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Gulfport Focuses on Drilling Multiple Wells at Sites
YOUNGSTOWN, Ohio – Oklahoma City-based Gulfport Energy Corp. says that net production of oil and gas wells it’s drilled in eastern Ohio's Utica shale should surpass production in other regions of the country as the company homes in on what it believes to be the richest part of the play.
"By mid-April, our Utica assets are forecasted to be generating more net production than our other existing areas," said Michael Moore, senior vice president and chief financial officer, during a conference call with analysts Wednesday.
The conference call was held to discuss Gulfport's fourth-quarter 2012 earnings.
Moore described production in the Utica as "choppy" over the last several months, but that production should streamline once MarkWest Energy Partners completes the first phase of a massive natural-gas liquids processing complex in Cadiz, Ohio, in Harrison County.
The wells under development, Moore said, "should be allowed to grow free of midstream constraints as MarkWest's infrastructure build-out leads our drilling program."
Moore said that the company is confident that MarkWest will finish the first phase of the plant by the second quarter of this year, allowing those wells drilled in 2012 to be hooked to the pipeline network so steady production can begin.
“We’re right around the corner from having the major hurdles overcome with MarkWest,” he said. “We’re also modifying our drilling plans to a certain extent to make sure we drill wells we can hook up immediately.”
Gulfport has hit big with a handful of oil and gas wells in the southern portion of the Utica in Belmont and Harrison counties. The Shugert well in Belmont County registered a peak rate of 7,482 barrels of oil equivalent per day, while a second well drilled at the site reported a peak rate of 4,913 barrels of oil equivalent per day.
Also, the company's Wagner 1-28H well in Harrison County reported peak test production of 4,650 barrels of oil equivalent per day. That well is already connected to a pipeline that send the gas to an interim MarkWest processing operation.
The success in this portion of the Utica has led Gulfport to focus on developing multiple wells on a single pad, thereby providing not only the best chance of tapping into "wet" gas reserves, but also to efficiently tap into the pipeline network now under construction there.
‘Many wells will be drilled on existing pads,” remarked the Gulfport CEO. “This will enable us to capitalize on existing pipeline infrastructure. We should have immediate hook-ups on all of this."
Gulfport holds some 137,000 gross acres in the Utica shale and drilled, or either started to drill, 14 wells in 2012, the company reported. At the end of 2012, two of these wells were in production, eight were completed and in a "resting" period, two wells were awaiting completion, and two other wells were in the process of being drilled.
The company's drilling activity has accelerated, and Gulfport has added a third rig to the play. That rig is expected to start its first well during the first week of March, and a fourth rig is planned to be introduced in April.
"We're rigging up to drill two more Wagner wells," Palm said. "So, they'll go right into the pipeline that's there."
The plan is to have all of the wells drilled connected to MarkWest's network with 20-inch lines and producing by June 1, Palm said. Ten of the 14 wells are expected to be producing by April, he said.
"We're going to have a nice ramp-up starting in the beginning of the second quarter. We know those lines are going to be there, so that's where we're doing the drilling."
Gulfport on Wednesday reported net income of $15.9 million on oil and gas revenues of $56.5 million for the quarter ended Dec. 31, or 28 cents per diluted share.
Gulfport also reported year-end 2012 net income of $68.4 million on oil and gas revenues of $248.6 million, or $1.21 per diluted share.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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