The latest oil and natural gas horizontal production numbers released by the Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management show a modest increase in production from where we left off in March of this year. The quarterly results show that Ohio producers recovered 4,044,072 barrels of oil and 388,560,451 Mcf (388 billion cubic feet) of natural gas, spanning April 1, 2017 through July 31, 2017.
The production results again show a positive sign, as we left 2016 seeing both oil and natural gas production decrease for the first time since ODNR began recording horizontal production numbers. There was a slight production increase of 4% for oil (up from 3,904,732 barrels) and 4% for natural gas (up from 372 billion cubic feet). Yes, we are up from the lowest point thus far, which is reassuring but production is still slowly rebounding.
The largest production increases on a quarterly basis that we have seen in the ODNR’s statistics is oil increasing 26% in the second quarter of 2015 (going from 4,401,687 in first quarter, to 5,578,255 in the second) and natural gas increasing 23% in the fourth quarter of 2015 (going from 245 bcf in the third quarter, to 404 bcf in the fourth quarter). Since both of those quarters, if production was not decreasing—which it did at one point for both products—we have only seen single digit percentage increases.
When looking for an overall trend of a cyclical industry, a quarter-by-quarter comparison over a number of years tends to provide the most accurate representation. We are encouraged to see that oil and natural gas producers are slowly ramping back up. The past two years brought a crippling downturn for the industry and this new sign of life is definitely welcomed by the industry.