Gas production in the Marcellus region has eclipsed previous rates, hitting a new record high that exceeded 450 MMcm/d (15 Bcf/d) in July. The news about the large U.S. shale gas basin, which accounts for nearly 40% of the nation’s shale gas production, was released Tuesday by the U.S. Energy Information Administration (EIA). The EIA reported that gas production from the Marcellus region has skyrocketed from 60 MMcm/d (2 Bcf/d) in 2010. The production increase was attributed to improved drilling productivity, which includes the better precision and efficiency that comes with horizontal drilling and hydraulic fracturing. The EIA predicts that these techniques will help push up production even further by the end of the month. “With 100 rigs in operation and with each rig supporting more than 6 million cubic feet per day [170 Mcm/d] in new-well production each month, new Marcellus region wells coming online in August are expected to deliver over 600 [MMcf/d] [18 MMcm/d] of additional production,” the EIA said in its report. “This production from new wells is more than enough to offset the anticipated drop in production that results from existing well decline rates, increasing the production rate by 247 MMcf/d [7.4 MMcm/d].” The year appears to be shaping up as a good one for oil and gas companies’ operations in the region, including Chesapeake Appalachia and Cabot Oil &Gas among others. Cabot called its Marcellus Shale properties the “cornerstone asset of its portfolio” that has driven record production and reserve growth. For second-quarter 2014, Cabot reported production averaged 37.7 MMcm/d (1,258 MMcf/d), marking a 41% jump over the same time last year. “Our operations in the Marcellus continue to meet expectations across our acreage position," Cabot CEO Dan O. Dinges said in a July 24 news release about the company’s second-quarter results. “We recently placed on production three pads that encompass the northern- and eastern-most reaches of our acreage with great success.” Chesapeake is scheduled to release its second-quarter results Aug. 6. But higher output has brought some growing pains. The EIA pointed out that production has outpaced pipeline capacity in the region, prompting the need for pipeline expansion projects. “As pipeline capacity is increased, markets in the Northeast gain greater access to Marcellus region gas, which can result in stabilized or decreased prices,” the EIA said. “Natural gas prices in the Northeast, such as the Dominion South trading point in southwestern Pennsylvania, have increasingly been below the Henry Hub price, in part because of increased access to Marcellus gas.” Contact the author, Velda Addison, at email@example.com.
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