Mahoning Valley counties exceed oil, gas production

By Kalea Hall

khall@vindy.com

YOUNGSTOWN

Oil and natural-gas production in Columbiana County once again has topped production in the two other Mahoning Valley counties.

Data from all four quarters of 2015 production released by the Ohio Department of Natural Resources and combined by The Vindicator show a year-over-year increase in both natural gas and oil in Columbiana County.

Natural-gas production came in at 37 billion cubic feet in 2015 compared with 21.3 billion cubic feet produced in 2014.

Oil production in 2015 totaled 214,412 barrels compared with 172,388 barrels produced in 2014.

Both Mahoning and Trumbull counties, however, saw decreased oil production. Trumbull also saw a drop in natural-gas production while Mahoning’s production stayed flat.

In Mahoning, 22,378 barrels of oil were produced compared with the 26,929 barrels produced in 2014. Natural-gas production remained at 4 billion cubic feet, which was the same amount produced in 2014.

In Trumbull, 10,871 barrels of oil were produced compared with 40,668 barrels in 2014. Natural-gas production for the county also dropped from 1 billion cubic feet to 628 million cubic feet in 2015.

“What you have with Trumbull and Mahoning counties is there were no new wells drilled in 2015,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. “There’s no new development.”

Companies are focused on the best areas, which in Ohio’s Utica Shale Play would be Monroe and Belmont counties where there are “very prolific dry-gas reservoirs,” Bennett said.

“Even in a low-price environment those areas are still economical,” Bennett said.

Dry gas is a natural gas that contains methane.

The state saw increases in both oil and natural-gas production. Oil production jumped from 10.9 million barrels to 21.9 million for a 99.9 percent increase year over year. Natural-gas production went from 452 billion cubic feet to 953 billion for a 110.6 percent.

“The increase was greater than we expected,” said Gabriele Sorbara, vice president of equity research and energy analyst for Topeka Capital Markets. “It showed how prolific the Utica Shale is in dry gas.”

Bennett said he was also somewhat surprised by the state’s production increase. He explained there are lease obligations that need to be met by companies.

“They are moving forward and developing acreage,” Bennett said.

Given the low-price environment, both Sorbara and Bennett expect to see a slowdown in the growth.

“We think it will taper off in 2016,” Sorbara said. [The growth] “may continue for a quarter or two. If prices remain this weak, it will be much harder to grow.”

Natural-gas prices for April delivery were $1.82 a million British thermal units as of Friday, according to Bloomberg Business. That’s compared with $2.82 reported on March 11, 2015.

The price of a barrel of West Texas Intermediate crude oil, which is used as a benchmark, was $38.50. Oil prices have dropped off since June 2014 when they were $100 or more. But the International Energy Agency recently reported there are signs that prices may have bottomed out.

At the same time, Business Insider reported Friday the combined count of U.S. oil and gas rigs hit the lowest level since at least 1949. Baker Hughes, an oil field service company that keeps count of the rigs, reported a total oil and gas rig count of 480.

In Ohio, the rig count has hit 13. The highest rig count in the state was 59.

“Less rigs means less wells being drilled,” Bennett said. “In any commodity-based industry you are going to have the highs and lows.”

Locally, the drop in energy prices has hit several local companies including Vallourec Star and Exterran. Vallourec Star has made workforce cuts, and Exterran is on an indefinite shutdown. Both supply the oil and gas industry.

But Bennett says the industry is still “a major component of Ohio’s economy.”

Out of the four quarters, Mahoning saw the most production in the first quarter when more than 8,400 barrels of oil and more than 1.4 billion cubic feet of gas were produced. That’s compared with the 2,173 barrels and 680 million cubic feet of gas produced during the fourth quarter in the county.

Trumbull County’s best quarter also was the first quarter with more than 3,500 barrels of oil produced and 201 million cubic feet of natural gas. That’s compared with more than 2,100 barrels of oil produced in the fourth quarter and 99 million cubic feet of natural gas.

Columbiana County saw the most oil production during the first quarter with more than 77,800 barrels produced, but the most natural gas came during the fourth quarter for the county with 11.6 billion cubic feet produced.

“I would assume it is starting to slow down,” Bennett said of the production growth in the state. “But there are a lot of factors at play.”