Drilling Down

Utica Gas Production Expected to Fall in July

YOUNGSTOWN, Ohio – Natural gas production across the Utica shale is expected to drop while oil production is anticipated to be unchanged in July, according to the U.S. Energy Information Administration’s latest drilling productivity report.

The agency reports that the Utica is projected to produce 3.666 billion cubic feet of natural gas per day in July — about four million cubic feet per day less than June.

Oil production is expected to remain flat at 79,000 barrels per day in the Utica.

All seven major oil and gas shale plays across the country are projected to report lower natural gas output for July, while all of them with the exception of the Utica expect oil production to drop compared to the previous month, EIA said.

Energy companies have throttled back production since oil and gas prices began their free fall in the fourth quarter of 2014. The price of oil has improved to about $49 per barrel, but rig counts are still low across the country and permitting activity has ground to a halt in plays such as eastern Ohio’s Utica.

The Ohio Department of Natural Resources, for example, issued just a single permit for the entire play for the week ended June 11. Enervest Operating LLC obtained a new horizontal well permit to drill in Carroll County.

As of June 11, 12 rigs were operating in the Utica, ODNR reports.

To date, 2,183 permits have been issued in Ohio’s portion of the Utica, 1,751 wells have been drilled, and 1,328 wells are now in production.

No new permits were issued in Mahoning, Trumbull or Columbiana counties in the northern tier of the Utica, according to ODNR.

In neighboring Lawrence County, Pa., however, Hilcorp Energy Co., the most active driller in the northern tier, received a permit to drill a new horizontal well in Pulaski Township, according to the Pennsylvania Department of Environmental Protection.

Hilcorp ceased drilling operations in late April at a well pad in North Beaver Township in Lawrence County after a series of small earthquakes no grater than 1.9 in magnitude were recorded in the vicinity.

Hilcorp was hydraulically fracturing two horizontal wells at the site when the small quakes occurred, the DEP said.

In March 2014, Hilcorp stopped a hydraulic fracturing operation at the nearby Carbon Limestone Landfill in Poland Township across the state line in Ohio after a 3.0 earthquake was recorded close to two well pads at the site.

A study subsequently determined that hydraulic fracturing likely triggered the tremors.

Published by The Business Journal, Youngstown, Ohio.