Appalachian Basin

Great Scott — It’s Already Been a Milestone Summer in Appalachia, Thanks to Shale!

There is great news coming out of Appalachia this summer thanks to Marcellus and Utica shale development in Pennsylvania, Ohio and West Virginia. Here are highlights of some of the key milestones achieved in the first half of 2017:

#1 Production is skyrocketing

The Appalachian Basin was the only region of the country to see growth in natural gas production in 2016, with a combined total of 2.5 billion cubic feet of natural gas per day (Bcf/d) more than in 2015 coming out of the Marcellus and Utica shale-rich tri-state region. Pennsylvania and Ohio both increased production by 1.2 Bcf/d, and West Virginia saw a growth of 100 million cubic feet per day (Mcf/d).

That trend of growth has continued into 2017, with the Energy Information Administration (EIA) estimating that Marcellus and Utica natural gas production will increase by 87 Mcf/d and 64 Mcf/d, respectively, from June to July. That puts the Utica Shale at 4.3 Bcf/d by July.

And while Texas may produce the most natural gas from its combined shale plays, the Marcellus Shale will produce more than double the natural gas of the next closest play, the Permian, in July with a record-breaking 19.4 Bcf/d, according to the EIA. By the end of 2017, we may very well see Marcellus producers break the 20 Bcf/d mark!

#2 Appalachia has the longest onshore laterals in the world

Source: Rigzone

Some of that increased production comes from the innovation occurring in the region. In fact, in May 2017, Ohio became the home of the world’s longest onshore lateral – the part of the well that travels horizontally through a formation shown above – thanks to Eclipse Resource’s “Great Scott” Utica Shale well in Guernsey County. From the Wheeling Intelligencer:

“In the Utica condensate area, I am extremely happy to announce that we successfully drilled what we believe is the world’s longest onshore lateral ever drilled with a total measured depth of 27,400 feet and completable lateral extension of 19,300 feet, almost 1,000 feet longer than the previous record held by our ‘Purple Hayes’ well,” Eclipse Chairman, President and CEO Benjamin W. Hulburt said.” (emphasis added)

That’s over three-and-a-half miles long and five miles deep!

Over in the Marcellus, Range Resources recently broke the record for the longest laterals in the play. The company – which drilled the first Marcellus well in 2004 when laterals were around 2,500 feet long – is now expanding their laterals to over 15,000 feet, or nearly three miles long. From the Observer-Reporter:

“What really kind of jumped off the page for us – is we were not aware what the record lateral length was in Pennsylvania,” says Cecil Township resident and Vice President of Drilling for Range’s Appalachia Division, Don Robinson. “And it turned out that we were drilling the longest laterals to date in the Marcellus.  The only other folks hitting that length were in the Utica in Ohio.”

As Peter Quinn, a drilling engineer for Range, explained to the Observer-Reporter, these lengths for laterals are something we are likely to see more of moving forward:

“Longer laterals are becoming the norm in the industry.”

#3 The economic impact in the region is staggering

A recent report from Cleveland State University found that total Utica Shale investment topped $50.4 billion from 2011 to the summer of 2016 – just in Ohio. And the Ohio Laborers District Council (OLDC) recently reported that it surpassed 2016 expectations by more than a million work hours and totaled 4.2 million work hours over a 16-month period from January 2016 to April 2017, thanks to the numerous shale-related pipeline and natural gas power plant projects taking place. That’s 3,000 laborers from Ohio alone being put to work thanks to shale development.

Ray Hipsher, Pipeline Specialist at the Ohio Laborers District Council, recently said,

The shale industry is hiring local workforce. That’s going to keep the money in the community and the laborers doing the work are going to take pride and care of the quality of their work, because we are your neighbors. We care about doing this pipeline work right and environmentally sound.” (emphasis added)

In Susquehanna County over in Pennsylvania, Cabot Oil & Gas recently reported reaching a milestone of $1 billion in royalties paid to landowners. That’s in addition to another $417 million in bonus payments to landowners and $4.6 billion in capital investmentsand that’s just one company, in one county in the Marcellus.

This year has also seen milestones for charitable giving in the region. Range Resources recently reported that since 2007, the company has raised over $1 million for community programs and services through United Way campaigns. But that’s not all. In addition to what Range has donated to United Way, the company has donated around $10 million in the last five years to nonprofit and other community programs in Pennsylvania. Once again, that’s just one company, in one state in the Appalachian Basin.

If the first half of 2017 is any indicator, the Appalachian Basin is in for a fantastic summer and an even better year!


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