Oklahoma-based Chesapeake Energy Corp. is pleased with initial test results for oil in Tuscarawas County and is planning to drill its first Utica shale well for natural gas in West Virginia’s Wetzel County.
Those were among the items that company officials discussed on Wednesday in an earning call with analysts and the media.
Chesapeake and other companies are trying to tap into the oil area in southern Stark, western Carroll and eastern Tuscarawas counties.
Chesapeake is "encouraged with what we’re seeing" in results from its Parker well in Perry Township in the southeast corner of Tuscarawas County, said CEO Doug Lawler.
The company, the No. 1 player in the Utica shale, intends to drill two to four additional oil test wells in the next six months as it tries to delineate the boundaries of the oil area, he said.
Chesapeake has between 80,000 and 100,000 acres of leased land in that area that could yield oil, he said.
He said the possibility of finding oil in "a forgotten part of the Utica and drive value for this company is really exciting for me."
Getting to the oil will require optimizing lateral placements, modifying fluid chemistry, volumes and hydraulic fracturing or fracking techniques.
The West Virginia well should be completed later this month, said Chesapeake senior vice president Chris Doyle.
The Messenger 3HU well near Wileyville is expected to be a big natural gas producer because it lies just east of Ohio’s Monroe County, a drilling hot spot for natural gas. It is Chesapeake’s first Utica well in West Virginia.
That outcome could lead Chesapeake to drill more natural gas wells in West Virginia’s Panhandle and in Ohio’s Jefferson County. Chesapeake has about 330,000 acres leased in those areas. The natural gas could be worth $4 billion to $7 billion, the company said.
Four other companies have started drilling in West Virginia’s Utica shale.
Drilling into the Utica shale in West Virginia will take longer and cost more because drillers must go deeper.
In the second quarter 2014, Chesapeake’s Utica shale production was 67 million barrels of oil equivalents per day. That was up 373 percent from a year ago and up 34 percent from the first quarter 2014, company officials said.
Oil accounted for 10 percent of the production; natural gas, 60 percent; and natural gas liquids like ethane, butane and propane, 30 percent.
The company had eight rigs working in Ohio and that will likely remain the same in 2015. It connected 48 Utica wells in the second quarter to start selling natural gas and liquids. It reported that the average peak production rate of those 48 wells was about 1,200 barrels of oil equivalents per day.
As of June 30, Chesapeake had 210 Utica wells awaiting pipelines or in the final stages of completion.
A just-opened addition to the gas-processing plant at Kensington in southern Columbiana County should help reduce that backlog of wells going into production, the company said.
The company says it has reduced costs and the time needed to drill. It also expects to start lengthening horizontal laterals to boost production.
Lawler said natural gas production in the Utica shale is likely to begin climbing sharply. His company is also exploring shipping options to send that gas to other parts of the country.
The company was hurt by the U.S. natural gas glut that dragged down prices.
Chesapeake is the No. 2 producer of natural gas in the country.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.