Marcellus Shale September Natural Gas Production Down Marginally


Oct. 19 2015, Updated 3:07 p.m. ET

Marcellus Shale natural gas production

In its Drilling Productivity Report on October 13, 2015, the EIA (U.S. Energy Information Administration) estimated that the Marcellus Shale’s natural gas production totaled ~16.3 Bcf (billion cubic feet) per day in September. That’s a marginal decrease over August’s production level. However, it’s 6% greater than production a year ago.

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

Over a longer period, natural gas production growth at the Marcellus Shale has been outstanding. Natural gas production rose from 1.3 Bcf per day in September 2007 to 16.3 Bcf per day in September 2015. That’s 11.8x the production in eight years.

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What it means for energy companies

Lower natural gas production in 2015 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 0.8% of the Energy Select Sector SPDR ETF (XLE) and 0.8% 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 55 in August to 51 in September. A year ago, there were 85 drilling rigs in the region.

The EIA calculates that the average Marcellus shale rig added production of 8.6 million cubic feet of natural gas in September 2015, a 5% gain since September 2014. In the past eight years, the gain amounts to ~16x.

Marcellus Shale: The largest shale gas basin

According to the EIA, the Marcellus Shale is the largest producing shale gas basin in the United States. 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 drilling efficiency at the Eagle Ford Shale.


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