Continued development gradually revealing Utica Shale potential

Norm Shade Published:

The Utica Shale is relatively rich in natural gas, oil and gas liquids. Early estimates by the Ohio Department of Natural Resources (ODNR) suggest a recoverable reserve potential of as much as 5.5 billion barrels of oil and 15.7 trillion cubic feet (tcf) of natural gas. Some geologists believe that the Utica Shale could rival the massive Marcellus Shale play in potential. At least one industry analyst has opined that the Utica likely will become the nation’s third largest shale producer of oil, natural gas, and gas liquids, after the Bakken in North Dakota and the Eagle Ford in Texas. 

Some forecasts say that Ohio could be producing 200,000 barrels per day (bpd) of oil from the Utica by 2017, which is small by Bakken and Eagle Ford standards, but a huge increase over Ohio’s 13,000 bpd production rate of the recent past. With development of the Utica in its infancy, more wells will have to be drilled before those forecasts can be validated. 

In the past year, the eastern Ohio area of the Utica has been heavily targeted for development of oil and natural gas liquids (NGLs). A sweet spot has been identified extending from Columbiana and Carroll Counties in the north and extending through three other counties to Noble County to the south. Interestingly, Noble County is the site of the very first commercial oil well drilled in Ohio in 1860. 

Leases, exploration and drilling operations have expanded steadily, but most wells are just starting to be put into production as investments in infrastructure expansions have lagged drilling. As of early April the ODNR reported only about 81 Utica wells were producing, with 189 more drilled, but not producing because gathering systems and processing plants were not yet in place to handle the gas and liquids. The ODNR report listed 303 more wells permitted or in various stages of completion. 

Chesapeake Energy Corp., by far Ohio’s most active driller and largest leaseholder with more than one million acres, continues to maintain an enormous growth outlook in the Utica Shale area. With 14 drilling rigs operating, Chesapeake expects to more than quadruple its Ohio oil and gas production by the end of 2013. At least 23 other companies have been actively drilling in the Utica, led by Gulfport, Anadarko, Antero, CNX, Devon, Enervest, HG Energy and RE Gas Resources.

In February Chesapeake projected that the estimated ultimate recovery (EUR) in its core area of Carroll and surrounding counties will average 5 to 10 billion cubic feet (bcf) of equivalents (combined natural gas, natural gas liquids, and oil) per well over its lifetime. Those estimates are significantly higher than what has been reported from wells drilled in the shallower Marcellus shale in Pennsylvania. Chesapeake and Range Resources have both reported EURs from the Marcellus as high as 4.2 bcf of equivalents per well. The U.S. Geological Survey reports that the average Marcellus well has an EUR of 1.1 bcf of equivalents. Marcellus wells in Pennsylvania tend to produce mostly natural gas, with small volumes of liquids.

For the first three months of 2013, Chesapeake reported Utica net production of 60 million cubic feet of natural gas equivalent per day (mmcfd). Although that is less than its earlier estimate of 75 mmcfd, Chesapeake still forecasts a much higher production rate of 330 mmcfd by year end as more processing facilities come on line. As of the end of March, Chesapeake reported 249 wells drilled in the Utica play, with 66 producing, another 86 waiting on connection to pipelines and 97 in various stages of completion. In the first three months of 2013, 13 Chesapeake wells began producing for the first time.

Overall, production information from Utica Shale wells is still somewhat limited, but several companies area reporting exceptional initial production rates. Chesapeake reported that its Cain well in Jefferson County tested at 1,540 barrels of oil equivalents per day (boepd), including 6.7 mmcfd of natural gas and 425 bpd of natural gas liquids (NGLs). Its Walters well in Carroll County reported 1,140 boepd, including 3.6 mmcfd of natural gas, 315 bpd of oil, and 220 bpd of NGLs. Its Houyouse well in Carroll County came in even better at 1,730 boepd, including 5.4 mmcfd of gas, 525 bpd of oil, and 305 bpd of NGLs. Even better was its Coe well in Carroll County, which was reported at 2,225 boepd, with about one-third being liquids.

Rex Energy Corp. announced initial production results from its first Ohio Utica Shale well, Brace #1H, located in Carroll County, at 1,094 boepd composed of 43% NGLs, 31% gas and 26% condensate. 

Ohio’s biggest well to date is Gulfport Energy’s Shugert well in Belmont County. It tested late last year at an amazing 7,482 boepd, including 28.5 mmcfd of natural gas, 300 bpd of oil and 2,907 bpd of NGLs. Its 9,020 ft. deep Stutzman well in Belmont County reported 4,060 boepd, including 21 mmcfd of natural gas and 945 bpd of NGLs. And its 7,806 ft. deep Clay well in Harrison County was reported at 2,226 boepd, including 5.9 mmcfd of natural gas and 761 bpd of NGLs.

Shale wells tend to produce at very high rates initially and then decline rapidly to a lower rate that is sustained for many years. It will therefore be several years before the true potential of the Utica is validated. As infrastructure for gathering and processing more gas is completed over the next couple of years, east-central Ohio‘s Utica play is expected to show rapid increases in production of natural gas, oil and NGLs. 

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