Wednesday, April 30, 2014

BP Pulls out Utica Shale in Ohio, Trumbull County

BP's announcement yesterday that it is pulling out of the Utica Shale should not come as a surprise when looking at their acreage position (Trumbull County) and reported Q4 2013 production results. BP took a chance testing this area. Such risk is necessary to better define the extent of the play. Others seeking acreage in Trumbull County should thank BP for getting some results in on such areas to the north.

Trumbull County wells: Production number for Q4 2013. Status updates as of April 26 ODNR report.
CLICK for large version

Trumbull County, at least in Hartford, Johnston, and Mecca townships do not look to be prolific enough to merit further investment, at least for now using current methods. The BP Trumbull County production results must have been a significant disappointment, though oil and gas companies are accustomed to a level of risk when exploring untested acreage. This also points to the fact that we are working with an inexact science. BP must of had some indication that the tens of millions spent had some chance of success. We don't know exactly what is down there, despite the best geoscientists studying the area. Production results are the yard stick, though even then, the methods used for locating the well path and fracking and completing the well can all have a huge impact on production.

The map below, showing the BP wells (labeled "B"), detail the locations, results, and other operators in the area. Things look better further south. Halcon's 5-well pad to the southwe looks to be going ahead.

Brammer and Halcon are the only other operators in the county at the moment. The first of Halcon's wells in the southwest portion of the county looks to be the best performer of the bunch and the fact that Halcon followed this up with a 5-well pad and another well drilled must be a positive sign.

Saturday, April 26, 2014

Q4 2013 Utica Shale Production Released

The Ohio Department of Natural Resources (ODNR) released Q4 2013 production numbers yesterday for Ohio's Horizontal Utica / Point Pleasant Shale Wells. The report sheds some light on why drilling activity is where it is today and what should be the trend going forward. At the same time, most believe that we are still in the early days so things will evolve as more and more data helps to better define the best areas. 

Top 3 OIL producing counties and 2013 Q4 Oil Sum (Barrels of oil)

  • Carroll (573,844), on 187 wells
  • Harrison (506,016, on 55 wells
  • Guernsey (199,341), on 25 wells

Top 3 GAS producing counties and 2013 Q4 Gas Sum (MCF)

  • Carroll (18,931,483), on 187 wells
  • Monroe (6,072,910), on 21 wells 
  • Harrison (5,993,842), on 55 wells 

Looking at these numbers and assuming total days of production during the quarter was relatively the same, Harrison county is the big winner with it's typically higher valued oil production. While Carroll county has 240% more producing wells than Harrison county (187 vs. 55), Carrol county saw only 13% more oil production than Harrison county.

At the same time, Harrison county looks to be just slight more prolific with respect to natural gas when compared with Carroll county. Carroll's  240% additional producing wells saw 215% more gas production.

Monroe county looks to be the big winner with respect to natural gas production, producing far more gas per well than either Carroll or Harrison counties. As a comparison, Monroe natural gas production was just slightly above Harrison county, while Harrison county has 162% more producing wells than Monroe county. And detailed below, Belmont County is not far behind Monroe county in Natural Gas production per well, producing 5,431,230 MCF on 22 wells vs. Monroe's 5,993,842 on 21 wells.

No wonder why the April 19th report shows Harrison county as the most active driller, with 36 wells drilling out of the total of 143 wells drilling, vs Carroll with 30 wells drilling, Monroe 23.Harrison county has also seen the most permits issued in 2014, so expect drilling and production numbers to follow.

Production data summed by county below is below.

For a map of Q4 2013 producing wells including production data for each well (minus a few (11) as explained on the page), please visit the production map here.

Note: Data is tabulated from the April 25, 2014 report provided by the ODNR.
While care was taken to present the numbers accurately, the Website owner
does not guarantee that the numbers are accurate and takes no responsibility
for any inaccuracies. 

Tuesday, April 15, 2014

What's New in Ohio's Utica Shale

The April 12, 2014 release of Ohio Utica/Point Pleasant shale activity report showed twelve new permits issued for the week, dominated by XTO Energy with eight new permits, all in Belmont County. CNX Gas added three new permits, two in Monroe County and one in Noble County. Statoil came in with one new permit in Monroe county. A map of the newly permitted wells is found below.

New Permits issued week of April 6, 2014

Click for Large Map

The same report also showed a total of 141 wells drilling, up eight from the prior week. Belmont county again showed up as the biggest gainer in wells drilling, with thirteen wells drilling, up from just six in the prior week. A map of all wells classified as drilling is found below.

Wells classified as "Drilling" as of April  12, 2014

Click for Large Map

List summary of wells classified as "Drilling"


Thursday, April 10, 2014

Gulfport's April 9th Investor Presentation Details Utica Shale Position

Yesterday, Gulfport Energy Corporation released new details of their Utica Shale Investment. The company highlighted
  • A Utica production increase of 48.6% from Q3 to Q4 2013, 7.2 MBoepd in Q3  vs. 10.7  MBoepd in Q4. (Such increases are nice to see, though perhaps common given the ramp up phase that we are still in with respect to the Utica).
  • Forecast Utica Shale production of 44.5 to 54.5 MBoepd in 2014. (On the low side this would equate to a 315% increase in production (MBoepd) vs. Q4 2013, perhaps not too surprising given the pace of drilling and drilled wells coming online).
  • Continued delineation of the Utica and a focus on the "harvest phase"
  • Currently running seven rigs (According to the April 5th 2014 Ohio DNR report, these seven rigs are drilling six wells in Belmont county and seven wells in Harrison county).
  • Optimized wells completed with slick water fracture stimulation and managed through optimal flow program show an increase in BOEPD (Demonstrates continue improvement in recovery methods and similar to many operators that are looking to improve return through technology). Map Gulfport's current (as of April 5, 2014) drilling locations below.
The report also shows where Gulfport and many others believe the Utica Shale is producing the various types of hydrocarbons (oil, condensate, wet gas, dry gas) and highlights what Gulfport believes to be their premium acreage position. And finally, the report outlines the access to the all important infrastructure required to move and process extracted hydrocarbons.

The complete investor presentation can be downloaded here.

Gulfport's Drilling locations as of Apri 5, 2014.

Disclosure: The author of this article owns shares of Gulfport Energy

Wednesday, April 9, 2014

Utica/Point Pleasant - Drilling Activity by County

The April 5th 2014 update from the Ohio DNR shows 133 wells drilling in the Utica/Point Pleasant in Ohio. The map below shows drilling activity by county. According to Ohio State geologist Mike McCormac, the higher activity corresponds to the "wet gas" window, with dry gas to the east and a mostly unexplored oil window to the west.

CLICK map for larger view, Data Source: Ohio DNR 4/5/2014 report

And with a reported cost of 8-10 million dollars to drill each well, this activity equates to a big "bet" by the oil and gas operators on where they expect to get the best returns. This also indicates a level of de risking and confidence in return on investment. Many believe that we are in the early days so we should expect some cautious exploratory wells to appear away from this core area but there is a lot left to exploit in these core counties.

Monday, April 7, 2014

Utica Shale Ohio - Drilling up 32% from March 2014

According to the Ohio DNR Utica Shale activity report released today, the number of Utica Shale wells classified as drilling is up 31.7% from March 1st, up to 133 vs. 101. Chesapeake accounts for the bulk of the increase with 48 wells classified as drilling compared to 26 on March 1st.

A complete breakdown of wells classified as drilling:

Chesapeake (48)                 PDC Energy (5)
Gulfport Energy (13)            Eclipse (10)
Antero (26)                        Halcon (1)
HESS (4)                            Devon (1)             
HG Energy (5)                     EQT (2)
CNX Gas (4)                        Mountaineer (1)
Hall Drilling (3)                    Chevron (2)
American Energy (5)            Rex (1)                             
Triad Hunter (2)               

Click HERE for Large Version
Note: This LARGE map includes a blue "Filter" tab in the upper left that allows you to filter the map by any attribute including status, operator, county, township and more. Source: Ohio DNR