Pittsburgh — Gas producers active in the Utica Shale play, both big participants and producers with smaller operations, have seen sharp spikes in production over the past several years, speakers at the Hart Energy Dug East conference in Pittsburgh said Wednesday.
Ascent Resources, one of the dominant participants in the play, has seen a dramatic ramp-up in production since it began drilling in earnest in the Utica about three years ago, Ascent CEO Jeff Fisher said.
The producer saw its production increase from 377 MMcfe/d in 2016 to about 1.36 Bcf/d at year end 2018. Gas comprises about 90% of the operator’s production, Fisher said on the sidelines of the conference.
Going forward, he said he expects the production to continue to ramp up, while the output of oil and NGLs will increase as a percentage of total production.
“If you look at our drilling activity, we are about two-thirds active on the dry gas, and about a third in the NGL and oil windows in terms of our capital investment,” he said.
The commodity diversity strategy will help the company lessen its exposure to the price dynamics of a single hydrocarbon, Fisher said.
“We’ve seen oil prices go up and down, and NGLs the same thing and the same with gas. We like the diversity because we know there’re going to be differences in those markets, but we also like to take a balanced approach.”
Fisher said the producer expects to continue to benefit from the additional pipeline capacity that has been built to move gas out of the Appalachian Basin over the past several years.
“We identified early on that the basin was going to need additional capacity,” he said. Ascent is an anchor shipper of Rockies Express and Rover pipeline, “and certainly that capacity enabled our growth. Without it we would have had to moderate our activity.”
TAKEAWAY PIPELINE CAPACITY
Those pipelines along with other recently built projects such as Nexus Pipeline “have served the basin very well,” he said. As a result, Ascent now not only has ample capacity to move gas out of the basin, but it also has seen Appalachian gas prices strengthen relative to Henry Hub prices.