trending Market Intelligence /marketintelligence/en/news-insights/trending/tHOcEMjoI5_UP1_HJV04-A2 content esgSubNav
In This List

Several Ohio drillers focus on dry gas while Antero strengthens play for liquids


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

Several Ohio drillers focus on dry gas while Antero strengthens play for liquids

Utica Shale drillers continue to focus on the dry gas window of the play in southeastern Ohio, according to November permitting data from the Ohio Department of Natural Resources, but one big player, Antero Resources Corp., has shifted to wet Marcellus wells as NGL prices improve.

Belmont and Monroe counties, along the Ohio River, accounted for 26 of the 35 new permits issued in the state, according to state data compiled Dec. 5. This was an increase from the 19 permits issued in the two counties in November 2016.

Rice Energy Inc., now merged into EQT Corp., accounted for nine Belmont County permits, while the other big permit puller, the Aubrey McClendon-founded Ascent Resources, split its nine permits between dry Belmont, with five permits, and the more liquids-rich Jefferson County along the Ohio River north of Wheeling, W.Va. In November 2016, Rice was issued no permits to drill, while Ascent was issued five.

While EQT has stopped drilling Utica wells in Pennsylvania, Rice executives waxed positive about low-cost Utica wells the second-quarter earnings conference call Aug. 3, their last call before merging into EQT.

SNL Image

"During the quarter, we turned to sales 11 gross operated Utica wells with an average of lateral length of 10,500 feet and average development cost of $1,105 per foot, which is 11% better than budget," Rice President Toby Rice told analysts. "We modified our drilling assembly, which resulted in a step change improvement in cycle times." Using new polycrystalline diamond, or PCD, bits, Rice was able to drill its longest Utica lateral, 13,700 feet, in five days after the vertical bore was complete, Rice said.

Chesapeake Energy Corp. kept its permitting centered in Carroll County, where Utica development began, and neighboring Columbiana County, both outside Canton in the wet gas window. The new permits mark an uptick in Chesapeake's activity. At the same time in 2016, it was issued zero permits.

While the number of Utica permits issued stayed steady year over year, some drillers of the shale such as Hilcorp Energy Co. and Antero, which were issued 11 and six permits, respectively, in November 2016, were issued none in November 2017.

Better NGL pricing has shifted Antero's interest back to the wet gas Marcellus, executives said, because natural gas liquids prices have improved significantly in 2017. "We realized an unhedged C3-plus [ethane, propane and condensate] NGL price of $28.92 per barrel during the quarter, which represents a 65% increase from the prior-year quarter," Antero President and CFO Glen Warren told analysts on the company's Nov. 3 earnings conference call. "When you combine the improvement in liquids price realizations with the fact that Antero has become the largest NGL producer in the U.S., you really get a sense for the exposure we have to a rising liquids pricing environment."

"I think the emphasis is going to be on the Marcellus over the next couple of years anyway," Warren said, though he noted that Antero has 11 Ohio wells ready to come online when Energy Transfer Partners LP's Rover Pipeline expands as scheduled at the end of 2017. "So we're just waiting on that Rover 1B phase to be completed. But other than that, I think you'll see us focused primarily on the Marcellus over the next few years … and on the rich gas within the Marcellus."