Hilcorp Is Digging Deeper into Columbiana County

YOUNGSTOWN, Ohio -- Hilcorp Energy Co., the most active driller in the northern tier of the Utica shale in eastern Ohio and western Pennsylvania, is poised to begin aggressive development of its leasehold acreage in the Brinker storage field of Columbiana County.

Data provided by the Ohio Department of Natural Resources show that Hilcorp recently applied for 25 new horizontal well permits that target three sites in Fairfield Township in the northern section of the county.

ODNR approved six of those permits Nov. 13 and 14, the agency reported. The other 19 are pending.

Much of the acreage lies in or around the Brinker, a 30,000-acre natural gas reserve in the Clinton sandstone strata, 3,000 to 6,000 feet below the surface of the earth.

Columbia Gas, a subsidiary of NiSource Gas & Transmission, owns the Brinker. In 2011, Hilcorp and NiSource entered a partnership to explore and transport natural gas in the Utica. Hilcorp acquired more than 1,000 leases in this part of Columbiana County from Chesapeake Energy Corp. in early 2013.

However, some landowners in the storage field held decades-old leases owned by Columbia Gas on terms far less favorable than the leases other landowners signed after exploration in the Utica began in earnest in 2010.

These landowners sued in the Columbiana Court of Common Pleas to renegotiate their leases on terms more to their liking. That case is closed, and it appears that Hilcorp is moving forward with its plans to develop the area.

Efforts to contact Hilcorp proved unsuccessful, and the law firm representing the landowners, Scullin & Cunning in Boardman, declined comment on the case.

"There are two new well pads that I've seen," reports Jeff Dick, chairman of geology department at Youngstown State University, who owns land in the Brinker. "This is good news for Fairfield Township."

Six of the new Hilcorp wells are planned for the McNicol farm, 10 of the applications propose wells at the Nolker property, while nine other wells are intended for the Blocksom property, ODNR records show.

Six permits for the McNicol farm were approved in mid-November. The remaining 19 await approval from ODNR.

Last year, Hilcorp acquired its leasehold acreage in Fairfield Township as part of a larger assignment from Chesapeake Energy Corp. It included 1,097 leases in Fairfield, Salem, Elk Run, Unity, Center and Middleton townships.

A production analysis Dick performed on local wells shows that well other energy companies drilled in Columbiana County show strong results, he says.

"It doesn't look too bad at all," Dick observes. On average, the geologist said, Columbiana County wells -- especially in the southern portion of the county -- could produce about 800 barrels of oil equivalent per day.

"They look pretty good," Dick says. "These wells are starting to look like those in Carroll County and northern Harrison County."

Between April 1 and June 30, Chesapeake's Dye well in Center Township in Columbiana County produced 526.4 million cubic feet of gas, the 21st-best producing well in all of the Utica that quarter. Chesapeake's Andrulis well, also in Center Township, was ranked 22nd in production with 508.4 million cubic feet.

To date, Hilcorp has drilled one well in Columbiana County at the Salem-Grubbs site in Salem Township. That well is in production and has yielded 119,816 million cubic feet of natural gas the second quarter, ODNR records say.

Meanwhile, Hilcorp continues to develop the lease acres it holds in western Pennsylvania, records show.

During the first full week of November, the Pennsylvania Department of Environmental Protection issued three new horizontal well permits for energy companies allowing exploration of the Utica shale in western Pennsylvania.

Hilcorp secured a single permit to drill a new well at the Buckner farm in Mahoning Township in Lawrence County while RE Gas Development LLC secured two permits to drill horizontal wells at the Leslie farm in Little Beaver Township in Lawrence County.

No new horizontal wells are slated for Mercer County, although McComb Oil Inc. received two permits for conventional vertical wells in Sandy Lake Township.

Meanwhile, the Ohio Department of Natural Resources issued more permits for new wells in the Utica shale during the week ended Nov. 15, the agency reports.

ODNR said it awarded 22 permits for horizontal wells, most of them in the southern tier of the oil and natural gas play.

Aside from the six Hilcorp wells, Gulfport Energy Corp. received six permits, three for wells in Belmont County and three in Noble County. Antero Resources secured six permits for wells in Monroe County and CNX Gas was issued a permit for a well in Monroe County.

Chesapeake Exploration LLC was awarded a single permit for a well in Harrison County and another permit for a well in Tuscarawas County. American Energy Utica LLC, an entity created by former Chesapeake CEO Aubrey McClendon, secured one permit for a well in Harrison County.

Chevron Appalachia LLC was awarded a permit for a well in Harrison County and XTO Energy, a division of Exxon Mobil, received a permit for a well in Belmont County, ODNR reported.

No new well permits were issued for Mahoning or Trumbull counties, records show.

Since 2010, energy companies have drilled a total of 1,176 wells in the Ohio portion of the Utica, of which 618 are producing. Thus far, ODNR has issued 1,630 permits and 53 rigs are operating in the play.

Copyright 2014 by The Business Journal, Youngstown, Ohio.
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