The Marcellus Shale| December 2019

Field Overview

The Marcellus Shale is the largest gas play onshore in the US. Located in the Northeast, it supplies the high demand markets along the East Coast. Most of the basin’s gas is produced through unconventional methods, while the little oil produced is mostly by conventional means. Some of the top formations include Onondaga and the Huntersville.

State Drilling Statistics

Active Drilling Rigs in Basin- 41
Total Rigs in Pennsylvania- 25
Total Rigs in United States- 781
Total U.S. Rigs down 27% YTD

State Top Producers

Top Gas Producer- Cabot
Top Oil Producer- (-)

Financial & Economic Updates

Another Oil Major Bails On Marcellus Shale

Low natural gas prices will be good for National Fuel Gas Co.’s customers this winter, but not the Amherst energy company’s profits. National Fuel on Friday cut its profit forecast for this fiscal year by 7% because falling natural gas prices will cut into the earnings of its oil and natural gas drilling business. With the company facing what CEO David P. Bauer called “a challenging commodity price environment,” National Fuel already had been planning to scale back its natural gas drilling operations in western and central Pennsylvania by about a third, dropping one of the three drilling rigs it currently operates in the region. And Bauer hinted Friday that the company could scale back even more if prices stay depressed in Pennsylvania, where a lack of available pipeline capacity causes natural gas produced there to sell for less than the national spot market prices.

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State Highlights

Challenges remain for bumping up Appalachian NGL demand

Appalachian Basin natural gas producers have long hoped that natural gas liquids demand growth would relieve the pain of low gas prices, but significant roadblocks remain to getting to market the bulk of NGLs produced in the basin. Appalachia’s production of NGLs – including ethane, propane and butane – has increased significantly in recent years, along with the rise of gas production from the Marcellus and Utica shales. The US Department of Energy projects Appalachian Basin ethane production will surge to 640,000 b/d by 2025, more than 20 times 2013 levels. In the short term, US producers are not seeing a strong incentive to produce NGLs because current NGL prices are very low, Stephen Ellis, a Morningstar equities strategist, said in an interview. In the longer-term view, however, the demand for US exports of propane and ethylene is expected to be very strong, with the bulk of the exports coming out of ports along the US Gulf Coast, he said.

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Study: Hydraulic fracturing ban would be costly to Pennsylvania

A ban on hydraulic fracturing would have a big impact in Pennsylvania, according to a new study funded by the U.S. Chamber of Commerce that predicts 609,000 jobs and $261 billion would be lost in the commonwealth by 2025 if a ban was enacted.The natural gas industry and its supporters have been ramping up concern about Democratic presidential candidates’ calls for either a reduction in or elimination of hydraulic fracturing, the process that has allowed the Marcellus and Utica shales in the tri-state region, especially Pennsylvania, to become the leading natural gas field in the country and the world. U.S. Sen. Pat Toomey, R-Pa., recently visited Pittsburgh touting his resolution in the Senate that would discourage any future presidents from having the power to ban hydraulic fracturing.

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Top Gas Producers

Top Oil Producers

Refining

Marcellus Production

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The information contained in this newsletter is provided by RARE
PETRO Engineering, PLLC via the following sources unless otherwise
noted:

www.eia.gov
www.drillinginfo.com
www.bhge.com
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