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U.S. shale gas output increasing

Industry survey finds Utica shale a standout in the United States.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   March 23, 2016 at 7:35 AM
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DENVER, March 23 (UPI) -- U.S. natural gas production is on the rise, with some reserve areas in the country's Northeast getting more output from fewer wells, an industry report found.

"The natural gas production record achieved in February is largely attributed to the Northeast, which also is still helping offset the declines seen in other major U.S. basins," Sami Yahya, a Platts Bentek energy analyst, said in an emailed statement.

Platts Bentek, a forecasting unity for energy reporting service Platts, reported February natural gas production in the Lower 48 U.S. states was 73.3 billion cubic feet per day, up nearly 2 percent from January.

According to its estimates, the February gas output level is the highest since it started keeping records in 2005.

The increase in production comes as most energy companies are scaling back on investments in the upstream sector in response to lower crude oil prices. Rig counts, which serve as a barometer for the health of the industry, have been in steady decline.

Yahya said for wells in the Northeast, the rig count has moved lower at least since November. A report last year from the U.S. Energy Information Administration found net natural gas production from new wells drilled into U.S. shale reserves is not enough to counter the expected decline from legacy wells.

At the time, EIA found only the Utica shale basin in Ohio was expected to post an increase in short-term production of the seven shale reserve areas it measured.

Platts, in its latest report, found the Utica shale was still resilient when weighed against other areas.

"The big focus now within the Utica is the drier areas, where the initial production rates of new wells are incredibly high," Yahya said. "This means you do not need to bring online as many wells to help keep production afloat."

A March report from the EIA finds output from Utica is in part behind the commercial viability of liquefied natural gas terminals planned or in service in the United States.

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