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Ohio gas production surges 39% as Ascent blows away projections

Ohio's Utica Shale gas production grew 39% in the third quarter year over year, nearing 7 Bcf/d, driven largely by continued growth in dry gas production from three counties along the state's Ohio River border with West Virginia and the need to fill new pipelines.

Jefferson, Belmont and Monroe counties accounted for 74% of Ohio's 6.95 Bcf/d of shale gas production in the third quarter, according to data from the state Department of Natural Resources, while Carroll County, the original home of the Utica, continues to see declines in output.

With the opening or expansion of Energy Transfer LP's 1.7 Bcf/d Rover Pipeline LLC, Columbia Gas Transmission LLC's 1.5 Bcf/d Leach XPress and the 1.5 Bcf/d DTE Energy Co.'s Nexus Gas Transmission LLC pipeline, producers had 4.7 Bcf/d of new capacity open in 2018 to markets in the Midwest and Gulf Coast.

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Privately held Ascent Resources, with a C-suite stocked with executives who cut their teeth opening the Utica while working at the play's pioneer, Chesapeake Energy Corp., continued to be the state's top producer. Ascent more than doubled its production year over year in the third quarter, well ahead of its own forecasts. According to a June 2018 presentation Ascent used to close a $1.5 billion private equity investment, the company hoped to average 1.375 Bcf/d of gas production. In the third quarter, production topped 1.9 Bcf/d after starting 2018 with 1.2 Bcf/d.

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Gulfport Energy Corp., previously the state's top producer, decided in 2018 to shift its spending south to Oklahoma's SCOOP shale oil and gas play. Its production in Ohio grew 6% year over year in the third quarter, but that could change in 2019.

Gulfport's longtime CEO, Michael Moore, stepped down at the end of the third quarter, and the board hired a veteran Appalachian shale executive to take his place. After years at Murphy Oil, incoming CEO David Wood was chairman and CEO at West Virginia driller Arsenal Resources Corp. and was a senior adviser at First Reserve Corp., one of the private equity backers of Ascent Resources.

"At Murphy, Mr. Wood strived to bring out a positive change and point the company into the right strategic direction, but it admittedly has been a very difficult company to lead," Stifel Nicolaus shale oil and gas analyst Jane Trotsenko told her clients Dec. 18. "We believe that Gulfport should provide Mr. Wood with a friendlier environment both in terms of assets and management team."

Another pair of veteran Marcellus and Utica executives getting a second bite of the apple are Encino Acquisition Partners LLC and Encino Energy LLC's CEO Hardy Murchison and Chairman John Pinkerton. Pinkerton opened the Marcellus Shale as the chairman and CEO of pioneer Range Resources Corp., and Murchison was a managing director at First Reserve. Encino bought out Chesapeake Energy's Utica position for $1.9 billion in a deal that closed in October.