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Chesapeake Reports New Utica Production Volumes
YOUNGSTOWN, Ohio – Chesapeake Energy Corp.’s first-quarter earnings release (READ RELATED STORY) provides a new window into the Oklahoma company’s high expectations for the exploration in Utica shale play areas of eastern Ohio, western Pennsylvania and northwestern West Virginia.
Chesapeake announced at the close of the markets Tuesday that it lost $71 million in the quarter ended March 31. With natural gas prices continuing to be depressed, the company affirmed it would concentrate developing its holdings in the liquids rich areas of unconventional shale plays. During the first quarter, liquids production increased 69% compared to the first quarter of 2011, the company said.
Chesapeake is the largest leaseholder in the Utica play, controlling about 1.3 million acres.
The company currently operates 10 rigs in the Utica fields and plans to average 13 rigs in 2012 and 22 rigs in 2013, according to its release, with its initial development focus the wet gas window.
“Chesapeake has drilled a total of 59 wells in the play, of which nine are currently producing, 15 are currently being completed, 15 are waiting on completion and 20 are waiting on pipeline infrastructure,” the company said.
Here are the new Utica shale results reported Tuesday by Chesapeake:
“Of the nine producing wells, eight are in the wet gas window. On a post-processing basis, peak rates from the wet gas window of the play have averaged approximately 415 barrels (bbls) of oil, 260 bbls of natural gas liquids (NGL) and 3.9 billion cubic feet (mmcf) of natural gas per day, or approximately 1,325 barrels of oil equivalent (boe) per day.
“The company’s best Utica well, the Buell 8H in Harrison County, had an initial peak rate of more than 3,000 boe per day in September 2011, with roughly half the production from liquids. The Buell well is currently producing at a rate of 1,040 barrels of oil equivalent per day, and the company believes the well will have an estimated ultimate recovery of at least 575,000 barrels of liquids and 13 billion cubic feet of natural gas.
“Three notable recent wells completed by Chesapeake in the Utica are as follows:
• The Shaw 5H in Carroll County achieved a peak rate of 770 bbls of oil, 180 bbls of NGL and 2.9 mmcf of natural gas per day, or approximately 1,440 boe per day;
• The Burgett 8H in Carroll County achieved a peak rate of 720 bbls of oil, 140 bbls of NGL and 2.1 mmcf of natural gas per day, or approximately 1,210 boe per day; and
• The Coniglio 6H in Carroll County, in a limited flow test before being shut-in to wait on a pipeline connection achieved a peak rate of 290 bbls of oil and 5.0 mmcf of wet natural gas per day, or approximately 1,125 boe per day at the end of the test.
“The company has a significant number of wells planned for the Utica oil window during the remainder of 2012 and is confident that it will have strong results based on its successful results in the oilier portion of the wet gas window, preliminary results from oil window testing and the results of certain of its competitors in the oil window.”
Chesapeake reported 2011 well production results April 2 to the Ohio Department of Natural Resources. The report consisted of five producing wells and four wells that have yet to come online but have extracted oil through brine water, a byproduct of the hydraulic fracturing process.
Together, the five wells have produced 2.6 billion cubic feet of dry gas and liquids since production ramped up in July 2011. Another 46,323 barrels of oil was also tapped from all nine wells, ODNR said.
Copyright 2012 The Business Journal, Youngstown, Ohio.