Record natural gas production set
CLAIRSVILLE – Oil is commonly known as black gold, and Rice Energy’s Gold Digger well pumped a prolific 1.55 billion cubic feet worth of natural gas from April 1 to June 30, helping Ohio establish a quarterly record for Marcellus and Utica shale yields.
Although U.S. Energy Information Administration estimates predict production from the formations to drop from August to September, the Buckeye State continued churning out more oil and natural gas earlier this year, according to official records. Shale drillers pumped about 221 Bcf during the second quarter, besting the previous quarterly high of 183.5 Bcf set from Jan. 1 to March 31. To put that in perspective, 1 Bcf is enough fuel to provide power to 24,315 homes for one year.
“You will continue to see growth out of the Utica because the capital is already deployed,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. “But we’re still fighting this glut of gas because we don’t have enough pipelines.”
“We are still a few years away from having all the pipelines we need. More pipelines are integral to the success of the Utica,” Bennett added. “If an operator puts $10 million into a well, he needs to make sure he can get that well online.”
Though Ohio features Marcellus and Utica shale rock formations, the field is generally considered part of the Utica shale region. Most Utica shale production consists of natural gas, but oil production is up in Ohio. The state produced about 10 million barrels of crude from shale from April 1 to June 30, up from 4.4 million barrels during the same stretch in 2014.
“We know the reserves are good, especially in these counties in the eastern part of the state,” said state Rep. Jack Cera, D-Bellaire. “I would like to see some more local people getting jobs, though.”
Cera is a member of the Ohio 2020 Tax Policy Study Commission, which could direct a larger portion of oil and natural gas severance tax revenue to the counties seeing the most activity. Ohio’s current tax for oil and natural gas drilling is 3 cents per every 1,000 cubic feet of natural gas and 20 cents for every barrel of oil.
“With the price being down, they say it’s a bad time for a tax increase,” Cera said of industry officials. “And we do have a real glut of both natural gas and oil right now. Hopefully, once more pipelines are built, we can get more of it out to market.”
Bennett said the selling price drillers need to make a profit of their oil and gas varies by company, but said no one is going to continue drilling if they do not believe it will be financially fruitful.
“The biggest key for our whole industry is to find more markets and more end-users,” Bennett said. “Whether for power generation or for manufacturing, this massive amount of low-cost energy is here. When prices come back, we will have a very viable shale play here in Eastern Ohio.”
In Belmont County, drillers such as Gulfport Energy, Rice Energy, American Energy Partners and XTO Energy continue leading the way in natural gas production, according to ODNR statistics. Numbers show Rice’s Gold Digger operation south of St. Clairsville along state Route 9 yielded the most gas in the county during the second quarter at 1.55 Bcf. The Antero Resources operation at the DK Carpenter site in Seneca Township leads the way in Monroe County, as this well rendered 1.02 Bcf during the second quarter.
Harrison County features a larger number of active shale wells than Belmont and Monroe, with the most productive being the Hess Corp. Athens B well, which produced about 730 million cubic feet during the period.
The most productive natural gas well in Jefferson County is the Chesapeake Energy Ciacci operation, which rendered about 570 million cubic feet during the stretch. In Columbiana County, Chesapeake’s Summitcrest well led the way with roughly 675 million cubic feet. To the southwest, RE Gas Development’s Hall well produced 340 million cubic feet of natural gas in Guernsey County from April 1 to June 30, while Antero’s Graves operation set the pace in Noble County at 530 million cubic feet.
Originally published in The Steubenville Herald Star