Shale Daily / NGI All News Access

Permit, Leasing Activity Increasing in Ohio's Utica Shale

The number of permits for horizontal natural gas wells in Ohio's portion of the Utica and Point Pleasant was on the rise in the closing months of 2011, according to the state's Department of Natural Resources (DNR).

DNR's most recent data shows that 11 permits were issued for horizontal wells in the Utica and Point Pleasant shales in October, 22 permits were issued in November and 19 permits were issued in December. DNR previously reported that it had issued 43 permits for horizontal wells in the overlapping shales between December 2009 and September 2011 (see Shale Daily, Sept. 15, 2011). The number of horizontal well permits and permitted vertical test wells in Ohio was relatively low when 2011 began -- just three and one, respectively -- but accelerated as the year went on and interest in the Utica and, to a lesser extent, the Marcellus, intensified.

A total of 22 horizontal wells have been drilled in the state's portion of the Utica and Point Pleasant shales, DNR said. The agency has also issued 11 Marcellus Shale horizontal well permits and reports six Marcellus wells have been drilled. There was "virtually no horizontal drilling in previous years" in Ohio outside the Marcellus, according to Michael Williams, a geologist with DNR's Division of Oil and Gas Resource Management.

DNR reports reveal that Chesapeake Exploration LLC, a subsidiary of Chesapeake Energy Corp., is by far the most prolific operator in Ohio's Utica, but other operators -- some of whom are also permitted to drill vertical wells -- include EnerVest Ltd., which partners with Chesapeake in some of the shale play, as well as HG Energy, Anadarko E&P Co. LP, Devon Energy Production Co., Ohio Buckeye Energy and CNX Gas Co.

And producers are leasing acreage in Northeast Ohio at a record-setting pace, according to the Akron Beacon Journal. More than 4,500 leases for gas and oil drilling were filed in Stark County last year -- nearly 2,400 of them in December alone -- compared with 1,113 in 2010, the newspaper reported. Chesapeake accounted for about 83% of the leases filed in the county. Neighboring Portage County also had a record year, with 2,202 leases filed in 2011. Even Wayne and Medina counties, which traditionally see much less oil and gas lease activity than counties to their east, reported an uptick in leases filed in 2011.

Last week French energy giant Total SA announced that it is paying $2.32 billion to acquire a one-quarter stake in Chesapeake's massive Utica Shale leasehold in Ohio (see Shale Daily, Jan. 4). The transaction gave subsidiary Total E&P USA Inc. an undivided 25% interest in about 619,000 net acres in 10 counties of eastern Ohio. About 542,000 net acres were contributed to the JV by Chesapeake and 77,000 net acres were contributed by Houston-based EnerVest and its affiliates.

Despite a recent decision by DNR to shut down a wastewater disposal well in Youngstown because of concerns that injections there may have triggered seismic activity, industry backers are confident that the decision will not have an impact on the emerging oil and gas industry in Ohio's portions of the Marcellus and Utica shales (see Shale Daily, Jan. 5).

Even though Ohio saw more recent activity than perhaps any other shale play in its early stages, the Utica and Point Pleasant won't boom this year, according to some analysts (see Shale Daily, Nov. 18, 2011).

ISSN © 2577-9877 | ISSN © 2158-8023
Comments powered by Disqus