Marcellus Shale Natural Gas Production Is Steady in August



Marcellus Shale natural gas production

In its Drilling Productivity Report on September 14, 2015, the EIA (U.S. Energy Information Administration) estimated that the Marcellus Shale’s natural gas production totaled ~16.4 Bcf (billion cubic feet) per day in August. That’s nearly the same as July’s production level. However, it’s 12.10% greater than the production a year ago.

Month-over-month, the natural gas production growth rate in the Marcellus Shale has gradually fallen in the past seven months.

The natural gas production at the Marcellus Shale rose from 1.2 Bcf per day in August 2007 to 16.39 Bcf per day in August 2015. That’s 12.1x the production in eight years.

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What it means for energy companies

Muted natural gas production growth at the Marcellus Shale may negatively affect major oil and gas producers in the region. Producers in this region include EQT (EQT), Anadarko Petroleum (APC), and CONSOL Energy (CNX). EQT accounts for 0.87% of the Energy Select Sector SPDR ETF (XLE) and 0.83% of the Vanguard Energy ETF (VDE).

Rigs and monthly additions from one average rig

The number of active rigs in the Marcellus Shale decreased from 74 in July to 69 in August. A year ago, there were 94 drilling rigs in the region.

The EIA calculates that the average Marcellus shale rig added production of 8.3 million cubic feet of natural gas in August 2015, a 10% gain since August 2014. In the past eight years, the gain amounts to ~15x.

Marcellus—largest shale gas basin

According to the EIA, the Marcellus Shale is the largest producing shale gas basin in the US. Currently, the Marcellus Shale accounts for 36% of the total natural gas production at the seven major US shales. The Marcellus Shale runs through western Pennsylvania, eastern Ohio, and West Virginia.

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


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