July EIA DPR – Utica Stands Alone with Higher Natgas Production
MDN’s favorite government agency, the U.S. Energy Information Administration, published the latest monthly Drilling Productivity Report (DPR) yesterday. Once again, like the June report, this latest report shows that over the next month natural gas production (and oil production) from the country’s seven largest shale plays will decrease. Last month was a milestone/first: Marcellus Shale production slipped (see A Sad First: EIA’s June DPR Reports Marcellus Production Slips). That trend continued and accelerated in the July report (which forecasts production over the next 30 days). Last month Marcellus production decreased by 28 million cubic feet per day (Mmcf/d). This month? It will decrease by 41 Mmcf/d. Natgas production from all seven shale plays together will take their deepest dive yet–down 260 Mmcf/d from the previous month. However, to put it in perspective, that’s down just 6/10ths of one percent, or 0.6%. It’s hardly a bloodbath. There is one bright spot with respect to natural gas production. Utica Shale natgas production was, once again, higher in this month’s report than in last month’s report. Natgas production in the Utica was up 42 Mmcf/d in June, and up 22 Mmcf/d in July. The Utica is newer and contains natural gas liquids, typically making it more profitable to drill than the Marcellus. Also, a number of new pipelines already in the works have continued to come online in the Utica. For those two reasons the little Utica continues to rock on while all of the other shale plays, including the mighty Marcellus, tapper off…
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Yesterday Gastar Exploration announced production rates for their second Utica well–drilled in Marshall County, WV. The Blake U-7H well production initially spiked at a high of 36.8 million cubic feet per day (MMcf/d) early in its first 30 days of being online. The overall average production rate during the first 30 days of going online was 20.2 MMcf/d. Following the first 30 days, the average production over the most recent 5 days was 14.8 MMcf/d. Which kind of gives you an idea of just how quickly well production tappers off…
We have major news coming from Aubrey McClendon’s American Energy Partners (AEP). A lot of news. So buckle in. First we’ll tell you the news, then we’ll give you our take on that news–what it means. In brief, the news coming from AEP HQ in Oklahoma City is this: (1) AEP’s Marcellus/Utica AEP subsidiary, American Energy Appalachia Holdings, has been spun out into a 100% standalone company and has changed its name to Ascent Resources; (2) the CEO of Ascent is the same guy who was the CEO of American Energy Appalachia Holdings–trusted McClendon lieutenant Jeffrey A. Fisher; (3) Ascent has cut a deal with Gulfport Energy to sell 35,000 prime Utica Shale acres for $407 million; and (4) Ascent has just sold shares in the company and taken out new loans for $977 million, giving them $700 million in cash after they pay off certain other loans. Whew! Here’s the details, along with a little news of our own about AEP…
In February 2014 MDN told you about a deal cut by wildcatter Aubrey McClendon to lease 130,000 acres in the Ohio Utica Shale, a deal with three different companies (see 
PDC Energy announced at the end of 2014 they would not drill any new wells in the Ohio Utica Shale in 2015 (see 
Traffic along an extended stretch of two Ohio highways in Columbiana County, OH was closed for nearly five hours on April 23 because a drilling rig that was moved leaked “a mineral-based synthetic, a non-hazardous drilling oil compound” for 27 miles as it was moved. Ouch. Somebody’s head will roll. The rig was being moved by a contractor for Chesapeake Energy. You might think somebody would notice something leaking over the course of 27 bloody miles! But apparently not. Fortunately the fluid/oil was not toxic or dangerous in any way, other than perhaps slipping on it…