Carrizo Oil & Gas has just received a permit for drilling in the Utica Shale in Trumbull County, Ohio. But the company says it’s not going to start its exploratory drilling for the foreseeable future, at least in Trumbull because Trumbull has more restrictive road repair demands, so instead Carrizo will drill its first Utica exploratory well in neighboring Mercer County, PA where the demands on road repair are not as restrictive.
The second Utica shale drilling permit has been issued for Trumbull County, but don’t expect to see the rig anytime soon.
Richard Hunter, vice president of Investor Relations with Carrizo Oil and Gas in Houston, said the permits for their Utica shale acreage were obtained but only as a first step in prospecting their exploration options.
"It’s an indication that we have an interest in possibly drilling a well, and it’s hard to read really any more into it than that," he said.
Carrizo’s acreage in the Utica shale play straddles the Ohio-Pennsylvania line in Trumbull and Mercer counties. Carrizo obtained the permit for Trumbull on May 9 and learned Wednesday they received the permit for the Mercer County land.
Hunter said they have not drilled anywhere in the Utica shale play yet, but the company does have between 26 and 28 Marcellus shale wells drilled in northeast Pennsylvania.*
The Trumbull County landowners got no signing bonus from Carrizo because the lease was existing and sold to Carrizo:
Robert Brugler said the [Trumbull County] land had been leased to Wichita Falls, Texas-based Cobra Oil & Gas five years ago for Clinton sandstone drilling. He said the lease was sold to Carrizo a few months ago. The Bruglers received no signing bonus, but the lease affords them 12.5 percent on any mineral production. But the wait for a windfall profit could be a long way off.
Glenn Brugler said he was told his land is an alternate option. His contact at Carrizo said the company still doesn’t know what the ground will yield, and so their first well in the Utica play will be an exploratory well. Because of the cost of that, Carrizo found Trumbull County’s road repair demands less agreeable than in Mercer County, he said.
As such, the exploratory well will likely be drilled in Mercer, Brugler said, and depending on what is found, his land may be the next to see a drilling rig roll in.
The 128.32 acre double-lot is currently seeded with corn.
"They told us they put it on hold so we went ahead and planted it," said Robert Brugler.*
*Warren (OH) Tribune Chronicle (May 18, 2012) – Second Utica shale permit issued in Trumbull County