In two days' time Hess Corp. has acquired stakes in almost 185,000 net acres in the Ohio portion of the Utica Shale, the latest deal adding 85,000 more acres to its prospective leasehold.

In the transaction announced Thursday Hess agreed to pay $750 million to acquire Marquette Exploration LLC, which is based in The Woodlands, TX, which includes a leasehold in Ohio. The leases, in which Hess would have a 100% working interest, are in Jefferson, Harrison and Belmont counties. Appraisal activities on this acreage are to begin by the end of the year, the New York City-based producer said.

Along with the Ohio assets, acquiring Marquette gives Hess a contiguous acreage position of more than 18,000 undeveloped net acres in northern Louisiana's Haynesville Shale in Bienville, Jackson and Lincoln parishes. Marquette operated two producing Hosston wells on this acreage, the Davis Bros 27-1 and the Davis Bros. 34-1. Marquette was founded in 2006 in partnership with Encap Investments LP.

CEO John Hess, who spoke Thursday at the Barclays Capital Energy-Power CEO Conference in New York City, said getting into the Utica Shale was important because it is "a major emerging U.S. unconventional play."

The Utica is high on the producer's to-do list, he said. The deal comes one day after Hess agreed to pay CONSOL Energy Inc. $593 million to acquire a half interest in CONSOL's nearly 200,000 net acres in eastern Ohio (see Shale Daily, Sept. 8). Hess would pay CONSOL $59 million at closing, which is expected next month, and $534 million in the form of a 50% drilling carry of some of CONSOL's working interest obligations over a five-year period.

"With these transactions, we have built a strategic acreage position in the Utica Shale, allowing us to strengthen our portfolio of unconventional resources in high quality assets, leverage our operating expertise and create significant potential for future growth in reserves and production," said the CEO.

The Utica Shale, he said, has the potential to deliver similar production and reserve growth comparable to Hess' acreage in the Bakken Shale of North Dakota. Late last year Hess paid $1.05 billion in cash to acquire 167,000 net acres in the Bakken from TRZ Energy LLC (see Shale Daily, Dec. 30, 2010). Net production from the Bakken averaged 25,000 boe/d in the second quarter, which was flat with the first quarter. Hess also controls about 107,000 acres in the Eagle Ford Shale and plans to drill 25-30 wells there this year.

Based on the Marquette purchase, as well as initial production results from the Bakken and the Eagle Ford, Hess has raised its annual long-term oil and gas production growth target to 3-5%, up from 3%, the CEO told analysts.

The Utica Shale in Ohio is considered a liquids play and because of that fact, "Utica is very much a midstream story," wrote exploration analyst Irene Haas of Wunderlich Securities Inc. That would fit well into the oily Hess portfolio.

"We expect that, if successful, the Utica could generate as much natural gas liquids as the neighboring Marcellus trend, if not more," Haas wrote. "U.S. ethane production is enjoying a new found popularity as one of the cheaper feedstocks for ethylene production. However, large amounts of mid-stream investments will be needed to get the Utica wet gas into production mode. We wonder how the gathering and processing infrastructure will evolve. We still need to quantify the aggregate volume of wet gas coming out of the Marcellus and Utica plays. Importantly, we need to understand how to find homes for all the ethane production."