After disconcerting Utica Shale production figures were released earlier this month by Ohio regulators, industry analysts said they were disappointed with the results of the first two test wells Halcon Resources Corp. drilled in the play, and EV Energy Partners (EVEP) said it is continuing to look for buyers interested in its holdings there.

On Thursday, Houston-based Halcon said its Phillips 1H well, located in Mercer County, PA, tested at a peak rate of 2.5 MMcf/d of natural gas and 120 b/d of condensate. The company said that based on composition analysis and assuming full ethane recovery, Halcon estimates the well, which is currently being placed into a sales pipeline, would produce an additional 240 b/d of natural gas liquids (NGL) for a total peak production rate of 730 boe/d.

Halcon said a second well, the Allam 1H in Venango County, PA, is shut-in and awaiting infrastructure after testing at a peak rate of 6.6 MMcf/d of natural gas and 22 b/d of condensate. After taking a composition analysis into consideration, and assuming full ethane recovery, the company estimates the Allam well is capable of producing an additional 728 b/d of NGLs for a total peak production rate of 1,652 boe/d.

“[These are] not great results, in our view, but [it’s] still [in the] very early stages of [the] play,” said Gordon Douthat, an analyst with Wells Fargo Securities LLC. “[That’s] not to say that the play won’t work, but [it] will likely take time to crack the code.”

It’s all about cracking the code, EVEP CEO Mark Houser told analysts recently. The company believes there is a significant oil potential, that only needs more drilling and refining techniques.

“However, only six wells have been drilled in the oil window today, and the results have not been good. [But] we believe this is a result of suboptimal completion design and there is more drilling [to be done]…All codes can be cracked. It will take further work over time,” Houser said.

Dan McSpirit, an analyst with BMO Capital Markets Corp., agreed, “one well doesn’t make a trend. Two wells may not either, but you can draw a line,” McSpirit said Thursday. He said that even though just two wells were at issue, the test rates “failed to excite just the same. [There’s] lots of gas here.”

McSpirit said BMO’s own calculations and assumptions showed the Phillips well was capable of producing about 49% liquids (condensate and NGLs), while the Allam well would yield about 45% liquids.

Earlier this month the ODNR reported that 87 wells in the Utica collectively produced 12.84 Bcf of natural gas and more than 635,000 bbl of oil in 2012. Industry experts responded overall in disappointed terms, but many conceded that a clearer picture was beginning to emerge about the play’s sweet spots (see NGI, May 20a).

During the NAPTP 2013 Investor Conference in Stamford, CT, on Thursday, Houser said the company and its parent, EnerVest Ltd., were still committed to selling 103,800 net acres in Ohio (see NGI, May 20b).

“We [are continuing] to market our properties in the volatile oil window for potential sale,” Houser said. “We’ve been approached by oil service companies, E&P companies with oil shale experience and potential financial partners for joint venture opportunities as a means to de-risk the play, and we’re pursuing those now.”

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