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One Year In, First Utica Production Figures Called 'Significant'

The first glimpse of Utica Shale productivity makes two things clear: Chesapeake Energy Corp. is leading the way and it is producing a fair amount of natural gas.

The Ohio Department of Natural Resources (ODNR) released 2011 production figures for the Utica Shale on Monday. The report lists the quantities of oil, gas and brine production for nine wells drilled into the play last year, all by Chesapeake Energy Corp.

According to state officials, drilling to date largely is focused on the edge of the gas window of the play, but the ODNR said the shale play appears to be liquids-prone, with reserves potential estimated at 1.3-5.5 billion bbl of oil and 3.8-15.7 Tcf of gas.

The Oklahoma City-based operator produced more than 2.5 Bcf of gas from five wells, which the ODNR described as being "significant," especially considering that production is constrained by pipeline and market capacity. The figure includes both wet and dry gas volumes. Chesapeake also produced about 46,326 bbl of oil from the five wells, in addition to smaller volumes from four other wells not currently in production.

"One can conservatively estimate the potential for these wells was more than what was reported simply because the operator may not be extracting minerals from these wells at their true capacity," ODNR communications officer Carlo LoParo told NGI's Shale Daily.

The ODNR described the limited oil production to date as "lower than estimated, but higher than conventional wells." Regulators speculated that "oil production may be incidental to gas production in much of the Utica play," and speculated that "reported oil volumes likely include condensate volumes."

Because Chesapeake announced initial production figures last September after it first completed some of the wells, the report also offered an opportunity to compare production figures over time (see Shale Daily, Sept. 29, 2011). Of the nine wells listed in the ODNR's report, five are currently in commercial production.

The shining star of the group was the Kenneth Buell 8H well, the only well in Harrison County, which was drilled to a lateral length of 6,418 feet. The well produced more than 1.5 Bcf over 198 production days in 2011, or 7.7 MMcf/d on average. By itself, the Buell 8H unconventional well accounted for roughly 2% of the state's total gas production in 2011 -- there was a total 49,000 conventional wells drilled in Ohio last year.

By comparison, last year the top producing well in the Marcellus Shale -- the shale formation directly above the Utica/Point Pleasant Shale -- was Cabot Oil & Gas Corp.'s King 2 well in Susquehanna County, PA, which produced on average 16.5 MMcf/d.

The Buell 8H well also produced 13,472 bbl of oil, according to ODNR. Initially the well produced 3,010 boe/d, or 9.5 MMcf/d of gas and 1,425 b/d of liquids. The other four producing wells in ODNR's report were all in Carroll County.

The next most productive well of the group, which produced at less than half the rate of the Buell 8H well, was the Neider 3H well, whose output averaged around 395 MMcf over 130 days last year, or nearly 3 MMcf/d. The well also produced 9,444 bbl of oil. The 3H well initially produced 1,615 boe/d, or 3.8 MMcf/d of gas and 980 b/d of liquids. Chesapeake drilled to a lateral length of 4,152 feet.

The Calvin Mangun 8H well, drilled to a lateral length of 6,231 feet, last year produced around 322 MMcf over 206 days, or around 1.5 MMcf/d, making it the least productive well in the bunch. The 8H well also produced 12,334 bbl of oil, although commercial oil production from the well did not begin until late July, according to the ODNR. The 8H well initially produced 1,530 boe/d, or 3.1 MMcf/d of gas and 1,015 b/d of liquids.

ODNR noted that the first figures from two wells, both in Carroll County, came late in the year. The Bucey 3H well produced 137 MMcf, or almost 2.6 MMcf/d, and 2,167 bbl of oil over 53 days. The Harvey 8H well produced 183 MMcf, or nearly 2 MMcf/d, and 6,096 bbl of oil over 92 days.

Chesapeake declined to comment on the figures, but during a conference call in February the management team said it had drilled 42 wells into Utica Shale, with seven producing and 35 waiting on completion and pipeline connections (see Shale Daily, Feb. 23).

Combined, Chesapeake's nine wells produced 76,004 barrels of brine last year, an amount that is "relatively low and will likely diminish over time," said ODNR.

The report also included figures from four wells that produced small quantities of oil during completion operations but did not produce any gas and were not in commercial production at any point in 2011. Two of the wells are in Carroll County, with one each farther north in Mahoning and Portage counties that are believed to be deeper into the wet-gas window of the Utica than Harrison and Carroll counties.

With an estimated 1.21 million net acres, Chesapeake is the largest leaseholder in the Ohio Utica/Point Pleasant, followed by EnerVest (760,000 net acres), Chevron Corp. (600,000 net acres), Anadarko Petroleum Corp. (240,000 net acres) and Devon Energy Corp. (235,000 net acres). BP plc also entered the play last month (see Shale Daily, March 28).

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