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Magnum Hunter Reports Blowout at Ohio Utica Shale Well

Magnum Hunter Resources Corp. on Saturday lost control of its Stalder 3UH, a key Utica Shale well for the company in Monroe County, OH, in a blowout threatening three other wells on the pad that's likely to delay year-end production.

The blowout is the latest setback for Magnum, which has been heavily focused on the Appalachian Basin and sold millions of dollars worth of noncore assets as it transitions to a pure-play (see Shale Daily, Aug. 11). The Stalder 3UH had a test rate of 32.5 MMcf/d in February, and subsidiary Triad Hunter LLC had temporarily plugged it to drill three other horizontal Utica wells on the pad (see Shale Daily, Feb. 14).

"Despite numerous precautionary measures taken in connection with the temporary plugging and abandonment operation, the well began to flow uncontrollably while recommencing production operations," the company said. "Triad Hunter personnel were removing the well's night cap flange when a pressure disruption occurred. They attempted to bolt back down this equipment but were not able to safely do so prior to natural gas flowback."

No injuries were reported in the incident, which Magnum said occurred at 2 p.m. EST on Saturday. The company added that both field personnel and residents living in the immediate area had been evacuated.

Ohio Department of Natural Resources (ODNR) spokeswoman Bethany McCorkle said local authorities evacuated residents living within a 1.5-mile radius of the well. She said 25 homes were evacuated on Saturday. Residents were allowed to return on Sunday, but they have been asked to leave at night until the well is brought under control.

McCorkle said specialists from Wild Well Control arrived on the scene late Saturday and were still working to clear the pad of equipment on Monday so they could begin their work.

The blowout is the second for Magnum in Ohio. It lost control of its Farley 1305H well in Washington County, OH, last year as well. The company was halfway through completing the third well on the Stalder pad when it lost control of the 3UH, said Wunderlich Securities analyst Irene Haas. 

Although Wunderlich has not changed its outlook for the company, Haas said Magnum could have a harder time hitting its exit rate of 32,500 boe/d given delays at the Stalder pad, which analysts had forecast to produce about 36 MMcfe/d once fully operational.

"We await additional information on the Stalder pad but do not believe the well or pad have been condemned due to the blowout," said Topeka Capital Markets analyst Gabriele Sorbara. "Given the high pressures in the dry gas Utica Shale, blowouts have been common."

Magnum has also been waiting for special air permits at its Stewart Winland pad in Tyler County, WV, where three Marcellus Shale wells have been shut in since September. The company applied for the wrong permits with the West Virginia Department of Environmental Protection and was forced to restart the process, which has delayed production from that pad (see Shale Daily, Oct. 10; Oct. 8).

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