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Baker Hughes U.S. Rig Count Loses 6 @ 594, M-U Drops 2 @ 36
Well, the bottom dropped out of the rig count last week once again. The national combined oil and gas rig count dropped by six to 594, the lowest it has been since January 2022. The Marcellus/Utica did not go unscathed either, losing two rigs. Pennsylvania lost one rig and now operates 21 rigs. Ohio remained steady with ten active rigs. However, West Virginia lost another rig and now only has five active rigs. One year ago this week, WV operated 13 active rigs. Yuck.
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The Ohio Department of Natural Resources (ODNR) released production numbers for the first quarter 2024 yesterday. Oil production, led by Encino Energy wells, is the headline news. Oil production from Encino represented 51.3% of all Ohio Utica oil production in 1Q. Ascent Resources was the next closest oil producer, with 21.8% of Utica oil produced. As for natural gas, Ascent Resources dominated with 42.8% of all Ohio Utica natgas production. In the number two slot was Gulfport Energy with 17.6% of natgas production, followed closely by Encino with 16.0% of natgas production. Below, we have lists of the top 25 gas and oil wells by production in 1Q24, along with charts showing gas and oil production by both drillers and by county. You’ll only find this news (and this level of detail) here on MDN.
For more than a decade, MDN has brought you stories about shale development on and under land controlled by the Muskingum Watershed Conservancy District (MWCD), an agency formed in 1933 to help control flooding and promote water conservation in the Muskingum River watershed area of Ohio, an area that covers 8,000 square miles (
Yeah, the bottom pretty much fell out of the rig count last week, both nationally and for the Marcellus/Utica region. We’re hitting new lows with both counts. For the M-U, Pennsylvania stayed the same with 21 active rigs, but Ohio lost one rig, and West Virginia lost two rigs last week, for a net loss of three — 37 active rigs across the region, the lowest in more than a year. The national rig count hit 600 last week, the lowest it has reached since January 2022. Ugh.
The Ohio Oil and Gas Land Management Commission (OGLMC) approved two bids to drill for oil and gas under (not on) state-owned lands yesterday. Antero Resources was the sole bidder to drill under a Dept. of Transportation (DOT) property in Noble County. Southwestern Energy won its bid to drill under DOT land in Monroe County along the Ohio River. The OGLMC also advanced five other nominations to drill under state-owned properties to the bidding process. One nomination advancing is a request to drill under the 84-acre Keen Wildlife Area in Harrison County (see 
Forced pooling is the practice of forcing landowners (rights owners) who don’t want to allow drilling under (not on top of) their land from blocking such drilling for their neighbors. Underground horizontal drilling used in shale wells often crosses borders into neighboring land. There’s no way around it. There is no surface disturbance for those who don’t want to lease. In Ohio, the practice of forced pooling is called “unitization.” At least 65% of landowners in a proposed unit must be leased in order to force the others in the unit to accept drilling under their land.
Last week, the Baker Hughes U.S. rig count lost another two rigs, down to 603, the lowest the count has been since January of 2022. Since last October, the national count had gone as low as 616 and as high as 629, and that was it — a fairly narrow band. That is, until three weeks when it crashed through the floor and went lower, down to 613. Then, two weeks ago, it was down to 605. And now, it has gone even lower, down to 603. Will we see it go lower than 600?
EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), owns a huge 430,000+ 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. As part of the company’s first quarter 2024 update, Keith Trasko, Senior VP for Exploration and Production at EOG, said Utica wells “compete with the best plays in America, very comparable to the Permian on a production per foot basis.” Wow! High praise indeed. The Utica is the new Permian…we like the sound of that!
Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), reported its first quarter 2024 numbers earlier this week. 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 1Q24 averaged 1,053.7 MMcfe/d, down just a shade from 1Q23’s average of 1,057.4 MMcfe/d. Production in 1Q consisted of 831.3 MMcfe/d in the Utica/Marcellus (79%) and 222.4 MMcfe/d in the SCOOP (21%). The production mix was comprised of approximately 92% natural gas, 6% natural gas liquids (NGLs), and 2% oil and condensate.
Encino Energy published its annual Community Progress Report for 2023 yesterday. The report provides insight into the company’s achievements through its Community Partnership Program and highlights its investments in the communities in which it operates. In five years of active operations in Ohio, Encino has donated more than $2 million to 145 community groups and organizations in the state. In addition, Encino employees have donated more than 2,000 hours of time to volunteer. Recipients include first responders at fire and police departments, seniors groups, 4H, hospitals, and many more.
Here’s something we had not previously heard: Investors (at least some investors) have “mixed or negative sentiment towards EOG Resources, particularly concerning its activities in the Utica Shale.” Some investors, according to Investing.com, are unsure that EOG’s Utica operation will perform well for the company and may be a drag on the company. An analyst with KeyBanc takes the opposite view and believes EOG’s Utica program will help the company.
Encino Energy is one of the big success stories of drilling for oil in the Ohio Utica Shale. Roughly 5 ½ years ago, Encino Energy, in partnership with the Canada Pension Plan Investment Board (CPP Investments), closed on buying Chesapeake Energy’s Ohio Utica assets for $2 billion (see 
A new bill proposed by two Republican state lawmakers in Ohio would make it easier to site and build natural gas pipelines to areas of the state where pipelines currently don’t exist. If our reading of the bill language is correct, it is aimed at stimulating new jobs by running pipelines to industrial parks and businesses that currently are not serviced by natgas. The aim is to stimulate new jobs and opportunities in the Buckeye State. Smart.