Well permits for the Utica shale in Ohio sank to a four-year low in June after hitting a 2016 peak of 38 in April, according to data from the Ohio Department of Natural Resources.
The data show permits for 14 wells in June, down from 16 in May and shrinking from 37 permits processed in June 2015.
The number of applications processed each month varies, ranging from 22 to 79 last year. But application numbers have consistently been lower on the year so far as producers tighten capital spending and rein in output because of low energy prices. June's total of 14 is the lowest since January 2012, when the department processed 13 applications. Records go back to September 2010.
The drop in drilling activity may have added support to spot natural gas prices near the shale. Prices at Dominion Transmission South, which includes pipeline deliveries from West Virginia and Ohio, averaged $1.70/mmBtu in June, up by 26pc from June 2015. June marks the first time this year that the monthly average price at Dominion South was higher than a year earlier.
Production rates in the shale have leveled out in recent months, likely connected to the drop in drilling activity. Data from the US Energy Information Administration (EIA) show Utica shale output peaking at 3.7 Bcf/d (105mn m³/d) in February, up by 7pc from the prior month, but rates have remained steady since then, ranging between 3.6 Bcf/d and 3.7 Bcf/d in March through May. The EIA expects output to remain within that range through the end of July.
