Houston-based Encino Energy LLC last month took over drilling and completion operations on a massive Utica Shale position in Ohio that it acquired late last year in a $2 billion deal from the play’s pioneer Chesapeake Energy Corp., with plans for steady growth in the state as it works to make the assets its own.

CEO Hardy Murchison said the company is currently running two rigs and two completion crews in Ohio, given the program inherited from Chesapeake. The privately held producer may add a third completion crew before the end of the year, he said.

“You have to recognize that we’re in the transition from Chesapeake to Encino and that takes months to accomplish,” Murchison said Thursday at the winter meeting of the Ohio Oil and Gas Association (OOGA) in Columbus. “As we take over, we obviously start to have more and more influence, but to be clear, virtually all of the wells that will go into production in 2019 were planned by Chesapeake when we arrived on scene.”

In his first public address since the acquisition was announced, Murchison said Encino is stabilizing operations and trying to work at a steadier pace. Chesapeake was among the first to develop the Utica, and with a once formidable position across the Appalachian Basin, it earned a reputation for innovation and solid well results. Chesapeake, Murchison said, had regularly been moving crews back and forth between Ohio and Pennsylvania, where it still has a large position in the northeastern part of the state.

“We’re basically focused on putting equal amounts of capital on the dry gas and wet gas of our areas,” He added. “That will fill pipes on both sides of our system.”

Murchison’s company formed Encino Acquisition Partners in 2017 to acquire and operate the Ohio assets with the backing of a frequent energy investor, the Canada Pension Plan Investment Board (CPPIB). Encino has legacy properties in western Oklahoma and the Texas Panhandle, but “the primary focus of its capital and resources will be the Ohio assets,” spokesperson Jackie Stewart said.

Chesapeake divested 900,000 net acres in the state to cut debt and pivot to oilier production in other basins across the country. At the time the deal was announced, Encino acquired 900 wells that were producing more than 600 MMcfe/d, acreage 85% held by production. More than 300,000 acres are in the Utica/Point Pleasant commercial window.

Encino COO Ray Walker, who joined the company last year after coming out of retirement from  Appalachian heavyweight Range Resources Corp., said the company has plans to “play a big role” given CPPIB’s long-term investment strategy.

“That’s one of the main things that really attracted me to Encino and the whole project, is the ability to look at this over multiple, multiple years, if not decades,” Walker said. “We’re not driven by having to flip this thing in three or four years, or having to worry about what the public markets think right now. It really does allow us to do things the right way for the right reasons.”

For now, Encino is focused on “optimizing” what it inherited from Chesapeake, said the COO. “Maybe we’ll add some lateral length, more proppant per foot, new target levels, things like that...really getting ready for the future.”

Growing restless after just a few months in retirement, Walker reached out to former Range CEO John Pinkerton, with whom he worked with to help pioneer the Marcellus in Pennsylvania. Pinkerton chairs Encino’s board, and Walker said he found a good fit with the company, which Murchison formed in 2011.

Murchison also worked under Pinkerton at Range as vice president of corporate development. He then spent 10 years at private equity First Reserve Corp., an active energy investor. Murchison also tapped Michael Magilton, another former First Reserve executive, to serve as CFO.

“Together, we started with a clean slate and said ‘where can we find the best asset to build our company around,’” Murchison said, adding that Encino made a “strategic pivot” to seek more capital after the commodities downturn of mid-2014. That led to its partnership with the CPPIB. The management team examined every major onshore resource play in the United States and found good prospects in the Eagle Ford and Haynesville shales, along with others in the Permian and Appalachian basins.

“But ultimately, the asset we found in Ohio checked every box from our perspective, starting with the state,” Murchison said. “It’s just a great, pro-business environment, with a great population of hard-working people and a huge resource in place in the Utica. In Chesapeake, we found a counterparty that had done a fantastic job assembling a great position and, for their own reasons, needed to focus elsewhere.”

As the company works through the transition, Murchison said some major changes are ahead for the Ohio operations, such as in completion designs. “We’re learning things every day,” he said. The company is taking a data-driven approach to implement its operational strategy.

“You used to hear me say publicly that the Marcellus is not the Marcellus everywhere,” Walker added. “And the same thing holds true to the Point Pleasant; it’s not the same everywhere. And so I think we’ll evolve and really focus on the data and technical designs that best fit that rock and work.”

OOGA’s 72nd annual winter meeting continued on Friday. More than 700 people were expected to attend, spokesperson Mike Chadsey said. Vice President Mike Pence delivered the keynote address on Friday.