Every few months the Ohio Dept. of Natural Resources (ODNR) produces a map that shows where Utica permits have been issued, where Utica wells have drilled, and where drilled wells are now flowing natural gas (and oil and NGLs). We bring you a copy of this map from time to time. Below is the most recent version, issued on Jan. 4. Here’s a few MDN observations about this map…
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Sometimes when we’re wrong, we’re still right! Last June MDN reported that CONSOL Energy, currently in the process of drilling a series of Marcellus and Upper Devonian shale wells at the Pittsburgh International Airport, was mulling over the possibility of drilling a single test Utica well at the airport (see CONSOL Energy May Add More Utica Wells to Pitt. Airport Project). Our error was in reporting CONSOL had already received a permit to drill a Utica well–they had not. However, CONSOL has just received permission from local town officials to swap out one of the planned Marcellus wells with a Utica well…
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We get a rather sobering assessment of the Utica Shale industry in Ohio from Shawn Bennett, executive vice president of the Ohio Oil & Gas Association (OOGA). Shawn tosses around phrases like “survival mode” and “significant turmoil” and “perfect storm” when talking about the Utica and what’s ahead in 2016. His advice? Ohio needs to “sit tight” and wait (and pray) for energy prices to rise. Here is what Shawn recently had to say about drilling prospects in Ohio for 2016…
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For years MDN has poked fun at RINO Ohio Gov. John Kasich for his jingoistic talk about not wanting “foreigners” in his state working at Utica drilling sites (see this story from three years ago – OH Gov. Kasich Continues Trash Talk Out-of-State Workers). Don’t tell Kasich, because he hates hearing this, but some are now saying that because Ohio has been employing “foreigners” from exotic places like Texas and Louisiana to work at Utica drilling sites, it has actually turned out to benefit the state. Why? Because in this downturn Ohio businesses are not as adversely affected. If all of those people now laid off had been Ohioans, the Ohio economy would have taken a much harder hit than it has. That’s one of the points in a Cleveland Plain Dealer article. Another point in the article is that because the Ohio Utica is much smaller and was just ramping up as the current price crash hit, when prices recover (and they will recover, eventually), Ohio will take off much faster than the big, old, decrepit Marcellus in Pennsylvania…
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On Monday EQT released a preliminary 2016 operational forecast. The company plans to spend $1 billion on drilling next year, which is half of what they spent this year. Although EQT’s top brass previously said they were dumping the Marcellus and concentrating on the Utica Shale instead (see EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016), it seems they’ve had a change of heart. Yesterday’s forecast says EQT will drill 72 Marcellus wells in 2016 and just 5 Utica wells. What happened? We don’t know–but we suspect EQT is finding it more of a challenge than they thought to get the price of a deep Utica well down to the $12.5 to $14 million range they predicted they could get it to. Here’s the details on what EQT plans to do in 2016…
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PDC Energy, with leased acreage in the Ohio Utica Shale, paused their Utica drilling program in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC issued their preliminary drilling budget for 2016 yesterday. As in 2015, the company’s focus will largely focus on the Wattenberg Gas Field, part of the Denver Shale basin in central Colorado. PDC plans to invest $440 million to drill somewhere between 135-160 Wattenberg wells in 2016. However, they also will un-pause their Utica program. PDC says they will spend $34 million to drill and bring online five new Utica wells in 2016…
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Ohio’s oil and natural gas horizontal well (i.e. Utica) production for 2015 has, has of the third quarter, already surpassed production for all of 2014 according to the Ohio Dept. of Natural Resources (ODNR). The ODNR issued their latest quarterly production update, for 3Q15, yesterday. During 3Q15 Ohio’s horizontal shale wells produced 5.7 million barrels of oil and 245 billion cubic feet of natural gas. Below we have the ODNR’s high level overview of the numbers, along with our own analysis showing: the top 25 producing gas wells, the top 25 producing oil wells, and then the top 25 gas and oil wells as ranked by average production per day. There is a difference! The longer an oil or gas well is online, the less it produces. Newer wells produce more. So we show you which wells are not just producing the most quantity overall, but which wells are producing at the fastest (most productive) rates–even if they haven’t yet been online a full three months (92 days). We also include a link to the complete list of 1,134 wells that had at least some Utica oil or gas production in 3Q15 in a more usable format than that provided by the ODNR…
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We are SUPER excited about a new study dated September 2015 but released just yesterday by economists and researchers at Cleveland State University (CSU). The study, broken into three parts, looks at economic development opportunities offered by Ohio’s Utica Shale. One of the three parts is titled, “Economics of Utica Shale in Ohio: Supply Chain Analysis.” We eagerly goggled it up and found that the authors use charts very similar to those developed by MDN and our own Supply Chain Tutorial (see Where Does YOUR Business Fit in the Marcellus/Utica Supply Chain? [FREE]). We have a copy of all three sections of the new CSU study (below). We *highly recommend* this study as worth your while to digest. Before we developed our own Supply Chain Tutorial we had not seen anyone mapping NAICS codes to each stage of the drilling and midstream process. The CSU study adopts MDN’s convention of mapping NAICS codes and goes well beyond our tutorial, which is why we’re so excited. If you work for a company that wants to see if there may be an opportunity to win business in the Marcellus/Utica industry, plan to spend some time with this study!…
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Rex Energy and Eclipse Resources are really like two peas in a pod. The people who founded Eclipse, which is shopping itself (see today’s companion story), are former Rex Energy people. Both companies are pure play, concentrating on the Marcellus/Utica, and both companies are headquartered in State College, PA. On Monday Rex Energy issued its third quarter 2015 update. The company lost nearly $95 million for 3Q15–but the entire thing was a paper loss, writedowns for the value of their assets because the price of natural gas took a nosedive. Production for the company was up 15% in 3Q15 over the same period a year earlier. Some of the biggest news we spot in the update is that Rex has been able to squeeze the costs all the way down to $5.2 million per Marcellus well they drill. Also big news: Rex put into production their very first Utica Shale well, drilled in Lawrence County, PA. Here’s the particulars…
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As we’ve been writing now for the past few months, the Utica Shale play is beginning to turn the heads of big, established Marcellus producers (see CONSOL Energy: Utica Drilling May Soon Replace Marcellus Drilling and EQT Dumps Marcellus Drilling, Concentrates on the Utica in 2016). There’s beginning to be more talk about the Utica one day surpassing the Marcellus. Is that even possible? How could it happen? Indeed it is possible, but there’s a lot of “ifs” with the theory that the Utica may soon bump off old man Marcellus…
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While Marcellus natural gas production will slide again for the third month in a row according to the latest EIA Drilling Productivity Report, Utica natural gas production continues to climb (see today’s companion story). One important note: Utica production, while climbing month after month, is still just a fraction of Marcellus production (about 20% of Marcellus production). According to another story we highlight today, the Utica may challenge the Marcellus as reigning champ of natgas production. Will/can the Utica actually produce as much or more natural gas as the Marcellus some day? It’s not out of the realm of possibility. How can that be? It all has to do with monster dry gas Utica wells…
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Noble Energy is a global driller involved in a number of shale plays in the U.S. including the DJ Basin, Eagle Ford Shale, Delaware Basin and Marcellus Shale. Noble idled the last remaining drilling rig they were operating in the Marcellus in September (see Noble Energy to Idle Remaining Marcellus Rig Next Month). Even so, they had a banner third quarter in the Marcellus. Noble issued their third quarter update yesterday and although the section on their Marcellus operations is brief (read it all below), it packs a punch. Even with reducing rigs to zero, Noble completed and brought online their first Utica Shale well (in Marshall County, WV). Noble’s production volumes in the Marcellus in 3Q15 rocketed to 493 million cubic feet of natural gas equivalent per day (MMcfe/d), more than a 50% increase over 3Q14 numbers. But wait, there’s more!…
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It’s obvious that Hess has pretty much given up on its Utica Shale drilling program. Just last week we told you that Hess is shopping the rest of its remaining Utica acreage (see Hess Quietly Shops the Rest of Their Ohio Utica Acreage). In releasing their third quarter 2015 financial and operating update yesterday, we were interested to see what Hess was saying, on the record, about the Utica. We found four references in their extensive update, which we’ve extracted out below…
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In addition to releasing their third quarter 2015 results yesterday, the top brass from EQT also held an analyst phone call. On that call we got updated details from EQT’s president of exploration and production, Steven Schlotterbeck, about the single highest initial-producing Utica Shale well ever drilled, EQT’s Scotts Run 591340. We also heard from Steve about two more Utica wells they’re currently drilling–one in Greene County, PA (about five miles from the Scott’s Run well), and one in Wetzel County, WV. But the big news from yesterday’s call came from EQT CEO David Porges. He said EQT has decided to suspend drilling in central PA and in the Upper Devonian–anyplace outside of their “core” Utica locations. Essentially, EQT is giving up on the Marcellus (for now) and going after the Utica instead. This is certainly big news and affects landowners in Marcellus-only areas–pretty much any place outside of southwest PA and the northern panhandle of WV. Porges says IF the Utica pans out as expected, it will be bigger than the Marcellus production-wise over time. EQT’s current thinking is that they will trim their drilling program to concentrate on drilling 10-15 Utica wells in 2016…
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In January 2014 Hess Corporation sold 74,000 of its 95,000 100%-owned Utica Shale acreage leases to Aubrey McClendon’s American Energy Partners for $924 million (see Hess Sells 74,000 OH Utica Shale Dry Gas Acres to Mystery Buyer). After the sale, Hess still owned 21,000 acres of leases plus a 50% share of a joint venture with CONSOL Energy in another 65,000 acres. In January of this year, Hess (like other drillers) cut way back on their budget for Utica drilling (see Hess Cuts Utica Drilling Budget 42% for 2015). It appeared that Hess was still in love with the Utica as recently as August when Hess’ top managers said some flattering things about their Utica acreage (see Hess Says Harrison County, OH “Truly the Sweet Spot” of the Utica). Perhaps that was a buildup to selling their remaining position–because that’s exactly what they’re now doing. According to unnamed sources who have seen an offering document being circulated, Hess is shopping all of their remaining Utica acreage, including the jv with CONSOL…
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This is disappointing. For over a year utility and electric generating giant NRG had planned to convert a coal-fired electric generating plan in Avon Lake (Lorain County), OH to burn Utica Shale gas instead. NRG’s plan includes building a $40 million, 20-mile pipeline to feed the Avon plant. That pipeline was finally approved in June (see OH Agency Greenlights NRG Utica Pipeline to Feed Electric Plant). The disappointment is that NRG has just announced they will not convert the plant from coal to natgas after all–at least not any time soon. Instead, they will add new pollution control equipment and continue burning coal. Why the change in plan? Part of the reason has to do with bats…
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