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Wednesday, October 21, 2015

Exec VP of OOGA Provides Status Update on Utica Shale

From Gas & Oil:
This time last year, Ohio had 42 drilling rigs operating in the state targeting the Utica/Point Pleasant formation. Today, more than half of them have been idled or simply moved to other states. Falling commodity prices have caused significant turmoil in the oil and gas industry in Ohio and across the United States. The question foremost on many people’s minds would be “What does this mean for the Utica?” It’s a great question given the fact that this is still a relatively new play and producers haven’t really hit the development phase yet. The good news is, we are not alone.

Across the United States alone, more than a thousand rigs have been laid down since this time last year. The reason is simple, OPEC has decided to wage an economic war on the U.S. domestic oil and gas industry. Commodity prices for oil, natural gas and natural gas liquids have dropped considerably which is great for the consumer, but for those in the industry it has created some serious consternation.

It is true that less money is being spent on the exploration and development of natural gas and oil this year which is why we have seen a slowdown of drilling in eastern Ohio. It truly bothers me when I drive Interstates 70 or 77 and I don’t see a rig or a flare in the distance, because that means energy and jobs aren’t being sustained. When there is a temporary slowdown, often you’ll see a change in focus to other sectors of the industry to help improve the ones that are in distress. Right now the change in focus we are seeing is on pipeline projects.
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