Gulfport 3Q16 Fin. Update: $157M Loss, 6 Utica Rigs Coming in 2017
In mid-October Gulfport Energy was one of the first out of the gate with information on the third quarter (see Gulfport 3Q16 Operations Update: Production Up 13%, Prices Up Too). However, that was only an operational report, and not the fuller, financial report. On Wednesday Gulfport delivered the full package/update. As we previously noted, natural gas production was up nicely. But a fuller reading of the numbers in this report shows that, like other Utica/Marcellus producers, both oil and natural gas liquids (NGL) production was down year over year for Gulfport. This confirms media reports we’ve noticed over the past few months (see Shift in Utica Drilling – from Wet Gas to Dry Gas and Why Utica Drillers are Moving from Wet Gas to Dry Gas). One reason to separate operational from financial updates is because the news in the financial update is typically not so good, while operational news typically is good. Once again we see that pattern. Gulfport lost $157 million in 3Q16–but that’s a big improvement from the $388 million loss in 3Q15. Here’s the fuller, financial update from Gulfport, including the news that the company plans to begin 2017 by running six rigs in the dry gas Utica…
Read More “Gulfport 3Q16 Fin. Update: $157M Loss, 6 Utica Rigs Coming in 2017”
Yesterday Murray Energy, which operates coal mines in Ohio, Illinois, Kentucky, Utah, and West Virginia, announced it had sold the leases for 5,900 of the acres it owns in Belmont and Monroe counties (in eastern Ohio) to an unidentified shale driller for $63.6 million. That works out to be ~$10,800 per acre. According to Murray officials, the sale will allow the company to focus on its core activity–coal mining. The money will also help the company stay out of bankruptcy court. The sale, which is slated to close “in the coming weeks” doesn’t ID the buyer. But we have a guess as to who bought…
Everyone loves a Top 5 or Top 10, including MDN. Who are the Top 5 drillers in the Utica Shale? It depends, of course, on your criteria for selecting such a list. One of MDN’s favorite writers on The Motley Fool website, Matt DiLallo, has just published what he calls “The 5 Companies Dominating the Utica Shale Play.” In other words, the Top 5 Utica drillers. Matt points out that in the span of five short years the Utica has become the nation’s second largest shale gas play, behind only the Marcellus. Matt uses a combination of acres-under-lease and number-of-wells-drilled to come up with his list of five drillers who are leading the charge in the Utica. It won’t surprise you to learn that Chesapeake Energy, which was the first company to drill in the Utica under then-CEO Aubrey McClendon, is head-and-shoulders above the rest as the #1 Dominator in the Utica. Some of the others in the Top 5 list may, however, surprise you. Here’s Matt’s excellent roundup of the Utica…
This is somewhat old news, but still news for MDN as we’re just learning about it. You may recall back in March MDN reported on a truck crash that resulted in a spill of 5,000 or so gallons of frack wastewater from Utica drilling, some of which ended up in the Barnesville Reservoir #1 (see 
MDN spotted a fascinating story in NGI’s Shale Daily publication about what may be a new trend developing in the Utica Shale. It all concerns interlateral well spacing. What the heck is that? When you drill a shale well, like a Utica well, you can drill down from a single location (i.e. well pad) multiple times and when you turn the drill bit horizontally, you drill an entirely new well. So each well pad contains, typically, anywhere from 2-12 underground wells. Each horizontal well underground is called a lateral. When you drill a lateral, you frack it–using small explosive charges to crack the rock apart near the lateral, injecting water with sand into the cracks. The water drains out, the sand remains “propping open” the cracks to allow natural gas (or oil, or NGLs) to drain out of the cracks, into the well and up the borehole to the surface. In the past few years most drillers have found putting the laterals about 750 feet apart keeps them far enough apart that the cracks from one well don’t interfere with the cracks from another well (see image below). Ideally you want the laterals to be far enough away that they don’t drain any gas from the next lateral–but close enough that you’re not leaving undrained rock in between. That distance in the Marcellus/Utica seems to be around 750 feet. But Rice Energy and Gulfport Energy, two major players in the Utica, are moving back to 1,000 foot spacing between their laterals. Why?…