Natural gas fundamentals-producers still feeling the pinch

The impacts of another potential downturn in the region’s natural gas industry still recovering from the 2015 slowdown came up as a concern in a panel Wednesday.

Executives said that low natural gas prices are having a crushing effect on natural gas companies, which have cut back on drilling rigs and laid off thousands of people in the past two years. They spoke during the first day of the DUG East conference focusing on Marcellus and Utica gas production.



It’s not just the natural gas drillers that are feeling the pinch. Contractors are increasing their own prices to make up for the lost volume, tightening the natural gas companies’ margins and potentially leading to a cut in drilling. Ed Long, chief operations officer at Apex Energy LLC, said service costs have gone up 10 percent to 15 percent in recent months. Apex Energy is a Wexford-based driller

“I think we’re going to see another downturn in the rig count,” said John Adcock, vice president-operations at Oklahoma-based driller Ascent Resources. Ascent has about 300,000 net acres in the Marcellus and Utica shale in the tri-state region.


Technology is helping natural gas companies do more with less. From 3D-modeling of well sites to predictive well repair modeling and wider and wider lateral wells, the panel overall showed optimism for the future of the drilling industry even in this time of low prices.

By using technology to gain even 10 percent more efficiency, the execs believed that could make the difference in weathering the next downturn and developing market leadership.

“Today’s optimum cannot be tomorrow’s optimum,” Adcock said.



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