Summer is the magical time of the year when West Virginia well-level oil and gas production data finally gets released, meaning we now have well-level data for the year 2017. Oil and gas production data has traditionally only been reported to the WVDEP once per calendar year, which makes monitoring trends in an important region for Marcellus/Utica production in Southwest Appalachia difficult compared to nearby Pennsylvania and Ohio. Those states report monthly and quarterly, respectively. The good news is the West Virginia legislature has passed a requirement for production data for horizontal wells to now be reported quarterly, meaning we should get a more frequent glimpse of how things are trending. So, what does data from 2017 show us?
There continues to be increases in average well productivity in West Virginia, with the overall average IP rate up 15% year-over-year to 8,800 Mcf/d. There were notable gains in Doddridge and Harrison counties, as seen below. Some of the increase can be attributed to increased lateral lengths, which are up about 4% from 2016, though on a per-lateral-foot basis, IP rates are still up about 11% year-over-year.
Higher IP rates are generally in wells located in counties farther south in West Virginia, as shown in the map below. This is partially related to liquids content, as the northern panhandle tends to have more rich acreage with higher GPMs, which generally correlates to relatively lower gas IP rates.
On a producer level, Antero had the highest average IP rate in 2017 at 13,800 Mcf/d, with activity focused in Doddridge county, while other producers averaged less than 8,000 Mcf/d. When normalizing based on lateral length, Antero was still noticeably above other producers at 1,600 Mcf/d per 1,000 ft of lateral, as seen in the figure below.
What does this mean for the region going forward? We have continued to see increased IP rates year-over-year, but are we reaching a peak to this gain? Further, with strong liquids pricing, there is a shift in focus back to rich gas areas, which may dampen overall IP rates.
Fortunately, with new reporting requirements in West Virginia, we won’t have to wait until next year to get a peek at how horizontal well performance is trending in the state. To keep up to date on production trends in the Northeast and across the country, check out BTU’s Upstream Outlook, and for a deep dive on the dynamics of the Northeast including infrastructure and pricing, request a sample of BTU’s Northeast Gas Outlook.