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Anadarko Eyeing Ohio's Utica Shale

Anadarko Petroleum Corp. appears to be joining a growing list of companies interested in the Utica Shale of Ohio.

The Woodlands, TX-based company received a permit earlier this month from the Ohio Department of Natural Resources (ODNR) to drill a horizontal well in Guernsey County, OH, located in the southeast corner of the state near the West Virginia border.

"We can confirm the permits from the Ohio Department of Natural Resources," Anadarko spokesman John Christiansen told NGI's Shale Daily. "For competitive reasons, we will provide acreage and additional details once we have assembled our base position."

The permit is the fourth issued in Guernsey County. The ODNR previously issued three permits for Chesapeake Energy Corp. to drill in the county and the company is currently in the process of drilling one of those wells in Wheeling Township, located some 20 miles north of where Anadarko is permitted to drill in Spencer Township. Chesapeake drilled to around 6,800 feet at its Wheeling well.

The Utica is directly below the Marcellus Shale. While the Utica is present from Quebec to Ohio, its "canoe" shape leads some geologists to believe it is more prospective at its shallower edges than its deeper center in Pennsylvania (see Shale Daily, Aug. 24).

According to company reports, Chesapeake is currently the largest net acreage holder in the Ohio Utica with 1.25 million acres. Rounding out the top five are EnerVest (780,000 acres), Chevron (623,000 acres), Consol Energy (200,000 acres) and Hess Corp. (185,000 acres).

While Anadarko is one of the leading producers in the Marcellus, the company operates primarily across a leasehold in north-central Pennsylvania where the Utica is deeper and less prospective than in eastern Ohio. Anadarko is currently running seven rigs in the Marcellus, where it is producing around 500 MMcf/d from around 125 wells, according to second quarter financial reports.

Although operators have been drilling through the Ohio Utica for decades to get to deeper oil deposits and permitting horizontal wells into the formation for at least a year, the Utica became the talk of the town after Chesapeake CEO Aubrey McClendon claimed that the play is "is likely most analogous, but economically superior to, the Eagle Ford Shale in South Texas" (see Shale Daily, Aug. 1).

Like the Eagle Ford, the Utica is believed to have dry gas, wet gas and oil windows. The Ohio portion of the play is liquids-rich.

Anadarko is a major player in the Eagle Ford (see Shale Daily, March 22).

Chesapeake is the most bullish operator in the play. The company has already drilled six Utica wells and holds 27 permits for horizontal wells in Carroll, Columbiana, Guernsey, Jefferson, Mahoning, Portage and Tuscarawas counties, according to the ODNR.

Chesapeake is partnering on some of its exploration with EV Energy Partners LP, the largest producing firm in Ohio. The Houston company is also pursuing a Utica drilling campaign of its own on around 400,000 acres separate from Chesapeake (see Shale Daily, Aug. 16).

CONSOL Energy Inc. and Hess Corp. recently formed a joint venture to explore the Ohio Utica (see Shale Daily, Sept. 8). CNX Gas Co., a subsidiary of CONSOL, already holds two ODNR drilling permits for horizontal wells in Tuscarawas and Jefferson counties.

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