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Gastar's First West Virginia Utica Shale Well Exceeds Expectations

Gastar Exploration Inc has delivered on one of the earliest publicly announced tests from the Utica Shale in West Virginia, where its long-awaited Simms U-5H well in Marshall County has exceeded expectations with a 48-hour gross sales rate of 29.4 MMcf/d.

The well was drilled to a total depth of 11,410 feet and completed with 25 hydraulic fracturing (frack) stages. More importantly, financial analysts noted, was its relatively short lateral, drilled to 4,447 feet.

"Adjusting for a 7,500 foot lateral, this well would have had a rate of 49.6 MMcf/d, making it one of the best wells in the dry gas Utica play," said Topeka Capital Markets analysts Gabriele Sorbara in a note to clients.

Monday's announcement appears to bode well for other operators in northern West Virginia that are preparing to test the Utica's potential there (see Shale DailyMay 16March 26). For now, it also shores-up the widely held belief that the formation will deliver farther south in Ohio, where nearby operators have reported eye-opening initial production (IP) rates, including a 32.5 MMcf/d test at Magnum Hunter Resources Corp.'s Stalder well in Monroe County and Rice Energy Inc.'s Bigfoot 9H in Belmont County, which tested at a peak rate of nearly 42 MMcf/d (see Shale DailyJune 2Feb. 14).

"We believe the Simms 5-UH is one of the most productive wells to date in the dry gas Utica play, particularly when considering the relatively short lateral length," said Gastar CEO J. Russell Porter. "The well has exceeded our pre-drill expectations with excellent porosity, pressures and flow rates. Along with successful Utica activity from other nearby operators, this well significantly de-risks Gastar's Utica/Point Pleasant assets."

The Simms test was an important one for Gastar, which has bet big on the Appalachian Basin. At mid-year, the region accounted for the bulk of its proved reserves at 71% (see Shale DailyJune 17). That number, though, only included  the Marcellus Shale.

Since early this year, exploration and production companies have been setting their sights on the Utica outside Ohio. Magnum Hunter said during its second quarter conference call that an IP rate would be released at its first West Virginia Utica well this month (see Shale DailyAug. 11). While Cabot Oil & Gas Corp., Antero Resources Corp., Chesapeake Energy Corp. and Stone Energy Corp., among others, have all either permitted or staked a Utica well in the state. Chevron Appalachia LLC's Conner 6H well in Marshall County tested at rate of 25 MMcf/d earlier this year, as well (see Shale DailyJuly 17).

Porter said Gastar would begin work on one or two more Utica wells in West Virginia later this year that could determine how aggressively the company will develop the formation going forward. The Simms well was the company's first in the Utica.

Gastar is also focused on its emerging Hunton Limestone play, a liquids-rich stacked pay zone in Oklahoma, where it acquired a significant amount of acreage last year (see Shale DailyApril 11Sept. 9, 2013July 5, 2013). The company said Monday that its Easton 22-1H and 22-2H wells in Kingfisher County reached a combined peak production rate of 1,528 boe/d, with a 92% oil cut. Two other operated wells in the Hunton, Gastar said, have been drilled and are awaiting completion, while five Marcellus wells in Marshall County, WV, are in various stages of drilling.

Drilling of the company's next dry gas Utica well is scheduled to begin in mid-October at the company’s Blake Pad.

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