is a multinational professional services network (i.e., consulting firm) based in London. EY is also one of the “big four” largest accounting firms in the world. EY published a new study last week titled “US Oil and Gas Reserves, Production and ESG Benchmarking Study” (full copy below). The study found that due to mergers and acquisitions in 2024, the largest publicly traded oil and gas companies in the U.S. went from 50 down to 40, and that those 40 companies produced a staggering 41% of all O&G production in this country. It’s probably no surprise that many in the list produce natural gas (and oil) in the Marcellus/Utica. 
Last week, the Baker Hughes U.S. rig count halted its downward trend, maintaining the same overall number of rigs as the week before: 539 active rigs nationwide. The count has been down (bleeding) 14 of the last 16 weeks. Has the bleeding now stopped? We hope so. The Marcellus/Utica count remained the same for the past four weeks at a combined 36 active rigs. PA operates 18 active rigs. OH is running 11 rigs. And WV is operating 7 rigs. Twenty-four rigs targeted the Marcellus and 12 rigs targeted the Utica last week. 
The U.S. Energy Information Administration (EIA) issued its latest monthly Short-Term Energy Outlook (STEO) last week. The STEO is the agency’s monthly best guess about where energy prices and production will head in the next 12 months. We joke about the predictions coming from a dartboard, given their seemingly random ups and downs. In this latest assessment, EIA dropped its estimates for the Henry Hub spot price for 2025, again. The agency expects the HH price to average $3.60 per million British thermal units (MMBtu) in 2025, $0.10 lower than last month’s forecast. EIA also dropped its 2026 forecast, now believing the gas price will average $4.30/MMBtu, down $0.10 from last month’s $4.40 (and WAY down from the estimate two months ago of $4.90 next year). 
Earlier today, Reuters published a great article titled “Key US natural gas trends to track as LNG exports hit new highs.” The article is full of terrific charts (and narrative) showing where our LNG is currently going (by country), along with where it has gone historically (by country). The article reveals that over the first 8 months of 2025, total U.S. LNG exports climbed by 22% or by 12.4 million tons from the same months in 2024 to a record 69 million tons. Europe accounted for over two-thirds of U.S. export volumes, followed by Asia. The top three markets were the Netherlands, France, and Spain, which together accounted for 28% of total U.S. LNG shipments so far this year. 
According to the U.S. Energy Information Administration (EIA), the United States set multiple records for energy production and exports in 2024. Of the record 103 quadrillion British thermal units (quads) of total primary energy production in the United States, a record 31 quads went to other countries. Who knew?! In 2024, the U.S. exported 55% of its domestic crude oil and natural gas plant liquids (NGPL) production either directly as crude oil or as processed petroleum products such as propane, distillate fuel oil, and motor gasoline. 
In the U.S. Energy Information Administration’s (EIA) Today in Energy online publication, the EIA lays out the case that more Marcellus/Utica molecules will help supply Gulf Coast LNG export facilities in the future. The EIA says the economics of producing more gas in the Appalachian Basin are more favorable. It’s just cheaper to produce natural gas in the M-U. The EIA’s models show that natural gas is and will transit through the Eastern Midwest region on the way to the Gulf Coast. Pipelines will carry our molecules over (to the Midwest) and then down (to the Gulf Coast). It’s a beautiful thing! 
The U.S. Department of Energy (DOE) yesterday released a new report, “A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate” (full copy below), evaluating existing peer-reviewed literature and government data on climate impacts of Greenhouse Gas (GHG) Emissions and providing a critical assessment of the conventional narrative on climate change. The report was developed by the 2025 Climate Working Group, a group of five independent scientists assembled by Energy Secretary Chris Wright with diverse expertise in physical science, economics, climate science, and academic research. Among the key findings, the report concludes that CO2-induced warming appears to be less damaging economically than commonly believed, and that aggressive mitigation strategies may be misdirected. Additionally, the report finds that U.S. policy actions are expected to have undetectably small direct impacts on the global climate, and any effects will emerge only with long delays.