Proving Them Wrong: How The U.S. Oil And Gas Industry Survived

The Saudis counted them out. So did the Russians, even many domestic analysts said North American shale and tight oil and gas production would decline in the face of low prices and that investment would dry up and output would fall. Well, guess what? They have all been proven wrong. Sure, rig counts have dropped and there have been painful layoffs of workers, but the industry is surviving and against all the “experts” advice, production of natural gas from the Marcellus and Utica shales of the U.S. Northeast is averaging 22.63 billion cubic feet per day in August, according to a Financial Times article. That is up 2 percent from July and the most since February’s all-time high of 22.78 billion cu-ft/d. Despite earlier U.S. government forecasts that combined gas output from the two shale areas lying beneath Ohio, Pennsylvania and West Virginia would decline, producers have managed to maintain volumes by tapping inventories of drilled but uncompleted wells and burrowing deeper, longer wells that yield more gas. Even though the number of drilling rigs has declined, technological developments have helped producers increase output. New production per rig now averages about 11.4 million cubic feet of gas in the Marcellus, an 18 percent improvement from a year ago, according to the article...more