Pittsburgh airport gas drilling could yield higher royalties
The Allegheny County Airport Authority could be in line to receive a bigger payout from gas royalties than initially thought because land at Pittsburgh International Airport is likely to produce more gas than predicted, Allegheny County and Consol Energy officials said Tuesday.
The company has figured out a more efficient way to plan its wells, allowing it to reach through more of the Marcellus shale despite using fewer boreholes, said Richard E. Goings, vice president of geology/engineering at the Cecil-based company. That may allow the company to drill test wells into a second formation, the Upper Devonian layer, early in its development at the airport, he said.
“There may be some incremental increase in gas coming out of there, but it certainly won't be double,” Goings said.
Better technology has allowed the company to drill longer horizontal wells, reaching nearly 10,300 feet in Westmoreland County this year, he said. “We just keep pushing the envelope a bit longer.”
County Executive Rich Fitzgerald said additional gas would mean more in royalties to benefit the airport.
“We hope they find a lot of gas. We all wish for that,” he said. “They haven't given us a written report, but early testing has shown there may be more gas than initially indicated.”
The county signed its first gas deal this year when the Airport Authority leased about 9,000 acres at Pittsburgh International to Consol Energy. The authority initially expected to receive about $500 million in royalties and fees over the life of the deal. That includes 18 percent royalties on the gas.
County Councilman Nick Futules, D-Oakmont, said he is pleased gas estimates are rising.
“That means more money for the airport,” he said.
Though Consol has increased estimates on gas production, its officials haven't substantially changed their estimates on the number of wells and well pads they'll develop, Goings said. Most of their gains will come from better efficiency, including well bores that stretch to 8,500 to 9,000 feet long as the company drills horizontally into the Marcellus.
Bobby Kerlik and Timothy Puko are staff writers for Trib Total Media.