The Utica Shale
According to the U.S. Energy Information Administration (or EIA), the Utica Shale in eastern Ohio has become one of the fastest growing gas-producing regions in the United States. In its Drilling Productivity Report (or DPR) released on April 13, 2015, the EIA estimates that in March, the Utica Shale produced 1.92 billion cubic feet per day (or Bcf/d) of natural gas. This is 3.8% more than production in February and 140% higher than a year ago.
Major energy producers in the Utica Shale include Chesapeake Energy Corporation (CHK), CONSOL Energy (CNX), and Range Resources Corporation (RRC). Higher Utica Shale gas production will also benefit midstream operators such as Williams Partners (WPZ), an MLP. WPZ is 7.3% of the Alerian MLP ETF (AMLP).
In the past eight years, natural gas production at the Utica Shale increased more than 11 times.
According to Baker Hughes, there are currently 18 rigs operating in the Utica Shale. In comparison, 24 rigs were in operation there a year ago.
Natural gas production per rig
Drilling efficiency has increased phenomenally in the Utica Shale. From March 2007 to March 2015, natural gas production per rig increased to 4.8 million cubic feet per day (or MMcf/d) from 0.1 MMcf/d, an increase of 40 times.
In the next part of this series, we’ll take a look at natural gas production at the Haynesville Shale.