Active rig count in Utica Shale doubles year on year - EIA

20 November 2012 20:30 Source:ICIS News

HOUSTON (ICIS)--Active oil and natural gas rigs in the Utica Shale formation on the last week of October doubled year on year, more than offsetting declines in active gas-directed rigs in the US, a federal agency said on Tuesday.

There were 28 active rigs in the Utica, located in the Appalachian Basin,  during the week ended on 26 October, and about 86% were drilling shale for oil, according to the US Energy Information Agency (EIA), reporting Baker Hughes data.

The number more than doubled the 13 active rigs on the formation at the same time last year, of which only 15% were targeting shale oil, the EIA said.

The 28 active rigs in the Utica represent 2% of all active rigs in the US.

The Appalachian Basin’s main shale play, the Marcellus, had 88 active rigs on the last week of October, a 38% drop from the 141 active rigs on the formation last year.

The EIA noted a shift away from drilling for Marcellus shale gas in Pennsylvania toward drilling for Utica shale oil in Ohio.

Pennsylvania’s decrease appears to be in regions that produce natural gas, which contains low volumes of liquid byproducts such as ethane, propane, butane and pentane, the EIA said. The state lost 56 dry gas rigs, while the number of wet gas rigs increased.

Despite the declining rig count in the Marcellus, the EIA said that average production of natural gas in October rose by 72% to 6.8bn cubic feet/day year on year.

The advent of shale gas has lowered both energy and feedstock costs for the US, which relies mostly on ethane as a feedstock for its crackers.

Shale gas has given US crackers a cost advantage over much of the world, which relies on oil-based naphtha.

By Tracy Dang