West Virginia oil and natural gas production both grew by double-digits last year, reflecting similar increases from unconventional wells in nearby Ohio and Pennsylvania that are likely to be tempered as operators continue to pull back across the Appalachian Basin.
Natural gas production for both vertical and horizontal wells rose by roughly 20% year/year to 1.8 Tcf in 2018, according to data reported to the West Virginia Department of Environmental Protection. Oil production grew by nearly 60% over the same time to 12 million bbl.
The West Virginia Oil and Natural Gas Association (WVONGA) said it was the 10th straight year of output increases in the state. WVONGA said oil and gas volumes hit record levels in 2018.
Doddridge was the largest natural gas producing county in the state at 434 Bcf, followed by Tyler County at 272 Bcf and Ritchie County at 200 Bcf to round out the top-three. Marshall County, also one of the leading gas-producing regions, was the state’s largest oil producing area last year with more than 2.9 million bbl reported.
Like West Virginia, both Pennsylvania and Ohio continued to see increases in natural gas output last year driven almost entirely by the Marcellus and Utica Shales. Unconventional operators produced 6.1 Tcf alone in Pennsylvania, up by about 14% from 2017, while Ohio’s unconventional production rose by more than 40% year/year to 2.4 Tcf.
But as supply has increased across the country and demand has waned, natural gas producers in particular have signaled a slowdown. Prices have fallen, and in Appalachia, a pipeline buildout is slowing. Investors have also shown an appetite for capital discipline.
Heading into the beginning of the year, Appalachia’s leading operators announced plans to curb spending. With the second quarter earnings season underway, some have also announced further cuts in activity. While production is still expected to grow across the basin in coming years, it is likely to be at a more modest single-digit pace given the commodities outlook and forecasts from the region’s top operators.