The U.S. Energy Information Administration (EIA) said Tuesday the number of drilling rigs active in the Utica Shale during the last week of October had more than doubled compared with the same week in 2011, with an increase in rigs targeting oil more than offsetting the loss of natural gas rigs.
Citing Baker Hughes Inc. data, the EIA said 28 rigs were active in the Utica on Oct. 26, compared with 13 that were operating on Oct. 28, 2011. The percentage of wells targeting shale oil increased to almost 86% from 15% year/year.
Although the 28 rigs active in the Utica was “well below” the 88 active rigs in the Marcellus Shale, the EIA pointed out that the number of drilling rigs in the Marcellus had actually fallen by 53 compared with 2011.
“Drilling activity in the Marcellus Shale is predominantly focused on natural gas, mainly in Pennsylvania,” the EIA said. “For the Appalachian Basin as a whole, the result has thus been a shift away from drilling for Marcellus Shale gas in Pennsylvania and toward drilling for Utica Shale oil in Ohio.”
The EIA said the decrease in drilling for natural gas in Pennsylvania’s portion of the Marcellus appeared to be happening only in predominantly dry areas of the shale play, those areas that contain low volumes of natural gas liquids (NGL).
“For these dry gas regions of [the Pennsylvania] Marcellus play, the rig count fell by 56,” the EIA said, again citing Baker Hughes. “For the four counties with rigs in Pennsylvania’s southwestern wet gas region of Marcellus — where, as in Ohio, there are relatively higher volumes of liquid byproducts — the year/year weekly rig count increased.”
According to EIA calculations based on LCI Energy Insight estimates, average natural gas production in the Marcellus rose 72%, to 6.8 Bcf/d, between October 2011 and October 2012.
Data from the Ohio Department of Natural Resources’ (ODNR) Division of Mineral Resources Management showed that full-year 2011 production in the Utica averaged 0.007 Bcf/d of natural gas and 127 b/d of oil.
ODNR spokeswoman Heidi Hetzel-Evans said she couldn’t confirm the EIA’s figures since the federal agency receives its rig count based on field reporting. However, “we certainly have seen the highest numbers of rigs in recent memory here in Ohio,” she told NGI’s Shale Daily. “We have not seen double digits of rigs before, and this year we are seeing double digits. So we certainly have more than doubled in the last year.”
Hetzel-Evans said there were 28 rigs operating in Ohio’s portion of the Utica as of Nov. 17. “That would certainly be double what we saw less than a year ago. Actually, it has doubled over the course of this year.”
Asked if her agency had a prediction over where the rig count in Ohio’s Utica would go from here, she said, “it’s difficult for the ODNR to speculate because we have so little production figures in house. In March we only saw a total of five wells in production; right now we’re showing about 41 wells in production, that we know of, based on our well completion reports, which are due 60 days after completion is finalized.
“We do expect by the end of the year we may be seeing between 200 and 225 wells drilled, and next year we do believe that will double to as much as 500 wells. In terms of production, we know that we are still in an exploratory stage, and we recognize with that fact it could be two to three more years before we really see peak production.”
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