The Utica Shale could be worth $500 billion, and the “biggest thing economically to hit Ohio, since maybe the plow,” Chesapeake Energy Corp. CEO Aubrey McClendon told an audience in Ohio last Wednesday.

“I prefer to say half a trillion,” McClendon said at the Ohio Governor’s 21st Century Energy & Economic Summit in Columbus. “It sounds bigger.” While admitting that fluctuating commodity prices make it difficult to accurately predict the value of a resource, McClendon called his estimate “reasonable.”

McClendon also continued his role as the most aggressive promoter of shale, telling two opponents to hydraulic fracturing as he entered the Ohio auditorium: “I’m the biggest fracker in the world. I’ve done it 16,000 times since 1989 and I’m proud of it,” before elaborating that he planned to increase jobs, lower the cost of energy and help the country become energy independent. “So what is your plan?” he asked.

When they told him they want a renewable energy supply, he said, “It’s not reality. It can’t happen.”

Although not a scientific analysis, McClendon’s figure is among the first offered for the infant Utica. Over the past two years Chesapeake spent $2 billion on 1.25 million acres in the play, including some acreage held in a joint venture with EnerVest Ltd., the leading conventional oil producer in Ohio (see NGI, Aug. 1).

Because oil from the Utica migrated to reservoirs beneath it, EnerVest CEO John Walker said his company and Chesapeake have 600 conventional well logs featuring the Utica, but now need to prove up the play.

Chesapeake is the only company to have completed a horizontal Utica well in Ohio — others have drilled but not completed Utica wells — but has not yet drilled into the oil phase of the play. Because oil molecules are larger than gas molecule, they promise to be more difficult to extract from tight shale, McClendon said.

Because the Utica contains an oil, wet gas and dry gas phase, Chesapeake is comparing it to the Eagle Ford and the industry is talking note. McClendon expects at least 10 companies to run more than 100 rigs in the play at full build out, investing as much as $200 billion developing the play in Ohio over the next 20 years.

“We know it’s big. How big is big? We don’t know and I can’t put volumes on it yet,” he said.

CONSOL Energy Inc. and Hess Corp. have formed a joint venture in the Ohio Utica (see NGI, Sept. 12). Anadarko Petroleum Corp. and others also are pursuing exploration. According to company reports, Chesapeake is the largest net acreage holder in the play, followed by EnerVest (780,000 acres), Chevron (623,000 acres), CONSOL (200,000 acres) and Hess (185,000 acres).

While bigger players explore the oil phase of the Utica, smaller companies are targeting the liquid and gas phase of the play, as well as the shales in the Upper Devonian formation located above the Marcellus Shale.

The State College, PA-based Rex Energy Corp. is encouraged enough by its first test well into the Upper Devonian/Burkett Shale north of Pittsburgh to justify additional wells into the formation in the coming year. The Gilliland No. 11-HB well in Butler County produced at an average rate of around 3 MMcfe/d over five days. Rex described the natural gas from the Upper Devonian/Burkett well as being “similar in composition” to gas from nearby Marcellus wells (although it produced at a lower rate than nearby Marcellus wells). Rex is currently hydraulically fracturing its first Utica test well, the Cheeseman No. 1, also in Butler County, and expects to have results ready by the time it releases its third quarter earnings within the coming weeks.

After releasing results from two Upper Devonian/Geneseo Shale wells in northwestern Pennsylvania, National Fuel Gas Co. subsidiary Seneca Resources said the formation probably could not be developed economically on its own at current prices, but could potentially be bundled into Marcellus operations.

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