BP to Drill 10 Wells in Trumbull County Next Year
NORTH JACKSON, Ohio – BP America is slated to drill at least 10 "appraisal" wells in Trumbull County next year starting in April, and if all goes according to plan, more will follow, executives said Monday.
“We’ll have those 10 locations drilled before the end of next year,” said Bruce Abbuhl, BP program manager for Ohio. “The purpose is to test the subsurface, look at the subsurface data core, and determine what type of liquids potential we have here along with gas.”
The first of these wells would be drilled somewhere east of Mosquito Lake, Abbuhl said, but could not be more specific. A unitization hearing was held Friday in Columbus regarding the site.
Should these initial tests prove favorable, BP would pursue development in other areas where it holds leases, Abbuhl said.
Abbuhl made the comments during a press event announcing BP's new hub for its Utica operations – a 43,000-square-foot building at the Youngstown Commerce Park once occupied by FedEx.
The prospective well sites in Trumbull County were selected because BP holds a significant amount of contiguous leasehold acres in these areas, Abbuhl said. That makes it easier to combine the acreage into larger units, which is necessary when energy companies conduct horizontal drilling.
Most of the initial work would be on land leased as part of the Associated Landowners of the Ohio Valley, or ALOV. Earlier this year, BP leased some 84,000 acres from more than 1,000 landowners in Trumbull County. The company continues to conduct due diligence on many of these land titles, Abbuhl said.
BP was searching for rural locations close to highways with easy access to the site, thereby limiting the use of county roadways. "We wanted to test across Trumbull County so we have a full understanding of the potential for the Utica play here," Abbuhl said.
Research such as 2-D seismic testing has already been performed across the county, and that data is being analyzed, he added. This information is used to determine certain depths and slopes of the Utica formation, so drilling operations can select precisely where to place a well.
"We're just now processing the data,” he says, “and that data won't be ready until February or March.”
The initial unit slated for development in April is a little more than 500 acres, but Abbuhl said most of these units would be smaller, between 200 and 300 acres.
Also, he noted that BP is looking at investing what amounts to "a couple hundred million dollars" into its operations next year. Most of these expenses are tied to developing and completing the wells.
While there are some pipelines in place that these wells could tap into, there isn't enough capacity to accommodate the projected quantities of natural gas and natural gas-liquids that might flow from the Utica.
As such, BP is in discussions with midstream companies to help develop more comprehensive infrastructure throughout the region that would allow it to transport natural-gas liquids, noted Ohio operations manager Joe Uppercue.
“We would have to look to expand the existing infrastructure to be able to handle and manage the amount of production that would be brought to the surface,” he said. That would probably require a midstream partner that would transport and process the natural gas and natural-gas liquids, he said.
Uppercue added that the company is "working really hard to make sure we use local providers for whatever services we need."
Local contractors looking to do business with BP can visit its website and contact its supply chain department. “For the initial 10 appraisal wells,” he said, “we’re reaching contracts with all local suppliers on civil construction, electrical, as well as mechanical.”
Much of the administrative work, as well as maintenance and conditioning work on rig equipment, would be performed out of the new location, Uppercue noted. The company has signed a three-year lease with a six-year option on the building with Redstone Investments, Youngstown. The building includes 5,000 square-feet of office space and another 38,000 square-feet of warehouse space.
Initially, four BP employees would work out of the new offices as well as several contractors, Uppercue reported. "As we approach the drilling program in April, it will increase from there," he said. "Depending on whether it moves from appraisals to development, it could increase significantly from that point."
He reported that the decision to locate BP's operations in North Jackson was because of the s proximity of the site to Interstate 76 and Interstate 80, while the building also offered opportunity for expansion.
“Drive times are approximately 20 to 25 minutes from this facility to the northern half of Trumbull County,” he said, where most of BP's acreage is.
Abbuhl said that the company is confident about its position in the Utica shale, even though other concerns have sold their leases and refocused efforts in other sections of the play, especially in southeastern Ohio.
“I can’t speculate on what other companies do,” he said. “A lot have come in and sold to other companies. That’s the business model they have. It’s not the business model we have.”
Abbuhl said that BP is looking to establish a long-term presence in the region, and developing this part of the Utica is an important step.
“This is a milestone in our journey to build a business here in the Mahoning Valley,” Abbuhl said. “We’re excited to be here.”
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