Chesapeake Energy Co. remains very satisfied with the results it is seeing from its liquids-rich Utica shale wells in eastern Ohio.
The Utica shale "will be solid for a lot of years to come," company spokesman Steve Dixon said Thursday.
Chesapeake, an Oklahoma-based energy company and the No. 1 driller in Ohio, also offered its first estimates on what those wells will produce.
The company is projecting what the industry calls estimated ultimate recovery (EUR) of 5 billion to 10 billion cubic feet of equivalents from each well over its lifetime in its core area of Carroll and surrounding counties.
It is just too early to offer a more specific EUR estimate, company officials said repeatedly on Thursday during a fourth quarter and all of 2012 earnings teleconference with analysts.
Those EUR estimates from Ohio’s Utica shale are significantly higher than what has been reported from wells drilled in the Marcellus shale in Pennsylvania.
Chesapeake and another driller, Range Resources, both have reported EURs from the Marcellus shale as high as 4.2 billion cubic feet of equivalents. A federal agency, the U.S. Geological Survey, later reported that the average Marcellus well has an EUR of 1.1 billion cubic feet of equivalents.
Marcellus wells in Pennsylvania tend to produce natural gas only, with small volumes little liquids.
As of Dec. 31, Chesapeake has drilled 184 wells in the Utica shale.
Of that total, 45 wells are in production, 47 are awaiting pipelines and 92 are in various stages of completion.
The company is operating 14 drilling rigs in Ohio and plans to average 14 rigs in 2013, the company said.
Chesapeake is expecting production growth from the Utica shale to jump significantly in 2013 with the completion of two natural gas-processing complexes operated by other companies in eastern Ohio.
Chesapeake also offered production information on four wells that were completed in late 2012:
•The Cain well in Jefferson County’s Springfield Township with 1,540 barrels of oil equivalents per day. That includes 6.7 million cubic feet of natural gas and 425 barrels of natural gas liquids (ethane, butane and propane).
•The Walters well in Carroll County’s Perry Township with 1,140 barrels of oil equivalents per day. That includes 3.6 million cubic feet of natural gas per day, plus 315 barrels of oil and 220 barrels of natural gas liquids.
•The Houyouse well in Carroll County’s Lee Township with 1,730 barrels of oil equivalents. That includes 5.4 million cubic feet of natural gas per day plus 525 barrels of oil and 305 barrels of natural gas liquids. Chesapeake had disclosed the totals from this well last fall.
•The Coe well in Carroll County’s Lee Township is producing 2,225 barrels of oil equivalents per day. About one third is liquids. No other information was released.
There is very little information on production totals from Ohio wells. Companies have offered information on about 20 wells. They must report production totals to the Ohio Department of Natural Resources by March 31. Last year, there was data from only nine Ohio wells.
Chesapeake said it still has $1.15 billion from its partnership with the French energy company, Total SA, and Texas-based EnerVest Ltd. It expects to use all of those funds in the next two years to fund drilling operations in Ohio.
The three companies formed a partnership in early 2012 to develop 450,00 acres in eastern Ohio.
Chesapeake said it expects to spend $6 billion to develop wells in 2013 in the Utica shale and elsewhere. About 11 percent of those funds are slated for the Utica. It ranks third behind the Eagle Ford shale in south Texas and the Anadarko Basin in Oklahoma and Texas.
The company reported that it has sharply reduced drilling costs in 2012 and shortened the time it takes to drill a well in Ohio: from 35 days to 22 days.
Chesapeake is also proceeding to sell off non-core areas in eastern Ohio and elsewhere. An upcoming sale on the Oklahoma-Kansas border will be announced soon.
Chesapeake also reported that last year scaled back its drilling with the number of working rigs dropping from 164 rigs to 85 rigs, due to low prices for natural gas. That includes only eight rigs in Pennsylvania’s Marcellus shale.
Chesapeake is the No. 2 producer of natural gas in the United States and the 11th largest producer of liquids.
The company is continuing to shift from natural gas with its depressed prices to liquids.
Outgoing CEO Aubrey McClendon had not participate in the earnings call for the first time in 80 quarters. He is stepping down April 1 and a search is under way for his successor.
For the fourth quarter, the company reported a profit of $257 million or 39 cents per share on revenue of $3.5 billion.
That compares to a year earlier with profit of $429 million or 63 cents per share on revenue of $2.7 billion.
For the 2012 year, Chesapeake lost $940 million or $1.46 a share on revenue of $12.3 billion.
That compares to 2011 when the company had a profit of $1.57 billion or $2.32 per share on revenue of $11.6 billio
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.