Gulfport 3Q16 Operations Update: Production Up 13%, Prices Up Too
Gulfport Energy, an Oklahoma City-based independent oil and natural gas exploration and production company (“driller”) that is a “top 5” driller in the Ohio Utica Shale, issued their third quarter operation update yesterday. Gulfport is one of a growing number of companies that issues their financial update separate from the operational update. Typically the operational update is the “good news” and the financial update the “not so good news,” so we’ll see what the financial update brings. In the meantime, let’s bask in the good news. Gulfport reports production is up 13% year over year, and the price they’re receiving for that production is also up. Here is Gulfport’s 3Q16 operational update…
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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?…
Last week Gulfport Energy released their third quarter 2015 financial and operations results (see today’s companion story). If you read the full update, you notice Gulfport is not taking delivery of a fifth Utica Shale drilling rig in early 2016 as previously planned–which connotes they will continue to operate the four rigs currently in operation now. But therein lies the rub. MDN received a tip last Thursday from a reader that said: “I received word last night that Gulfport Energy is going to suspend operations in Ohio until the END of 1Q 2016. This would also include their service provider company, Stingray, which just had approximately 150 layoffs already. This news should break today once they inform the employees of the ‘layoff’.” MDN has not seen nor heard anything in the news about Gulfport suspending all drilling operations. We did find mention from September that Stingray had filed a WARN notice they would be laying off 47 employees in Pennsylvania and Ohio. We’re not sure what to make of the rumor…