OKLAHOMA CITY -- Chesapeake Energy Corp., the most prolific driller in eastern Ohio's Utica shale, today reported that oil and gas production from its wells in the play increased 373% during the second quarter versus the same period last year.
Increased production has also led to more capacity at UEO Buckeye's Kensington cryogenic plant in Columbiana County. Chesapeake, a major customer of the Kensington plant, reports that the third phase of the processing facility was finished in June.
"This incremental capacity will enable the company to connect more Utica wells to sales during the 2014 second half and begin to reduce its inventory of non-producing wells to a more normalized working level," the company said.
Chesapeake's Utica production results were released along with the company's second quarter financials released this morning.
The company said Utica net production averaged approximately 67,000 barrels of oil equivalent per day. About 10% of production was oil, 30% was natural gas liquids, and 60% of the output was natural gas.
Chesapeake reported that it operated an average of eight rigs and connected 48 wells to pipelines across the Utica during the quarter. Average peak production rate of those wells stood at approximately 1,200 barrels of oil per day, the company said.
As of June 30, Chesapeake had 210 wells awaiting pipeline connection or in various stages of completion.
Average net production in the southern Marcellus shale in Pennsylvania and West Virginia stood at about 58,000 barrels of oil per day for the period, an increase of 67% compared to the second quarter of 2013, the company reported.
Approximately 9% of production was oil, 34% was NGL, and 57% was natural gas. The company connected nine wells during the quarter that averaged a peak production rate of 1,875 barrels of oil per day.
Average net production in the northern Marcellus in Pennsylvania stood at 878 million cubic feet of natural gas per day, an increase of 12% compared to last year. All of the company's production in this tier of the Marcellus is dry natural gas.
Chesapeake reported net income of $145 million during the quarter, or $0.22 per diluted share. This compares to $457 million net income, or $0.66 per diluted share, reported during the second quarter of 2013, the company said.
"Chesapeake delivered solid organic production growth in the quarter while continuing to demonstrate capital discipline and efficiency," Chesapeake CEO Doug Lawler said in a statement. "As a result, we are increasing our 2014 production outlook while leaving our capital budget unchanged."
Average daily production of all Chesapeake wells across the country stood at roughly 695,000 barrels of oil equivalent per day during the second quarter, a 13% increase over the same period last year.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.