Which Way Did Marcellus Shale Natural Gas Go in November?


Dec. 15 2016, Updated 7:37 a.m. ET

Marcellus Shale natural gas production

In its Drilling Productivity Report on December 12, 2016, the EIA (U.S. Energy Information Administration) estimated that gas production at the Marcellus Shale was ~18.1 Bcf (billion cubic feet) per day in November 2016. That’s a rise of ~0.40%, which is marginally higher than the October 2016 production level and ~7.0% higher than production in November 2015.

Month-over-month, natural gas production growth at the Marcellus Shale has been steady in the past year.

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 November 2008 to ~18.2 Bcf per day in November 2016.

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Rigs and monthly additions from the average rig

The number of active rigs in the Marcellus Shale rose to 37 in November 2016 compared to 35 in October 2016. In November 2015, there were 44 drilling rigs in the region.

The EIA calculates that the average Marcellus Shale rig added production of ~12.1 million cubic feet of natural gas per day in November 2016. That was a 19.0% rise compared to November 2015. In the past eight years, the gain amounts to ~16.0x.

What does this mean for oilfield services companies?

Higher production and drilling productivity at the Marcellus Shale over the years has benefited oilfield equipment and services providers such as Weatherford International (WFT), National Oilwell Varco (NOV), Superior Energy Services (SPN), and FMC Technologies (FTI).

NOV makes up 1.6% of the WisdomTree Dividend ex-Financials ETF (DTN), which tracks an index of high-dividend-yielding US companies outside the financial sector. You can read why Weatherford decided to raise its capital in Market Realist’s Weatherford Infuses Capital into Its Leveraged Balance Sheet.

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


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