Thursday, July 24, 2014

Utica Shale Ohio Activity July 19, 2014 - Drilling Window Narrows

July 19, 2014 - Drilling locations in Ohio's Utica / Point Pleasant shale tighten

The recent  Ohio DNR Shale Development & Activity report shows 143 wells drilling as of July 19, 2014 compared to 163 wells classified as drilling on June 21, 2014.

The number of counties with drilling activity reported has shifted from 12 to 9 during the period. Harrison and Monroe counties still lead all drilling with 38 and 35 wells drilling in each county respectively, slightly down from activity reported June 21.

The three counties no longer reporting any active drilling include: Columbiana (2 previously), Jefferson (2 previously), and Washington (1 previously).

Looking at the two maps below demonstrates a further"narrowing" of the drilling window with some activity to the north and east now curtailed.

 As of June 21, 2014, wells classified as "Drilling"  
(NOTE: Image below excludes two Portage and Trumbull county outlier wells to the north) 
  
Utica Shale wells Drilling, June 21, 2014

































View interactive map here


As of July 19, 2014, wells classified as "Drilling"
(NOTE: Image below excludes two Portage and Trumbull county outlier wells to the north) 


































View interactive map here



Tuesday, June 24, 2014

Utica Shale - Ohio June 21st 2014 Report - What's New?

Highlights from the Ohio DNR Utica Shale / Point Pleasant Shale Activity Report

32 new Utica Shale permits were issued for the week, map here. Halcon permitted the lone well in the North in Trumbull County. The remainder of the new permits were issued in Harrison (8), Monroe (7), Belmont (6), Guernsey (4), Carrol (3), and Noble (3).

163 wells are listed as "drilling" for the week, map here. Wells classified as drilling are up by 10 from 153 last week. Harrison county reports the most wells drilling at 36 followed by Monroe (31), Carroll (23), Noble & Guernsey (19 each), and Belmont (16). From there the activity by county drops sharply with Columbiana, Jefferson, and Morgan (3 each), and Portage, Trumbull, Washington (1 each).

Producing wells increased by 3, attributed to Chesapeake wells in Union Township (Carroll County).

Other statistics to report include, wells drilled and awaiting production (up 8 to 292), and wells listed as permitted only (up 2 to 441).

Note that the data (including well status) and maps are as accurate as the reporting which, by law, can lag a bit, up to 60 days, and while I take care to attempt to be accurate, I take no liability for mistakes made.




Monday, June 23, 2014

Carrizo Reports Utica Shale Investment Increase in 2014, Outlines Details


Carrizo outlines 2014 development plans, Utica Shale specifics

 

During it's June 18, 2014 presentation at the Tudor Pickering Holt 2014 Hotter N' Hell Conference, Carrizo Oil & Gas outlined their investment and development plans for the Utica Shale in Ohio in 2014. The company also shared other particulars which shed some light on their views of the Utica Shale in general.

Projected to drill 9 wells in 2014
The company reported net acres in the Utica at 25,700 where they expect to eventually drill a total of 140 wells with a 150-acre spacing (6,500' laterals spaced at 1,000'). The company plans to operate one rig in the Utica in 2014 and to both Drill and Frac 9 gross  / 7 net wells. Total Carrizo spend in 2014 in the Utica Shale is pegged at an estimated 100MM vs. a spend of just 18MM in 2013.

Favorable acreage position and projected economics
The company made a point of highlighting that their acreage lies in a favorable high rate condensate area validated by the other operators with proven production in close proximity (Gulfport, PDC, and Antero). According to the latest June 14, 2014 Ohio DNR activity report, Carrizo's permits thus far lie in Guernsey County, which is noted as a favorable area that has had particular focus from other operators with 19 wells currently drilling in the the county.

The company also identified a per well total cost at $10.1MM in 2014. And based on expected type curve economics of $85 NYMEX Oil and 1,348 Gross Mboe production (455 Mbo Condensate only), wells should payback should be 1.6 years.

Type curve for production decline
The report also included a Utica Shale production "type curve". Steep production decline is nothing new in shale plays and significant decline over the months is expected, though such projections can and will have some error. Production decline is far from an exact science. How significant the decline curve error is (positive or negative) will remain a mystery until some real data comes in. The decline curve is impacted by many things, including stimulation and completion technology and practices, along with production management. And as noted, despite steep decline curves, projections are viewed as favorable for the wells with a "payback" in about 1.6 years given assumptions on NYMEX Oil price, amount of condensate/liquid production and the production decline, or "type curve" over time.

The complete Carrizo presentation can be found here.

Wednesday, June 18, 2014

PSU June 24 Webinar Examines Utica/Point Pleasant Shale

June 24th, at 1PM Eastern Time (Note, on June 19th PSU changed the date of the Webinar to the 24th of June) , The Penn State Extension's Marcellus Education team will hold a Webinar entitled "Utica and Point Pleasant - Where are We Now?"

In this monthly Webinar, Manuj Nikhanj, Managing Director, Head of Energy Research for ITG Investment Research will present an analysis of the Utica and Point Pleasant Shale Formations.>

Manuj also presented at the Play-By-Play Energy Conference held November 18th, 2013 in New York City. His November presentation entitled "Rise of the Big Three: The Future of Lower 48 Oil Production is chock full of great analysis and displays. The presentation does an especially deep analysis of the Eagle Ford, Bakken, and Midland Basin formations.

Manuj also delivered a presentation on the Utica entitled "Utica Shale: A Glimpse into the Future".

Download or view his November 13 presentations here. If these presentations are an indication of what to expect, tomorrow's presentation can't be missed.

Registration for the June 19 Webinar is free and can be completed by visiting the Penn State Extension Website

Tuesday, June 17, 2014

Five Utica Shale Facts that Can't Be Ignored

The June 14, 2014 Utica Shale Activity Report released by the Ohio DNR today is telling on how much things have changed vs. last year and where things are heading. Let's have a look.

  1. Of the 153 wells classified as "drilling" in the June 14, 2014 report, only 3 wells are situated north of downtown Canton. 

    At about 7 million/well, current drilling activity alone accounts for a current bet of  approximately one billion dollars on the Utica Shale.

    As a comparison, on June 15, 2013, only 12 wells were classified as "drilling".

  2.  Just six counties: Belmont, Carroll, Guernsey, Harrison, Monroe, and Noble account for 149 of the 153 wells currently drilling. These counties lie mostly to South.

  3. Wells classified as "drilled" and waiting for production stands at 284. Some of those wells are in a "resting period" and soon will be producing. Other wells are awaiting infrastructure, and still more are not being put into production for other reasons (more favorable economics, etc).

  4. 467 wells are classified as "producing" 254 of those, or 54%, lie in two counties, Carroll and Columbiana. Given the shift in activity to the south, this percentage will go down over time as Southern wells come online.

  5.  Of the 69 new permits issued June 1-14, 2014, only 1 new permit is north of downtown Canton
And looking at all permits issued from January 1, 2014 through June 14, 2014. The map below tells it all. The future activity is South.
Permits issued January 1, 2014 through June 14, 2014. Source: Ohio DNR Data.
NOTE: Each red dot may indicate multiple wells on a platform.




DUG East 2014 & Investor Presentations Covering the Utica Shale

While most of us did not have the opportunity to attend the DUG East 2014 conference held the first week of June, a few of the presentations have appeared online.

DUG East 2014 Presentations

Range Resources: The presentation makes some reference to the Utica (along with the Marcellus Shale and Devonian Shale) in both Ohio and Pennsylvania.
Download [PDF]

Gulfport Energy Corporation: The presentation is entitled "Exploring the Geology of the Utica Gas and Liquids Areas" and includes some nice technical information on the Utica Shale.
Download [PDF]


Other June 2014 investor and analyst presentations making reference to the Utica Shale

Other players in the Utica made references to the Utica Shale play in June investor/analysts presentations found here:

Consol Energy - June 12 Analyst Day presentation - Download [PDF]
Stone Energy - June 11 Investor presentation -  Download [PDF]
PDC Energy - June 5, Oil & Gas Investment Symposium - Download [PDF]
Triad Hunter - (Subsidiary of Magnum Hunter) - June 5 Investor Presentation - Download [PDF]

Wednesday, May 21, 2014

Where the Utica Shale Ranks Among U.S. Shale Plays

While many of us that closely follow the Utica Shale can point to the growth in activity as a great sign, it is interesting to look outside to some of the other U.S. tight plays for some perspective.

Where does the Utica Shale fit?
According to the May 16, 2014 report from Baker Hughes (rig count), the Utica shale ranks 9th in rig count. And this 9th position equates to just 3% of rig count among the major basins, most unconventional. For example, the Permian, Eagle Ford, and Williston (Bakken) basins account for a whopping 68.8% of the rigs. The Marcellus + the Utica account for just 6.3% of rigs.

Rig Count Comparison

Data Source - Baker Hughes Rig Count: http://www.bakerhughes.com/rig-count






















Chart of rig counts

Data Source - Baker Hughes Rig Count: http://www.bakerhughes.com/rig-count   

Production Comparison
Another useful comparison is to look at the total monthly production from the play. Here the U.S. Energy Information Administration does not show the Utica Shale in the top six, apparently the play has yet to reach a total production amount worth mentioning. Utica Shale production is just starting to ramp up but it may be some time, if at all, before it reaches the status of the six most prolific areas as defined by the EIA.
 
Source - EIA: http://www.eia.gov/petroleum/drilling/?src=Natural-f1

Conclusion
So, while we cheer the Utica and do expect great things to come, this play will not likely rival many of the larger plays in the U.S. Of course there is nothing wrong with this. Anything that the Utica Shale can add to the nation's supply and to the economy is greatly appreciated.