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PA Adds One Rig, Now @ 15; National Rig Count Drops One Rig @ 584
One month ago, Pennsylvania’s rig count dropped to just 12 rigs, the lowest that state has operated in the last 17 years (see PA Drops Another Rig to 17-Year Low; National Rig Count Even @ 585). Since then, PA has re-added one rig per week for three weeks in a row, and as of last Friday, the state was running 15 rigs for the first time since early October. Ohio and West Virginia both remained constant, with ten active rigs each. Cumulatively, the M-U sported 35 active rigs last week. We haven’t seen a rig count that high since August of this year (three months ago). Read More “PA Adds One Rig, Now @ 15; National Rig Count Drops One Rig @ 584”
Environmental wackos have made building a new natural gas pipeline anywhere in the northeast (or southeast) such a heinously nasty experience with multiple and repeated regulatory challenges and a blizzard of lawsuits that nobody has ventured to propose a new “greenfield” (brand new from scratch) pipeline since Mountain Valley Pipeline, which took a decade to complete at double the original budget. We’re hopeful the situation will change under the new Trump administration. The Marcellus/Utica industry recognizes we need another new pipeline to move more of our molecules to other regions. What would be the “driving force” to prompt a company to be willing to try once again? 
Ascent Resources, founded as American Energy Partners by gas legend Aubrey McClendon, is a privately held company focusing 100% on the Ohio Utica Shale. Ascent, headquartered in Oklahoma City, OK, is Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S. The company issued its third quarter 2024 update last week. The company produced 2,075 MMcfe/d (2.08 Bcfe/d), down 4% from 2,165 MMcfe/d (2.16 Bcfe/d) produced in 3Q23. Ascent pivoted to produce more liquids, including oil and NGLs, with an emphasis on producing more NGLs during 3Q24. According to the update, the company plans to continue its liquids focus in the fourth quarter. 
EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), owns nearly a half million acres of leases in the Ohio Utica. EOG calls its position the “Ohio Utica combo play” and now considers it one of the company’s “premium plays.” EOG concentrates on oil drilling in the Utica. The company experimented with the Utica this year, however, the time for experimenting is coming to a close. During the company’s third quarter update last Friday, COO Jeff Leitzell said EOG will be “up to two full rigs and one full frac fleet by year-end” next year. 
We’ve written a number of times about the Ohio Utica Shale and its beginnings with gas legend Aubrey McClendon, who, as CEO of Chesapeake Energy, was one of (if not THE) first to recognize the Utica as an oil play. However, it was a successor company, Encino Energy, that figured out how to coax large quantities of oil out of the Utica shale. Encino is one of the big success stories of drilling for oil in the Ohio Utica Shale. However, using the right tech is only part of the equation that transformed a company founded in 2017 into the #1 largest oil producer in Ohio and all of the Marcellus/Utica. 
Three weeks ago, Pennsylvania’s rig count dropped to just 12 rigs, the lowest that state has operated in the last 17 years (see 
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its third quarter 2024 numbers yesterday. The company drills Utica and Marcellus wells in Ohio. It also has an active drilling program in the Oklahoma SCOOP shale play. Gulfport’s net daily production for 3Q24 averaged 1,057.2 MMcfe/d (1.06 Bcfe/d), up slightly from 3Q23’s average of 1,056.9 MMcfe/d. Production in 3Q consisted of 861.6 MMcfe/d in the Utica/Marcellus (81%) and 195.6 MMcfe/d in the SCOOP (19%). The production mix comprised approximately 91% natural gas, 6% natural gas liquids (NGLs), and 3% oil and condensate. The company has spent $52 million on maintenance leasehold and land investment so far this year, pointing out that leasing still happens. 
The Ohio Natural Energy Institute (which 
The realignment 
The U.S. Energy Information Administration (EIA) reports that U.S. natural gas production from shale and tight formations declined by about 1% from January through September 2024 compared to the same period in 2023. Most of the decline comes from two shale plays—the Haynesville in Louisiana and Texas (down 12%) and the Utica Shale in Ohio, Pennsylvania, and West Virginia (down 10%). Although the EIA’s analysis (below) is excellent and instructive, it misses one important detail about the decrease in Utica Shale gas production. 
Last week, MDN brought you a story about a developing issue of who, ultimately, should pay to build out new electricity sources for data centers (and AI) that increasingly use huge amounts of power (see 
The Ohio Department of Natural Resources (ODNR) asked a panel of lawmakers called the Ohio Controlling Board to waive the need for competitive bidding for $11.2 million in contracts to plug orphaned oil and gas wells around the state. Yesterday, the Controlling Board approved the request. The contracts were awarded to two companies: Next LVL Energy (owned by Diversified Energy) will receive $7 million, and CSR Services will receive $4.2 million. 
We always get a small thrill when we notice a new company working in the Marcellus/Utica. This is one of those occasions. Tiburon Oil & Gas Partners, LLC, headquartered in Houston, TX, is headed by four former Carrizo Oil & Gas executives. Tiburon was formed in 2022 “to responsibly acquire, develop, and operate upstream oil and gas assets in the Appalachian Basin.” In a press release issued yesterday, Post Oak Energy Capital announced it is giving buckets of money to Tiburon to close a deal to lease land in the liquids-rich portion of the Utica Shale play in Ohio. Have money, will drill. 
We’ve been talking a lot lately about data centers and AI (artificial intelligence) because these facilities use enormous amounts of electricity, and electricity must be generated somehow. Most often, electricity is generated by burning natural gas. Gas-fired plants are important customers for Marcellus/Utica gas. A situation in Ohio in the Columbus area related to gas-fired power is likely to play out in other areas, too. It’s something you should be aware of. The issue, in a nutshell, is this: Who should pay to build new power sources to feed data centers? Should existing electric customers be on the hook for some of the cost? Should the data centers (companies like Google, Amazon, Microsoft, Facebook, etc.) pay upfront or be forced to commit to long-term contracts for the extra demand they will place on the grid?