Shale Daily / NGI All News Access

Mercer County, PA, Seeing Large Increase in Leasing

Located three counties due north of the wet gas window of the Marcellus Shale, and over a state line from expanding development in the Utica Shale, Mercer County, PA, nevertheless appears poised to benefit from development of both plays in the near future.

According to Mercer County Recorder Dee Dee Zickar, the county recorded 1,460 oil and natural gas leases during the first two months of 2013, the latest months where complete data was available. By comparison, the county recorded 572 oil and gas leases during January and February of 2012, about a 150% increase.

"It's definitely not slowing down," Zickar told NGI's Shale Daily on Monday. "I'm hearing that the companies that have been present here in our office -- some whom have been here for some time -- are now switching gears and are now in drill mode."

Zickar added that through Monday, the county so far has recorded 292 oil and gas leases for March. She said the most active companies operating in the county were Halcon Resources Corp., Hilcorp Energy Co. and Chevron Corp.

"With that being said, we haven't seen a decrease in the number of title searchers in our office," Zickar said. "They have been here pretty consistently since November 2012. So it doesn't appear to me that the researching phase has slowed down a bit. That's what we've been hearing from some of the industry representatives who are here regularly.

"When I first heard that, I wondered if that meant that the research end of it would be coming to a close, but it doesn't appear that it is."

Terry Engelder, a geosciences professor at Pennsylvania State University, speculated that companies operating in Mercer County were more interested in the deeper Utica Shale than the shallower Marcellus Shale.

"If the Marcellus is deep enough, it certainly is very clear that [Mercer County] is in the window that would supply more than methane," Engelder told NGI's Shale Daily on Monday. "I've seen some maps where people have speculated that the boundary between the dry gas and the wet gas, at least in the Utica, is east of Mercer County. That would be a good thing."

Engelder emphasized that, like the geologists being dispatched by companies to Mercer County, his knowledge of the geology there is based upon a pre-drill basis and not from any test wells.

"I don't know of any particular well test in that county. There's no silver bullet here," Engelder said, later adding that pipelines wouldn't be constructed there until the companies "know that there's a worthy amount of natural gas of one sort or another."

So far this year, the Pennsylvania Department of Environmental Protection has issued six drilling permits for Mercer County.

Halcon Operating Co. Inc. plans to drill four horizontal wells targeting natural gas in the county -- Gallagher 1H in Greene Township; Pilgram No. 2 Unit 1H and 3H in Otter Creek Township; and Stevenson Unit 4H in Salem Township. The Pilgram wells will also target oil.

Meanwhile Hilcorp Energy Co. plans to drill one horizontal gas well, Delware McCullough 1H, in Delaware Township, while EnerVest Operating LLC plans to drill one vertical gas well, Smith No. 2, in Greene Township.

Across the state line, in Trumbull County, OH, BP Plc plans to begin drilling the first of 10 appraisal wells starting in April (see Shale Daily, Dec. 20, 2012). The company plans to drill the first well on a 500-acre parcel on the east side of Mosquito Creek Lake.

Last November, Seneca Resources Corp. announced plans to drill a horizontal test well in the Henderson prospect, which spans Mercer and Venango counties (see Shale Daily, Nov. 29, 2012).

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