EIA: Longer wells, higher productivity increase Utica gas output amid rig count fluctuation
WASHINGTON, D.C. -- In April 2018, natural gas production from the Utica formation, located primarily in Ohio, averaged 5.8 Bcfd, or about 7% of total U.S. dry natural gas production. Utica natural gas production has increased relatively steadily since 2011, and in 2017, natural gas production from the Utica formation reached a new annual high of 4.9 Bcfd, 23% higher than 2016 levels.
Despite steadily increasing production, Utica’s rig count and prices in the region have fluctuated. From 2011–2014, as Dominion South and other nearby hub prices remained higher than $2.75/MMBtu, the average yearly rig count kept rising, reaching an average of 43 rigs in 2014. However, by 2016, the rig count fell to 14 rigs, and prices declined to $1.50/MMBtu. New pipeline projects added takeaway capacity from the region in 2017 and both rigs and prices rose, though they remain lower than previous levels.
Utica’s natural gas production increase has been supported by higher per-well production from new wells. Similar to production activity in other regions, such as the Marcellus and the Haynesville, drilling operators have increased the lateral length of horizontal wells. From 2011 to 2017, the average length of laterals increased from 4,649 ft to 8,628 ft, according to DrillingInfo.
As production has grown, well productivity has also risen. EIA uses three-month cumulative production as a proxy for initial productivity (IP) rates because the number of days in production for any given month is not available. In Utica, the first three-month cumulative production per well increased from about 146 MMcf in 2011 to 824 MMcf in 2017. Moving forward, productivity gains are expected to continue as lateral lengths increase and optimization of spacing between wells improves well recovery.
