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Ohio Utica well permits rebound in March

04 Apr 2018 20:26 (+01:00 GMT)
Ohio Utica well permits rebound in March

Houston, 4 April (Argus) — Permits to drill wells in the Utica shale in Ohio soared in March to 43, more than doubling the 16 permits issued the month prior, according to data from the Ohio Department of Natural Resources.

The number of permits issued in February was down by 41pc from January permits and was the lowest monthly count since 11 permits were issued in June 2016. Permits in March soared from the prior month but were 26pc lower than the year-earlier level of 58.

The number of applications processed each month varies, ranging from 25 to 58 in 2017.

Spot natural gas prices at Dominion Transmission South averaged $2.24/mmBtu in February, down by 9pc from February 2017, amid higher production rates this year. The index rebounded in March as demand rose on multiple late season winter storms in the US northeast that month, averaging at about $2.38/mmBtu.

Argus natural gas forward prices for Dominion South in May 2018 are averaging $2.15/mmBtu, compared with the May 2017 spot price average of $2.71/mmBtu, suggesting that supply is readily available amid higher output levels, despite large late-season withdrawals from storage in the US northeast.

Gross gas output from the Appalachian region, a gas-rich area that includes the Marcellus and Utica shales, rose in February to 26.9 Bcf/d (762mn m³/d), according to the US Energy Information Administration (EIA). Appalachian gas production during that month was up by 1.2pc from a month earlier and increased by nearly 17pc from a year earlier. The EIA said it expects the region to hit 27.2 Bcf/d in March.

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