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Tuesday, August 30, 2016

Focus in Utica Shale Shifts Towards Dry Gas

From NGI:
The buildout of gathering infrastructure in the Utica Shale's dry natural gas window of Southeast Ohio has remained robust over the last year as the midstream has worked to stay ahead of, and in some cases fallen behind, operators that have flooded a three-county region. 
Natural gas production in the Appalachian Basin has remained resilient to the commodities downturn, continuing to grow at a time when volumes across the rest of the country have bottomed out. Unlike their counterparts, the Northeast shale plays are once again poised for year/year growth. 
While a wholesale shift to dry gas production hasn't occurred across the basin, many of its leading operators have been more focused on it, particularly in Monroe, Belmont and Jefferson counties, OH. Lower breakevens, better local markets for some and a shallower Utica target compared to other locations in the basin have increasingly attracted more companies to Ohio's dry Utica (see Shale Daily, April 7). 
Development in the play is also relatively new, compared to the Marcellus Shale. And while the cancellation and delays of long-haul transportation projects continue in some ways to temper the Northeast's production outlook, gas has also been trapped on a lack of gathering capacity. A buildout is still under way in Southeast Ohio that will help add to the region's incremental gas supply.
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