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Oil, gas output declines in state, Valley
By Kalea Hall
YOUNGSTOWN
The state’s oil and natural-gas production has hit a much-expected slowdown.
The Ohio Department of Natural Resources reported a year-over-year first-quarter increase in 2016, but fourth-quarter 2015 production compared with first-quarter 2016 production shows a drop in oil and just a slight increase in natural gas.
Natural-gas production in the state during the fourth quarter of 2015 was 302,505,428 billion cubic feet; in the first quarter of 2016, the state produced 329,537,838 billion cubic feet.
Oil production in the state dropped from 6,249,116 barrels reported in the fourth quarter of 2015 to 5,485,854 barrels reported in the first quarter of 2016.
“We are finally starting to see the drop in oil,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. “Natural-gas production should also decrease. This is the smallest increase we have seen.”
The production numbers dropped quarter to quarter even though the number of wells increased. ODNR’s first-quarter 2016 report lists 1,351 horizontal shale wells, 1,302 of which reported oil and gas production during the quarter, while the fourth-quarter 2015 production lists 1,265 wells, 1,230 of which reported production.
MAHONING county
Mahoning County was the only county in the Valley to see a quarter-over-quarter increase in both its oil and gas production. In the first quarter of 2016, the county’s natural-gas production was 741,558 million cubic feet compared with 680,800 million cubic feet reported in the fourth quarter of 2015.
Oil production during the first quarter of 2016 was 2,275 barrels compared with 2,173 barrels produced in the fourth quarter of 2015.
The county’s year-over-year comparison, however, shows a significant drop in both oil and natural-gas production.
Oil production in the first quarter of 2015 was 8,485 barrels, and natural-gas production in the county was 1,182,430 billion cubic feet.
TRUMBULL county
Trumbull County’s production showed a decrease in both comparisons. For the first quarter of 2016, the county north of Mahoning where little production is taking place reported production of 1,809 barrels of oil and 92,712 million cubic feet of natural gas.
That’s compared with fourth-quarter 2015 Trumbull County production of 2,112 barrels of oil and 99,689 million cubic feet of natural gas.
For the first quarter of 2015, Trumbull County reportedly produced 3,590 barrels of oil and 201,681 million cubic feet of natural gas.
COLUMBIANA COUNTY
In Columbiana County, the Valley’s major producer, natural-gas production numbers varied, while oil production showed a consistent drop year-over-year and quarter-to-quarter.
Columbiana County’s first-quarter 2016 production was 28,163 barrels of oil and 10,469,589 billion cubic feet of natural gas.
In the fourth quarter of 2015, the county reportedly produced 36,713 barrels of oil and 11,690,817 billion cubic feet of natural gas.
In the first quarter of 2015, the county’s production came in at 77,805 barrels of oil and 8,930,179 billion cubic feet of natural gas.
PRICE IMPACT
OOGA expected to see oil production decline given the state of the industry. Prices have dropped from more than $100 a barrel in the summer of 2014 to $48.85 a barrel reported June 21 by the U.S. Energy Information Administration.
High supply and low demand drove prices downward and slowed production here in the states.
OPEC did not yield to the cartel members who wanted more profits and market share. OPEC’s leader, Saudi Arabia, typically would have cut production to prevent a price collapse.
“What we have seen is companies abandon the liquids and oil-producing parts of the Utica,” Bennett said. “Given that there’s been an 80 percent drop [in oil prices], it’s only a matter of time until you’ll see natural gas follow that trend.”
Recently, natural-gas prices have been trending upward at $2.768 a million British thermal units on the New York Mercantile Exchange for July delivery.
“[It’s] a very slow road to recovery,” Bennett said.