Oil, gas numbers up and down in area
MARIETTA – Though the Ohio Department of Natural Resources reported that production numbers for oil and gas in the first quarter of 2015 increased across Ohio, in Washington, Noble, Monroe and Morgan counties that overall growth was only in natural gas.
Across the four counties Ohio’s horizontal shale wells produced 18,937 barrels less oil than the previous quarter but 6,831,902 million cubic feet (mcf) more of natural gas than the final quarter of 2014. That decline in part is due to the surplus of oil and gas that drove prices down throughout 2014. As a result some wells were taken off line until demand requires greater activity.
Conor Dea, production analyst at Antero Resources Corporation which has wells in Noble and Monroe counties, said some of that decline is due to the environment where the wells are drilled or what other work is going on in the surrounding area.
“We could have shut down wells when drilling for a new one nearby and that would affect the numbers or there could be a downstream issue with the compressors for the natural gas that needs to be addressed,” said Dea. “It’s subjective because it’s all dependent on each specific reservoir. For drier areas it’s expected for production to eventually decline.”
Though overall numbers for oil production are down across the four counties, there are a variety of environments even within the small section of southeast Ohio.
Eric Heis, spokesman for ODNR, said the geology of the area is a major factor for those numbers. “Monroe is especially more of a gas place than an oil place,” said Heis. “It’s just a different terrain and geology there than what’s in the northeast or eastern parts of Ohio.”
For Antero, numbers are down in Monroe County but up in Noble.
“We brought on quite a few wells in Ohio in the first quarter and so naturally that contributed to the rise because we have more on-line producing,” said Dea about Noble County. “But in Monroe County we brought on some wells mid-way through 2014 but that condensate production dropped off while the gas production stayed constant; therefore those oil levels didn’t carry over into the first quarter.”
Jackie Stewart, a representative from Energy in Depth, which is the independent public education and research leg of the Petroleum Association of America, said both Monroe and Washington counties are being looked at closely by the oil and gas industry.
“We’re all watching and starting to see in Monroe that natural gas is getting huge and in Washington we want to see what happens in the second quarter because it’s too early to tell right now,” said Stewart.
The reason Washington County is still up in the air for analysts is because there are three wells that have not been in production during either quarter. All three are owned by Triad Hunter LLC.
Stewart also mentioned that the new well in Salem Township owned by EdgeMarc Energy Ohio LLC that was only in production for 12 days in the first quarter. In that time it produced 1,715 barrels of oil and 86,323 mcf of natural gas.
“We need to take a closer look at the second quarter for that well to get a better understanding on the production numbers because the amounts of that well are very impressive for the short time it was up and running but not a full picture of the full quarter,” said Stewart. “If you broke it out to how much wells are producing per day it’s really incredible.”
She said the Merlin Well (the EM well in Salem Township) produced 142 barrels per day versus the highest producing well in Adams Township, which was only 22 barrels a day.
Mike Edwards, senior director of investor relations at PDC Energy, said those initial high numbers in production should be taken with a grain of salt.
“Oil and gas production typically has a higher rate early on because it’s a previously untapped reservoir,” said Edwards. “But those first pressure rates decline significantly for most wells as that initial pressure drops. They may still be producing 20-50 years down the line but we don’t have a long enough production history to predict the life of the wells.”
PDC Energy’s wells in both Washington and Morgan counties saw declines in both barrels of oil and cubic feet of gas produced in the first quarter. Edwards attributed that fall to natural decline.
“The ones in Washington County were drilled and completed in early 2014 and the two in Morgan were on-line by August or September of 2014 so they’ve just experienced that natural decline,” said Edwards.
The first quarter for 2015 production ran from Jan. 1-March 31 and the second quarter ends June 30.