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Ohio Nears 2,000 Utica Shale Permits, 1,000 Producing Wells

Ohio's Utica Shale is likely to soon surpass another key milestone, with the state reporting that it is just three shy of having issued 2,000 horizontal drilling permits for the play, where nearly 1,000 wells are producing.

At the end of last week, the Ohio Department of Natural Resources (ODNR) said it had issued 1,997 horizontal Utica permits. There are currently 998 producing Utica wells. Twenty-one rigs were operating in the state as of last Saturday, according to ODNR.

The state issued its first two horizontal Utica permits in 2010. By 2011, Chesapeake Energy Corp. had drilled a series of the state's first horizontal wells, but it wasn't until 2012 that the state's first commercially producing wells were put into operation. Unconventional natural gas production has skyrocketed since then, going from 12.84 Bcf in 2012 to 452 Bcf last year (see Shale DailyMarch 24May 17, 2013). Ohio surpassed 1,000 permits in November 2013 (see Shale DailyDec. 6, 2013)

Early last year, ODNR said it expected to issue 2,542 permits by the end of this year, but that was before commodity prices plummeted (see Shale DailyJan. 17, 2014). Financial analysts noted a drop in Ohio Utica permitting heading into this year, when they said producers were likely "retreating" to the more cost-effective Marcellus Shale. Still, the decline in permitting activity has not been as acute compared to oil rich basins in North Dakota and Texas.

ODNR reported that 1,586 Utica wells have been drilled to date. Operators have also been issued 44 horizontal permits for the state's Marcellus, where they have drilled 29 wells. Carroll, Harrison and Belmont counties remain home to the most permits, with 495, 369 and 244 permits issued, respectively.

Monroe and Noble counties -- also in the southeast part of the state -- have seen permit numbers grow, reflecting a trend toward dry gas in the play. In Monroe County, 216 permits have been issued. In Noble County, the state has issued 177 permits. 

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