Gulfport Energy Gets Active in Ohio’s Utica Shale

Gulfport Energy Corporation is an Oklahoma City-based independent oil and natural gas exploration and production company. Most of Gulfport’s oil and natural gas drilling operations are located along the Louisiana Gulf Coast and in the Permian Basin in West Texas. However, Gulfport has acquired acreage and is starting to make moves the Utica Shale of eastern Ohio. They are currently in the process of drilling and completing their first five Utica Shale wells.

Yesterday Gulfport provided an operational update. Here are the relevant sections with respect to their Utica Shale operations:

Utica Shale Processing and Gathering Definitive Agreements

Gulfport today announced the completion of definitive agreements with MarkWest Utica EMG L.L.C. ("MarkWest") to construct and operate gas gathering pipelines and processing facilities associated with Gulfport’s development of its Utica Shale acreage in Eastern Ohio. MarkWest currently plans to process the gas at its Harrison gas processing complex and will provide Natural Gas Liquid ("NGL") fractionation and marketing services at its Harrison County fractionator, where NGLs will be marketed by truck, rail, and pipeline.

MarkWest will initially bring on line an interim 40 MMCF per day refrigeration gas processing plant with a third quarter 2012 startup date.  This interim facility will be followed by a 125 MMCF permanent cryogenic gas processing facility which is expected to begin operations by the first quarter of 2013. MarkWest anticipates installing an additional 200 MMCF per day of cryogenic capacity in early 2014.  It is expected that MarkWest will have approximately 60 miles of pipeline infrastructure with approximately 9,000 horsepower of compression to move Gulfport volumes by the end of 2012.  By 2014, MarkWest’s Utica build out will include up to 140 miles of high and low pressure gathering lines and 20,000 horsepower of compression. By early 2014, MarkWest’s downstream facilities will include up to 325 MMCF per day of cryogenic gas processing capacity located in Harrison County and 100,000 barrels per day of C2+ fractionation.

In addition to its Harrison processing complex, MarkWest is developing a second processing complex in Noble County. MarkWest will initially bring online an interim 45 MMCFPD per day refrigeration natural gas processing plant, with an expected fourth quarter 2012 completion date. The Noble interim facility will be followed by an additional 200 MMCFPD cryogenic processing plant, which is expected to be completed in mid-2013. The Harrison and Noble processing complexes will be connected through a NGL gathering system to the Harrison fractionation complex, which will include 100,000 barrels per day of C2+ fractionation capacity by the first quarter of 2014. The Harrison fractionation complex will be connected through an expansion of MarkWest’s Marcellus NGL gathering system to its Houston fractionation complex. The Houston and Harrison facilities will be the largest fractionation complexes in the northeast, and will provide tremendous operating flexibility, and reliability, as well as market access.

Utica Shale Update

In the Utica Shale, Gulfport has reached total depth on its first three horizontal wells in the play. The Wagner 1-28H, Gulfport’s first horizontal well in the play encountered an average vertical thickness of 123 feet within the Point Pleasant interval, has been successfully completed with a 28 stage hydraulic fracture treatment and is currently in a 60-day resting period prior to testing and flowing the well. The Boy Scout 1-33H, which is currently undergoing hydraulic fracture treatment, was drilled to a true vertical depth of 7,704 feet with a 7,974 foot horizontal lateral and encountered an average vertical thickness of 126 feet within the Point Pleasant interval. The Groh 1-12H, which is currently waiting on completion, was drilled to a true vertical depth of 7,327 feet with a 5,414 foot horizontal lateral and encountered an average vertical thickness of 119 feet within the Point Pleasant interval. To date, Gulfport’s Boy Scout 1-33H and Wagner 1-28H wells represent the longest laterals and longest total measured depths of any wells ever drilled in Ohio. At present, Gulfport has two rigs active in the Utica Shale and is drilling ahead on the fourth and fifth horizontal wells of 2012.*

*Gulfport Energy (Jun 4, 2012) – Gulfport Energy Corporation Provides Operational Update