Rover Pipeline Driving Increased Activity

For years we have been telling our clients that the oil and gas activity will pick back up once adequate pipelines are in place to transport the gas out of the Appalachian Region. There are a number of pipeline projects (Rover, Leach Xpress, Mountaineer Xpress, Atlantic Sunrise to name a few) which are scheduled for completion over the next year or two.

With Rover Pipeline now on track to be in service by November 2017, oil and gas producers in the Utica shale have been forced to ramp up activity to fulfill their commitments to Rover. In order to get priority in shipping with pipelines, oil and gas operators are required to commit to providing certain volumes of gas to the pipeline on a daily basis. The primary operators in the Ohio Utica shale, Antero Resources, Ascent Resources, Eclipse Resources, Gulfport Energy and Rice Energy have a combined commitment to Rover of 2.3 Bcf/day of natural gas.

Most operators in the Utica have an inventory of drilled, but not completed wells (DUCs). This means that the wells simply need fracked in order to have them ready to produce. While the oil and gas companies will be able to put those wells online fairly quickly, oil and gas operators will have to increase their activity in order to keep up with their pipeline commitments. This is evidenced by the fact that Ascent Resources, Gulfport Energy, Rice Energy, Eclipse Resources, and Antero Resources have combined to approximately double their activity in Ohio since November of 2016. As more and more of these pipelines go into service, you should continue to see an increase in activity from the oil and gas industry to meet the new pipeline commitments.