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Utica Exploration Marches North to Mahoning, Trumbull
YOUNGSTOWN, Ohio -- Now that the core of the Utica shale play is defined, it's likely outlying areas such as Mahoning and southern Trumbull counties will see oil and gas exploration ramp up in 2013, according to an official from the Ohio Department of Natural Resources.
"That's where a lot of the drilling may occur this year," Rick Simmers, chief of ODNR's oil and gas division, said Thursday during a press event in Columbus announcing the 2012 production results of 87 wells now operating in the Utica (READ RELATED STORY).
Much of the drilling and permitting activity thus far is concentrated in Carroll and Columbiana counties, Simmers reported, but as the play develops, exploration activity should move north and south of the core region instead of west.
"Most of them are concentrated in Carroll County, Columbiana County, with a trend down toward Noble, Belmont and Guernsey County," Simmers said. "There's also a trend in drilling going northward through Columbiana County, into Mahoning County, and southern Trumbull County," he said.
ODNR Director James Zehringer said that during 2012, the 87 wells listed produced more than 600,000 barrels of oil and more than 12 billion cubic feet of natural gas.
"Production in these initial Utica wells makes a compelling statement of the staggering amount of oil and gas resources Ohio shale may contain," Zerhinger said. "Our projections for the rate of growth for the Utica play have been accurate so far."
It's clear that production of horizontally drilled Utica wells far outstrip the conventional vertical wells that have been a part of Ohio's oil and gas industry since the 19th century, Zehringer said.
Although the 87 wells make up just .02% of the total number of wells in the state, they produced last year 12% of the oil and 16% of the natural gas in Ohio, the ODNR director said. "Utica well production is skyrocketing."
On average, a single Utica well produced as much as 312 conventional wells, Zehringer said, and produces as much natural gas as 448 of these wells. "This shows the enormous potential of this play."
By 2015, the director said that Utica wells could produce as much as 73% of the oil and gas in Ohio.
Nevertheless, the data released Thursday confirms analysts' suspicions that the Utica is mostly natural gas, and not the lucrative oil field that many had banked on when the play was first announced in 2011.
Initially, some analysts and industry specialists boasted that the Utica could hold up to $500 billion in oil reserves.
Reuters reported that oil production averaged just 1,742 barrels per day, while natural gas output totaled 18.837 billion cubic feet, or 35 million cubic feet per day.
Ten energy companies reported results to the ODNR for wells in production during 2012.
By far, the biggest producer in the Utica is Chesapeake Energy Corp., which was the first major energy company to launch exploration efforts in the Utica.
Chesapeake reported its 53 Utica wells produced 372,212 barrels of oil and just over 10 billion cubic feet of dry and wet gas.
Among the most productive of these wells is the Burgett 8H well in Carroll County, which yielded 46,914 barrels of oil and 332 million cubic feet of gas over 206 days of production.
Chesapeake reported results from five Columbiana County wells, three at the Ayrview Acres site in West Township, one at the Sanor Farms pad in Knox Township and another at the Jan Paul Farms pad in Hanover Township.
So far, the best out of these five is the Ayrview 5HT well, data shows. That well produced 9,101 barrels of oil and 40 million cubic feet of gas in just 32 days of production.
The single well registered as producing from Mahoning County, an early well known as the Getchey well in Milton Township, produced just 816 barrels of oil and no natural gas. That well is now inactive.
There were no production numbers from wells in Trumbull County.
Gulfport Energy Corp., which tested some positive wells late last year, reported its eight wells produced 63,167 barrels of oil and 767.1 million cubic feet of gas for the year. That company's most productive is the Wagner 1H in Harrison County, which produced 12,147 barrels of oil and 644 million cubic feet of gas over 129 days.
"There's some good wells, and some not so good wells," observed Tom Stewart, executive vice president of the Ohio Oil and Gas Association, or OOGA, "and some dry holes."
Stewart said it's still hard to gauge the Utica's potential since most of the wells were not in production for a full year. Just three out of the 87 were in production for more than 300 days in 2012.
"I view statements such as 'staggering' amounts of oil and gas with some caution," Stewart said after the data was presented. "We need to study the numbers and the data a little more"
Shawn Bennett, representative for the oil and gas advocacy group Energy In Depth, said the production numbers present an overall snapshot of the Utica.
"It also reflects the infrastructure that needs to be put in place," Bennett said.
Energy companies have said the biggest impediment to oil and gas production throughout the state is the lack of pipelines and processing networks that are required to manufacture and transport gas to respective markets.
"A lot of these numbers aren't representative of what these wells can do," Bennett observed. "Once we get the processing plants up and running, then these wells can flow to their full potential."
Momentum Midstream is building a $900 million processing system in Columbiana and Harrison counties that will separate wet gas from dry gas, and then transform the wet gas into specific, saleable products such as ethane, butane and propane. The first phase of that plant is expected to go online soon.
MarkWest Energy is also investing nearly $1 billion to develop its own processing operation in Harrison County.
"Ohio is the heart of the Utica play, and we believe the industry activity proves that," ODNR's Zerhinger said.
Although the Utica may not yield, at least for now, the volumes of oil that was first anticipated, Zerhinger noted that the Utica contains highly profitable natural gas liquids.
"Companies want wet gas," he emphasized, "and Ohio's got it."
COMPREHENSIVE COVERAGE:
2012 Utica Results Show 'Onset of New Boom'
Two New Wells Slated for Poland Township Site
Copyright 2013 The Business Journal, Youngstown, Ohio.
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