Marcellus-Utica Moving Forward, Here To Stay

PITTSBURGH—More than 1,600 people gathered to exchange success stories and ideas at Hart Energy’s DUG East conference and exhibition.

“I think people are excited about the potential that lies ahead. We are about 10 years into this Marcellus play and when you look at a lot of the other plays in the nation, after five or six years they start to fizzle out and they go to the next play. Well the Marcellus and the Utica have so much potential, that they’re going to be here a long time,” said Tim Dugan, executive vice president and COO of CNX Resources. “There is going to be a focus here for a long time, and I think the operators in the basin realize that and understand it. I think as an industry we have learned how to operate successfully and profitably in the current price environment. We are not dependent on gas price like we were several years ago. I think the future of the Marcellus and the Utica as we move into stack pays and we find more ways to be more economical, more productive and drill better wells, the future of the Utica and Marcellus is really exciting.”

Gary Slagel of Steptoe & Johnson and also a board member of the Pennsylvania Independent Oil and Gas Association (PIOGA) sat down with Hart Energy to discuss what he sees happening for the region. “I think overall for the Tri-State region, things are really starting to pick up. We are seeing more and more rigs being committed to developing resource. A number of the pipeline projects are moving forward. Those things all are very indicative of I think a positive energy in the industry right now. Not only for western Pennsylvania or Pennsylvania in general but for the tri-state area, eastern Ohio as well as northern Virginia are all seeing the positive signs associated with the industry. It’s a movement with the expectation that there is going to be the ability to move the resource to the user points.”

The story for the Marcellus-Utica is getting the product out. “The market is the Gulf. The Marcellus gas has to get down to the Gulf. Yes, there are lines that carry: Rover, Nexus and certainly within the northeast market itself, but the bulk of it, the majority, the growth profile has to go to the Gulf. Certainly now, but also as you think of the future growth the Marcellus wants to achieve some of the objectives that producers have up there and would like to achieve. It has to go to the Gulf,” said Justin Carlson, vice president and managing director of research for East Daley Capital Advisors.

Mark Rothenberg, CEO and co-founder of APEX Energy, sees the optimism staying. “Well, I think everybody in the basin is still very optimistic. I think we all realize there is no other place in the country that can produce the type of natural gas wells that we produce here. We are still the most economic basin when it comes to natural gas. There is a little bit of pessimism or negativity in that the overall natural gas environment is not good. Most investors want to be in oil and this really isn’t an oil basin, this is a natural gas basin. I think you have a little bit of negativity around the lack of oil opportunities here but overall most of us came here for natural gas and we are going to believe in that storyline and we just adjust to match what the current gas prices are.”

Exhibitors at DUG East noticed a rise in attendance. “We’ve had a lot of activity. There’s been an increase from last year as well. We have met some really interesting people that seem to be really excited about the state of the industry and where it’s going as well as the expansion and growth that we are having right now,” said John Singleton, Visuray.

“We are seeing an uptick in oil prices, natural gas just got over $3 the other day. Overall, everyone is excited for the growth and just getting lean, mean efficient, and moving forward. It’s been a really positive show this year,” said Andy Mook, Magnum Oil Tools.

“From a standpoint of DUG East and the ability to sit down to converse with a lot of other players in the industry, to share ideas,” Carlson said. “There is so much out in the digital world with respect to social media and articles. There is a lot coming at people but I don’t know that it ever replaces the value of just talking to someone face to face, having a conversation back and forth about how things evolve. You can’t escape the value of that from a standpoint of thinking and being creative about new ideas.”

“You have to have things like DUG East. If you don’t we all just sit in our offices and we just focus on our own company and our own daily jobs,” Rothenberg said.“So, it takes things like this to get us out of the office, get us interacting and networking, and this is probably the best forum to do it.”


Jessica Morales

Jessica Morales is the video reporter for Hart Energy. She contributes to the Digital News Group's interviewing and video production. 

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