Chesapeake Energy Corp. remains convinced that Ohio’s Utica shale will be productive, once needed natural gas pipelines and processing plants are completed.
"Processing is really the holdup," said chief operating officer Steven Dixon today in the company’s first quarter 2013 operational and financial update.
.An expanded processing plant at Natrium, W. Va., is expected to open this month and a second processing complex in Columbiana and Harrison counties is scheduled to open mid-2013, and those will provide a big boost to the Oklahoma-based energy company, said Jeffrey A. Fisher, executive vice president, production.
Through March 31, Chesapeake had drilled 249 wells in the liquid-rich Utica shale that is mostly in eastern Ohio. A total of 66 wells are in production, 86 wells are awaiting pipelines and 97 wells are in various stages of completion. It has 14 drilling rigs in the Utica shale.
Chesapeake, the No. 1 drilling company in Ohio, said it is confident that it will meet year-end projections and produce 330 million cubic feet of natural gas per day from its Ohio wells.
That would be more than enough natural gas to fuel Ohio on a daily and yearly basis. In a typical year, Ohio consumes about 820 billion cubic feet of natural gas.
In the first three months this year, the company produced an estimated 60 million cubic feet of natural gas per day in Ohio, the company said.
It expects to more than quadruple that natural gas volume with the completion of the pipelines and processing plants and the drilling of new wells this year, officials said.
The company is getting average peak daily rates from the 13 Utica wells that began first production in the first quarter was 1,200 barrels of oil equivalents per day.
Company officials raved about the results from one of the Coe wells, a cluster of six wells in Carroll County.
That well is producing 7.6 million cubic feet of natural gas per day, plus 235 barrels of oil and 470 barrels of natural gas liquids. That is equal to 1,980 barrels of oil equivalents per day, the company said.
The six wells, all built from one well pad in Lee Township, are averaging 4.9 million cubic feet of natural gas per day, plus 75 barrels of oil and 280 barrels of natural gas liquids including butane and propane. That is equal to a daily average of 1,170 barrels of oil equivalents.
The cost of the first Coe well was nearly $8.5 million. The other five wells averaged $5.9 million.
To date, Ohio has approved 627 Utica permits through April 27, of which 310 wells have been drilled. A total of 89 wells are in production. A total of 32 drilling rigs are working in Ohio.
Chesapeake officials offered no new information of the proposed sale of non-core Utica leases.
In April, the company has said it intends to keep its core area in Carroll and nine surrounding counties. It is attempting to sell about 94,000 acres of leased land in Stark and Portage counties, plus other leased land in Ohio.
The asset sale or sales are triggered by Chesapeake’s desire to reduce its debt.
The company’s net income was $58 million or 2 cents a shared, compared to a loss of $28 million or 11 cents a year earlier. Stripping out hedging losses and other one-tome items, Chesapeake reported a profit of 30 cents a share.
Chesapeake, the No. 2 natural gas producer behind Exxon Mobil Corp., has been hurt in recent years by low natural gas prices that are starting to climb.
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.