Ohio’s Utica Shale producers gained momentum in the second half of 2017, reporting a 27.5% year/year increase in natural gas production during the third quarter and an 18.5% sequential increase, according to data released this week by the Ohio Department of Natural Resources (ODNR).
The healthy gains come after modest increases for most of the year as operators in the state worked to emerge from the commodities downturn. Unconventional natural gas production hit 460.6 Bcf, up from 361.2 Bcf in the year-ago quarter and 388.6 Bcf in 2Q2017. Shale oil production also increased slightly to about 4.2 million bbl from roughly 4 million bbl in both the year-ago period and 2Q2017.
Last year was marked by oil production declines, but those volumes have bounced back and risen since 1Q2017. Natural gas production in the state, however, continues to set records. Many operators throughout Appalachia are preparing to fill a bevy of takeaway projects that are scheduled to come online soon and were calling for production ramps heading into 2018.
Antero Resources Corp., for example, has said it has nearly a dozen drilled and completed wells that are waiting for Rover Phase 1B to come online. The Federal Energy Regulatory Commission last week cleared the project to bring three Ohio supply laterals and associated compression into service that would allow that to happen by the end of the year and boost available capacity from 1 Bcf/d to 1.7 Bcf/d.
“I believe it's a combination of improved drilling economics in the dry window of the Utica, combined with an increased production in Ohio ahead of the start-up of Rover Pipeline,” said NGI’s Patrick Rau, director of strategy and research, of the third quarter gains. “Longer laterals are really helping out there.”
Rig counts are also currently higher in Ohio, Pennsylvania and West Virginia than they were at this time last year. There were 26 rigs running in the Buckeye state at the end of last week, compared to 18 at the same time last year, according to Baker Hughes Inc.
ODNR’s third quarter report listed 1,760 producing wells, with average per-well oil production of 2,367 bbl and average natural gas production of 261.7 MMcf. Ohio law does not require the separate reporting of natural gas liquids or condensate. Oil and gas totals include those volumes.
ODNR has issued 2,703 horizontal Utica permits, and 2,187 Utica wells have been drilled to date in the state. The agency has permitted another 51 Marcellus Shale wells and 35 of those have been drilled.