Utica production surged in last two years: EIA

A new federal report shows that production in the Utica Shale play has surged in the last two years.

Utica production has increased from 155 million cubic feet per day (MMcf/d) in January 2012 to an estimated 1.3 billion cubic feet per day (Bcf/d) in September 2014, according to the U.S. Energy Information Administration’d monthly Drilling Productivity Report released Tuesday. The agency recently included the Utica in its monthly report surveying shale plays throughout the U.S.

Drilling in the Utica region, which includes production from the Utica and Point Pleasant formations as well as legacy production from conventional reservoirs, has been focused on eastern Ohio since mid-2012, the EIA noted. The formation, which is part of the Appalachian Basin, extends into Pennsylvania, Maryland, New York and West Virginia.

“Utica Region natural gas production growth was constrained before July 2013 because of limited natural gas processing capacity in the area,” the agency said in a statement released concurrently with its monthly report. “As a number of processing plants have been built and brought into service over the past year, more natural gas is being gathered from wells and processed to meet pipeline specifications, allowing the gas to flow on interstate pipelines.”

The Utica’s production growth also follows that of its sister formation, the Marcellus, as well as national upward trends. Another report states that these trends should ease concerns about whether there will be enough fuel supply in stock for the winter.

Marcellus production surpassed 15 billion cubic feet per day (Bcf/d) in July and is expected to continue inching toward 16 Bcf/d.

By September, the EIA estimates that Marcellus production will add 252 MMcf/d to reach about 15.8 billion cubic feet per day.

Marcellus production clocked in at only 2 Bcf/d in 2010. The formation that underlies much of Pennsylvania now accounts for almost 40 percent of U.S. shale gas production, according to EIA data.

Overall, natural gas production in the lower 48 states rose by 0.5 Bcf/d during between June and July, according to Bentek Energy, a Denver-based analytics firm. Production averaged 68.5 Bcf/d last month, “marking the highest monthly average on record and surpassing the previous record set in June,” according to Bentek.

On a year-over-year basis, average July 2014 gas production was up 5.1 percent from July 2013 or 3.3 Bcf/d higher.

"While our official forecast doesn't predict average monthly production to exceed 70 Bcf/d until April 2015, the reality is that we'll likely hit 70 Bcf/d on several days in the month of September,“ said Jack Weixel, Bentek director of energy analysis, in a statement. 

“The 70 Bcf/d level is a big mental hurdle for the market. To think about that volume of natural gas being available every day will calm most fears about insufficient storage levels going into winter.”

According to Bentek data, 2014 production will average 67.7 Bcf/d due to a higher price for natural gas and continued growth in liquids-rich shale basins such as the Eagle Ford, Bakken, Permian and Greater Anadarko, in addition to dry gas production in the Marcellus.

Stephanie Ritenbaugh: sritenbaugh@post-gazette.com or 412-263-4910

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