Find out why the Utica Shale formation is being called the “best shale play in the U.S.”
Magnum Hunter Resources Corp., which owns more than 97,000 acres in the Utica Shale play, is calling the region the “best shale play in the U.S.” According to an online report, the Houston-based company says it “expects to significantly increase reserves in the Utica shale.”
The Utica Basin — which is 170,000 square miles in the Appalachian Basin — features sweet spots in Eastern Ohio, and it has provided successful ventures for many. According to the Ohio law firm Bricker & Eckler, which tracks shale-related infrastructure and development projects, the Utica Shale play has brought $18.7 billion in investments to Ohio.
A total of 105 projects are underway or completed in Ohio, according to the firm’s Shale Economic Development Overview report for spring 2014. Those projects include things directly related to the industry, such as pipelines and plants as well as hotels and new office spaces.
Here’s a look at five more things to know about the Utica.
1. Dry gas is still hot. Geologist Larry Wickstrom of Wickstrom Geoscience in Ohio, told 1,500 attendees at the Ohio Oil and Gas Association’s annual winter conference that the most productive wells drilled thus far are in a strip that runs from Carroll County in the north to Washington County in the south defining the best wet gas productive area.
“There is also a large dry gas window along the southeastern edge of Ohio and extending into Pennsylvania and West Virginia,” he says. “If natural gas prices increase to where things are economic again, there will be some phenomenal dry gas wells in that area.”
Initial production data showed at least one well producing 1.25 billion cubic feet of gas in less than 90 days. “Some of these wells are monsters,” he adds.
Still, the potential has hardly been tapped, and extensive seismic data from private companies could show far more potential. “The real hot spot on the play will be more toward the south than some folks originally thought,” Wickstrom says.
2. Go south, young man! According to Wickstrom, Utica Shale drilling of wet gas is moving south. “The play is being refocused,” he says. That, in turn, shifts the infrastructure development, housing and development of other outside amenities. “They kind of shifted accordingly,” he says, with companies also eager to move into the dry gas window as well.
3. Shifting from gas to oil. Wickstrom says there is a big oil window in the Utica, otherwise known for wet natural gas production, however, it has, thus far, proven to be too shallow. At the shallower depths there is inadequate reservoir pressure and porosity development to allow economic production.
“This year is going to be a telling year for oil,” Wickstrom says. “Several companies have announced plans this summer to attempt wells edging out into the oil window and will be trying a number of different completion techniques. We know the oil is there; it’s just a matter of getting it out of the reservoir.”
That might require another technology breakthrough, he notes. “I think at some point it will allow us to extract the oil from these shallower shale plays,” he says. “Everyone faces the same problem.”
4. Like a good neighbor? For a few years now, the Cambridge (Ohio) Area Chamber of Commerce has been actively educating its members and the general public about Utica Shale development through the Guernsey County Energy Coalition. The Chamber has seen many areas benefit from energy companies in the region.
“What we’ve seen over the past three years is an increase in the number of oil and gas companies coming in and getting involved, wanting to get engaged in the community,” said Chamber President in an article on EnergyInDepth.com. “They’re coming in and wanting to join the chamber, they’re wanting to offer sponsorships for our events, they’re wanting to be involved and engaged in the community and what’s going on here.
“They have really done a good job at being good community partners and stewards of the community. It’s been really rewarding for us because they don’t just do it and walk away.”
The Coalition has invited energy industry speakers and even hosts a family friendly “shale-a-bration” to honor the development of the Utica Shale.
5. Tough competition. While many companies are finding the Utica a prosperous region, others are taking a pass. According to published reports, BP, Halcon Resources Corp. and other companies are dropping plans to develop in the Utica Shale. Many developers and energy companies thought the far Eastern area of Ohio would be the “next big thing,” but some companies have not found the regions as productive as thought.
Right now, one of the biggest players in the region is Chesapeake Energy, which came in early on this play in 2009, and in 2010, they started a very aggressive leasing program, quickly establishing a very large block of over 1 million acres, according to Wickstrom.
“Chesapeake had a real lock on things,” he says. “By the time BP came in, most of the big blocks in the core of the play had been taken.”