American Oil and Gas Reporter - February 2016 - 91

ConventionSection: Ohio Oil & Gas Association
notes, and domestic refineries are dealing
with large volumes from all of the country's unconventional plays. When oil exports become more prevalent, he predicts
OOGA's member companies will see
more profits.
Working The Utica
Ohio operators have delineated the
Utica Shale's limits during the past several
years, Bennett says, a play that many

originally believed would extend over 18
eastern Ohio counties has proven commercially viable in all or portions of eight
counties.
"Where the Utica works, it works
well. But commodity prices have to make
those wells economical, and only three
counties are seeing development because
it is uneconomical to operate in the other
counties," Bennett says. "As commodity
prices come back, the rigs will return

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shaped recovery. "I don't think we know
which one we eventually will see yet,
but almost by definition better times have
to be ahead, because I do not see how
things can get much worse. It is only a
matter of time until we get there."
According to media sources, two projects that went on line in 2015-the Rockies
Express Pipeline Zone 3 East to West
and Texas Eastern Transmission's Uniontown to Gas City Expansion project increased area take-away capacity by 2.2
billion cubic feet a day. News reports estimate as many as 25 Appalachian Basin
pipeline projects are planned for completion by 2018. If all are built, 23.4 Bcf
of Marcellus and Utica shale gas will
gain access to markets outside the Northeast, including customers in Canada, the
Gulf Coast and the Southeast, as well as
international markets through upcoming
liquefied natural gas export terminals.
If natural gas prices begin to recover
by 2018, Bennett predicts the needed
pipelines, compressors and associated infrastructure will be ready for increased
output from the area.
"That will be very important, because
of the growth of gas coming from the
Marcellus and Utica. While the basin
serves as the nation's growth region for
natural gas production, operators remain
stifled by the lack of adequate pipeline
infrastructure to get their gas to markets.
For many years, natural gas came out of
the Gulf and Texas and moved up to the
Northeast. We have created a dramatic
shift, and now we have to redistribute
natural gas throughout the United States,
and really push it out of the Northeast to
other portions of the United States. That
takes time."
Hill adds that the proposed pipelines
are exactly what producers need to boost
their bottom lines.
"More than anything else, Ohio producers need to get this infrastructure built
out and completed, so they can get natural
gas out of the basin," he says. "That will
help eliminate the negative basis producers
are experiencing on gas pricing. Low
New York Mercantile Exchange prices
are bad enough. When you subtract the
negative basis, it is terrible, especially
for conventional producers operating vertical wells."
Appalachian Basin oil producers also
are waiting to feel the impacts following
Congress' move to lift the U.S. prohibition
against oil exports, Hill says. Utica oil in
particular has a very high API gravity, he

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FEBRUARY 2016 91

American Oil and Gas Reporter - February 2016

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