Marcellus/Utica production exceeds the Permian, and will do so through 2019

Appalachia still reigns supreme in natural gas in the U.S., and has powered the majority of recent growth in gas production in the country.

According to the EIA, drilling in the Marcellus shale began in 2003, and was soon followed by drilling in West Virginia. The Utica became a target in Ohio in 2010, and has recently become a target in West Virginia and Pennsylvania. The EIA reports more than 1,800 wells have been drilled in the Utica and more than 11,300 wells have been drilled in the Marcellus.

Appalachia is the Largest Shale Basin in the U.S.: EIA

Source: EIA

Appalachia is the Largest Shale Basin in the U.S.: EIA

Source: EIA

Tremendous production growth

These wells have fueled tremendous production growth. According to the EIA, natural gas production from the Appalachian region has increased by more than 14 Bcf/d since 2012. Production from the Marcellus and Utica account for 42% of all U.S. shale gas output, far beyond any other play.

Appalachia is the Largest Shale Basin in the U.S.: EIA

Source: EIA

The Marcellus and Utica produce so much gas, in fact, that Appalachia is the largest basin in the U.S. on a BOE basis, producing about 200 MBOEPD more than the Permian. While the Permian’s massive growth this year has attracted much attention, it has not been enough to dethrone Appalachia and is not likely to do so in the near term. If current growth rates continue, the Permian will not be the largest basin on a BOE basis until early 2019, when each basin is producing over 5.4 MMBOEPD.

Appalachia is the Largest Shale Basin in the U.S.: EIA

Source: EnerCom Analytics

Appalachian production per rig highest

Wells in the Appalachian, like in other plays, have benefited from recent improvements in technology. Longer laterals and improved completions have helped companies weather the storms of low commodity prices, as have efficiency improvements.

The average lateral length in West Virginia was over 7,000 feet in 2016, compared to 2,500 feet in 2007. While horizontal length has grown, the time it takes to complete a well has fallen quickly, from about 30 days in 2011 to 7 days in 2015.

These improvements, combined with the massive productivity of the Marcellus and Utica, means new production per rig is highest in Appalachia.

Appalachia is the Largest Shale Basin in the U.S.: EIA

Source: EnerCom Analytics


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