Gassy Northern Utica in Ohio Turns Oily Thanks to Encino Energy
Encino Energy purchased Chesapeake Energy’s Ohio oil and gas assets (including Utica Shale assets) in 2018 for $2 billion (see Encino Takes Over from Chesapeake in Ohio Utica; Big Plans). A few months later, Encino CEO Hardy Murchison and COO Ray Walker (formerly of Range Resources) told attendees at a conference they would do oil drilling in the state differently and better than Chesapeake (see Encino Says They’ll Do it Better in the Utica than Chesapeake Did). They did! By June of last year, Encino had become the biggest oil producer in the state, having “cracked the code” on oil drilling in Ohio (see Oil Prod. in Northern Utica Comes Alive – Encino Cracks Oil Code). Encino is now turning parts of northern Utica, places like Columbiana County that are known for producing mostly natural gas, into oil-producing zones.
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Once a month, the analysts at the U.S. Energy Information Administration (EIA) issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months or so. We sometimes poke good-natured fun at the EIA because their predictions go up in one month, and in the next month, they go down, etc. What about the latest STEO dart board, published yesterday? It won’t surprise you to read that due to warmer weather, the EIA prognosticators believe the average Henry Hub natural gas spot prices will remain “subdued” around $2.40/MMBtu in February and March. What about for the entire year?
Perhaps our headline is slightly misleading. EOG is not the modern equivalent of Jed Clampett walking along and seeing crude bubbling up out of the ground (as in the fictional 
After the climate crazies at the UN’s COP28 climate talks finally (after years of trying) rammed through language about “transitioning away from all fossil fuels,” energy intelligence group Wood Mackenzie ginned up ten predictions for the energy industry in 2024 based on the false premise of transitioning away from fossil energy. WoodMac’s predictions hint at a downturn in gas, LNG, and solar projects, and a rise in blue hydrogen, nuclear, and new developments in carbon capture technologies, along with some other forecasts for the year ahead.
U.S. oil production increased by 21% over the past five years. According to data from the Energy Information Administration (EIA), in 2023, U.S. oil producers set a new annual all-time high production record. The increase in U.S. oil production is driven by a surge of production in a handful of states. We have a list of the Top 11 oil-producing states over the past year. One of the states on the list is a Marcellus/Utica state. Can you guess which one? Hint: It’s NOT Pennsylvania…
The left is slowly, begrudgingly, but inevitably coming to the conclusion that so-called peak oil demand–the theory that other forms of energy will replace oil and that oil demand will diminish–is “pure fantasy.” Axios, founded by former POLITICO “journalists” and catering to Gen Z lefties with attention deficit disorder from growing up playing video games 24/7, ran a short article quoting research by “prominent analyst Arjun Murti,” who offers a sobering case for why “a global peak in oil demand may be very far away.” While the article doesn’t use this exact language, the upshot is that using oil for energy leads to human flourishing–lifting people out of poverty. Oil demand may slip in certain Western countries, but the use of oil for energy will continue to grow in third-world countries for decades to come.
It’s getting even uglier out there. For the sixth week in a row and the 15th of the last 16 weeks, the U.S. active rig count lost rigs. A lot of rigs. Last week the number decreased by a whopping 12 rigs after falling by five rigs per week for the three weeks prior. The total is now down to 642 active rigs across both oil and gas. Sadly, the Marcellus/Utica dropped three rigs last week (after losing two the week before) for a combined M-U rig count of 40–the lowest this year. Last week Pennsylvania picked up two rigs after losing two the week before, but the additions in PA came at the expense of Ohio (lost 2 rigs) and West Virginia (lost 3 rigs).
Folks new to the Marcellus/Utica may not know this, but Chesapeake Energy’s then-CEO Aubrey McClendon first “discovered” the Ohio Utica about 15 years ago. Under McClendon, Chesapeake spent over $2 billion acquiring rights to drill 1.3 million acres in Ohio–or roughly 5% of the state’s land area. McClendon pegged the value of the Utica for Ohio at half a trillion dollars. He famously said the Ohio Utica is “the biggest thing economically to hit Ohio, since maybe the plow.” McClendon was tossed out of the company he founded by corporate raider Carl Icahn, so he started a new company (to target the Ohio Utica) that eventually became Ascent Resources. Tragically, McClendon died in March 2016, so he never got to see his dream turn into reality (see 
Once a month, U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. The latest monthly report, issued Tuesday, predicts that U.S. natural gas production AND demand will rise to record highs in 2023. EIA projected that dry gas production will rise to 103 billion cubic feet per day (Bcf/d) in 2023 and 104.12 Bcf/d in 2024. The current record high is 98.13 Bcf/d set in 2022.
In 2020, EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), sold *all* of its Marcellus assets, which were located in Bradford County, PA, to Tilden Resources for $130 million (see 
Some disturbing news has just come to light thanks to an investigation by Fox News. According to internal Dept. of Energy (DOE) calendars obtained by Americans for Public Trust, DOE Secretary Jennifer Granholm secretly consulted China’s National Energy Administration Chairman Zhang Jianhua, a senior member of the Chinese Communist Party, on Nov. 19, 2021, and then again two days later on Nov. 21, 2021. On Nov. 23, 2021, the White House announced a release of 50 million barrels of oil from the Strategic Petroleum Reserve (SPR). After releasing the oil, Granholm’s DOE then sold millions of barrels of oil to China! In other words, Granholm sold cheap oil to China to prop up that country’s economy while making our own country less energy secure. China is America’s #1 enemy.
The U.S. Energy Information Administration (EIA) published a post noting the increase in the use of energy in the U.S. from 2020 to 2021. Energy usage increased by 25%, adjusted for inflation, in 2021. Why? In 2020 we were deep in the throes of lockdowns due to COVID. Nobody was going anywhere, pretty much, which significantly decreased the use of gasoline and diesel. Once the country emerged from the COVID pandemic, and people began to move around again, energy usage (petroleum products) soared.
Earlier this month, we noticed a short Bloomberg article about a stray comment made by Exxon Mobile CEO Darren Woods. He was speaking at the Bernstein Annual Strategic Decisions Conference held on June 1 in New York City. Woods said he has tasked the brainiacs who work for Exxon to figure out a way to improve fracking, which (Woods said), is still “not well understood.” Woods wants to double oil recovery from fracked wells. Folks, doubling oil (and gas!) recovery via fracking would launch the second shale revolution!