Penn Virginia Corp. of Radnor on Tuesday reported disappointing production rates on its first three horizontal Marcellus Shale natural gas wells.

"The Marcellus Shale test wells had initial production rates which fell short of our expectations," H. Baird Whitehead, the company's chief executive, said in a statement.

The test wells in the central part of Penn Virginia's 35,000-acre position in Potter and Tioga Counties are expected to be connected to pipelines in August, when natural gas sales will begin.

"We will monitor longer-term production once these wells are turned into the pipeline and determine if the reserves can support a development program in this immediate area," Whitehead said.

Shares of Penn Virginia fell 3.4 percent, or 49 cents, to $13.96 in New York. The company is the only Marcellus operator based in the Philadelphia area.

The company's initial results are not unusual for operators drilling in areas outside of the "sweet spots" of the Marcellus Shale, an unconventional formation that underlies much of Pennsylvania and several surrounding states. Production rates can vary, depending upon the quality and thickness of the shale.

In February, Encana Oil & Gas USA Inc. ceased operations in Luzerne and Columbia Counties after concluding that its leases were unlikely to produce commercial quantities of gas.

Penn Virginia said its wells, called Risser #A-1H, Risser #A-2H, and Dunn #A-1H, had peak 24-hour production rates of 3.1 million, 2.8 million, and 4.0 million cubic feet. During a three-day period, the wells had average 24-hour production rates of 2.1 million, 1.7 million, and 2.7 million cubic feet.

By comparison, Cabot Oil & Gas Corp., one of the most prolific Marcellus producers, in May reported two horizontal wells in Susquehanna County had initial rates of 29.5 million and 29.7 million cubic feet per day.

Penn Virginia said that an additional well in the western part of its acreage was awaiting completion and that it planned to drill several vertical test wells later this year in the eastern part of its holdings.

Contact staff writer Andrew Maykuth
at 215-854-2947 or amaykuth@phillynews.com.