EIA Apr DPR: M-U & Haynesville Slash Gas Production, Permian Soars
The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for April, issued yesterday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for May will decrease production from the prior month of April. This is the tenth month in a row that EIA has predicted shale gas production will decrease for the combined seven plays. However, it won’t decrease everywhere. Gas-focused plays like the Marcellus/Utica and the Haynesville will see the most significant drop in production (a combined loss of 359 MMcf/d). In contrast, the oily Permian play will see a massive boost in the production of “associated” natural gas — the gas that comes out of the ground along with oil. The Permian is also adding another 12,000 barrels per day of oil production in May.
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Last week, the Baker Hughes rig count dropped three more rigs. It is the fourth week in a row the count has dropped. The count went from 620 active rigs two weeks ago down to 617 last week. Since last October, the national count has gone as low as 616 and as high as 629. And that’s it. No higher and no lower. The national count is 18% lower than this time last year (down 131 rigs). The Marcellus/Utica remained the same last week at 42 active rigs — the fourth week in a row for that count. Pennsylvania operates 22 rigs; Ohio operates 12 rigs; and West Virginia operates 8 rigs.
The Ohio Oil & Gas Association (OOGA) held its annual meeting in March at the Hilton in Columbus, OH. While MDN was not there, an industry friend sent along a copy of the slide deck used by the Ohio Dept. of Natural Resources (ODNR) Division of Oil & Gas Resources Management. The ODNR’s “regulatory update” addressed a number of interesting issues, including the state’s ongoing application for “primacy” in permitting carbon dioxide injection wells, permitting and unitization (forced pooling), updates on rule changes for drilling and fracking, and several “top 5” lists for natural gas and oil producers in the Utica Shale.
Oil production in the Ohio Utica hit a record 27.8 million barrels in 2023, up 41% from 2022, according to researchers at the Levin College of Public Affairs and Education at Cleveland State University. In December, eastern Ohio oil wells pumped 93,000 barrels of crude, up one-third from December 2022, according to federal data. Oil has been locked away in the Utica/Point Pleasant shale layer for millennia. Aubrey McClendon, co-founder and former CEO of Chesapeake Energy, was the first to see the vision of freeing oil from the Utica. However, it was a successor company, Encino Energy, that figured out how to coax large quantities of oil out of the Utica shale.
Like a phoenix rising from the ashes, the seemingly moribund effort to drill shale wells on land located in Ohio’s Wayne National Forest (WNF) is active once again. WNF is a patchwork of public and private mineral rights that covers over a quarter million acres of Appalachian foothills of southeastern Ohio. For years, the Bureau of Land Management (BLM) blocked new permits and drilling in WNF. During the Trump administration, the BLM began to auction off federal leases and permits (
According to the data geeks at the U.S. Energy Information Administration (EIA), U.S. natural gas production grew by 4% in 2023, which was similar to the growth in 2022. U.S. gas production in 2023 averaged a whopping 125.0 Bcf/d (billion cubic feet per day). In 2023, more natural gas was produced in the Appalachia (Marcellus/Utica) region of the Northeast than in any other U.S. region, accounting for 29%, or 37.7 Bcf/d, of gross natural gas production. However, production growth in Appalachia slowed because our region doesn’t have enough pipeline takeaway capacity to transport more natural gas out of the region to the markets that would buy it.
Summit Midstream Partners, LP, which owns midstream (pipeline) assets in a number of major plays across the country, including the Marcellus/Utica, announced on Friday the sale of the company’s Ohio Utica assets, including its Summit Midstream Utica, LLC subsidiary, which includes its approximately 36% interest in Ohio Gathering Company, approximately 38% interest in Ohio Condensate Company, and other wholly-owned Utica assets. The sale was made to a subsidiary of MPLX LP (i.e., MarkWest Energy) for $625 million in cash. Summit will no longer own Utica assets in Ohio, but the company WILL retain (for now) its Marcellus assets in West Virginia.
Now we’re teaching our kids how to become eco-terrorists? In Ohio?? It seems the answer to that is YES. Ohio State University (OSU) has a geography class that teaches “the political economy of climate change and the political philosophy of climate justice.” One of the books to be used in the course is: “How to Blow Up a Pipeline.” Ring any bells? There was a movie released with the same title last year (see 
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 fourth quarter and full-year 2023 update yesterday. The update contains a statement by CEO Jeff Fisher that says we should look for a shift in the company’s strategy in 2024 for less gas production and more liquids production.
U.S. Senators Sherrod Brown (D-OH) and Jeff Merkley (D-OR) introduced the Protecting American Households From Rising Energy Costs Act, legislation that would ban the export of crude oil or liquefied natural gas (LNG) to the U.S.’s biggest adversaries: China, Russia, Iran, and North Korea. “We should not allow American liquid natural gas to fuel China’s state-sponsored industries. The Chinese Communist Party uses that energy to cheat and undermine Ohio production and Ohio jobs,” said Brown. “Blocking China and other adversaries from obtaining our LNG will protect our national security.”
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 fourth quarter and full-year 2023 update, EOG said it will “step up in activity in the Ohio Utica play” in 2024. During a conference call with analysts, EOG’s COO Jeffrey Leitzell said the company would boost activity in Utica to begin operating one rig full-time.
Yesterday, the Ohio Oil & Gas Land Management Commission (OGLMC) met to award contracts to drill under (not on) several Ohio state parks, including the 20,000-acre Salt Fork State Park in Guernsey County. Anti-fossil fuel nutters didn’t disappoint. They showed up and dressed up in burlap bags and silly hats, standing along a wall to protest against the proceeding. Fortunately, the protesters didn’t disrupt or stop the proceeding (they had been threatened with arrest if they did). The big news (for us) is that Encino Energy, which has long coveted the Salt Fork State Park property, did NOT win the contract for it! At some point, Encino pulled its proposal for Salt Fork and instead concentrated on several other parcels. The contract for Salt Fork was awarded to Infinity Natural Resources. We have the complete list of who won which contracts and how much they are paying in signing bonuses and royalties.