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EIA on Key Shales: Crude Oil Production to Drop in December

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Part 4
EIA on Key Shales: Crude Oil Production to Drop in December PART 4 OF 9

Which Way Did Marcellus Shale Natural Gas Go in October?

Marcellus Shale natural gas production

In its Drilling Productivity Report on November 14, 2016, the EIA (U.S. Energy Information Administration) estimated that the Marcellus Shale’s natural gas production totaled ~18.1 Bcf (billion cubic feet) per day in October 2016. That’s a marginal ~0.1% lower than September 2016’s production level, but ~9% higher than its production in October 2015.

Month-over-month, natural gas production growth in the Marcellus Shale has been relative steady in the past year.Which Way Did Marcellus Shale Natural Gas Go in October?

Which Way Did Marcellus Shale Natural Gas Go in October?

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Over a longer period, natural gas production growth at the Marcellus Shale has been outstanding. Natural gas production rose from ~1.5 Bcf per day in October 2008 to ~18.1 Bcf per day in October 2016.

Rigs and monthly additions from the average rig

The number of active rigs in the Marcellus Shale increased to 35 in October 2016 compared to 31 in September. In October 2015, there were 46 drilling rigs in the region.

The EIA calculates that the average Marcellus Shale rig added production of ~11.9 million cubic feet of natural gas per day in October 2016, a 19% rise compared to October 2015. In the past eight years, the gain amounts to ~16x.

What does this mean for oilfield services companies?

Higher production and drilling productivity in Marcellus over the past few years have benefited oilfield equipment and services providers like Weatherford International (WFT), National Oilwell Varco (NOV), Superior Energy Services (SPN), and FMC Technologies (FTI).

NOV makes up 1.4% of the WisdomTree Dividend Ex-Financials ETF (DTN), which tracks an index of high-dividend-yielding US companies outside the financial sector.

In the next part of this series, we’ll look at drilling efficiency at the Eagle Ford Shale.

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