Appalachian Basin natural gas production still growing 🔒

The Appalachian Basin continues to grow.

It’s producing increasing volumes of natural gas despite a sharp drop in new wells being drilled in 2015 and 2016 due to low commodity prices, says Timothy Knobloch in a recent presentation at the Ohio Oil and Gas Association’s annual program.

The basin is also growing quietly in two additional states: Virginia and Kentucky, Kallanish Energy reports. Virginia has 120 new producing horizontal wells in the southwestern portion of the state that get little attention, Knobloch says.

Kentucky now has 1,034 producing horizontal wells in the Lower Huron play in its eastern counties.

Knobloch, president of James Knobloch Petroleum Consultants, in Marietta, Ohio, has offered his annual review of the Appalachian Basin for roughly 15 years.

Impressive production

From 2011 through 2016, the Appalachian Basin produced 28 trillion cubic feet (Tcf) of natural gas, plus 102 million barrels (MMBbls) of crude oil and condensate, he reported.

The data included 7.8 Tcf of natural gas and 30 MMBbls of oil in 2016. The natural gas volume increased from 6.68 Tcf in 2015, while the oil and condensate volume dropped from 34.26 MMBbls. Those 2016 totals are a big jump from the 1.8 Tcf and 2.44 MMBbls of oil in the basin in 2011, he said.

Knobloch said the Appalachian Basin’s production totals are impressive. “The basin is very successful. …And the best is yet to come.”

Pennsylvania leading the way

The five-state Appalachian Basin now has 11,780 producing horizontal wells, according to Knobloch. That is led by Pennsylvania’s 7,079 producing wells, or 60% of the total. West Virginia has 2,120 wells, 18%, and Ohio has 1,427 wells, 12%, as of Dec. 31, 2016. Kentucky has 9% and Virginia has 1%.

In all, 9,978 horizontal wells are producing in the Marcellus Shale, 1,785 in the Utica Shale, 976 in the Lower Huron and 835 in other rock formations within the basin.

Overall, the basin has 24,487 horizontal wells from permitted to producing to plugged. It is dominated by Pennsylvania’s 16,220 wells, or 66.2% of the total.

What’s really stands out in the Appalachian Basin are the big-producing Marcellus wells in northeast and southwest Pennsylvania, according to Knobloch.

Two Appalachian Basin areas stand out for the biggest EURs (estimated ultimate returns) per 1,000 feet of laterals, an indication of the best-producing wells, Knobloch said. They are northeast Pennsylvania and southwest Pennsylvania/southeast Ohio/northern West Virginia.

He also said he expects to see more drilling in the future in Pennsylvania’s shallow Burket Shale.

Activity drops

The number of horizontal wells permitted in Pennsylvania dropped from 2,224 in 2014, to, 1,345 wells in 2015, to 640 wells in 2016.

The five busiest counties for drilling have been Bradford with 3,131 wells; Susquehanna, 2,067; Washington, 2,034; Greene, 1,408; and Lycoming, 1,408.

The top counties for wells in production are Washington, 1,186; Bradford, 1,053, Susquehanna, 1,025; Greene, 763; and Lycoming, 757.

Interestingly, Lycoming County had zero wells spud in 2016. Washington County was No. 1, with 124 wells.

The top operators in Pennsylvania in 2016 were EQT, with 102 wells spud, followed by Range Resources, with 60 wells and Cabot Oil & Gas, with 37 wells.

The highest EURs per 1,000 feet of laterals are in Washington County. The average length of laterals has grown in Pennsylvania, from 4,451 feet in 2012, to 7,235 feet in 2016.

The number of horizontal wells permitted in Ohio dipped from 733 in in 2014, to 460 in 2015, to 242 in 2016. Ohio counties with the greatest number of wells in production are Carroll (431 wells), Harrison (275), Belmont (209), Monroe (149) and Noble (118).

The top counties for all horizontal wells are Carroll with 513 and Belmont with 417.

The most active operators in Ohio in 2016 were Gulfport, with 34 wells spud; Antero Resources, 31; Ascent, 25; Chesapeake, 11; and Eclipse, three.

The highest EURs per 1,000 feet of laterals are in Jefferson, Harrison and Belmont counties. The average lateral in Ohio has grown from 4,827 feet in 2012, to 8,513 feet in 2016.

The number of horizontal wells permitted in West Virginia declined from 641 in 2014, to 518 in 2015, to 117 wells in 2016.

The top counties for drilling have been Doddridge, with 718 wells; followed by Wetzel, 510; Marshall, 450; Harrison, 321; and Tyler, 293. Doddridge is No. 1 for wells in production with 370, Wetzel is No. 2, with 331.

It’s unclear how many wells were spud in 2016 in West Virginia because of reporting delays, Knobloch said.

The highest EURs per 1,000 feet of laterals in 2015 were in Marion, Tyler and Wetzel counties. Data for 2016 was not available.

EQT, Gulfport running most rigs

In 2017, the two drilling companies with the most rigs at work in the Appalachian Basin are EQT with eight rigs in Pennsylvania and Gulfport Energy with six rigs in Ohio. In addition, Antero Resources has three rigs in Ohio and two in West Virginia, and Rice Energy has three rigs in Ohio and two in Pennsylvania.

There were 24 rigs at work in Ohio, 27 in Pennsylvania and five in West Virginia, as of January. At its peak in 2012, the basin had nearly 160 rigs at work.

The longest laterals in the Appalachian Basin are Eclipse Resources’ Purple Hayes in Ohio’s Guernsey County, at 18,554 feet. The biggest producing well in Ohio is Rice Energy’s M. Warrior 12H at 31.1 billion cubic feet (Bcf) of natural gas in 2016.

In Pennsylvania, the longest lateral is Noble Energy’s RHL4 DHS well in Greene County, at 11,328 feet. The biggest producing well is Cabot’s Pijanowski J2 well in Susquehanna County, at 65.3 Bcf of gas.

In West Virginia, the longest lateral is EQT’s Henderson 514095 well in Dodd County, at 12,033 feet. The biggest producing well is Antero’s Isaac 1H well in Harrison County, at 21.7 Bcf of natural gas.