Natural gas plays where two upstream and one midstream Oklahoma City-based companies are active are hanging tough so far this year as the COVID-19 pandemic continues.
Enverus, an on-demand software and data analytics company that follows the oil and gas industry, highlighted encouraging trends seen in the Appalachian and Haynesville basins in its Enverus FundamentalEdge series report released earlier this month.
While drilling activity is down in both basins, it hasn’t fallen as much in those as it has in other oil-focused onshore shale plays.
Plus, the report notes that production from those basins recovered to about where it was before energy markets collapsed, said Maria Sanchez, an energy market analyst at Enverus who focuses on natural gas fundamentals.
“The impact of the COVID-19 pandemic and the price war between Russia and Saudi Arabia really drove oil prices down,” she said. “So we have seen a lot of shut-ins on wells in April and May, especially in the oil-focused plays.”
Pipeline flow data showed Enverus that natural gas production from the Appalachian and Haynesville initially dropped by about half earlier this year, but has since rebounded, Sanchez said.
Further, Enverus estimates total natural gas production from both basins will continue to climb between now and the end of next year, even as total natural gas production nationally falls.
The anticipated gain to is due to an expectation numerous pipeline products will become operational between now and mid-2023 that will move the natural gas from where it is produced to where it either is consumed on the East Coast or exported from the Gulf Coast.
Two plays with steady demand
The Appalachian, generally referred to as the Marcellus and Utica Shale fields, are active operational areas for both Chesapeake Energy Corp. and Ascent Resources Utica Holdings.
Enable Midstream Partners gathers, processes and ships gas from wells in the Haynesville in Texas and Louisiana.
While Ascent Resources cut the number of rigs it was using to drill in the Utica from three to two, Chesapeake actually doubled the number of rigs operating in the Marcellus, from two to four. Chesapeake also is operating one rig in the Haynesville.
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