US operators targeting liquids-rich Utica shale play

Posted on 13 December 2011

By Katie Mazerov, contributing editor

While the Bakken and Eagle Ford shale plays continue to be the focus of US onshore drilling, the industry is also making moves into a new play that could prove to be the most profitable unconventional formation yet, with huge reserves of dry gas, wet gas and oil condensates believed to exist.

The Utica shale formation covers much of the Appalachian Basin, underlying sections of the Marcellus play and extending across northern New York, western Pennsylvania, eastern Ohio and part of Ontario, Canada. The vast play also reaches into sections of Maryland, Tennessee, West Virginia, Virginia and Kentucky. Neither the boundaries nor the full potential of the play have been fully realized as only a few wells have been drilled.

Deposited 440 million to 460 million years ago, during the Late Ordovician period, the formation has considerably higher carbonate content than the Marcellus. The Utica is also much deeper, reaching more than two miles below sea level in the eastern portion of the formation. Depths decrease to the west and northwest, into Ohio and beneath the Great Lakes.

The play is believed to feature three phases: dry gas in the eastern region; wet gas as the play moves into Ohio; and oil condensates farther to the west, said Jesse Carl, a representative for Rex Energy, which just drilled its first Utica test well that reached approximately 8,000 ft below sea level beneath the company’s acreage in western Pennsylvania. The well had a lateral length of 3,551 ft and was completed with 12 hydraulic fracturing stages. Initial test results were 9.2 MMcf/day of dry natural gas.

Focus on Ohio

The current focus appears to be wet natural gas and oil reservoirs in Ohio, where several companies are securing leases and initiating drilling programs. Rex has an active leasing program with plans to target 15,000 net acres of leasehold by year-end, and expects to begin drilling in Carroll County in eastern Ohio in early 2012, Mr Carl said. The company anticipates having 100 drilling locations by the end of 2011.

“The potential of this play is a great thing to see,” he said. “The governor of Ohio has been very favorable toward the industry, and this will be a good thing for the people of that state.”

CONSOL Energy is spudding its first horizontal well in the Utica in early December, in Tuscarawas County, an oil-producing area of eastern Ohio. Earlier this year, the company tested the Utica zone in a vertical well drilled in Belmont County. CONSOL recently completed a joint venture agreement with Hess to develop approximately 200,000 Utica acres in eastern Ohio. Hess will operate primarily in 80,000 liquids-rich acres in Belmont, Harrison, Guernsey and Jefferson counties, while CONSOL will operate in the remainder of the acreage located primarily in the anticipated oil window.

“We’re looking forward to leveraging the core competencies of the two companies and building on that to successfully develop the Ohio Utica play,” said Harry Schurr, general manager Utica Operations and Hess JV. “Under the JV, the two companies see the potential to operate an average of two rigs in 2012 and 3.5 rigs in 2013, with as many as five rigs projected to be operational by 2015.”

CONSOL has 750,000 acres in the Marcellus play, with the Utica underlying most of that section, said John Corbett, district geology manager for southwest Pennsylvania and the Utica play. “We’re currently drilling the Marcellus at almost 8,000 feet; the Utica is another 5,000 feet beneath that. Given current natural gas prices, the opportunities in the liquid-producing regions of Ohio make the Utica very appealing.”

Chesapeake Energy has spudded 19 wells in eastern Ohio, with eight completed and strong initial drilling results for seven horizontal producing wells in the wet and dry gas phases, chairman and CEO Aubrey McClendon reported in the company’s third-quarter earnings call. The company is in the process of finalizing a joint venture with a major international operator for a portion of Chesapeake’s 1.5 million net acres of leasehold and has committed to drilling at least 50 wells per year in 13 eastern Ohio counties through 2016, Mr McClendon said.

The company has five rigs operating in the play, with plans to increase the number to eight by year-end 2011, 20 by year-end 2012 and 30 by year-end 2014, he added, noting the formation is believed to be economically superior to the Eagle Ford play.

1 Comments For This Post

  1. John Eshun Says:

    Please am Multipurpose driller looking for job thanks.

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 15 April 2015

    DNV unveils Recommended Practice to standardize steel forgings for subsea applications

    Steel forgings are important building blocks for subsea components and are often tailored to meet end-users’ specific requirements. This results in long delivery times...

  • 14 April 2015

    BSEE issues proposed BOP, well control regulations for public comment

    On 13 April, US Secretary of the Interior Sally Jewell announced proposed regulations that call for more...

  • 14 April 2015

    Wood Mackenzie: Deeper cuts may be needed to achieve cash flow neutrality

    The rapid and aggressive response by oil and gas companies to low oil prices has stabilized the sector...

  • 13 April 2015

    UKOG completes Weald Basin PEDL126 acquisition from Magellan

    UK Oil and Gas now holds 100% interest in the Weald Basin onshore license PEDL126 after acquiring...

  • 13 April 2015

    Noble Energy to drill Humpback, Rhea offshore Falkland Islands this year

    Noble Energy has acquired a 75% interest and operatorship of the PL001 license in the North Falkland Basin from...

  • Read more news